John Bercow: Tory tax cuts should champion the poor, not the rich

I am sick of the claim that we are concerned only about the rich. Sadly the charge has stuck

Share

John Redwood has suggested that the £4bn of proposed Conservative tax cuts represent merely a down payment and that more would follow. To my mind, given the rising budget deficit, pressure on public services and voter scepticism about extravagant promises, big tax cuts are neither affordable nor desirable. Any speculation to the contrary should be decisively quashed. There is a world of difference between prudent proposals to help the most needy in society on the one hand and showering largesse on the affluent majority on the other.

John Redwood has suggested that the £4bn of proposed Conservative tax cuts represent merely a down payment and that more would follow. To my mind, given the rising budget deficit, pressure on public services and voter scepticism about extravagant promises, big tax cuts are neither affordable nor desirable. Any speculation to the contrary should be decisively quashed. There is a world of difference between prudent proposals to help the most needy in society on the one hand and showering largesse on the affluent majority on the other.

The Conservative pledge to slash council tax for pensioners will be warmly welcomed. As it is right to help most those who have least, the top priority now for Conservatives should be to slash taxes for the lowest paid people.

Consider the plight of the working poor in Britain today.

People on modest incomes pay income tax and national insurance at a rate of 33 per cent. Moreover, 1.5 million low-income working households are penalised by tax credit and benefit withdrawal when they try to boost their income, twice as many as in 1997. They keep just 40 pence of every extra pound they earn.

Wait a minute. Isn't Gordon Brown supposed to be a champion of the poor? Well, yes and no is the answer. He lowered the starting rate of income tax from 20 per cent to 10 per cent but more than halved the bandwidth from £4,300 to £1,500 in 1999-2000, thereby increasing tax by stealth. This starting rate now applies to the first £2,020 of taxable income. In effect, this much lauded lower rate has had little impact. Indeed, when combined with the reduced bandwidth, those earning £9,000-10,000 a year are worse off.

There is no denying that the interaction of the tax and benefits system is both fiendishly complex and deeply regressive. What is more, when the impact of other taxes such as VAT and council tax is taken into account, the poorest fifth of householders pay a higher proportion of their income in taxes than any other group.

Amongst the working poor forced to hand over a scandalously large slice of their earnings to the Inland Revenue are part-time workers on the minimum wage; students working to pay their tuition fees; and pensioners receiving just £60 a week from a personal pension.

What needs to be done? Oliver Letwin should pledge that in his first Budget he would raise the personal allowance and the earnings threshold to the point where a person working 20 hours per week at the minimum wage becomes exempt from income tax and employee national insurance. Only people with income exceeding £5,058 would pay income tax and national insurance. Hundreds of thousands of families would gain from this. It would cost £3.7bn, could be delivered over two years and would be worth every penny.

Some of Britain's low paid will climb out of poverty by acquiring skills or qualifications that enable them to earn bigger incomes. Others might not progress to better paid employment, because poor health, lack of motivation or even the absence of opportunity prevent them doing so. Yet they slog their guts out for paltry pay and are fighting a hellish battle to make ends meet. If they could only keep what they earn, they would have a sporting chance of winning that battle.

There are two good and simple reasons why the poor should be the main beneficiaries of the initial Tory tax cuts. First, it is morally right to assist those who earn the least and are hit the hardest by the tax system. The needs of the poor, in terms of the struggle for survival, are unarguably the greatest. The benefit to them of relief from tax would be vastly greater than to the rich or comfortable.

Secondly, it makes political sense for Tories to help the poor. I am heartily sick of political opponents' claims that Conservatives are extreme, out of touch and concerned only about the interests of the rich. Sadly, the charge has stuck as poll after poll has shown us for over a decade. In standing for the Conservative leadership, Michael Howard recognised the problem. Rightly, he was at pains to stress that he wanted to reclaim the tradition of One Nation Conservatism which has defined the party for much of its most successful history. From Wilberforce to Shaftesbury, Disraeli to Lord Randolph Churchill and RAB Butler to Iain Macleod, the Conservative Party knew that its duty to the disadvantaged was paramount. So it is today.

