It was a case of choose your headlines and take your pick on Sunday, when Labour announced their first tax pledge of the campaign. Depending on which paper you bought, the news was either “no tax rise for 95% of people” or “taxes set to soar for £80k earners”. Both of those statements are true, and the fact that the news caused such a furore tells us a lot about the challenge Labour face on tax.
Whilst Theresa May and Philip Hammond seem set to make no pledges to keep taxes down, they will get away with it in voter’s minds because broadly the electorate believe their instinct is to keep taxes as low as they can. The fact that Corbyn and McDonnell are perceived to want to tax-and-spend puts them under more pressure to make promises to restrain tax rises. Yet when they make such promises, as they would argue they did on Sunday, all of the focus goes to the gaps in the pledge. And Labour are left with more headlines talking about tax rises, even when few would be affected.
This problem for Labour has been there for generations, and Blair and Brown dealt with it by locking down the whole issue with cast-iron commitments not to put them up. That was (just about) deliverable with the growing economy of their times in office, but it’s simply not credible in this age of budget deficits and austerity. There is no easy answer to this, but as a general rule of thumb if the debate is about tax the Tories are winning and Labour is losing. And looking at the polls, there’s no doubt that’s the case in 2017.