John O’Connell is Chief Executive of the TaxPayers’ Alliance.
The news headlines yesterday offered warnings that both major parties are pledging to bring public spending levels back to the 1970s. Spending looks set to increase to 40.6 per cent of GDP. Projections show that this will go up to 42 per cent of GDP by 2023, with pledged increases for the NHS.
Perhaps the most surprising thing of yesterday’s news was that it was a left-wing think tank talking about the size of the state – it was the Resolution Foundation’s paper The shape of things to come that caused the stir.
(A side note – I wonder if a free market/classical liberal think tank would have received the coverage the BBC afforded to the Resolution Foundation if one of them had issued warning figures on the growth of the state?)
The Conservatives are making higher spending on the police, the NHS and education election priorities. It’s understandable that these things are popular. It’s also understandable that voters may want more money spent on frontline policing, say, when they read about the shocking increase in knife crime over the last few years. The Conservatives were seen as the party of law and order – it would make sense for them to reclaim this ground and equip the police to do their jobs with better equipment and better guidelines for a robust approach.
There is a problem with how such pledges are financed, though. Voters know that higher spending usually means tax rises. And that’s the other side of the coin – the tax burden is already at a 50-year high. Though tax might not be the most important issue at the moment, it is climbing up the agenda. And just like crime, Conservatives surrender this ground at their peril.
You might have heard a Conservative politician recently say: “I believe in free markets…”. What usually follows is a gut-wrenching: “…but…”, followed by lots of stuff that contradicts the opening statement.
It’s starting to feel a little like that with tax. The ‘low tax Tory’ moniker is wearing thin when we hear little detail to follow the zeal. I would also wager that Conservative activists don’t always like arguing for socialist-lite policies, even if politicians fall into that trap. And that’s exactly what it is: a huge trap. The left might not win the war, but they are winning the peace – they have dragged political debate in their direction, and the right should learn that lesson from the 2017 campaign.
But it doesn’t seem that it has. Some groups on the centre right fall for the notion that typical taxpayers – those on lower incomes – only want cash spent on them. Look again at well-intentioned surveys like that which spawned labels like ‘Workington man’ and you can see that those on the centre right can risk looking a little out of touch. As 2017 showed, these stereotypes are dangerous and can take groups of voters for granted. You can’t out-left the left, so why try so hard to do so?
So what can pro-freedom politicians offer?
The TPA has released new polling – which you can read about in today’s Sun – which shows key working class swing voters aren’t easily categorised as simply wanting more spending. They also want clear and tangible tax cuts to cost of living; in fact, in many areas they are more likely to support tax cuts than professional classes, who are perhaps more interested in winning the social approval of their peers around the table at dinner parties. Lower earners understand the importance of business as big employers, and see sky-high business rates as destructive for small firms.
They also want to see action on areas where politicians have not dared to tread, like the BBC licence fee and council tax.
As James Frayne explored on this site (disclosure: as James mentions in his piece, his firm Public First carried out this research for the TPA), these voters aren’t desperate to tear down capitalism with Corbyn. They are not as obsessed with rich vs poor as middle class commentators and beret-wearing socialists.
Conservatives must unlearn the lessons of Theresa May and stop throwing money at working class voters without a way to pay for it. After all, public spending on a family of four will be around £52,000 in 2019-20 – a whopping £1,000 a week.
By all means, spend more on the police, fill potholes, build better infrastructure – but offer up some spending reductions elsewhere to pay for it. Cull a quango, scrap a subsidy, ditch a diktat.
It shouldn’t come as a surprise to anyone, but typical taxpayers want a system that rewards hard work. They believe in prosperity. Yes, they also want a retail offer: and tax cuts must be on that list.