Yahoo Sports Tax cuts would revitalise the Conservative Party
There is at last relief on the horizon for family budgets stretched to breaking point by 18 months of inflation and tax rises. Rishi Sunak wishes to cut the basic rate of income tax or, intriguingly, National Insurance, by up to 2p in the pound, coming into effect in April 2024. While this remains conditional on inflation and borrowing costs falling sufficiently to make the move fiscally responsible, and no final decision has been taken, it is clearly very much at the top of the Prime Minister’s list of priorities. Even better, there would be a promise of more to come if re-elected.
It is a welcome return to form for the Conservatives after a series of disastrous, incentive-sapping tax hikes on capital and labour. Having allowed the tax burden to creep to its highest level in 70 years, the party appears to be starting to recover its sense of purpose. The hope must surely be that the electorate will recognise and reward this. If this is to occur, however, more will be needed.
Our tax system remains byzantine, the complexities of rule and ritual governing over it more suited to Gormenghast than to a country seeking to establish itself as a nimble alternative to a sclerotic European continent. In places it is unfair, in others it is economically damaging, and in all too many it is both at the same time. Inheritance tax manages to combine deep unpopularity with a burden on saving and an overly complex implementation. Abolishing it would make for an effective statement of intent ahead of the election, setting the tone for the next term of Conservative government. Corporation tax, too, is economically damaging, and the decision to raise rates seems dispiritingly effective in driving investment overseas.
Such cuts must be paid for. Slimming down the state and its ever-increasing demands for funding would be welcome, but perhaps the best way to pay for a lower tax burden would be with a booming economy that can afford to provide more services for a given share of national income. It is disappointing, then, that just as the party is rediscovering its way again on tax, it is in danger of losing it elsewhere.
Government policy appears to be aimed at making groceries more expensive. The ban on “buy-one-get-one-free” offers for “unhealthy” food is still set for this autumn, while green levies imposed next year could increase household bills by up to £140 per year. These are intended to reduce waste, make progress towards net zero and raise funds for recycling, but will effectively be taking money from households already struggling to make ends meet.
We already have far too many of these sorts of regulations. Mr Sunak’s re-embrace of a low-tax vision is to be praised. He should also scrap his green crackdown and position himself as the consumers’ champion.