Yet mere words are not enough. To persuade the electorate that Conservatives have changed, that we offer a distinctive alternative and that we will deliver is our most urgent necessity. The obvious step is to put the working poor at the forefront of our Timetable for Action. Take the poor out of tax. Let them keep what they earn. Above all, we should proclaim this message with the passion so often reserved for speeches about Europe and immigration.

Of course, this "help the poor" approach is not certain to work. Yet it is right in itself and would represent a decisive break from the failed messages of narrow self-interest which characterised the 1997 and 2001 campaigns. It is surely worth a try.

React Now

  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Recruitment Genius: Project Implementation Executive

£18000 - £23000 per annum: Recruitment Genius: They work with major vehicle ma...

Recruitment Genius: Chiropractic Assistant

£16500 per annum: Recruitment Genius: A Chiropractic Assistant is needed in a ...

Recruitment Genius: Digital Account Executive - Midlands

£18000 - £26000 per annum: Recruitment Genius: They work with major vehicle ma...

Recruitment Genius: Web Developer

£28000 - £30000 per annum: Recruitment Genius: This company provides coaching ...

Day In a Page

Read Next
With an eye for strategy: Stephen Fry’s General Melchett and Rowan Atkinson’s Edmund Blackadder  

What Cameron really needs is to turn this into a khaki election

Matthew Norman
An Italian policeman stands guard as migrants eat while waiting at the port of Lampedusa to board a ferry bound for Porto Empedocle in Sicily. Authorities on the Italian island of Lampedusa struggled to cope with a huge influx of newly-arrived migrants as aid organisations warned the Libya crisis means thousands more could be on their way  

Migrant boat disaster: EU must commit funds to stop many more dying

Alistair Dawber
NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

Who's monitoring the outsourced NHS services?

A report finds that private firms are not being properly assessed for their quality of care
Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

How do Greeks feel about Syriza?

Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
From Iraq to Libya and Syria: The wars that come back to haunt us

The wars that come back to haunt us

David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

Too busy to surf? Head to The Pool

A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders
Heston Blumenthal to cook up a spice odyssey for British astronaut manning the International Space Station

UK's Major Tum to blast off on a spice odyssey

Nothing but the best for British astronaut as chef Heston Blumenthal cooks up his rations
John Harrison's 'longitude' clock sets new record - 300 years on

‘Longitude’ clock sets new record - 300 years on

Greenwich horologists celebrate as it keeps to within a second of real time over a 100-day test
Fears in the US of being outgunned in the vital propaganda wars by Russia, China - and even Isis - have prompted a rethink on overseas broadcasters

Let the propaganda wars begin - again

'Accurate, objective, comprehensive': that was Voice of America's creed, but now its masters want it to promote US policy, reports Rupert Cornwell
Why Japan's incredible long-distance runners will never win the London Marathon

Japan's incredible long-distance runners

Every year, Japanese long-distance runners post some of the world's fastest times – yet, come next weekend, not a single elite competitor from the country will be at the London Marathon
Why does Tom Drury remain the greatest writer you've never heard of?

Tom Drury: The quiet American

His debut was considered one of the finest novels of the past 50 years, and he is every bit the equal of his contemporaries, Jonathan Franzen, Dave Eggers and David Foster Wallace
You should judge a person by how they peel a potato

You should judge a person by how they peel a potato

Dave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
Beige is back: The drab car colours of the 1970s are proving popular again

Beige to the future

Flares and flounce are back on catwalks but a revival in ’70s car paintjobs was a stack-heeled step too far – until now
Bill Granger recipes: Our chef's dishes highlight the delicate essence of fresh cheeses

Bill Granger cooks with fresh cheeses

More delicate on the palate, milder, fresh cheeses can also be kinder to the waistline
Aston Villa vs Liverpool: 'This FA Cup run has been wonderful,' says veteran Shay Given

Shay Given: 'This FA Cup run has been wonderful'

The Villa keeper has been overlooked for a long time and has unhappy memories of the national stadium – but he is savouring his chance to play at Wembley
Timeless drama of Championship race in league of its own - Michael Calvin

Michael Calvin's Last Word

Timeless drama of Championship race in league of its own