Is bashing the bankers risking the New Labour image?

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.