In an exclusive article for ConservativeHome, Edward Leigh MP has this morning called for Tories to use the next Parliament to lift 14 million low-paid people out of income tax altogether.

Mr Leigh claims that Gordon Brown’s decision to announce a 2p tax cut in his recent Budget gives the Tories "the greatest opportunity in a generation to champion the case for lower taxes."  "By reinventing himself as a tax-cutter," Mr Leigh writes, Gordon Brown "will no longer be able to advance its moronic but plausible argument that you cannot cut taxes without putting doctors and nurses on the dole."

Embracing David Cameron’s "sharing the proceeds of growth" formulation, the Cornerstone MP says that the lion’s share of the proceeds of growth should not go to extra public spending but to help families that are struggling to make ends meet.  He points to the 3.2% increase in the UK tax burden since 1997, according to OECD figures, and a recent Centre for Policy Studies analysis that shows that real disposable incomes are flat for many households.

Lower taxes are not just socially just, he writes, but are essential for a thriving economy.  He points to the experience of Australia and Ireland where lower taxes have quickly paid for themselves by stimulating innovation and job creation.

He sets out his specific proposal at the end of the article:

"We should aim to take around 14 million low paid people out of income tax altogether. This could be done by tripling the personal tax allowance to £15,000 in today’s prices – which would also mean raising the top rate threshold to £47,000. Such a change should be phased in over the lifetime of a future Conservative government and could be paid for without cutting public spending or increasing borrowing.  Over a four-year period the cost of such a proposal in lost revenue would be about £44 billion. We could balance the books by holding future overall spending increases to inflation rather than the 2 per cent increase in real terms envisaged by Labour. On top of that, we could use efficiency gains from our bloated and wasteful public sector to produce real increases in priority spending areas such as health, education and law and order."

Although Mr Leigh has been careful to use the Cameron-Osborne ‘sharing-the-proceeds-of-growth’ formulation his call is very unlikely to be embraced by the Tory leadership.  It looks like the sort of up front commitment to tax cuts that has already ruled out.  It is twice as large as Lord Forsyth’s prescription for a £21bn tax relief package.  Mr Leigh’s policy idea will appeal to the many Tory members who are hungry for tax cuts, however.  A ConservativeHome poll before last year’s Party Conference found that 30% wanted a promise of a substantial tax cut before the General Election and 33% wanted a promise of a small tax cut.

In order that there not be two threads on this subject I am not enabling comments on this post.  Please join the debate on YourPlatform where Edward Leigh’s full article is posted.

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