Free-market capitalism is supposed to be hard-wired into Tory DNA; the Conservative constant in an ever-changing world. But in the rush to appease interest and focus groups alike, Tory spending plans have started to look not much different from Corbynite ones.
Last week the Institute for Fiscal Studies laid out in stark terms how far the Tories had moved from their platform of fiscal prudence. The think tank said that the government was “adrift without any fiscal anchor” and could no longer afford tax cuts. Moreover, it reached the remarkable conclusion that the Tories were planning to spend almost as much on public services as Labour.
That’s not to say there weren’t important differences. Comparing the two parties, the IFS seemed to assume, somewhat strangely, that John McDonnell’s economic programme would be better for growth. While it did note that renationalisation was expensive, Jeremy Corbyn’s hard-left commitments to policies such as expropriating 10 per cent of shares received little analysis. For now, at least, the Tory party is still standing up for private enterprise.
For taxpayers, though, that’s the bare minimum they expect from the party of Margaret Thatcher. The tax burden is at a 50-year high and, despite not topping the polls as the most important issue for voters, tax is creeping up the agenda. Pursuing a fiscal policy that plays to that of his left-wing opponents will ultimately leave the prime minister exposed, and Tory candidates playing catch-up.
The IFS suggested that Britain was destined for Brexit-induced economic doom. It warned of serious slowdown, plummeting business investment and a descent into fiscal profligacy. We offer an alternative view. While the Taxpayers’ Alliance does not take a position on whether or not the UK should leave the EU, we know that, in any scenario, taxpayers’ interests must be represented. In the event of the UK leaving the EU without a withdrawal agreement, rather than spending more taxpayers’ money, fiscal policy should be targeted at enhancing growth, productivity and business confidence.
Last week we published a package of reforms in five key taxes, including income and corporation tax, to promote a competitive and pro-enterprise economy with benefits for everyone, no matter how they voted in the 2016 referendum. Splashing the cash and surrendering to the cause of ever-greater spending is not in the Tories’ interests. In their hearts, they know it. And if voters work that out too, there won’t be a Thatcher-sized majority waiting for them after the election, whatever kind of Brexit they go for.