Home Insights Sailing with a ‘fair’ wind behind you – Autumn Statement comment

Sailing with a ‘fair’ wind behind you – Autumn Statement comment

By Ensors Team
3rd Dec 2014

I have no particular interest  but, like many other sports in which I have no interest, I tune-in approximately once every 4 years IF it appears that Great Britain may be about to take a medal in the Olympic Sailing. This sort of “fair weather” spectating has a drawback in that I do not really understand what is going on and therefore rely on the commentary team to tell me whether things are indeed looking Gold-en for the plucky Brit, or whether it is time to click a button on the remote. 

However one tactic that stuck with me was that it is possible, quite literally, to take the wind out of your oppositions sails. It is a tactic that works best if you are already ahead on points and the pressure is on the opposition to win that day. Taking the wind out of his sails at the right time may mean that you both fail that day, but you win by default as he is then unable to catch you overall.

Looking at the Labour Party and it’s hopes at the next General Election, I do not think even their most fervent supporter could have said that they had a strong wind behind them. Having seemingly lost the economic argument, any momentum they had was fuelled by a slight breeze behind a fairness argument – the lower paid have suffered the most, millions more people now pay higher rate tax, people with valuable properties should pay a mansion tax. 

Given that the Conservatives are also struggling to find any sort of current to carry them along, the deficit remaining too high for any vote-buying giveaways, the Chancellor used what little room for manoeuvre he had to becalm the Labour boat.

Any arguments about how the lowest paid are being left behind as Britain “recovers” are to be defended by reference to the increase in personal allowance to £10,000 now, £10,600 next year and the promise of £12,500 to take everyone on minimum wage out of tax completely.

For the first time in 5 years this increase will also benefit those who pay higher rate tax in that the basic/higher rate tax threshold will also increase.

And finally, there is to be a complete overhaul of Stamp Duty Land Tax which in one swoop:

  • Removes the (frankly ridiculous) slab system of tax that has been the cause of so much hostility over the years AND
  • Taxes those with the most valuable properties significantly more, meaning much of the benefit that Labour were reaping from Mansion Tax proposals will be diluted.

Rather feebly Ed Balls’ response to the Autumn Statement included the rhetorical question “now (the Chancellor) has accepted high-value properties are being under-taxed why won’t he match Labour’s commitment to an annual charge on the most valuable properties?”

I immediately thought that the honest answer to the question was “because we have enough ridiculously stupid ideas of our own without adopting one of yours”.

So I am afraid that for Ed Milliband (after his poor showing at the last Budget) the Chancellor has once again “won on points”.