John O’Connell is Chief Executive of the TaxPayers’ Alliance (TPA).
Given the new government’s plans to spend more money, with interventions to rebalance the economy, many free market purists or fiscal hawks may feel that the conversation has shifted leftward – that perhaps Jeremy Corbyn has left some sort of legacy, even in electoral evisceration.
But things have clearly shifted back to the centre-right. Judging the national mood is not all about tax and spend – it’s just as much about culture and patriotism; law and order; enterprise and trade. Even on fiscal policy, when the Conservative manifesto was released it contained great policies like the cut to national insurance, with a view to align it to income tax over time, which the TaxPayers’ Alliance (TPA) has argued for since 2012.
It’s perhaps naive to assume that the BBC, Sky News and Channel 4 will re-diversify the voices on their news shows. The lack of self-reflection for many years means broadcasters still don’t appreciate that believing it’s wrong to let violent criminals off the hook with a short sentence doesn’t make you extreme – it makes you in touch with public opinion. Or that refusing to toe the Twitter line on social issues shouldn’t deprive you a platform.
That’s not to say there should be a purge of lefties from broadcast shows, of course. We all want a proper debate. But it would be nice if producers now realised, with Corbyn and his team packing their bags, that declaring oneself ‘literally’ a communist ought to indicate a position outside the realms of reasonable debate on the airwaves.
We may not be the only game in town, but tax and spend is what the TPA does. Our position is, quite reasonably, that we believe in a pro-enterprise country with lower, simpler taxes funding better public services. Since we were established in 2004, we have campaigned for radical reforms to Whitehall, such as advocating scrapping entire departments in our 2015 Spending Plan.
So while the assumption is that there will be a full shift leftward on economics,I’m not so sure that is the full picture.
After all, while there are indeed promises to spend more on schools, the police and the NHS, there are plans afoot to radically shake up Whitehall. Just look at the reported reviews into defence procurement – that has the potential to save taxpayers a fortune. Current practices lock in inefficiency and costs spiral, so change is long overdue. The machinery of government itself may yet be re-organised too, with departments merged and functions streamlined. Early signs are that this will be more than the usual rearrangement of some deckchairs and the ordering of new letterhead. Saving taxpayers’ money should run alongside delivering better services.
Infrastructure spending is set to increase, with the manifesto setting out a maximum of £100 billion over the next five years. If done in the right way, capital expenditure is more growth-enhancing than current expenditure. It’s no secret that the TPA believes that HS2 should be consigned to the scrapheap – so we instead ran the Great British Transport Competition to find alternative projects on which to spend the money. All of them were less glamorous but would, as a whole, do vastly more than HS2 to increase productivity. Crucially, many of the projects were in areas of the country that have felt ignored for too long.
Promisingly, there is also talk of further devolution of tax and spend powers. Decentralised spending is well known to be linked to faster growth and improved productivity. After all, what are the chances that all local politicians in Yorkshire and the West Midlands would have spontaneously chosen to spend their own budgets on a high speed link to London, rather than improving links within their own counties, for example?
Spending on research and development can have similarly decent results for growth, if done well – another mooted priority for Number 10. Then, to take advantage of all of that, better education and skills training will be needed.
Let’s assume that all works as planned and economic growth is delivered – what then? I’m not convinced that Boris and his team would simply continue to ramp up spending for its own sake. I wrote during the campaign that TPA polling showed that working-class voters don’t want to be mollycoddled: they are more aspirational than middle-class voters, believing that corporation tax cuts are good for jobs and realising that firms can simply up sticks and move if they punished by the taxman.
The election result itself seems to have cheered markets so if it follows that we see an economic boom – mini or otherwise – there will room to deliver tax cuts for those delivered the Conservatives their majority. These cuts may be focused on those on lower incomes, such as the increase in national insurance widely touted for the first budget, but those who believe in lower taxes should be confident that this argument has been heard loud and clear.
Final note of cheer – we know that Boris does not like the nanny state. He might have banned drinking on the Tube, but there was never any suggestion that it was done for the drinkers’ ‘own good’. Rather, the intention was to tackle anti-social behaviour of drinkers. Regardless of the merits of the policy, that’s an important distinction.
That, therefore, can be good news for taxes. Left-wing campaigners – aided and abetted by paternalist Conservatives – have had a good deal of success in using the tax system as a means to implement their whims and punish the Working Class. The fewer taxes, the better; the more personal responsibility and individual choice, the better. Just as people don’t like to be lectured and patronised about Brexit and identity politics, they don’t like to be told what to eat, drink or do in their leisure time by high falutin academics.
And a final note of caution: Labour, campaigning on a Marxist manifesto, still got one in three votes. So it’s important that the Centre Right continues to engage in respectful debate on pages like these – and, hopefully, on the airwaves – to ensure we see off hardline socialism for good. We can show that Britain is ‘literally’ not Communist.