Among its extensive list of New Year’s resolutions, the Labour party would have presumably included: “Try to win back an ounce of economic credibility”.
Under the hapless leadership of socialist fanatics Jeremy Corbyn and John McDonnell, this once-proud party has plummeted in the polls, with a survey late last year revealing that just 18 per cent of voters trust Labour to manage the public finances. The Tory leadership, despite widespread daily criticism of its handling of Article 50, was trusted by 44 per cent of respondents.
But if Labour was hoping to turn a new leaf, 2017 has not started particularly well. Earlier this week McDonnell’s team released a statement with the breathless headline – “NEWS FROM LABOUR: Hammond’s £5.4bn tax giveaway to big banks”. Sounds exciting, even scandalous, no? Unfortunately, nearly every word is completely incorrect.
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Firstly, the figures included in the statement are not “news” – or at least not new news. They are from November, published in the Office for Budget Responsibility’s outlook which accompanied the Autumn Statement and was widely perused in both Westminster and the City at the time.
More importantly, Labour has muddled them up. The £5.4bn headline is the result of an embarrassing mistake in McDonnell’s back-of-fag-packet calculations. His shadow Treasury team, the people who want to control Britain’s multi-trillion-pound public finances, tried to add up five simple numbers (estimating income from the bank levy), yet somehow put the figures in the wrong columns and ended up £1bn out. Oops.
The correct number is £4.4bn. So what is this “tax giveaway”? It’s the difference between projected bank levy takings before and after George Osborne announced he would gradually replace the levy (a tax on balance sheets) with a surcharge (a tax on profits). Between the current fiscal year and the end of this parliament, the government will earn £4.4bn less from the bank levy. However, it will pull in an extra £4.7bn from the new surcharge. Rather than a “giveaway”, the numbers reveal an extra £300m to be paid by banks.
With the UK on the brink of historic change, the country needs a strong opposition more than ever. Yet Labour, instead of bothering itself with the finer details of the Brexit process, has started 2017 by spewing out silly and error-riddled attempts at banker-bashing. To save their party, Labour MPs must – somehow – find a way of toppling McDonnell and Corbyn before the year’s up.