Guess who is the longest running PG Wodehouse character? Tony Ring knows and I hear Norman Murphy shouting the answer from heaven.
Stanley Featherstonehaugh Ukridge is our man. PGW wrote stories about him from 1906 until 1966. Get-rich schemes are his speciality and he tries to convince his richer friends to participate. “There are wheels within wheels, old horse” Ukridge confides mysteriously and it’s a handy phrase if one wants to be less than candid; ideal for aspiring MPs facing their electorate.
Labour Shadow Chancellor, John McDonnell, shares Ukridge’s love of cooking up financial schemes. While he was lying in the bath he had a Eureka moment for the Labour manifesto. He worked out that most voters earn less than £70,000 a year, ergo if you raise taxes for those earning more than £70,000 most voters will not be affected and will happily vote for this. Then, after he had chased the soap around, he had another idea. Companies don’t vote so why not raise Corporation Tax too? Then there will be plenty of revenue to hand out to the people who vote Labour.
It is a particularly dangerous moment for Labour to adopt such a suicidal fiscal policy. Lowering tax rates increases revenue, increasing them incentivises people to use every trick to avoid paying them. Higher Corporation Tax will make it even easier for companies to decide to move to the EU. The good ship UK is entering choppy waters in negotiating Brexit and needs to woo businesses, increase employment and productivity and increase tax revenues.
John McDonnell has called the Conservatives liars. The Conservatives have ruled out raising VAT but have not explicitly said they will not raise tax or National Insurance. They hope not to, but in the uncertain times ahead must retain this flexibility. I think that they are being honest and realistic.