Tax rise a Shakespearean return to childhood

With record levels of debt, this Government returns to raising taxes echoing the: “….Last scene of all, That ends this strange eventful history, Is second childishness and mere oblivion; Sans teeth, sans eyes, sans taste, sans everything.” (Shakespeare, “As You Like It”, Act II, Scene VII)

When you have to watch someone die, one of the most distressing things is the period that Shakespeare called a second childishness. As a patient enters the final stages, he may suddenly start speaking of mummy, babbling nursery rhymes or talking a foreign language that he forgot at the age of four. The patient may be suddenly rude, irrationally angry or jealous. It is as though all the decades of acquired behaviour and education are melting away, to reveal the juvenile instincts beneath.

That is the stage we have reached, alas, with this moribund Labour government. All the pretensions of the Blair years are vanishing before our eyes – all that lip-service they used to pay to the importance of enterprise; all that carefully confected obeisance that Tony taught them to make to capitalism.

As the Labour government undergoes its death agonies, we seem to be back in the 1970s, with uncontrollable debts, unemployment rising and the IMF waiting in the wings. After decades of restraint, there are joyful Labour MPs giving vent again to the infantile slogans that brought them into politics. Squeeze the rich. Squeeze them again. Then squeeze them until the pips squeak.

They came for 45p, and the world said nothing. Now they have come back for 50p, and we don’t really dare to protest, even though the true rate – once you have taken into account the loss of allowances – is a 61 per cent grab of the income of top earners. That is a flagrant breach not just of Labour’s manifesto commitment but also of the principle that the state should not pre-empt more than half of what you earn. Labour is going back to its class-war roots, and we don’t dare to protest because these are hard times, and it seems only fair that the rich should pay more to help us all out of it.

We don’t stick up for the bankers because we know that the bankers bear a heavy share of responsibility for the sub-prime crisis. This credit crunch wasn’t caused by the Spanish practices of idle shiftless workers. It was nothing to do with working to rule, closed shops and senseless demarcation disputes at British Leyland.

In the words of the Brazilian President Ignacio Lula da Silva, the world’s banking crisis was caused by white men with blue eyes, and there are millions of people around the world who are going to suffer poverty and unemployment because of the greed and folly of a small number of extravagantly remunerated bankers. How could anybody possibly sympathise with these monsters?

Yesterday a newspaper published the annual list of the 1,000 richest people in the country, and you would have needed a heart of stone not to laugh at the way they have collectively lost billions in wealth. We don’t protest at the 50p tax rate because we can’t bear to be seen to be on the side of rich folk these days; and yet we should protest, my friends, because this 1970s era tax is a serious economic error.

The richest 1,000 people in the country may have lost a fair slice of income; they may offload the loss-making restaurant or flog the grouse moor, and yet the tragic reality is that their lives – by comparison with the rest of us – will not be much affected either way. For the really rich people the effect of the 50p rate will be simply another challenge for their tax accountants. It is extremely doubtful that the revenue raised will be anything like as much as Alistair Darling claims, and in any case, the sum is trivial by comparison with the scale of the problem.

Whatever the other crimes of the bankers, they are certainly not responsible for the horrific state of the nation’s finances. It wasn’t the bankers who caused the £175 billion black hole, the one that our grandchildren will still be struggling to fill. It was the sensational mismanagement of the Labour government, watercannoning good money down the drain in times of plenty and failing to put anything by for the downturn.

It believed its own demented propaganda about ending boom and bust, and using hundreds of taxpayers’ billions in a ruthless and concerted attempt to expand the state sector – to the point where it amounts to about 70 per cent of the economy in a place such as Newcastle upon Tyne – and thereby to build up a huge and unbudgeable mass of people whose livelihoods depend upon the government and who are therefore more likely to vote Labour.

