A progressive tax increase - that is, one which hits the rich more than the poor - is announced. The country is desperate to reduce its deficit, and the measure has relatively little political cost.
You'd think that "progressive" Labour would be falling over itself to support the cutting of Child Benefit to the better-off - effectively just such a change - to give itself room for manoeuvre on spending in its forthcoming manifesto. But, extraordinarily, it opposes on a technicality, saying that it is "unfair".
Madness. And, since Labour will now have to find a plan, probably a politically costly one, to find an additional £2bn for its manifesto, it seems it will also have exacted revenge upon its face by the simple expedient of cutting off its nose. In fact, if it were pure political craftiness, to try to make trouble for the Tories, it might not be elegant or statesmanlike, but it would at least be understandable.
But it is not even that, according to Labour's own statements. It is simply sticking to a position held for countless years: that the universality of Child Benefit is a shibboleth, and targeting to those who really need it beyond the pale. Even in the face of an overwhelming argument to the contrary, namely, that we are pointlessly subsidising the already rather well-heeled by an amount that they probably barely notice.
And, were further evidence required, when even the Guardian is criticising Labour's position and making approving noises about Boris Johnson's, you know there's something badly wrong.
Prisoner of the past
But logic is not at the centre of this decision-making process. The problem is, simply, that Ed Balls has become a prisoner of his years at the Treasury. As the same piece says, tellingly, "it largely adds up to a defence of the things he helped put in place with Gordon Brown". Ouch.
We shall never know whether or not Alan Johnson would have made a brilliant Shadow Chancellor; we never really had time to find out. But when he unexpectedly resigned two years ago, to be replaced by Balls, senior Tories rubbed their hands; for the obvious reason that they could now brand the new Shadow Chancellor, a pivotal figure in Brown's long years at the Treasury, as co-architect of the nation's economic ills.
But there was a second, less obvious reason, which fewer twigged, why it might not be good news for Labour: that it would later be difficult for him to support solutions which he did not adopt during those years, and reject those which he did. Miliband, to his credit, realised that Balls was not his best option. But, in the end, Johnson's exit pushed him awkwardly into the very move he had originally eschewed - a return to the finance portfolio.
And so we come to the bizarre situation of Child Benefit for the better-off. It is not as though it is an arguable case. Like now-defunct mortgage tax relief, a similar subsidising of the better-off, it has been ripe for removal for years, but Labour has never wanted to do it. There are a few arguments against its removal, but they are flimsy ones.
Universality of benefits is often cited. But why, if it means you end up having government cash doled out to people who don't need it?
Next, it's effectively a tax rise, yes, and all tax rises hurt. But psychologically, it's arguably much more painless than a real tax rise, because the better-off (a) will hardly notice, and (b) mostly accept the rationality of the argument of not receiving a benefit they don't need (that said, there seemed to be a number of 50k-earning supposed "progressives" bleating about the impact on their comfortable households on Twitter last Sunday night).
Then there's means-testing - that's why we don't make benefits non-universal, argue Labour politicians: because it's divisive and stigmatising. And they have a point. But, irritatingly, Osborne's seen to that - the repayment of the excess benefit will be through the tax system instead (or, obviously, you can choose to opt out). Technological advances also mean that the tax and benefits systems are slowly growing closer together, and could ultimately work much more closely in harmony with one other. This means targeting becomes much less painful.
So, we are left with the flimsiest of all political excuses - "the implementation's bad", or "there will be anomalies". So what?
How Brownism lives
And then, worse, contradictions. The BBC: "Labour's Ed Balls says that the government should tax the richest, rather than make changes to child benefit payments that affect those on middle incomes."
But that's exactly what the government is doing, taxing the richest. Balls is implying, disingenuously, that it is somehow hitting the middle of the income demographic and leaving out both ends. It's not, and Balls is better than this. In the end, he is left waffling on Murnaghan about "a principled approach to the welfare state which we would call progressive universalism".
The irony is that, although not universal, this change is singularly progressive - it takes more from the rich than the poor. Just what Labour has been arguing that the Tories should do, so they have done.
In other words, it's not about the implementation at all, really. Balls disagrees with the principle of the change; either that or he secretly agrees with it, but doesn't want the political fallout of having changed his mind.
So in the end it's poor politics for Labour, because all the public sees is the Labour Party arguing (a) against belt-tightening which hits the poor, and simultaneously (b) against belt-tightening which hits, er, the rich. Conclusion: Labour is against all belt-tightening, period; thereby helpfully feeding the Tory narrative of "same old Labour: crisis, what crisis?"
No, the uncomfortable truth is to do with a man trapped by his own past; in order not to be inconsistent, or perhaps just from a stubborn refusal to break with the Brownite economic agenda. It's an agenda which needs to be broken with, or, at the very least, to allow the freedom to be broken from when necessary. Balls can seemingly do neither. It's a problem.Reuse content