Class war is no substitute for efficiency

Class warfare is still alive and kicking in the UK, albeit in ways that warriors of old would hardly recognise

Class warfare is still alive and kicking in the UK, albeit in ways that warriors of old would hardly recognise. The debate and violence that accompanied the ban on fox-hunting must have mystified many an outsider but is best explained by the attitudes of many of those who sit on the government's back benches.

The old men of the left have forced through the ban on hunting, bizarrely seeing it as revenge on the class who gave birth to Thatcherism and the defeat of the miners. Weird as this seems, sympathy for the poor old fox has nothing to do with the decision to stop hunting it.

Irish entrepreneurs take note: selling hunting holidays in Ireland should be a guaranteed moneyspinner. I have registered westbritholidays.com if anyone is interested in buying it from me.

Another echo of battles that raged long ago came from the Liberal Democrats, who will now go into the next general election as the only party committed to raising taxes. Or, putting it another way, they are the only party honest enough to admit that taxes will have to rise to meet existing spending plans, let alone any additional ones.

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The proposal to raise the top rate of tax to 50 per cent for anyone earning over £100,000 (€146,000) will, according to the Lib Dems' Treasury spokesman, affect only 1 per cent of workers and raise the princely sum of £5 billion.

This is just another mean-spirited attempt to hit all those nasty people who the Lib Dems, and many within the Labour Party, believe unjustly earn too much money.

Lady Williams of Crosby said it was "right" to ask the well-off to "contribute a little more in tax, so that less well-off people could send their children to university and ensure proper care for relatives".

All very noble stuff and is very reminiscent of left-wingers like the ex-Cabinet minister, Clare Short, who said on several occasions that she, and other high earners, "should pay more taxes". Somebody should point out to these people who think their own taxes are too low that they are quite free to pay more, if they so choose. The Chancellor will happily accept cheques or cash.

In the unlikely event that they get the opportunity to implement any of their policies, a £5 billion increase may not even materialise and, in any event, is neither here nor there. Total public expenditure will come close to £500 billion this year; that's up over £100 billion (in real terms), or 27 per cent, since Labour came to office.

And few of us have spotted an increase in the quality or quantity of public services. People would be much more impressed - and willing to pay higher taxes - if somebody could explain how the money can be spent effectively and not wasted.

As a matter of fact, we have had loads of tax hikes in recent years: our stealth tax-and-spend chancellor has been implementing a Lib Dem agenda for quite some time. Any party that can credibly claim a cost effective method for improving public sector provision will win the next general election.

Raising the marginal rate of tax in a high profile way is an act of envy. It also reveals just how short some people's memories are. When Arthur Laffer first drew his famous curve on a dinner table napkin showing the circumstances under which tax rises can be self-defeating, the US marginal rate of tax was 70 per cent - and it had come down from 94 per cent. Present at that dinner (in 1974) were three other people, two of whom were Dick Cheney and Donald Rumsfeld, which explains why the first thing George W Bush did on taking office was to cut taxes.

They still see high marginal tax rates as a bad thing in the US, another big Transatlantic difference of opinion; taxation is just one issue about which we have to decide whether to be European or American.

Denis Healy, Labour Chancellor in the 1970s, once famously spoke about raising taxes to "squeeze the rich". Healy was as honest as he was clever; he believed it the duty of a socialist government to "raise taxes until the pips squeak".

It is ironic, perhaps, that the Lib Dems now inherit that socialist mantle. It is a shame that they dress up the rhetoric of class warfare as an attempt to educate the poor and care for the sick. There is plenty of money available already to achieve those goals, if only existing expenditure was more properly directed.

Chris Johns

Chris Johns

Chris Johns, a contributor to The Irish Times, writes about finance and the economy