This government’s colossal deficit is the result of Gordon Brown’s decision to abandon prudence and to use the public purse to buy election victory. We will all pay the price, rich and poor, and if we attack the rich with punitive taxation we will simply end this country’s reputation as a place where enterprise and wealth creation are rewarded.

It is not just the financial services industry that will be hit by a 50 per cent rate, because London is not just a world leader in financial services. The UK capital leads the world in law, in medical science, in higher education, in advertising and in a huge spectrum of the creative and media industries.

This tax sends out a signal to any business leader thinking of coming here to set up a company that the climate is changing, and that if Labour remain in power it is likely to become positively inimical to effort and initiative.

Instead of launching this raid on the rich, the government should have taken the axe far more seriously to government waste; and the final reason why we should object to the 50 per cent tax rate is that if we keep schtum, they will simply do it again. Why not 55 per cent? Why not 60 per cent? Why don’t they go right the way back to their childhoods, and start echoing Denis Healey’s 83 per cent top rate of taxation? I never thought I’d say this, but last week I felt acutely the loss to politics of Tony Blair.

[First published in the Daily Telegraph on 26 April, 2009 under the heading, “This moribund Government has returned to its miserable youth.”]

17 thoughts on “Tax rise a Shakespearean return to childhood”

  1. So, since lowering taxes or keeping them stable has brought the world to the brink of crisis (and beyond) the solution is to continue to do so?

    Now, Boris, I had no idea you were that close to intellectually enfeebled dotage, yourself.

  2. It’s not as though they reduced taxes on the poor. We start to confiscate one-third of somebody’s income when they earn more than about £120. Then we tax them again when they buy clothes, heat their homes, buy a bed and a duvet, etc. etc. etc…… It was not always thus. Forty years ago a man on average industrial wages paid no income tax and only suffered sales taxes on ‘luxuries’. The con has always been to increase taxes but fool us into thinking that Somebody Else will pay them. It isn’t so. The tax bell tolls for thee.

  3. Tiresias: 40 years ago? I was still on pocket money and well aware of prices for food, clothes, etc but woefully ignorant of anything ‘economic’. Was all health and all education really free even for those in work?

  4. Anyone earning more than £150K will now pay half their income in tax. You might think that’s fair enough. But hang on. Let’s say that in UK there are 30,000 people earning £1m a year. Labour was getting around £400k from each of them.

    Now they get £500k from each of them. That’s an extra £3b a year.

    But UK’s debt is £1.4 trillion. Paying this off with an extra £3b is like trying to pay off your mortgage with what you find down the back of the sofa. Not that exactly £3b because half a dozen billionaire might up sticks and leave the country. Lose the really high earners and Labour will end up with less than they were getting before. If you were Chancellor, wouldn’t you rather have 40 per cent of a billionaire’s earnings than none at all?

    The only reason you’d put tax up to 50 per cent is if you were a cretin. Or a Communist. Which is the same thing.

    Jeremy Clarkson, The Sun, 25.4.2009. Brilliant !

  5. A Caribbean takeaway has been ordered to close down for good in 3 day time, under Labour’s new law, because it’s too close to a school. Meanwhile, FOUR police officers ( 1 hen, 3 cocks ) are standing guard outside the poor takeaway to stop any kids from entering the shop. Don’t police have anything important to do? Like arresting suspect terrorists, write down their names and addresses in order to pay them social benefits money? Cool country, aren’t we?

    Check out the photos, folks. 4 police officers standing proudly outside the takeaway !

