Isabel Hardman Isabel Hardman

How tax transparency can help the Tories

George Osborne is as adept as any gamekeeper at setting little traps in every Budget and Autumn Statement for Labour to fall down. He hinted at a few in his Marr interview yesterday and they were largely the sort we’ve come to expect from the Chancellor on welfare and deficit reduction, but there’s also speculation that he could set another trap on tax.

Ben Gummer’s 10-minute rule bill calling for National Insurance to be renamed the ‘Earnings Tax’ received a disproportionate amount of attention for what is normally simply a parliamentary device by which a backbencher can garner a little bit of attention for their hobby horse. But the reason it received so much attention was that it was made quite clear that this proposal had sympathy at the highest levels of government. It could well be that this sympathy translates into action later this week, which would be another awkward trap for Labour as it would mean that any attempts to close the post-election black hole by sneakily raising National Insurance would be trickier when voters are encouraged by a new name to associate this payment with a tax rather than some benign social investment that they personally benefit from.

But this isn’t the only clever thing that Ben Gummer has proposed that makes the Treasury happy. Later this year, the first tax transparency statements will be sent to voters, offering a breakdown of how their taxes are being spent. This was another 10-minute rule bill from Gummer that was adopted by the Chancellor. Like the Earnings Tax idea, these statements have a noble aim of making the tax system a little clearer for voters, but Conservative sources also point out that they’ll be most useful for their party as they’ll show not only how much of taxpayers’ money is spent on welfare, therefore making it just that bit easier to make the case for further cuts to that budget.

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