Interesting discussion between Don Paskini at LibCon, and John Rentoul (here, and responding to Don here).

John wrote that Labour’s decision to tax bankers bonuses was a further nail in the coffin of New Labour and their hard won reputation for economic competence, and that it would lose the goodwill of the types of voters in marginal seats that they need to win future elections, rendering them unelectable for a generation.

Dan replied pointing out correctly that the polls actually showed that higher taxes on the wealthy are popular, and the penalisation of city bankers especially so. John’s response was that they were popular in the short term, but would do much greater damage to Labour’s image in the long run.

I’ve some sympathy for John Rentoul’s view here. Polls on whether the public agree with a policy or not do not always tell the whole story. When looking at a policy there is the direct effect of whether people agree with it or not, and the indirect effect of what associating themselves with that policy will do to a party’s image.

The example I normally use is not taxing the wealthy, but immigration. Polls consistently show that immigration is an issue people care about, and that they want harsher restrictions upon it. Surely immigration would be a winning issue for the Conservatives? Not necessarily, since they have also spent the last four years trying to change their image to look less reactionary and “nasty”. If they made anti-immigration a key message, it might itself be popular, but would risk making them look bigoted and unpleasant.

It’s the same with taxing the rich. If tax hikes are necessary, polls always show that people much prefer them to hit the rich. Equally, penalising bankers is a route to easy popularity. The downside is that it risks making Labour look like a party that doesn’t like success or aspiration, an image that Tony Blair managed to shed.

It’s a balance though, and in this particular circumstance I don’t know if John is correct. It may be that the public’s desire to see the bankers cut down to size and appetite for taxes that apply to those richer than them outweigh the potential damage to Labour’s image – the reality is that in judging trade offs like this, polling can’t necessarily give you a firm answer.

108 Responses to “Is bashing the bankers risking the New Labour image?”

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  1. Some excellent points raised by Osborne, particularly the contraction sleight of hand, but it is still hard not to wince at the squeaky George delivery.

  2. Banker bashing has become a sport which is encouraged because it diverts attention from others worthy of blame in this whole financial debacle.
    Others include the government, the FSA, individuals who racked up too much debt, and of course the previous Chancellor and now PM. Due to the recent history of government, I see this phase of banker bashing as spin to mask the real picture. To bash the people who contribute massive sums to the UK economy does not seem rational, but it feels good in desperate times.

  3. BoE has calculated that a 20% reduction in bonuses & dividends between 2000 & 2008 would have accumulated additional reserves equal to the entire taxpayer-funded rescue -which might then have been unnecessary !

  4. @ Villa bali

    Rateher a squeeky Osbourne rather than Dr Death Darling

  5. “Some excellent points raised by Osborne, particularly the contraction sleight of hand, but it is still hard not to wince at the squeaky George delivery.”

    Piers Fletcher Dervish

  6. Last week nicely hidden away on the same day Darling made his speech the Office for National statistics issued a report estimating the government pension black hole at a whopping 2000 billion. You then add current debt at 1400 billion still growing, plus and the bank bailouts plus PFI and other possibly hidden debts, dropping tax revenues and the real debt figure could be around 4000 billion + or 3 times GDP, even for Labour this must be an all time record. Not forgetting quantitative easing at 200 billion.
    If I were Cameron I wouldn’t be so keen to win the next election.

  7. New Angus Reid poll on politicalbetting shows a 16 point Tory lead

  8. Banker bashing could be a new blood sport.

    Hunting with dogs is banned, but not hunting with small shareholders. Then for the oiks there could be I’M A BANKER, GET ME OUT OF HERE and half an hour of interview with Paxman would earn you a plate of soup.

    Then there are possibilities with stocks, but not the kind bankers are used to. That would be really popular.

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