Anatomy of an announcement – 3 key things Labour can learn from the 10p tax announcement

15th February, 2013 8:47 am

Good policy, Good politics – Yesterday was a good day for the Labour Party

Ed Miliband’s 10p tax announcement was one of the high points of this parliament for Labour. The party’s “lack of policies” is often criticised – not least by me – and always receives a robust response from those close to Miliband, who say that they’ve produced the most policy of any opposition two years in. They cite the bankers bonus tax, technical baccalaureate, plans to build homes with the proceeds of 4G and – of course – the “five point plan”. The problem though is that none of that really punched through.

Yesterday’s announcement did though, leading news bulletins and drawing numerous (often conflicting) lines of attack from (one half of) the coalition.

Better than that, this was a good policy (taxing millionaires to cut taxes for millions) that is also exceptionally good politics. It divides the coalition, forces the Chancellor to produce a giveaway for working people of his own in the budget and puts some Clear Red Water between Miliband and Cameron – and perhaps just as significantly, Miliband/Balls and Brown.

There was a time when these two men would have charged at a hail of political bullets for their Scottish surrogate father – now they came to disinter one of his greatest policy failures. Balls in particular twisted the knife by comparing Brown’s 10p tax decision to Osbornian electoral divide and rule, pitting one group against another. Make no mistake, Ed Balls hates Osborne as much as he once appeared to love Gordon Brown. This wasn’t something he said lightly, and if Brown were watching – wherever he is – it will have hurt.

Perhaps the most impressive part of yesterday’s announcement though was the media management surrounding it. It was clearly meticulously planned – even going ahead when trains were cancelled and travelling from London to Bedford became something of an Odyssey. There was no way this speech was going to be cancelled.

The announcement was managed in three key ways – which the party can and should learn from for future Miliband interventions.

The expectation game – expectations were set rather low for Miliband’s speech. Few expected any sort of major announcement (we did though) and expectations were lowered further when Cameron mocked the speech on Wednesday at PMQs. As one Mili-spinner said yesterday, “David Cameron and Guido did a great job getting expectations lowered ahead of the speech”, and Miliband was able to far surpass them once the announcement was made. A few suspected that there was something coming – and key Miliband advisers alluded to something big in an off the record pre-briefing of the speech to “thought leaders” last Monday – but the full announcement was kept under wraps until the day, so everyone thought it would be a routine speech. It wasn’t.

Genuine policy offer – 10p tax punched through because it helps millions and is easy to explain on the doorstep. It’s also big enough that it can’t credibly be described as just tinkering with the tax code. The Tories will gripe that this was thought up overnight, but as Dan Hodges said yesterday “while Ed Miliband has his faults, a propensity for chucking major policy announcements around with gay abandon isn’t one of them”. Quite.

TV over papers – none of the papers were given the scoop ahead of the announcement. Even the Guardian – who got an interview with the Labour leader ahead of the speech – didn’t get the big announcement any earlier than anyone else. The pre-speech briefing made the speech sound like a typical fluffy and vague One Nation affair. How wrong that was. Holding the big announcement back for the speech ensured TV news coverage through the whole day and stopped what was a major announcement fizzling out by lunchtime. TV is how most people consume their news, and this announcement – especially in terms of the “optics” – was made for TV. And of course once the TV news has started focussing on the announcement, the newspapers have to follow suit on their websites and in the next day’s paper anyway.

Yesterday was a good day for the Labour Party. The policy was smart, will help millions, is incredibly clear and true to Labour values. The announcement was handled well, and it puts the ball firmly in Osborne’s court ahead of the budget.

More days like this, please, Mr Miliband.

  • Monkey_Bach

    Not bad. Eeek.

  • ovaljason

    67p a week. Is this what you are celebrating, Mark?

