The "UK is moving towards higher tax with no debate." So wrote the FT’s Martin Wolf in an article from October last year – shortly after Lord Forsyth’s Tax Commission had reported. I overlooked the article at the time but I have just Googled it after Andrew Marr referred to it in his exchanges with David Cameron, earlier today. It’s a powerful piece. A subscription is required to read the whole thing but I list some key extracts below:
"The UK has become a significantly higher tax country since the mid-1990s, while taxation has moved in the opposite direction in most other high-income countries. If the country had witnessed large improvements in the quality of public services, the abandonment by David Cameron’s Conservatives of any attempt to argue for a significantly smaller state would be understandable. What is remarkable, however, is that Mr Cameron is arguing for higher spending – notably in his opportunistic opposition to Mr Brown’s mythical “NHS cuts” – even though he apparently believes that much of the spending has been wasted."
"It is little noticed, moreover, that the UK government spends less on pensions as a share of GDP than most eurozone members. Its spending elsewhere must, therefore, be generous by all but the standards of the world’s most highly taxed countries, such as France and the Nordics."
"One does not have to be a fanatical tax-cutter to fear the longer-term economic consequences… The OECD, for example, has concluded that: “The increase in the average tax rate of about 10 percentage points over the last 35 years may have reduced OECD annual growth rates by about 0.5 percentage points.”"
"The UK seems to have moved, without serious debate, towards a political consensus in favour of a high-tax, high-spending state even though there is next to no confidence that the state knows how to spend the money well. This is an extraordinary success for Mr Brown and a no less extraordinary failure by the Conservatives. Can Mr Cameron win on this terrain? Should we care if he does? Thatcherism looks ever more like a brief interlude between Butskellism and something that may be called “Browneronism”."
Tomorrow’s ToryDiary will summarise some other key ways in which Conservative policy is ‘Europeanising.’