‘Stealth Socialism’ exposed

£Billions for banks

It’s been a torrid day for the Government with no clear outcome. A Tory in the Chamber this afternoon dredged up the stale jibe of ‘stealth taxes.’

I was called after him and highlighted Labour’s main achievement of Stealth Socialism. A long litany of money-moving measures has shifted wealth to the poorest, taking millions of pensioners and children out of poverty. It’s ‘Stealth’ because we do not want the Daily Mail to hear about it. They take a stern line with shifting wealth - from the rich to the poor at least. But it’s Labour’s greatest achievement.

Now we are in fix because we have taken money from the low paid to reward the average and well paid. It cannot be justified, excused or dodged. What we need is a clear statement with a bankable promise that action will be taken to restore the money lost.

In the Commons Chamber, I expressed the bewilderment of my constituents after the announcement of the £50 billion to shore up the banks. I asked ‘How is that there are always tens of £billions available to rescue banks from their own incompetence or to pay for an unplanned war with Iraq, but the Labour Government with its brilliant record of re-distributing wealth cannot give a cast iron promise to correct a serious error which is impoverishing low income families?

Alistair Darling’s reply was not helpful. It was reassuring to get an e-mail from two non-constituents agreeing with the point I made. There is a point in speaking in the Chamber after all.

The parliamentary Labour Party is a private affair so I will not directly quote anyone. Nevertheless, I am sure the morning papers will. It was not a punch-up but a reasonable debate. The uber-loyalists appealed for unity – curiously for the sake of our Council Election candidates. They are the ones demanding a volte face in my experience.

The majority of speakers made heartfelt pleas for a change of direction. They are wounded by the loss of trust from life-long Labour supporters. There was anger that the effect of the 10p change has been wildly exaggerated. One MP told how he had taken to the CAB six of his constituents who believed they were about to lose money. Only one is. The rest are gaining.

The dire threat of the horrors of a Government losing a Finance Bill was spine chilling. A revolt on Monday is tonight slightly less likely that it was this morning.

The 40 of us who have signed Frank Field’s amendment will not be frightened off by whips' scare stories about the Government falling. They used the same threat to try to persuade us to vote for the Iraq War. 139 Labour MPs voted against. If we had won that vote, nearly 200 British soldiers who have fallen would be alive today.

If the Government lose a vote, there will be a vote of confidence next day. None of the 40 will side with the Tories then. We must get across to the Government the deep sense of anger and betrayal felt by this foul-up.

Hansard reports

Mr. Darling: To explain it in simple terms, the Government are effectively lending money through the Bank of England to the banks. In other words, that money has to be repaid, so the position is rather different.

Paul Flynn (Newport, West) (Lab): There is money available—tens of billions—to fund the banks because of their own incompetence, and money was available, which will not be repaid, when we had an unplanned war against Iraq, so surely a Labour Government with a brilliant record of stealth socialism in their redistribution of wealth to the lower-paid for the past 10 years can find a mechanism to ensure that those who will lose out because of the abolition of the 10p tax rate will be compensated.

Mr. Darling: As my hon. Friend acknowledges, the Government have done a great deal for people during the past 10 years, particularly those on low incomes, and as I said yesterday, we will continue to do so. It is essential that we put in place the plan before us today because many people in this country, including those on modest incomes, depend on being able to get access to mortgages, and on mortgage payments being kept as low as possible.

Comments

[Observer]

The 10p change is indeed a strange direction for a Labour government to take with its natural voter constituency, and one that is hard to justify by the standards of any political creed.
As for the M.P. who tries to claim the effect is much exaggerated / misunderstood, let him take a look at the BBC's Have Your Say website on this issue. Read the despair of over 5000 (!) respondents
That's some reaction.

[Bedd Gelert]

Don't capitulate !!

If they win the vote, fixing the problem will be ignored for a few more months, and a solution will be kicked into the long grass.

Only the bad headlines [albeit only for a day] will make the Government realise that this is a 'thus far, and no further' moment.

This is the only language that they have ever understood - a rebellion where the majority is merely reduced will be a damp squib which makes no headlines whatsoever.

