On July 1st 2014 Greg Mulholland, Lib Dem MP for Leeds North West, had a chance to show where he stands.
He had a chance to support those who think it is obscene that it is alright
– not only to make the poorest pay for his government’s austerity politics
– but also to give the highest earners a 5% tax cut.
He blew it, just as he has done before!
In his budget of 2013 Chancellor George Osborne, with wholehearted support from the Lib Dem’s Chief Secretary to the Treasury, cut the top rate of income tax from 50% to 45% for those earning more than £150,000 per year. Ed Miliband and Shadow Chancellor Ed Balls criticised this ‘giveaway budget’ that would benefit not just high earners but millionaires – like those sitting on the Coalition front bench including David Cameron and George Osborne.
Greg Mulholland voted in favour of that Income Tax cut for the rich.
In January 2014 Balls committed the Labour party to reinstating the 50% rate after the next general election. Balls said, “For the next Parliament, we will restore the 50p top rate of tax for those earning over £150,000, reversing this unfair tax cut for the richest 1 per cent of people, and cutting the deficit in a fairer way.”
The Labour party’s 50% income tax reversal policy has been attacked. Its critics have argued that the 50% tax rate actually does not deliver much revenue to the Treasury. But the evidence for this argument has been scant and, such as it is, much contested.
So on July 1, Ed Balls and his team decided to put the matter to Parliament.
The aim was to inform you – to cast some light on the situation and to reassure the public that Labour’s commitment to the cut is properly costed.
The opportunity was provided by the passage of the Finance (No. 2) Bill through its Report Stage and Third Reading stage.
Shabana Mahmood, Labour’s Shadow Treasury minister, moved to have a new clause placed within the bill.
The clause, if approved, would have required the Chancellor of the Exchequer to publish a report on the additional rate of income tax, i.e. from 45% to 50%, within three months of the passing of the Act. In particular and in layman’s terms the report would have been required to show the impact upon the Exchequer receipts of:
1. setting the additional rate at 50% in the tax year 2015-16, and
2. reducing the additional rate for 2013-14 on the amount of income tax paid by all people who are liable for the additional rate, those with taxable incomes of over £250,000 per year and those with taxable incomes of over £1,000,000 per year, and
3. the reduction in the additional rate for 2013-14 on the level of bonuses awarded in April 2013 to employees in the financial sector.
To repeat, all that the motion sought to do was to require the LibDem/Tory Coalition government to provide official data concerning the fiscal costs and benefits of the cut to the top rate of income tax and its possible reinstatement.
The Institute for Fiscal Studies joined Labour in saying that more research, data and analysis are necessary if we are to get a complete answer on the issues of data and yield relating to a 50p top rate of tax.
The aim was, as we said above, to inform YOU – to ensure you had the full facts here.
Greg Mulholland was at Westminster on 1 July. He took part in the vote – and he was amongst those who voted against Labour’s motion.
He was in excellent company – trooping into the lobby with the likes of that scourge of food bank users, Iain Duncan Smith.
We’ve not yet heard why Mr Mulholland voted against the motion – we doubt we will.
Until we do, however, we can only assume
– either that he is against forming fiscal policy on the basis of clear information
– or that he wants to make it clear that when push comes to shove he’s on the side of the rich.
Alex Sobel, Labour’s candidate in Leeds NW, commented.
‘At a time when Save the Children are forecasting that 5 million children will be living in poverty by 2020 if the Coalition continues – and when middle income earners are paying the highest percentages of tax – isn’t it fair that the wealthy pay their fair share?
If I was in Parliament today I would have voted for the amendments to the finance bill – to ensure that we could lift children out of poverty – and to ensure that we don’t condemn their families to foodbanks and life on the breadline.’
Just to remind you – all Labour was asking for were facts and figures out there for you to see.
Perhaps what Mr Mulholand is also against is you being fully informed when you cast your vote in May 2015.
But we’ll be working on that one.
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