Driven by data; ridden with liberty.
Labour leader Ed Miliband has pledged that a tax on bank bonuses would help endow a ‘jobs guarantee’ scheme for young people throughout the next Parliament. The party also intends to reduce pension tax relief to fund their plans. Less than a month ago, the proposal was said to only last for one year, even when it was described as the “centrepiece and foundation stone” of Labour’s economic policy. In a 2009 speech, then-Chancellor Alistair Darling described the tax on bank bonuses as “a special one-off levy of 50% on any individual discretionary bonus above £250,000.” Despite estimates of raising £550m, the tax had a net yield of £2.3bn.
(Video: Press Association; Published: 14th March 2011)
Back in that strange parallel universe called 2011, The Guardian described Labour’s vague plan “to support growth in the economy” with a bank bonus tax. This was later delineated to propose help for young unemployed people and subventions for the construction industry. Labour promised to cut the VAT on petrol. This tax was also pledged towards reducing Britain’s deficit.
In 2012, Labour pledged the Regional Growth Fund would be increased by £200m. Shadow Business Secretary Chuka Umunna dipped his hand into this tax pool, utilising £5m to “transform units that are already empty into cultural, community or learning centres”. Even the central spending has changed, as what was once a “fund for youth jobs” has now evolved into the ‘compulsory jobs guarantee’. Unsurprisingly, Patrick Worrall of Channel Four’s Fact Check found “Labour has over the years suggested using £2bn from a bonus tax to cover at least £2.5bn worth of projects.”
Despite the morass of policies dependent upon a bonus tax, Labour have sought to curtail their own promises by demanding banks cut discretionary remuneration. Mr Umunna said: “The public rightly expects the culture of excessive bonuses must stop.” When Chancellor George Osborne rejected the upper limit on bank bonuses exercised by the European Parliament, the Shadow Chancellor Ed Balls mocked:
It tells you everything about David Cameron’s government that while Labour are [sic] saying ‘let’s get energy prices down for families, let’s help families with childcare, let’s get people back to work’, he’s sending his chancellor to Brussels to stand up for bankers and bankers’ bonuses.
It tells you everything that Labour appears to set policy by tarot card readings.