16 September 2021
Vacation
Putting the Question?
By J.R. Thomas
Amongst all the angry shouting and rising clamour from Conservatives in both Westminster and the constituencies, there is a sense of puzzlement. Has Boris vacated his senses? Or does he have a death wish to vacate his job? This is a man noted for his original take on matters of policy, for an ability to step back, collate in his mind the need and the possible solutions, and then produce convincing arguments for whatever it was he has decided is the right course. (Not always correct, but usually convincing.) And Boris had one great advantage (he still has, but he seems to have switched it off), a sweeping knowledge of western history and politics, right from the birth of civilisation in Greece to what may turn out to be the marker of the end, the Second World War.
His hero, Winston Churchill, had the same extraordinary command of the long view of history, an ability to interpret modern times in the context of past times, and to articulate that understanding. Churchill knew one important thing in the 1930’s, which was that trying to reach settlements with dictators never works. He could see in the growth of Soviet Communist Russia and National Socialist Germany that these were greedy beasts which would always want to gobble up more. That drove his opposition to appeasement, and after his long years in the political wilderness, in his old age it brought him triumphantly back to direct his country’s affairs.
Actually, Churchill knew lots of other fundamental truths about what people want and will accept; and at the end of his career those too served him well. From the great sweep of history with which he was so familiar, he was well aware that the people will not put up with being over taxed for long. High taxation is much more bearable to the rich than to the poor, and though the rich may flee to friendlier domiciles, the poor will in the end rise up and protest, violently if necessary. Winston was able to spend his last ministry easing the enormous tax burden imposed on the British public by war and post-war socialism, a job not finished until the 1980’s under Mrs Thatcher.
Before we arrive back in 2021, we might reflect there is an eternal political truth which Churchill probably knew, though not in the way we know it today. That is, that people will lie to questioners and especially to opinion pollsters unless the question being asked is very carefully put; and often, even then. We will come back to this.
Our Prime Minister is a man of many faults; not unusual in senior ministers. But forgetfulness has never seemed likely to be one of them. Yet, in the past few weeks he seems to have developed a serious memory lapse, forgetting that high taxation is always resented by the people who are taxed. Indeed, for a Conservative government to increase the burden of tax, except in times of extreme trouble, is always fatal. And yet, here is a man who really ought to know better increasing the tax charge in the most painful and unfair way. To increase National Insurance may seem superficially to be an easy solution. It is simple, and it is almost impossible to avoid. The cash registers in the Treasury will start ringing next April, and what the Treasury economists have forecast is what will come pouring in. To the extent it can be avoided, that can only be by the rich and well advised who can take payments in kind or create pension efficient schemes and other measures. They in any case find the burden less because there is an upper limit on payments. And by wealthier pensioners, who do not pay it and yet are to be the main beneficiaries of it.
Indeed; this may be a very efficient tax to collect, but it is the most unfair and regressive, falling much more painfully on the poorer workers than on rich capitalists. All tax is to an extent unfair, but one that hurts the poor more than the rich is idiotic. And so is any government that increases its burden.
What may have misled the Prime Minister and the Chancellor of the Exchequer, is that in recent weeks the opinion pollsters have been out and about asking a question which, simply put, is “Will you pay a higher rate of National Insurance to cover the costs of the NHS and of social care, yes or no?” The answers have been a huge majority for “Yes”. But beware. This is what is known as the beating your wife question: “Have you stopped beating your wife, yes or no?”. It sounds cruel and heartless to say, “No, I will not pay anything extra for health and welfare” so there is an automatic tendency to say “Yes” and look virtuous. (Ask for a contribution then and there, Ms Pollster, and see how that goes down). And “national insurance” sounds prudent and worthy whilst “tax” doesn’t; and the question is biased in its expression and terrible in its simplicity. Not “will you pay more tax for health and social care that you may never need, into systems notably inefficient and whose costs are spiralling out of control and which tomorrow will announce a whole raft of new senior jobs at £200,000 a year and more; and, oh yes, the burden of this tax rise will fall less on the rich”. That of course is an equally biased question; but speculate on how different the answer might be.
A cynical and experienced Tory knows that when persons are asked questions about increasing taxation coupled with virtuous aims, they will often say “Yes” but what they mean is “I don’t mind tax being increased on other people” or “Yes, providing it is the rich – people richer than me”. Last week the polled were all in favour of higher NI contributions; but since Mr Johnson announced them, new polls suggest that suddenly the Tory lead in the “Which way would you vote if there were a General Election next week?” has vanished and Labour is suddenly ahead. Not that anybody would understand Labour to have become the low tax party, but they suddenly don’t think the Tories are the low tax lot anymore. And the voters are going to kick out against that, from Woking to Workington, from Blythe Valley to Beaconsfield.
So what is Boris playing at? Maybe there is some grand strategy playing out here; NI will go up, but soon basic rates of tax will go down, VAT will be reduced, income thresholds will go up, all just 18 months before the next election. That might well be a big winner. That might explain why the cabinet and in particular Rishi Sunak have gone along with this almost bizarre behaviour. If you are going to cause pain, do it quick and early so that what will be remembered is the kindly balm which made the patient feel better.
If that it is the strategy it is a dangerous one, especially with the love which Mr Johnson has for grand projects. In the long run if taxation is to fall, so must government spending (and it helps if interest rates stay low). Boris, have you stopped spending too much, yes or no?
