Party Political Animal

Posts Tagged ‘Prescott’

Here’s a fact: inequalities in income under this government have got worse, both before and after tax. To put matters more brutally: the rich have got richer under Labour – relatively, while the poor have got poorer. And after the abolition of the 10p tax bands, things will get worse.

Delve into the more arcane recesses of the HMRC website and you will find a table showing that between 1999-2007, the pre-tax share of income of the bottom 1%, 5% and 10% and 25% and 50% of earners has fallen – while the share of the top 1%, 5%, 10%, 25% and 50% all rose. The after-tax figures make little difference.

If you don’t believe me, look at the Commons answer on the subject from Treasury minister Angela Eagle for July 17th 2007. I’m glad that Angie was forced to choke out that reply, because the rise in inequality under the Tories was a rallying cry for old Trots like her.

In fact movements in inequality varied in the Tory years. Overall, though, Angie and her gang had a point. Income did become more unequal between ’79 and ‘97. The excuse – and it was a decent one – was that the Conservatives began by dismantling a penal tax regime and that economic reforms delivered massively improved prosperity across all income groups.

In fairness, this government has also delivered an overall increase in wealth – up to now, anyway. But they have little excuse for increasing inequality. So what went so wrong?

First, they promised what they could not deliver. To take one small example, Gordon Brown came to the Treasury in ’97 on an election pledge of taxing the non-doms. Non doms are, as we know, often very rich people who live in this country but pay no tax. Yet nothing happened for a decade – and we all know what happened next.

Then, in an attempt to produce a “fair society”, Brown micromanaged the tax system by introducing a new 10p tax band and tax credits.

The theory behind tax credits is good. The interaction of the tax and benefits system often disincentivises people from going to work. The Tory government struggled with the problem and didn’t really come up with answers.

Tax credits for less-well off workers and families address the problem – in theory. In practice, the tax credits system has been so complex that even the HMRC don’t seem to understand it. Over-payments suddenly reclaimed and under payments not remedied have left thousands of poorer people in a desperate state.
Five years ago Treasury minister Dawn Primarolo admitted “the system has not worked 100% right from the word go”. It still isn’t. Did someone mention joined-up government?

Overall, Brown’s obsessive tinkering with the tax system has mirrored his U-turns on capital gains tax, pensions and savings policy, all of which has been a bonanza for accountants and tax lawyers – without addressing inequality.

And now they’re supposedly concentrating on the 20p band to “simplify” the system. Yeah, right! The truth is that Brown failed to save in the fat years, so now the lean times are coming the government is skint and needs to tax the poor to raise some dosh – at just the time when the economy needs a bit of consumer spending

No wonder poor John Prescott tried to eat himself to death. “Things can only get better..” – remember the new Labour anthem of 1997? Wrong. They just got worse.

Phillip Oppenheim

Only two people hit me in my 14 years as an MP. One was Anne Widdecombe and the other, John Prescott – I’ll leave you to judge which was scarier.

Prezza whacked me while I was waiting for a cup of tea and sticky bun in the Members’ Tea Room queue.  The Big Man was irked by my reference in the House to his performance at a motor industry dinner (we had one then – a motor industry, I mean) where he had thrown a hissy fit over not being seated at the top table.

That was 1992, just before the election. Prezza was opposition transport spokesman and had been seen tearing a strip off the waiter for seating him at a table which was apparently beneath his dignity.

The fashionable joke among a certain type of Tory MP at the time had been to bray “G and T steward” every time Prescott spoke in the Commons – he had begun life as a cruise ship steward. So after the motor industry dinner debacle, a rather obvious line of faux-sympathy presented itself about Prezza finding himself on the other side of the table etc etc.

All very cerebral – and Prezza’s response was in kind. He sought me out like a rather turgid, but dogged Soviet-era heat-seeking missile.

“You are a f******g Tory c**t – and your mother was a c**t too” was roughly the line he took, before building up to a massive haymaker of a punch, which thankfully glanced off my shoulder before landing its full impact on a sturdy hot water machine which, I’m told, bears a hefty dent to this day.

The saga somehow got onto the front page of The Times, adding to the impression that whatever the shortcomings of John Major’s new regime, Kinnock’s crew were just not up to government – which, of course, was the general aim of the whole Prezza-baiting episode, run by a Tory Whip’s office hit-squad called “Q” under the direction of none other than David Davis.

At the time Prezza was more generally worshiped by the media, a pack of middle-class boys and girls with a collective guilt-thing about proletarian lads like Prezza. And in opposition, of course, it was easy for the Big Man, who just had to turn up to transport disasters and blame it all on the evil, blood-sucking Tories.

I, on the other hand, always knew Prezza was a thick goon. And so it proved when he finally made it into government where he became Tony Blair’s pet-working-class hero – and pretty much single-handedly kept the Tories alive by his performance as deputy-PM.

And it got worse. Not only was he the most hopeless minister in living memory – and God knows there was some tough competition, and I’m not just talking Labour ministers. But then in 2006 the story emerged of the affair with Tracey Temple, his secretary. Already too much information. And now, this!
Dear old Prezza – in so many ways a metaphor for everything that has gone wrong with the brave, new Labour world. Pass the sick bag.           

Phillip Oppenheim