Regular readers of this site will know that we hope that the Conservative Party might deliver a year-by-year increase in the income tax threshold so that the poorest Britons are progressively taken out of the tax system. We believe that it can be paid for by reducing the growth rate of public spending and could underpin a process of wider political realignment that could detach ‘the hard working classes’ from a Labour Party that has failed them. The story on page two of today’s Express therefore provoked some interest from us (click on image to enlarge).
Our contacts at The Express said that people very close to David Cameron were said to be sympathetic to the policy idea. Cameron’s advisers believe that public sector waste has led the the popular mood to swng violently against the idea that more money is needed to improve schools, hospitals and other public services. We put the story to Team Osborne and were told (1) there were "no plans" to raise thresholds, (2) the story was "speculative", and (3) there was "no money" in the coffers*. Interesting replies but the door wasn’t quite shut in our face.
Matthew Elliott, Chief Executive of The TaxPayers’ Alliance has welcomed the Express story:
“If David Cameron adopts a policy of tax cuts for the poor, by increasing the income tax threshold, it would be hugely popular with voters and could be paid for by restricting the growth in government spending. With rising food and fuel prices and the credit crunch, families are having to budget and voters now think the government should do likewise. This policy would emphasis that there is a moral dimension to tax cuts as well as an economic benefit.”
At the weekend the Institute for Fiscal Studies issued a warning that the next Government might have to increase taxes. Increased taxation could be deadly for our economy. We’d like to see spending growth reduced to 1.5%pa or even 1%pa so that money can be found to help poorer workers and for economy-boosting tax relief.