George Osborne will stand up today and attempt to answer some pretty tough questions. How can we restore some level of health to the public finances? How will Britain deal with a growing demographic crisis? Can we afford to continue piling up debts and spending beyond our means, or do we need to rein in spending by waging a War on Waste? Can he get the country back on the road to long-term prosperity by adopting a tax system which delivers simpler, lower taxes?
Finding answers to these questions is the defining political challenge of our age. That’s why we, together with the Institute of Economic Affairs, have launched the ThinkTent at Conservative Party Conference this year. It’s a space for a grown up debate about the direction in which Britain should head, another breath of fresh air to sit alongside the outstanding work of those behind the ConservativeHome marquee.
So what should the Chancellor announce? First, unlike Mr. Miliband, he must show that he really does understand the importance of eliminating the deficit and starting to pay off Britain’s astronomical credit card bill. It may be optimistic – perhaps even politically naïve – to expect that any politician hoping to be in power on May 8th next year would lay out the tough choices Britain will have to make, but that doesn’t mean it shouldn’t happen. We need to hear less rhetoric about making hard choices, and get more concrete detail about what savings an Osborne Treasury would make in its second term.
We need to hear more about how to address the increasing unfairness of so-called fiscal drag, with tax thresholds failing to keep up with inflation. It means ordinary families are dragged into the higher rate band of Stamp Duty as house prices increase, making it harder for them to climb the property ladder and even more difficult for aspirational young people to buy their first home. It means that the immoral and unjust Inheritance Tax, a tax designed only for the very wealthiest, is hitting more and more people. And it means that people on salaries much less than double the national average are being pulled into the 40 per cent income tax rate, a problem that will only get worse as the economy
The Chancellor must stand up, apologise for allowing these scandalous and stealthy tax hikes to occur on his watch, and promise to dramatically increase the existing thresholds as a first step towards the long overdue reform of our tax system we detailed in our 2020 Tax Commission Report. He can address people’s understandable concerns about tax avoidance by slicing out some of the 17,000 pages of our tax code, getting rid of the loopholes large enough to drive a Take That tour bus through.
In short, we need ambition. We need radicalism – and while the pre-briefed sections of the Chancellor’s speech around the benefit cap are welcome, they can hardly be described as earth-shattering. We need to hear a speech that’s as brave and bold as the discussions we’re having in the ThinkTent, and the ones that are happening in the ConservativeHome marquee next door. Britain faces huge challenges and tinkering around the edges of a tax code that is actively hurting people, whilst failing to articulate a clear vision to restore the health of our public finances, isn’t just politically weak but profoundly immoral.
It’s trendy to say that politics is dying, that ideas have been replaced by soundbites. That politics can’t measure up to the challenges Britain faces. In the ThinkTent, as in ConservativeHome’s marquee, we’ve already seen that to be untrue with passionate arguments and the battle of ideas clearly alive and well. We have much more to discuss over the next two days – we’ll talk about everything from Britain’s transport infrastructure, to the unfairness of the regressive sin taxes that hit the poorest hardest, to how to relieve the Council Tax burden. Let’s hope some of the boldness we’ve seen in the ThinkTent makes it in to the Chancellor’s speech, and that politicians of all stripes commit to building an economy that allows people the freedom to enjoy prosperous lives.