A Good Day To Bury Byers - He Resigns As Minister Of Transport May 2002.In his budget speech in 1988, Nigel Lawson announced that he was cutting the top rate of income tax from 60% to 40%. This meant that in one fell swoop those on top earnings found themselves almost 50% better off - coining it under Thatcherism. The bulk of the Labour MPs in the Commons were incensed at the announcement. Alan Meale immediately shouted out "shame" from the back benches and I was one of a host of Labour MPs who joined in the call. The Speaker was obliged to suspend the Commons, to give us a cooling off period.
The gut reaction of many Labour MPs had changed by 1997, when we were elected on a manifesto which said that there would be no increase in income tax rates. I have always believed that we should have a progressive taxation system. One which provides for reductions in those tax rates which effect the poorer, with increases in the rates that effect the rich.
When I finally made it into a meeting in 10 Downing Street, I raised with Blair the possibility of removing our commitment to there being no income tax increases for the rich, at least at the subsequent general election. To which he replied "Harry, we can't go into a General Election promising to raise income tax." That seemed to me to be a permanent stance, for in a democracy there is always a coming election.
When I later raised the matter at a back-bench meeting in the Commons with the Chancellor, Gordon Brown replied that "nothing is set in concrete". With Alistair Darling's introduction of a 50% tax rate, it has taken some 10 years and a world economic slump to break through the concrete.
Leading the attack from within Labour ranks to the 50% rate is Stephen Byers. From December 1998 to June 2001 he was a disaster as Secretary of State for Trade and Industry. In pursuing his private enterprise ideology, he undermined both of the areas he had responsibility for - trade and our industry. The manufacturing industry which disappeared on his watch would have had the competitive edge today, given the collapse in the value of sterling which makes exports cheaper and imports dearer.
Within the North East Derbyshire Constituency which I represented at the time,he facilitated the dramatic foreign take-over and closure of Biwater at Clay Cross. This was done despite Biwater being economically viable and having booming overseas order books for its ductile pipe production, with an annual turnover of £60 million (at 2000 prices) and a local work force of 700. Nor was he ignorant as to what he was doing; for the details of the workers case was put fully to the Commons, to his Department, to the media, to the Office of Fair Trading, to Tony Blair and repeatedly to himself.
I have no respect whatsoever for Stephen Byer's political views, including his recent attack in the Commons on the belated and modest move to a 50% tax rate.
This is the last time I had a go at Byers.
4 comments:
Oh dear. The left myth about the 40% tax rate in 1988 lives on!
In fact, the overall tax take from higher earners leaped from 19% to 26% of total revenues after Lawson's famous (balanced) budget - leaving more room for tax cuts for lower earners and allowing enterprise and productivity to flourish in an aspirational culture.
As Rafa Benitez would say: "Fact!"
So your 'hammer the rich' nonsense actually means 'hammer everyone'.
Perhaps you could explain why the Labour Party under Blair appeared to comprehend these not-so complicated economic realities, but Labour under Brown hasn't.
Has Labour got dumber? Or is it just desperate to appeal to the anti-capitalist 'core vote'.
On the evidence of your post, I'd say both.
denverthen : The 1988 40% tax rate lasted for 21 years, not just until the next budget. Lawson's budget included the deregulation of the financial sector and led to the (aspirational?) overheating of the economy and rapid inflation. So he resigned. We then went into recession under Lamont. Brown ran the economy in the Blair years and he must have been the person who "comprehended these not-so-complicated economic realities" which then enabled us to make our own contribution to the wider economic collapse. That the very medicine that led to the collapse will somehow now cure us, is a peculiar thought.
Again, I'm afraid this is merely your own party's (historical) propaganda speaking.
The recession of 1991-2 was caused by inflation, sure. And the Tory government (particularly Alan Walters - but not Lawson) should be held to account for allowing the money supply to get out of control. They should have raised interest rates into the bubble in '89, as Lawson wanted. And just as Brown should have done in 2005 to deflate an even bigger one. Of course he wouldn't - it was an election year. But the criminal thing is that he then went on deliberately to inflate the bubble even further while deficit-spending, thus leaving us wide-open when the banks HE deregulated to the point of insanity (not Thatcher or Lawson) failed.
Fortunately, with a new government, the impact on Britain of his diabolical mismanagement might just about, with luck and reason, be limited to 'disastrous', rather than 'catastrophic'.
But the central principle holds true: if you punish enterprise and aspiration with confiscatory taxation, everybody, rich and poor, suffers. There is nothing fair about that, something Blair's Labour party apparently had learned.
But it's a deep lesson that the body politic of this country learned the hard way in the 1970s and early 80s. Labour ditching it for whatever reason won't change that. Hence the slump in Brown-Labour's popularity. His - and Labour's - (undeserved, it seems) economic credibility is shot-through, and rightly-so.
I'm rather saddened that a man of your clear intellect and integrity can't seem to accept these realities.
Best wishes to you sir, nonetheless.
denverthen : I don't accept Thatcherism nor the inheritence of Thatcherism which includes Blair/Brown New Labourism. The worst features are currently being reflected by Stephen Byers. It is "enterprise and aspiration" (under a free hand) which have got us into the current international economic slump. Never have the objective circumstances been more suitable for equalitarian, collective, democratic and socialist solutions to tackle the economic, climatic and social problems the world faces. Unfortunately, never have the subjective circumstances of what goes on in most "opinion leaders" heads been more of a problem. On the one hand we have fruit-cake terrorists and on the other hand we have counter-productive nonsense such as "if you punish enterprise and aspiration with confiscatory taxation, everybody, rich and poor, suffers." If you claim that what I say is Stalinist and depends on brainwahing, then you have missed the point.
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