What do voters have to thank the Tories for?

Last November Jeremy Hunt announced what he proclaimed was ‘the biggest tax cut on work since the 1980s’. He cut employee National Insurance from 12 per cent to 10 per cent, yet to his great disappointment, the polls didn’t budge.

This week he decided to double down, lowering NI again, to 8 per cent. ‘The UK now has the lowest effective personal tax rate since 1975,’ he said. It’s likely the public will still be unimpressed, because taxes are rising further. Hunt’s policies will in fact leave the UK with the highest overall tax burden since 1948.

The headline rate may be falling, but the proportion of income subject to taxes has gone up, primarily because tax thresholds have been frozen. Four million additional low-paid workers will be liable for income tax, and another three million will be caught by the 40p rate. Many will find themselves paying the 45p rate.

The Chancellor is billing this as a £900 giveaway for the average worker, combining last year’s 2p cut with this year’s additional 2p cut. But in effect it’s a stealth tax. Workers keep less, not more, of what they earn. Anyone working 35 hours a week on the minimum wage will be only too aware of the facts. They will now pay 47 per cent more income tax than if the tax thresholds had kept pace with inflation. Why should they be grateful to the Chancellor for that? For the first time in modern British history, the average voter will be going to the polls with less disposable income than they had at the previous general election. This is not a formula for electoral success.

It is true that Hunt had little scope for cutting taxes, but the blame for that can be placed on high government spending. The lockdowns and the failure to restore the workforce to pre-pandemic levels have come at a high price.