[rwendland]

I find this 10p change a difficult one, because at the same time child tax credits are going up by a big step. I don't agree with removing the 10p band, but I think the effects have often been overstated.

For example I think you are wrong in saying "impoverishing low income families" above. Child Tax Credit has been increased well above the rate of inflation. By my calculation the per-child element has been increased by 13% (£1,845 to £2,085), and the deduction income threshold has been increased by 23% (£5,220 to £6,420). So I'd guess that no 2 child family (and few if any 1 child families) would lose out overall provided they claim the tax credits they are entitled to, and in fact most low paid families will be quite a lot better off.

Single people and childless couples (below 65) seem to be taking most of the hit, and families with school age children and 65+ pensioners are benefiting in general. I don't think that part of the change is so terrible. Not so sure about benefiting mid-income folk with the 22% to 20% change though.

It would help in working this out if the DWP had produced the 2008 Tax Benefit Model Tables by now, as it would be easy to compare the situation for many sample families:

http://www.dwp.gov.uk/asd/tbmt.asp

Sorry that this is a rare occassion that I'm not sure that I back your position on a policy.

[Chris]

rwendland, the problem and the unfairness is that already poorly paid people, who just happen to be single and/or without children, are being made poorer at a stroke by this change.
Nobody minds children and families being helped but penalising single, childless people (whilst the very richest and those who don't need extra help benefit) is simply a step too far.

[Jolly well pissed off Roger]

Having just received my Notice of Pension,
There's just one thing that needs a mention.
My Tax has doubled, that's no lie,
As I continually struggle, just to get by.
I had been saving for a weekend break,
But that's now a break that I just can't take.
Darling seems to need it more.
To fill Labour's ever gaping maw.

As a member of the 'untermensch',
I'm not suprised at this latest stench,
Of Labour at it's absolute worst.
We truly are NuLabour cursed.
Their cowardly attack is on the weakest.
Their Earth is not for inheritance by the meekest.
In May's elections, I hope they lose,
By the lack of votes from those they abuse.

I appreciate your principled stand,
But it hardly helps with cash in hand.
All that I hear is "Jam tomorrow",
This helps me little with my holiday-less sorrow.
So next time you're off on your holiday jag.
Is there any chance that I can carry your bag?
That's just about all that's left to me.
I'll just help to pay for your holiday spree.

[Paul Flynn]

Sorry I have been out of action all day - reading the comments on my Blackberry. Thanks to rwandland for a fair assessment and for less-than-jollyroger. Saying there were good things in the Budget is not audible at the moment because of the disbelief about the 10p tax.. The sense of betrayal and outrgae runs deeps - and understandably so.

My 'holiday jag' Jolly Roger is a 7 year old Skoda with 135,000 miles on the clock.

[Paul Flynn]

Nick Meakin, that's a horrible conclusion you have reached.

Yes there have been disappointments.In 1996, I said we would win the election and lose the party. That has almost become true.

But work out where pensioners would be if the Tories had been in power since 1997, basic pensions would be less than now, no pension credit, no winter fuel allowances, no free telly licences and a lot else. The Tories 'cut' the basic pension in 17 of their 18 years in power. Disappointing? Yes. But as bad as Tories????...Never.

[Paul Flynn]

Observer, there is a campaign by the Tories to claim how much each low paid job has lost. This is as alarming as the Sun claim that Labour would charge everyone an extra £1,000 in tax. This put the wind up the nation - including millions who paid no tax at all.

Yes I believe that some who are complaining will discover that they are not losers when their monthly pay check arrive. Of course, many others will lose.

[Jolly well pissed off Roger]

The 'jag' is in the lower case.
It's not the Skoda that you efface.
It's unrestrained activity or emotion.
I wonder where you got that Jag notion.
Nevertheless my holiday's gone.
And at the risk of keeping on,
Wish you to know that my loss is now.
Whilst Darling milks the Public Cow.

Jam tomorrow's no use to me.
I'll have to see what's cheap for tea.
Of course, that's none of your concern,
Considering the wages that MPs earn.
The cost of food, heat and fuel just rockets,
Whilst Darling continues to empty our pockets.
He's blundered big-time with this move,
Which May's elections will surely prove.