  • Amber_Star

    This wasn’t something he said lightly, and if Brown were watching – wherever he is – it will have hurt.
    ————
    Mark, Gordon Brown’s ‘mea culpa’ on the 10p tax rate was one of the few times that I’ve seen a politician make a genuine, heartfelt admission about a mistake. Perhaps Gordon is pleased that Ed B has told the media that Gordon went against the advice of both Eds at the time; maybe Gordon is more concerned about the Labour Party being re-elected than about his own UK ‘legacy’.

    • John Ruddy

      I think Gordon would be more concerned about Ed doing whatever it takes to wipe the smug grin off Cameron’s face, rather than any personal ego trip

    • John Ruddy

      I think Gordon would be more concerned about Ed doing whatever it takes to wipe the smug grin off Cameron’s face, rather than any personal ego trip

    • John Ruddy

      I think Gordon would be more concerned about Ed doing whatever it takes to wipe the smug grin off Cameron’s face, rather than any personal ego trip

      • jaime taurosangastre candelas

        Are the two party leaders not equally challenged, in that both have chosen total fools to run, and to Shadow, the Treasury? Balls has no credibility at all from his 10 years in the post, and Osbourne started from a low platform of towel-counting for John Lewis and inputting the visitor numbers in to a NHS computer system, and fell off it precipitately, and between them we now have 13 years of disastrous economic management. I imagine that the University of Oxford is deeply and equally ashamed that both were students there.

        Neither are worth “a candle”.

        • John Ruddy

          What 10 years are you talking about? I think its safe to say that of the 3 big issues during the Labour Government, Ed Balls got 2 of them right – Bank of England independence and keeping out of the Euro. He’s already said that there was a failure of Bank regulation, but then he was only responsible for that for a short while, and of course he regulated them much more than the tories like yourself wanted to.

          Since then, of course, he’s been totally right and vindicated on economic policy. Not that you would admit it.

  • http://twitter.com/SimonG_UC Simon

    A couple of small problems:

    1) The policy is actually no such thing – firstly Miliband wouldn’t commit it as a election manifesto promise and secondly he gave no indication of where it would kick in or extend to

    2) The policy isn’t funded as (sadly) Guido pointed out

    I can give a policy announcement – Free beer for all – but people will soon realise it is as empty as a shadow cabinet members head when looked at for more than a nano second.

    Fact is that all politicians hold no answers. They have no real ideas. They have failed.

  • David B

    The so called mansion tax is not a tax on millionaires it is a tax on people who have had the good fortune to buy a house in an area with high house price inflation over many years.

    Will the threshold be moved up and down as house prices rise and fall or will fiscal drag be used to increase the people caught in the tax.

    Ultimately this tax is a poll tax based on residence rather than ability to pay. The real fun and games will begin when pensioners are asked for 25,000 because of house value. Then the TV cameras will be there to see them being evicted because they cannot afford to pay. I suspect this aspect has not been considered and like the ending of the 10p tax band this is meant to correct there will be a lot of poor headlines and a very fast policy adjustment!

    The whole idea fails your own fairness test.

  • http://www.facebook.com/people/Mike-Homfray/510980099 Mike Homfray

    It was a mistake, but we do need to bear in mind that in our political system we operate under collective cabinet responsibility. This must mean that frequently ministers have to defend policies they privately question

  • markfergusonuk

    The policy is funded – as was made clear on Thursday the 10p tax rate would only be restored to the same amount as the Mansion Tax raised

  • Alexwilliamz

    That’s quite a rise if you are sitting on two mill. My advice sell up, move somewhere pleasant in the regions and live off the massive capital left over!

  • Alexwilliamz

    That’s quite a rise if you are sitting on two mill. My advice sell up, move somewhere pleasant in the regions and live off the massive capital left over!

