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

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

Opilio Recruitment: QA Automation Engineer

£30k - 38k per year + Benefits: Opilio Recruitment: An award-winning consume...

Opilio Recruitment: UX & Design Specialist

£40k - 45k per year + Benefits: Opilio Recruitment: A fantastic opportunity ...

Opilio Recruitment: Publishing Application Support Analyst

£30k - 35k per year + Benefits: Opilio Recruitment: We’re currently re...

Opilio Recruitment: Digital Marketing Manager

£35k - 45k per year + benefits: Opilio Recruitment: A fantastic opportunity ...

Day In a Page

Read Next
Our political system is fragmented, with disillusioned voters looking to the margins for satisfaction  

Politics of hope needed to avert flight to margins

Liam Fox
David Cameron delivers his speech on immigration at the JCB World Headquarters in Rocester, Staffordshire  

Cameron's speech was an attempt to kill immigration as an election issue

Andrew Grice
Homeless Veterans Christmas Appeal: ‘We give them hope. They come to us when no one else can help’

Christmas Appeal

Meet the charity giving homeless veterans hope – and who they turn to when no one else can help
Should doctors and patients learn to plan humane, happier endings rather than trying to prolong life?

Is it always right to try to prolong life?

Most of us would prefer to die in our own beds, with our families beside us. But, as a GP, Margaret McCartney sees too many end their days in a medicalised battle
Thomas Cook's outgoing boss Harriet Green got by on four hours sleep a night - is that what it takes for women to get to the top?

What does it take for women to get to the top?

Thomas Cook's outgoing boss Harriet Green got by on four hours sleep a night and told women they had to do more if they wanted to get on
Christmas jumper craze: Inside the UK factory behind this year's multicultural must-have

Knitting pretty: British Christmas Jumpers

Simmy Richman visits Jack Masters, the company behind this year's multicultural must-have
French chefs have launched a campaign to end violence in kitchens - should British restaurants follow suit?

French chefs campaign against bullying

A group of top chefs signed a manifesto against violence in kitchens following the sacking of a chef at a Paris restaurant for scalding his kitchen assistant with a white-hot spoon
Radio 4 to broadcast 10-hour War and Peace on New Year's Day as Controller warns of cuts

Just what you need on a New Year hangover...

Radio 4 to broadcast 10-hour adaptation of War and Peace on first day of 2015
Cuba set to stage its first US musical in 50 years

Cuba to stage first US musical in 50 years

Claire Allfree finds out if the new production of Rent will hit the right note in Havana
Christmas 2014: 10 best educational toys

Learn and play: 10 best educational toys

Of course you want them to have fun, but even better if they can learn at the same time
Paul Scholes column: I like Brendan Rodgers as a manager but Liverpool seem to be going backwards not forwards this season

Paul Scholes column

I like Brendan Rodgers as a manager but Liverpool seem to be going backwards not forwards this season
Lewis Moody column: Stuart Lancaster has made all the right calls – now England must deliver

Lewis Moody: Lancaster has made all the right calls – now England must deliver

So what must the red-rose do differently? They have to take the points on offer 
Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

It's in all our interests to look after servicemen and women who fall on hard times, say party leaders
Millionaire Sol Campbell wades into wealthy backlash against Labour's mansion tax

Sol Campbell cries foul at Labour's mansion tax

The former England defender joins Myleene Klass, Griff Rhys Jones and Melvyn Bragg in criticising proposals
Nicolas Sarkozy returns: The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?

Sarkozy returns

The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?
Is the criticism of Ed Miliband a coded form of anti-Semitism?

Is the criticism of Miliband anti-Semitic?

Attacks on the Labour leader have coalesced around a sense that he is different, weird, a man apart. But is the criticism more sinister?
Ouija boards are the must-have gift this Christmas, fuelled by a schlock horror film

Ouija boards are the must-have festive gift

Simon Usborne explores the appeal - and mysteries - of a century-old parlour game