The Conservative Party and some of its grander figures ought to be ashamed of themselves.
After 12 years of self-professed Tory fiscal probity we have national debt at a record high, taxes at record highs, rampant inflation and a record number of people claiming benefits. Things are so bad, Labour is able to credibly claim it would be better at managing the Nation’s purse strings.
At last, along comes a Prime Minister who recognises that Treasury orthodoxy does not work, charts a proper Conservative way forward and promptly gets shot down. Not by the opposition but by her own. At the forefront of her detractors are the very people who landed the country in this dire state – Michael Gove being one of the worst.
On 7 October Gove was quoted in the FT as saying this is “not a time for gambling”. Someone needs to let him know that doing the same thing over and over again and expecting a different result is insane.
In truth, Gove is not insane. He is bitter. Bitter that his time in front line politics is over. Out with the failed orthodoxy rightly had to go its proponents. Gove was past his sell by date years ago. Why Johnson kept this Machiavelli in Cabinet can only be explained by a desire to keep his enemies close.
Perhaps Truss should have done the same. But she is a straightforward person. She believed Gove had nothing to offer – so out he went. Along with a whole host of other serial Cabinet postholders.
Their tantrums now are no better than what you might expect from a spoilt child throwing their toys out of the pram. Sadly, the consequences are much more serious.
What these disaffected Tories will end up doing is splitting the Party, ensuring Ms. Truss’s sensible agenda is undermined and the country delivered into penury. It will be their actions, not the Prime Minister’s, that will deliver a Labour victory in 2024. The electorate is watching and they do not like what they see.
The reality is that there is no such thing as a funded tax cut if the aim is to grow the economy. You cannot grow by robbing Peter to pay Paul. Ms. Truss’s tax reversals and cuts were the bare minimum required.
Was cutting the 45% tax rate politically sensible – no. Was it the right thing to do – yes. Its cost was the smallest of all the tax cuts delivered on the fateful day of the mini-budget. The naysayers need to know that the 560,000 odd people who make it into this rarefied tax bracket actually pay close on 40% of all income taxes. We need wealthy people making the UK their home. Keeping their taxes high may satisfy those who prefer the politics of envy but it is bad economics.
If anything, taxes should have been cut further. Most of the £45 billion in “unfunded” tax cuts were either a reversal of tax increases yet to take place or tax increases recently instituted.
The Chancellor could, with real justification, have delivered a genuine cut to corporation tax. Reducing that tax to 12%, the same level of the Republic of Ireland, would have propelled our private sector. Businesses from across the World would have relocated to the UK. Would such a dramatic cut have been unfunded – yes. Would the Treasury’s tax take have reduced – no; they, along with the economy, would have rocketed up.
Taxes in the UK were too high. They had to be reduced.
The Prime Minister is also absolutely right to wish to deregulate to create a lower cost dynamic economy. We are weighed down with EU red tape. We need it gone. This would have nil cost to the Treasury.
Gove and other disaffected bitter has-beens need to take a good hard look at themselves in the mirror. Is their political career more important than the wellbeing of the country? Absolutely NOT.