Ed Miliband was right, time to tax wealth

It’s been said often enough that only capitalists can save capitalism. But for the past decade one has looked to them forlornly for any green shoots of fresh, radical thinking, for the ideas that might begin to address the causes of the rage-powered politics that has so destabilised our democracy. At long last, perhaps, the buds are poking through the soil and straining towards the sun.

Let’s not go overboard – the lumpen mass of the Conservative Party continues to tear itself apart over Brexit and shows little interest in or capacity for anything else. There is a black hole where much of government thinking should be. No 10 is haunted by a spectral figure, like one of those ‘white ladies’ said to flit around the passageways of old mansions.

Labour is arguably a little better, in that it has at least produced some challenging domestic policy proposals that have inspired a degree of passion. Unfortunately those proposals are of such creaking vintage, and advanced by such darkly treacherous little men, that they promise only a return to a flabby, centralised state that would be an enemy of innovation and freedom, a malign, controlling force kicking down doors in places it has no business being, and a cuckoo in the nest of the Western alliance. The Marxist cadre that has seized control of Labour’s commanding heights has outfought, out-thought and out-manoeuvred its own backbenches, now seemingly inhabited by people too demoralised to resist, or even to think.

But the centre, pace Yeats, usually holds – when it finds itself outpaced by events, its levers and buttons turned rusty and ineffective, it has a knack of finding ways of catching up, of constructing a new toolkit to meet new challenges. This usually means shucking off strictures and golden rules that were once taken as gospel but are no longer fit for purpose, absorbing the best ideas from the fringes (or cleaned-up, workable versions of them), constructing a compelling case around change that can appeal to a broad coalition of voters, and leaving the crazies to wonder where it all went wrong. It’s what the mainstream music industry has done with each ‘unlistenable’ new minority craze, from jazz to rock n roll to acid house to grunge to rap to grime and beyond.

When speaking to a centrist politician (whether of Labour, Tory or Lib Dem association) it’s not uncommon at the moment to hear the phrase “Ed Miliband was right.” If that seems a curious view of a man who flopped so spectacularly as Labour leader, it’s usually followed by “he was just too early.” As one senior Labour figure put it to me recently, he was “a man both ahead of his time and a man out of time.”

It’s worth looking back at some of the commitments he made in the party’s 2015 manifesto. They included:

• Abolish non-domicile tax status
• Return the top rate of income tax to 50p
• Reduce university tuition fees to £6,000 a year
• Freeze energy bills until 2017 and give the regulator the power to cut bills this winter
• A mansion tax on properties worth over £2m

Many of these ideas were seen as problematic at the time. Despite a prolonged period of austerity and consequent cuts to services and living standards, there was as yet no national majority behind the idea of a more active state that could intervene in markets and raise taxes on the better-off. And even now, looking at this list, you may find some of the ideas objectionable. But there’s little doubt that the electorate’s mood has changed – and the politics and politicians with it.

There are now vibrant debates not just on the Left but on the Right over how to ensure the elite and super-rich pay their share; on tax rises to provide more funding for the NHS; whether tuition fees should be reduced or even abolished; whether robust state intervention is necessary to bring privatised utilities to heel; on how to create a housing revolution; and, as UnHerd has so comprehensively covered this week, whether there should be a shift from income to wealth taxes.

Whether you’re Nick Boles or Nick Timothy, Damian Green or Boris Johnson, Tim Montgomerie or, even, Theresa May, you’ve been wrestling with all this. “There is a critical mass that tax on wealth will have to happen at some point, as the system is unsustainable. It’s something the prime minister is cautiously interested in,” according to Theresa May’s former staffer Chris Wilkins.¹

This is in part forced by necessity – the public services require more money, and fast. It’s estimated the NHS will require an extra £20bn a year by 2022. It’s a rare Tory these days who calls for the NHS to be replaced by a system of private insurance, or for tax cuts for the better off to stimulate economic activity. Instead, Left and Right seem roughly to be cohering around a set of ideas that were until recently unthinkable – and in doing so both are providing credibility and cover to the other. The financial crash, its after-effects and what they have exposed about the existing settlement have proved to be a game changer.

Not everyone’s happy at the prospect of wealth taxes, of course. UnHerd’s Peter Franklin regards them as:

“a dead-end, indeed a political graveyard. There is no short-cut to the reform of capitalism, no way forward but to defeat cronyism, corruption and exploitation. Win those battles and the only wealthy people will be those who deserve it.”

That might have been true a decade or even three years ago, but I’m not sure it is now. Telling long-suffering voters that fixing capitalism will be a prolonged, slow process and asking them to bear with us (again) is a dog of a political message. The times require energetic change, the refashioning of the social contract and a new approach to who gets what and why. It seems certain to me that wealth taxes will be a part of this new deal, and, more importantly, that they deserve to be.

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Chris is a former head of comment at the Daily Telegraph and is Scotland Editor of the New Statesman. He believes Britain badly needs a new party structure and a proportional voting system.

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