We used to have a column in MoneyWeek called “Where’s my tax?”, in which we looked at the many ridiculous, unjustified ways the Government spends our money. We were never short of material for it and if we were still running it (and I think we might start again), we wouldn’t be now either. This week alone we’ve heard that in 2005/2006 the Treasury spent £56m on hotels, food and drink; that Tony Blair spends nearly double the amount entertaining people for dinner at Downing Street now than he did in 1997; that the Government’s failure to pay out European Community Aid to farmers on time will cost us £22m (to cover interest payments to farmers who had to take out loans to survive); and that Havering Council in Essex has spent £10,000 investigating which of their many boorish-sounding councillors made baa-ing noises during a debate about a temporary building for some sheep.
Labour tax rises: failing to raise thresholds
I don’t really care much about how much Mr Blair and Mr Brown spend on their dinners and I find it hard to get worked up about the antics of the Havering lot, but I do care about the final effect of all the extravagances of our rulers: add them up and you’re talking real money – money that has to come from somewhere. There have been 80 separate tax rises under this Labour government, but Mr Brown has also proved expert at lifting more money from us without appearing to actually raise taxes by using the simple trick of failing to raise thresholds in line with earnings. Today, 1.2 million more people pay 40% on their earnings than did in 1997, for example, and pretty much anyone who owns a house in the southeast is going to leave their heirs a nasty tax bill. The total tax take is now nearly double what it was a decade ago.
Labour tax rises: why is no-one making the case for lower taxes?
So here’s the question: why don’t politicians ever say so? Obviously, it’s not a topic I’m expecting Gordon Brown to address any time soon, but as Martin Vander Weyer points out in the Daily Mail, practically no one in the public arena is “making the moral and economic arguments for lower taxes”. George Osborne has reportedly said that he’d be keen to think about getting rid of stamp duty, but beyond that there’s little real endorsement of a tax-cutting agenda from the new Tories.
This is surely a huge mistake. Focus groups may be telling Cameron that they care more about there being lots of money for schools and hospitals than they care about their own disposable incomes, but if this wasn’t nonsense a decade ago, it certainly is now. People don’t tell the truth in focus groups anymore than they do on surveys that ask them which income bracket they fit into: they just say what they think makes them look good – in this case, as Vander Weyer puts it, like responsible citizens rather than “tax whingers”. We all know what they really want (what we all really want) and what they’ll vote for when the time comes: for the tax take to be as low as possible and for the money we hand over to be spent well on the things that matter.
That means less entertaining for Tony, less idiotic behaviour from councillors, less incompetence from the Rural Payments Agency, less boozing from Treasury employees and much the same amount of cash spent on the NHS. It doesn’t seem that hard a political stance to take to me.