‘You want the dowry, but you don't like the bride’ is how Israeli prime minister Levi Eshkol summed up his colleagues’ wish to keep Judea and Samaria but not the Arabs living there. I feel much the same about right-wingers losing their shizzle over a report in the Sunday Telegraph about new taxes being mulled by Downing Street. Christopher Hope has two sources who say the Prime Minister and Chancellor are contemplating a ‘mansion tax’ (either in the form of an annual wealth tax or a higher council tax band) and cutting pension tax relief on those earning over £50,000 from 40 per cent to 20 per cent.
‘Had we wanted Labour, we'd have voted for Corbyn,’ huffed the Bruges Group. Ryan Bourne from the Cato Institute detected ‘a class war redistributive agenda’ on the cards at the Treasury, but, with apologies to Russell Kirk, Saj’s not a communist, he’s a jogger. The Telegraph leader column damned the wealth levy as potentially ‘catastrophic’, declaiming a rumoured increase in inheritance tax as ‘an assault on the family’, and fretting that a mansion tax ‘would undermine one of our key selling points as a country’. Treasury officials, the paper charged, were ‘dusting off every absurd anti-Tory and anti-supply side idea cooked up by left-wing think tanks and technocrats these past 20 years’.
Brexiteers understood that the 2016 referendum aligned state-slashing Thatcherism with a working-class demographic that lacks the right’s cynicism about the merits of government. Without that demographic, we would still be in the European Union. Without that demographic, Boris Johnson would not be in Downing Street today. You got the dowry, now you’re stuck with the bride.
Besides, the bride is not as unprepossessing as some right-wingers would have you believe. For one, the proposed reforms to pension tax relief would reportedly generate £10 billion per annum, a hefty chunk of change for a government which spent the election handing out IOUs to voters in the North and Midlands like it had access to Scrooge McDuck’s money bin. The Resolution Foundation has previously estimated that a mansion tax of one per cent on purchases over £2 million and two per cent over £3 million would raise £1.1 billion annually for the Treasury. New York introduced a mansion tax in 1989 and has yet to fall into Bolshevist depravity. The progressive property tax applies a one per cent levy to purchases of homes valued over £774,000, 1.5 per cent at £2.3 million, 2.25 per cent at £4.6 million, 3.25 per cent at £9.3 million and 3.9 per cent for anything in excess of £19.3 million. In France, l’impôt sur la fortune immobilière is another progressive levy that taxes properties ranging from over £676,000 (0.5 per cent) to more than £8.5 million (1.5 per cent).
The Telegraph points out that those affected by a mansion tax would be households ‘principally in the south of the country’. They say that as if it were a bad thing. The rebalancing of the economy from London and the south to the rest of the country is long overdue. Delondonisation will redistribute wealth and opportunities from the place that has been monopolising both for generations to the communities denied them.
These proposals sound too ambitious to get past the Tory backbenches, yet in many ways they are excessively timid. Social democratic governments aren’t the only ones that can use fiscal policy to attack social and economic inequalities. Capping entrepreneurs’ relief at £1 million (instead of the current £10 million) would not only raise £1.4 billion this year, but it would also be entirely in line with the Tory mantra that it is the party of small business and those on middle incomes. The Resolution Foundation also calculates that scrapping lifetime and help-to-buy ISAs — which essentially give wealth to those who already have wealth — would raise £1bn annually by 2023/24. The revenue generated would not only pay for promises already made but fund transformative investment in housing, health and education in those communities that have never really recovered from deindustrialisation.
Nor need it all be about tax rises: setting corporation tax at regional or city level could allow government to make it more attractive to do business in Castleford than in Camden. This would take us closer to the Swiss system of tax competition between cantons and would give the regions a fighting chance. If this all sounds a bit Londonphobic, let’s remember that the capital has the highest percentage living in relative poverty after housing costs (28 per cent) of any region of the country. One way to reduce this would be a land value tax. The London Assembly planning committee estimates such a levy could free up enough land in the capital to build 276,000 housing units.
It’s understandable that Tories baulk at such suggestions, for they run counter to what the Tory party has believed for the past 40 years. But the Tory party goes back a lot further than that and what is now spat upon as heresy was once conventional Conservatism. Gearing the Tory party towards the interests of the poor and those on modest incomes is not progressivism, but Peelism:
‘I shall leave a name execrated by every monopolist who, from less honourable motives, clamours for protection because it conduces to his own individual benefit; but it may be that I shall leave a name sometimes remembered with expressions of good will in the abodes of those whose lot it is to labour, and to earn their daily bread by the sweat of their brow, when they shall recruit their exhausted strength with abundant and untaxed food, the sweeter because it is no longer leavened by a sense of injustice.’
Today, the monopolists are those who hoard significant wealth or property and pay minimal tax on either, entrenching inequalities that deny a great many others their fair chance in life. Those who labour are those struggling to get their hands on a chance. The Tories should not make enemies of the wealthy — some of whom have worked hard for what they have — but there is scope to pursue a common-good conservatism that appreciates the social relationships and responsibilities of a country with chasms in income, wealth and economic opportunity. The breaching of Labour’s Red Wall wasn’t just about Brexit or winning an election. It is a chance to reacquaint Toryism with a sense of justice.