Political Theatre: Using the Media to Campaign for Tax Cuts

Graham Bell, 26 September 2011

Categories: Finance | Politics | Conservative Party | The Telegraph |

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Early in September the BBC news reported on those calling for the 50p tax rate to be cut, by giving an enormous amount of attention on television, radio and online news to a letter sent to the Financial Times and signed by twenty people who wanted the top rate to be scrapped. This followed the regular calls from the right-wing press to cut tax for the wealthiest people in Britain. The coverage of the story was perhaps disproportionate given that the change being called for would not affect the majority of the population (just 1% of taxpayers, according to the letter to the FT, are subject to the top rate), but, regardless, it became the day's headline story. The premise of the letter was that the tax rate ‘damages the economy’.

The signatories of the letter included economists from Universities in Cambridge, Cardiff, Leicester and London, and from the Monetary Policy Committee (part of the Bank of England). Two economists from the consultancy group Volterra also signed the letter. It is worth noting that Volterra Consultancy advised was consulted by the Department of Health and the NHS to advise Andrew Lansley about “the impact of competition and choice on quality of care received by patients”. Volterra's Nick Bosanquet regularly blogs about the NHS, calling for “more choice and competition”. The signatories of the letter, like those who feature in so much news about government policy, are unaccountable, unelected individuals.

The public calls for cutting the 50p tax started some time before the appearance of the letter, and included Boris Johnson on the 26th July. On reporting this, the Telegraph included figures to demonstrate poor growth data, presumably in an effort to relate it to the 50p rate. Johnson was referred to as an “increasingly outspoken critic of the Coalition”, which gives the impression that the policies of the government are subject to regular challenge. By the next weekend, a Conservative ex-chancellor also called for the abolition of the 50p rate. Less than two weeks later, and just days after the UK riots, a demonstration of the widening equality gap, George Osborne referred to the taxes as 'economically inefficient'. Interviewed on The Today Show on BBC Radio 4, he stated that he had asked the Inland Revenue to assess 'whether [the 50% tax] is raising money or not'. While a layperson may not know the exact amount raised by taxing 50% of salary payments over £150,000, one would no doubt be able to take a wild guess as to whether it raises money or not.

It is likely that hundreds of millions, or even billions, of pounds are raised from this tax. Regardless of how much the tax generates, such a cut in tax would see the wealthiest in society being rewarded while the poorest of the country continue to be punished for the financial irresponsibility of some of the highest earners. That the media have taken such an anti-tax approach in this case is hardly surprising in a society with such heavy corporate control of the media. The London Evening Standard summed up how the corporate press feels about the 50p tax rate: “Now he [Boris Johnson] has made a wider case for tax cuts as a way to stimulate growth. This paper agrees that we must be aggressively pro-enterprise.”

The debate about the abolition of the tax rate in the media focuses on whether high-earners will stay or leave the country, and whether the tax rate will hinder competition. That it may have been the desire of the Coalition government from the start (and very much fits into the ideology of a neoliberal conservative government) is not discussed.

A clever PR campaign, with the letter reported by The Telegraph before its publication in the Financial Times, has opened the debate with a case for cutting the top rate. News articles have connected the scrapping of the rate with proclamations about competition and economic health, and thanks to the media, those who favour the tax rate can be depicted as careless and irresponsible when it comes to economic matters. The whole debate is unravelling as a sort of political theatre in which only those with the prescribed ideology can partake.

Categories in which this article appears: Finance | Politics | Conservative Party | The Telegraph |

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