    • David B

      But why should these people be forced to move when people living in 4 bedroom houses and only using one of them and getting housing benefit should not be? Where is the fairness there

    • David B

      But why should these people be forced to move when people living in 4 bedroom houses and only using one of them and getting housing benefit should not be? Where is the fairness there

      • Alexwilliamz

        Who said anything about forcing, i was suggesting they had a golden opportunity to escape the ratrace. Besides i’m pretty sure this would be linked to rateable value, so no different to council tax. As to your other statement, you seem to be out of date, or will be very soon. Besides if you own a house over two million and as you state most of it is equity then you ARE a millionaire as people quite often point out at milliband. Out of interest what do you imagine the starting value of this two mill property is, as i am guessing that it would still have been way over what most of us could ever imagine affording.

        • jaime taurosangastre candelas

          £20,000 for a £2 million house is a figure being mentioned (1%) annually.

          The problem is that £20,000 is four times the £5,000 that it might cost you to buy a Cayman Islands off-the-shelf company, get it legally assigned to own your property, and keep a clever lawyer on retainer. Pay yourself £1 a month in nominal rent, and when the tax bill is sent to the Cayman Islands, firstly you are a tenant and so not responsible for your landlord’s tax arrears, and secondly certainly not involved in any legal arguments about valuation. So, a one off £5,000 to set up the legal arrangements, and a £1,000 a year to keep the lawyers going. Much cheaper than £20,000.

          This will drag on for years, You as a technical tenant have legal protection from eviction, so long as you pay your £1 a month rent, and the Government will realise it is not worth it, and scrap the ludicrous idea.

          • Dave Postles

            ‘Individual owners of high value residential property who wish for other
            reasons to continue to hold them within an envelope will have to pay a charge to do so.’

            Treasury Consultation Document: Ensuring the fair taxation
            of residential property transactions (May, 2012)

          • jaime taurosangastre candelas

            How very nice and naive of the consultation document. It appears to assume consent is in place.

            First, establish ownership, and then a value involving all sorts of research. That will be expensive for the taxman.

            The taxman may wish all of the individual owners to voluntarily come forward and meekly agree to “play ball”, but life is not like that if you are trying to get people to pay a new and expensive tax. He’ll have to go and find them, all around the world in little tax havens and asset holding companies with opaque ownership.

            This mansion tax appears to be ridiculously easy to get out of.

            I don’t mind the principle of this particular progressive tax if a value is unchallenged (which they will not be), but as a practical policy it is simply stupid, and should be “ditched” as it is demonstrably stupid and will make Labour appear to be naive and not worthy to govern.

          • Dave Postles

            RTFM.

          • Dave Postles

            RTFM.

          • Dave Postles

            RTFM.

        • Dave Postles

          ‘The Liberal Democrats are considering an assault on pensioners’ anomalous tax privileges by imposing national insurance on any earned income, and capital gains tax on property or assets sold at death.

          The proposals are in addition to a mansion super tax that would cover all property assets including second homes. The ideas are set out in a
          policy consultation paper due to be put before the party’s spring
          conference next month.’

          [Guardian online]
          Cable seems to be laying the ground to be ambiguous about Labour’s mansion tax proposal if the details are purely ‘political’.

      • Dave Postles

        No doubt you have an example from the Tory press about the 4-bedroomed house with a family only using one of the bedrooms. On the other hand, the situation is that that contravenes the regulations for housing benefit. You are not supposed to have more bedrooms than are essential. There have been cases of divorced parents who are not allowed to have a spare room for when their child visits. Single persons are only allowed to have one bedroom if they are on housing benefit.

        How many OAPs are there who are what you and JoeDM define as asset rich and cash poor? Do you have any data? According to the newspapers, many of them are second homes. Anyone who could afford a £2m-house, is likely to have a fair-sized pension as well. As Alex indicates below, it is fairly easy to convert this sort of asset into liquid capital by equity release.

  • Dave Postles

    Just like the £75k for social care just proposed, the Treasury concedes that the payment can be deferred until after death or the property is sold (Treasury Consultation Document: Ensuring the fair taxation
    of residential property transactions (May, 2012)). It has been investigated quite thoroughly, but its implementation was prohibited by Cameron as prospectively alienating his supporters.

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