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Alex Morton is Director of Policy at the Centre for Policy Studies, and was a member of David Cameron’s Downing Street Policy Unit.

You don’t have to look at the polls to appreciate that the reputation of the British political class is taking a hammering. And if Conservative politicians are to regain the trust of their voters when Brexit is resolved – although admittedly at this point it often feels more like if – they need a detailed vision on how to improve the UK, allied to a clear sense of whose side they are on.

In a speech that the Centre for Policy Studies hosted last week, Dominic Raab made the argument for raising the threshold for National Insurance, which would give everyone who works a major tax cut. It was equally encouraging to hear Boris Johnson, at the headquarters of JCB, set out a vision that included a suggestion that no one should ever lose more than half of any pound they earn to tax, whether rich or poor.

These two policies formed the core of a brilliant report published in November by my colleague Tom Clougherty called Make Work Pay, which we were honoured to have the Prime Minister help launch. (Tom outlined the ideas on ConservativeHome in November.)

It is right and crucial that politicians – and in particular the Conservative Party – back hard work and effort, rather than seeing the British taxpayer as an endless source of money for whichever stakeholder group has walked into the ministerial offices that morning. As I’ve noted before, 2012-2017 saw higher median household income growth than 2002-7, which was substantially helped by tax cuts  – in particular, the increases in the personal income tax threshold (first suggested by Lord Saatchi in a CPS report). If we ditch this approach, we will see sluggish income growth return.

There is no such thing as an entirely free lunch

The flip side of this – unless you have access to Labour’s magic money tree – is that you also need to set out how you will pay for tax cuts.

The Laffer curve helps, because it means that there is a dynamic effect – if you cut rates, you get back some of the money from higher output and lower levels of legitimate tax minimisation. But there is no way around it – letting voters keep more of their money also involves Government spending less.

The deficit might have shrunk, but it is worth remembering that the UK is currently ten years into the economic upswing. Even on current plans, assuming fairly steady growth, the total national debt will remain at around 80 per cent of GDP. It would be fiscally irresponsible to widen the deficit again just when we have finally got the public finances under control.

The same is true for those Conservatives who argue that rather than tax cuts, we need targeted spending increases in order to deliver on the promised ‘end to austerity’. Given that the NHS has taken most of the available cash growth will generate, that money will have to come from somewhere – and voters won’t be pleased if it’s their pockets. In other words, if spending must rise, either taxes must rise too, or other areas must be cut further.

Higher growth can, of course, help – indeed, in the medium and long term it is absolutely essential. But growth is not something that happens because politicians make a speech. It happens when they make the right decisions to free up the economy.

All too often, for example, politicians condemn over-regulation as a bad thing in the abstract – but a good thing in practice. But you cannot load endless environmental, social, tax, disclosure and other requirements on to businesses – especially smaller ones without the giant compliance departments of the multinationals – and somehow expect them to be as efficient as they would otherwise have been. So, if you want higher growth, you need to explain how this will be achieved.

The 2017 manifesto wasn’t wrong because it was ‘tough’ but because it was morally flawed

I am arguing, in other words, that if the Conservatives want to cut taxes and increase growth, they will have to make some tough decisions about what Government should not do, as well as what it should, or set out how they will reform the economy and government – beyond mere platitudes – to make the state more effective and economy stronger.

Some people will shy away from this analysis, and cite the 2017 manifesto as proof that people do not want politicians who would make ‘tough’ decisions.

But the problem was not that the 2017 manifesto set out a series of choices. It was that the choices made were the wrong ones. I remember from my time working in Downing Street, the Civil Service during the 2015 Spending Review tried to push Number 10 into arguing for similar schemes to the 2017 manifesto’s politically disastrous social care plan. To David Cameron’s credit he rejected them as unfair and un-conservative, because they penalised those who had worked hard and saved, even though he agreed we needed reform.

As you try to make savings you need to understand who your people are

This is a reminder that as a politician sets out their detailed plans, they need a base, a group of people who stand by them through thick and thin because they believe in what they are trying to do. Without this, they flounder – witness Macron’s troubles, which are in large part down to the fact that other than a small group of well-heeled Parisians, he has no real base in the wider country.

This was true of Tory administrations past. The Thatcher premiership got extremely rocky at times, but her sense of who ‘her people’ were meant she always had a group who were supportive of her and who her MPs knew backed her to the hilt.

Nye Bevan once said that socialism was the language of priorities, but in truth this applies to all political parties. You cannot be all things to all people. You need to accept that not everyone will approve of what you do, and ensure that there is a group of supporters who can be relied upon in difficult times. You need to bear this in mind when you set out your vision and details.

Ultimately, this is one of the reasons why Theresa May is right to stand with the wider conservative movement on Brexit, and against those who are trying to overturn the vote in a second referendum. Regardless of what you think of the wider issues around the deal, she knows and understands the importance of party unity – with just 19 per cent of Conservative voters supporting a second referendum and 70 per cent opposing one, including nearly six-in-ten strongly opposing one, the Party outside Westminster is clearly overwhelmingly against.

Post-Brexit, the Conservatives will need to re-engage with their voters and members after what will have been a bruising few months. That, in turn means they need to prioritise what matters – in particular, coming up with the detail on tax and spend, and doing so in a way that brings Conservatives together as far as is possible.

68 comments for: Alex Morton: For voters to have more money, Government must spend less

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