Labour ‘tax bombshell’? More Arthur Daley economics

Cameron says ‘every working family’ faces an extra £3,000 tax bill if Labour win the election… Hmmm...

The Mole

David Cameron has produced the first dodgy statistics of the “short” election campaign - starting today - by claiming that “every working family” in Britain will face an extra tax bill of £3,000 if Ed Miliband gets elected.

The Tories are planning to wheel out the “tax bombshell” they last used in 1992 when John Major stood against Neil Kinnock and won.

Lynton Crosby, the Aussie in charge of the Tories’ election strategy, has clearly figured out that if it worked then, it can work again now. And he might be right.

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Cameron is going to see the Queen today to formally seek the dissolution of Parliament – his last act as Prime Minister. He doesn’t have to go but he clearly wants to show his authority over Miliband the pretender.

When he gets back from the Palace, he will kick off the Tory election campaign by claiming that Labour will have to raise taxes to find the extra £30bn needed – according to the respected Institute for Fiscal Studies - to balance the books in the next Parliament.

Cameron and Crosby are claiming that at least half that amount will have to be raised in taxes, hence the £3,000 tax bill for every working family. What makes that figure dodgy is that it assumes the tax burden will be imposed uniformally on every family in Britain.

Chuka Umunna, the Shadow Business Secretary, appearing on Radio 4’s Today programme, dismissed it as “nonsense”. He also said he did not accept the £30bn figure outlined by Paul Johnson, director of the IFS, on the Andrew Marr Show yesterday.

However, Umunna refused to give any clearer picture of what Labour believed the shortfall would be and how they would find the money. “I’m not going to spell out a Budget now. You are asking me to tell you what is in a Budget in 2019. I can’t do that.”

The fact is that both sides are using Arthur Daley economics.

Cameron’s threat of a “tax bombshell” looks as iffy as Labour’s claim that every family is £1,600 worse off under the coalition than they were in 2010.

That figure is based on the assumption that people’s real incomes are not rising. Yet they have started to move in the last few months, with wages beginning to outstrip inflation. As Paul Johnson said: “Average household incomes have just about regained their pre-recession levels. They are finally rising and probably will be higher in 2015 than they were in 2010, and possibly higher than their 2009 peak.”

Incidentally, the BBC has produced a chart of the most popular words to describe the voters’ attitude to the general election. Top of the list are 'interested’, ‘excited', 'bored', 'concerned’ and…'confused'.

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is the pseudonym for a London-based political consultant who writes exclusively for The