SIXTY PER CENT OF NOTHING
Michael Lewis says that
he will leave Britain the day Labour is elected
LIKE most people I am able to recall precisely where I was when I first heard important news. I was beneath the clock on the corner of 44th and 5th Avenue in Manhattan when Saddam Hussein invaded Kuwait; and on a king-sized bed in New Orleans when President Kennedy was shot. But until last Wednesday I had never been able to say with absolute certainty where I would be when I heard the momentous news of the future. Last Wednesday, as I read the most recent Labour Party manifesto, I realised that on the morning the next Labour victory be- comes official I will be standing in a long line at the British Airways economy class ticket counter at Heathrow airport, return- ing whence I came seven years ago.
Let me explain. There are many aspects of the Labour publication, 'Opportunity Britain', perfectly acceptable to a woolly- minded American writer who has no more than an ordinary number of political con- victions. Eliminating VAT on sanitary towels, for example, seems a sound enough idea. Both the creation of a Scottish Parliament and the abolition of the House of Lords deserve to be tried if for no other reason than their promise of high comedy. I would even grudgingly accept the incom- petence that a Labour government would no doubt introduce to the day to day affairs of state. What I can't tolerate is paying 60 per cent of my income to the British Government, as Labour would have me do, when I could be paying 31 per cent to the United States government. By the time my accountant called in a panic — hours after the first editions hit the doorsteps — I had already made up my mind. I will be leaving and taking my advances and royalties with me; and instead of 40 per cent of my current earnings the British Government will get 60 per cent of nothing.
I know what you are thinking: a writer is meant to be above such pedestrian consid- erations. True. I would prefer to say I was driven solely by aesthetic and ideological concerns. They make for more heroic- sounding dinner party soliloquies. And I might even be dissuaded from leaving if I thought that the Labour Party was working for the greater good of the community. But they are merely tinkering with the tax structure to get themselves elected. They've peered inside Britain's wallets and worked out that there are enough votes from people earning £20,000 or less that they can ignore the others. In short, the Labour Party and I will be engaged in a base, unprincipled struggle for control of my bank account.
I would keep these damning, mean- spirited sentiments to myself if I didn't suspect that about fifty thousand other Americans, several hundred thousand Asians, Indians and southern Europeans, and at least one Swedish professional tennis player are coming to exactly the same conclusion. Many sweaty, striving profoundly un-English foreigners (like me) took Mrs Thatcher to heart and came to Britain in the last 12 years to seek their fortune and their home. With a Labour victory an economy once genuinely friend- ly to ambitious foreigners will have re- turned to what is perhaps a more honest hostility, since the English tend to suffer foreigners only when they are paying the bills. So we will leave.
It's just possible that we will be joined by a few hundred thousand Englishmen. In casting his large nets Mr Kinnock has dramatically underestimated the mobility of the modern middle class. In the last 12 years a new group of well-to-do people have emerged who can transfer their affairs easily to the country with the lowest taxes. Among them are some of the very people (City professionals, property developers) that Labour would most relish taxing. But faced with a gap between American and British tax rates larger than existed for much of the 1960s and the 1970s they and others will surely flee like Kurds, leaving behind nothing to milk but the weary udders of the landed aristocracy.
With its platform Labour said it aimed to create a 'world-class economy'. Mr Kinnock drew international comparisons to per- suade us that a tax rate on high incomes of 60 per cent would have no effect on the productivity of Britain. The rate, he said, would be 'exactly the same as it is in Germany, less than in Italy and France and of course does not really start to compare with the 64 per cent plus levied on the same people in Japan,' happily neglecting to mention that in none of these countries do wealthy people declare anything like their full incomes. What Mr Kinnock was tacitly admitting was a return in Britain to the age old European tradition of tax evasion.
So I am sceptical of Mr Kinnock's claim that the Labour tax plan of the 1990s will not disrupt the British economy as the Labour tax rates of the 1960s and 1970s did. I am also puzzled by the Times leader last Wednesday that explained why I should be grateful to the Labour Party. `Members of the middle class need not feel too gloomy,' it said. 'The fear that seized them in the 1960s and 1970s reflected less their material suffering than a feeling that their qualities were not esteemed. Now both main parties salute opportunity.' But one of them has its spare hand more deeply in my wallet, and that does make me gloomy.
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