Once again New Labour are breaking their own rules. This time the target is their own pledge “not to raise the basic or top rate of income tax” which went into not just one, but three successive manifestos and survived the transition from Tony Blair to Gordon Brown. In his pre budget report Darling is expected to announce a new 45p income tax rate on those earning more than £150,000 a year which will undoubtedly ruffle a few feathers. Furthermore he will announce a fiscal stimulus of up to £20 billion which will be subsidised by you guessed it: higher public borrowing. By increasing state borrowing from 70 to £120billion to rescue the economy from the downturn, as well as breaking his long-held vows on not increasing income tax, Brown and Darling have torn up their own rule book once again to stake their political future on their economic leadership, which at best is oppourtunist.
I believe this latest stunt shows he has been taking one to many lessons from Barack Obama. New Labour once prided itself on embracing the wealthy and the middle classes, indeed in many ways their ‘Prawn cocktail’ offensive which wooed City Fat Cats was why they won the 1997 election, however now, watching Obama win a landslide promising to tax the rich to kingdom come, Brown is tearing up his own rules for the sake of his political future. What makes me believe that this is nothing more than an electoral stunt is because by aiming his tax hikes at the rich the Tories are faced with a starke choice: defend the rich and risk being labelled elitist (when really all we want to do is reward not penalise success!) or back it and risk alienating a large swathe of middle england, the wealthy and their own backbenches and grassroots. Furthermore this extra tax burden would not come in to play until 2010 which is likely to be the year of the election. Very clever Mr Brown.