MAIL ON SUNDAY COMMENT: £75bn that should make it easier for Rishi to cut taxes
A cold, dank wind of near-despair is blowing through the Tory Party this weekend. Two miserable by-election results and continued bad news in the polls suggest a rout next year – perhaps even worse than 1997, with the Conservative contingent in the Commons down to double figures.
If this happens then it will be a disaster for the many in this country who seek protection from confiscatory taxation, insolent, inefficient state bureaucracy and the other problems of Left-wing rule.
Perhaps it will not be so bad. Politics does tend to veer violently between triumph and disaster, and political fortunes can change hugely in a matter of months. Labour are privately terrified that one foolish speech or remark by Sir Keir Starmer or his volatile deputy Angela Rayner could puncture their lead and even destroy it. The opposition is still divided between Labour and the Liberal Democrats, who polled strongly in Mid-Bedfordshire.
British Prime Minister Rishi Sunak walks at Downing Street in London, Britain March 15, 2023
The opposition is still divided between Labour and the Liberal Democrats, who polled strongly in Mid-Bedfordshire
By-elections, with their low turnouts and the freedom they give voters to protest without risk, are often a poor guide to General Election results. But on the other hand, Rishi Sunak has not, as yet, turned out to be a Tory Superman. He is not even Desperate Dan. Far from being a dynamic new force assuring the country that he has answers to our national problems, Mr Sunak has been so quiet that it’s easy to forget he is there at all.
There is a reason for this. The Good Ship Tory was in trouble partly because it zig-zagged so much, and also because of its crew’s self-indulgent habit of throwing the captain overboard, apparently every few weeks. A period of calm, during which nobody walked the plank and there were no sudden, violent changes of course was necessary to get things back in order.
But there are dangers in that too. When things get too quiet, and MPs and activists have not got enough to do, there are mutterings below deck, and the danger of mutiny.
One of Labour’s most effective leaders, Harold Wilson, used to say that his job was like that of a coach driver, going so fast that the passengers were either too ill or too exhilarated to complain. It is not a bad principle.
Rishi Sunak needs to provide a sense of movement, to silence the rebels and excite his supporters. And he has just been handed a very good Tory cause. He may not like the source. The Growth Commission was set up by Liz Truss, one of his least favourite politicians. But she does not control it. And its report offers him a very tempting opportunity.
By simply doing nothing to adjust tax thresholds and allowances for inflation, the Treasury has handed itself a colossal £75 billion in extra income by the fiscal year 2027-2028, after the next election. The effect, known as ‘fiscal drag’, scoops billions into the Government’s pocket and likewise scoops huge numbers of people into the tax net without anyone needing to announce it in the Budget or inform those paying the extra.
No doubt there would be times when the Government could simply sit on – and spend – this easy windfall. But this is not one of those times.
At the moment, the money is just a free gift to Sir Keir Starmer, who no doubt has plans to waste it in the usual Labour way. But by handing it back to the public in the form of cuts, especially cuts to the iniquitous levels of inheritance tax, Mr Sunak could open a potent gap between him and Labour, and engage the enthusiasm of his party and its voters.
The Left’s howls of outrage would only help. All is not yet lost. But time is short. The Prime Minister should take this opportunity as soon as possible.
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