“If the salt hath lost its savour, wherewith shall it be salted?” Forgive me for starting off with a quote from the Good Book. Please just regard it as paying respect to the 400th Anniversary of the King James Version. But for those less than comfortable with the cadences of the seventeenth century, let me offer you a paraphrase in a modern context. If the Conservative Party has ceased to be conservative, what exactly is the point of it?
As the months go by, I’ve become increasingly concerned about aspects of Coalition policy, and making every allowance for the exigencies of coalition, I’m getting more concerned by the day. It’s not just one or two policies. It’s a broad range. I know there’s some good stuff. Sorting the fiscal problem. Iain Duncan Smith on Welfare. Michael Gove on Education. But think of the bad stuff.
Ken Clarke’s justice policies. Our decision to decimate the armed forces while they’re still fighting and dying in Afghanistan (and I exonerate Liam Fox — I expect he feels just as badly about it as I do).
I have written extensively on Europe, so I won’t repeat it all. But the fact remains that we’re handing new powers to Brussels faster than Labour did before us. We’ve failed to make a stand at any point. And now we have the effrontery to bring forward this “Sovereignty Bill”, which is no more than pathetic window dressing. We whipped Conservative MPs to oppose an amendment that did no more than reassert the sovereignty of parliament. What were we thinking of? We’re not fit to call ourselves Conservatives.
We have become obsessed by the modish nonsense of climate change, yet our policies, even in their own terms, will have a trivial impact on climate. But they will do huge damage to our economy. They will drive a million families into fuel poverty. They threaten our energy security. And they will drive energy-intensive industries, and investment, and jobs, out of the UK altogether — and into remote jurisdictions with lower environmental standards. These are the very manufacturing industries that Cameron and Osborne are relying on to “rebalance the economy”.
But my biggest concern right now is tax. There is the public backlash which will result from our pig-headed determination to implement the fuel duty escalator, but that may be the least of our problems. We are driving up taxes on high earners to the point where the damage to the City of London is real and immediate, not merely speculative and probable.
Yesterday’s press carried an analysis of the early impact of the “Non-Dom Tax”, a £30,000 levy, which was simply a populist measure to “share the pain”. Since its introduction, the number of non-doms in the UK has fallen by 16,000, or 11%. The levy is estimated to bring in £350 million in 2009/10. But the Treasury estimates that non-doms as a category pay a total of £7 billion a year in income and other taxes in the UK. If we’ve lost 11%, that’s £770 million – more than double the revenue. And that’s without counting the businesses and the skills we’ve forced into exile.
This is perfect example of a general point that I make ad nauseam: raising tax rates won’t deliver a proportionate rise in revenues, and may actually reduce them.
Then there’s Labour’s 50% income tax band, which we have failed to cancel. It is already driving high earners, and high-earning businesses, out of London, to the benefit of Switzerland and Frankfurt. Add to that the Coalition’s crass bank-bashing, and it seems we have a death-wish for the City of London.
Let me quote Jeremy Warner (in another Biblical reference):
“We can cleanse the temple of the money-changers if we like, but it won’t get rid of the money-changing. Some other jurisdiction will end up with the economic advantage instead”.
Like many Conservatives, I am in despair over the direction we are taking, and the self-inflicted damage we are doing. Where do we go from here? Is anyone in Downing Street listening?