Another day, another story mooting a new tax rise. Today the Sun reports the Chancellor is considering a rise in National Insurance contributions for the self-employed. Like other tax rises floated in recent days – from fuel duty to corporation tax to capital gains tax – it has quickly met opposition from members of the Tory party whether it be No.10, rival ministers or the parliamentary party.
With Rishi Sunak looking ahead to the Autumn Budget, no proposals are definite. However, the backlash over every measure that’s been floated points to a problem coming up the track: no unifying Conservative economic principle. Long gone are the days of David Cameron and George Osborne’s long term economic plan. Boris Johnson has made clear on numerous occasions that he has no desire to return to austerity measures and his new look Tory party also campaigned on a high spend message in the 2019 election.
As a result, the new intake of MPs contains many who expect high investment in their areas. But there are also long timers who believe from previous doorstep experience, it would be politically toxic to do mass cuts or tax rises. It’s not clear where the majority believe the line crosses between money saving measures and politically toxic revenue raisers.
There is concern in the Treasury that there is a disconnect at present, between the billions spent so far on coronavirus emergency measures and what needs to be paid back. One Conservative figure observes that a lot of MPs see that money as dealt with and not as money owed.
Few MPs believe now is the time to saddle the economy with big tax hikes – and it seems even small measures are going to prove contentious. There is no unity in the Tory party on who should carry the burden. This points back to another problem: the parliamentary party is divided on who their core voter ought to be.
The new intake of 2019 MPs in former Labour heartlands tend to be anti-tax rises full stop: ‘Tax rises were not in the manifesto,’ one noted over the summer when asked about the upcoming budget. They are particularly against anything that punishes their voters on the cost of living. Taxes on wealthier voters are something that could get backing among red wall MPs. However, Shire Tories believe the party’s traditional voters have already been neglected and to tax their base would be a step too far.
Unless Sunak can convey to his party the need to raise revenue, any rise or new tax will be a very hard sell. The bulk of Conservative MPs prefer to point out low borrowing rates or talk about the pros of tax cuts – as the Chancellor’s colleague Therese Coffey, the Work and Pensions Secretary, did on today’s morning broadcast round.
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