  6. Mr. Johnsons remarks abou the financial problem being the irresponsibility of the Labour Politicians is somewhat disengenuous. I do agree that the politicians have a GREat deal to do with it, as much as the bankers, but the politicans and banker have been working together world wide, to achieve the dismaying state the country finds itself in now.
    Within a week of coming into power, the Blair administration freed the banks to regulate themselves, and look at the ultimate result. Financial unregulted anarchy, all playing into the entrepenureal skills of the Thatcherite Babes, get rich quick, and ultimately pigs eating pigs.
    Goodwin, the mere tip of the rotten crumbling iceberg, is a prime example of the uncaring greed culture, laughing all the way , dare I say it, to the bank!
    The 50p tax is MINIMAL to what the fat cats have been creaming off the contry’s economy. There should not be a minute wasted on pity, compassion or understanding these untermensch. Hit them with at least a 75p tax and REALLY make them squeal, like the swin they are!
    To come out with a feeble passing of the problem as ‘If we tax them too much, we will lose them to other countries’, is completely welcome. If they are the best that we have had so far, then we will be well rid of them!
    Mr Johnson is still of the priviledged class, out of contact with reality, and a well educated but ignorant buffoon. Let him stick to Have I got News for You, and keep us smiling this way, but he can not be considerd a serious politician, on current record. Politicians these days aren’t to be considerd seriously anyway. They are all feathering their own nests, as soon as they can get an expense account written up ! We’d be well shot of the lot of them and get some proper caring people into Westminster
    like Bremner Bird & Fortune, Mark Steele and thet ilk, but they know better than to sully their hands in that cess pool of lies, duplicity and sychophantic treachery. Plus ca change, as they say in Moscow!

  7. Englishmen abhor waste but admire common sense. Cameron should highlight waste over and over and over again in all its guises. He should appeal to the citizens of this country to join him in this “crusade” including spotlighting the most egregious examples and the recipients and beneficiaries of such waste, aka the bureacratic sponge. Having done that he should dangle the plumb of reducing taxes but improving services. It’s a simple approach (follow it and the election is a shoo in)which is show-casing in London where it has a vocal champion. At last. Go Boris matey!!

  8. “Yesterday a newspaper published the annual list of the 1,000 richest people in the country, and you would have needed a heart of stone not to laugh at the way they have collectively lost billions in wealth.”

    Shouldn’t this read “……and you would have needed a heart of stone to laugh….” Or is this praeteritio again? Who laughs at people losing all their money?

  9. Gill – yes, healthcare and education were free, except for prescription charges. Dentistry was free and there were even NHS spectacles. Social moblity was much greater, partly because our working man’s children could receive a good free education. That wasn’t my point, though. It was that we used not to tax ordinary working people, let alone the poor. Four decades of waste, improvidence and bloated government have forced us to tax people who can’t afford to be taxed, plus the hidden tax paid on food produced under the Common Agrictural Policy. It’s shameful.

    1. Tiresias – you certainly do have a point. If the super-wealthy are going to de-camp and the black-market workforce/trade is increasing, the tax system just is not working. Balancing tax and public expenditure is vital. How we get rid of the fat in the public sector (of which there is lots) could be solved by a backroom of young strategists armed with a whiteboard and some red pens. Winning the hearts and minds of those hard-working individuals who are in unnecessary jobs and who have to be redeployed in a private sector that needs help is going to be a much greater challenge and that’s where Team Cameron is going to need some wise heads rather than just bright heads.

  10. Of course Labour are returning to the class war its the last card they have in their deck…..they will orchestrate a new sense of class before they are booted out of office by the electorate that they are about to devide with this nonsense…..The wealthy will start to look for other places to secure their old age other than pensions which in turn will reduce the overall money in the pension pot and leave middle income pensioners left with a smaller pension pot. Wages will fall from rich employers or they will just lay staff off to keep their profit margins high….which in the long term is a faulse economy but what ever keeps you afloat for now is the opening to a more prudent Britain that will be run by the conservatives.

    And Boris I would like to add to your correlation between the Shakespearean death throws and the The Labour Government……I think it is more the case that they have been reading Dylan Thomas’s “Do not go gently into the night”……

  11. “So, since lowering taxes or keeping them stable has brought the world to the brink of crisis (and beyond) the solution is to continue to do so?”

    Low taxes induced the banking crisis? I think you’ll find it was an abundance of credit.

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