17 June 2019 | OPINION
Dominic Raab may not become the next Prime Minister of this country, but if his tax proposals were introduced, it would give the party a desperately needed post-Brexit vision. We need to remember that we are most successful when we are a low-tax party, as this is the foundation of what we stand for as Conservatives. Looking forward to the 2020s, we need to continue to strive towards a low tax, high wage and low welfare society. ‘A vision for the 2020s’ is an unused phrase. Raab’s tax proposals offer the Conservatives the opportunity to claim this for our own.
It is important to remember that the Conservative Government has made positive progressive changes on tax. If you manage to get past the self-indulgent finger wagging of The Guardian, the left-wing protesters and the Twitterazi, there has clearly been a determined effort by this government to improve the life chances of the many. This has primarily been by cutting income tax. Over 30 million taxpayers have benefited from increasing the personal allowance from £6,475 in 2010 to £12,500 in April 2019. This means basic rate tax payers are paying over £1,200 less income tax than 9 years ago.
It is ridiculous when commentators suggest this tax cut disproportionately helps high earners, as it proportionately helps lower earners much more. When I was earning £15,000 a year working in jobs such as a support worker in a homeless hostel, this ongoing tax cut was hugely beneficial.
Even with this fantastic policy, the tax burden is still the highest it’s been for over 30 years. If we are to differentiate ourselves from Labour on tax, we need to adopt Raab’s tax plans without hesitation. With the government now running a surplus on day-to-day spending, we have the fiscal headroom to allow people to keep more of their own money. Raab’s first tax priority would be to raise the National Insurance threshold from just over £8,000 to match the personal allowance at £12,500. This would mean an extra £460 to low and middle earners – a hugely progressive policy.
Following the changes to National Insurance, the aim is to cut income tax by 5p over 5 years. This would clearly show a direction of travel from the Conservative Party, although Raab has made it clear that it wouldn’t be funded by more borrowing. This may mean higher taxes on unproductive wealth or further savings elsewhere. Even if this were the case, cutting income tax would still be a hugely popular move, as people would see their real pay increasing on a monthly basis.
The current government has made good progress in moving our country to a lower income tax, higher wage, lower welfare economy. With the budget deficit at sustainable levels, we should now go further and cut taxes for lower and middle earners. Raab’s tax polices offer the Conservatives a mission beyond Brexit that we should whole-heartedly embrace.
As Conservatives, we must never forget that we believe that taxpayers know how to spend their own money better than any government.