Can the Conservatives credibly describe themselves as the 'low tax party' anymore? - Bill Carmichael

Forgive me for being so grumpy, but January is a notoriously difficult month for many families, especially in financial terms.

Not only do we have to pay off the bills that ran up during last month’s festivities, but January is also the deadline to fill out the HMRC self assessment form and pay any extra income tax owed.

Added to the increased energy bills and the cost of living crisis, this can make life particularly hard this time of year.

To contradict the poet T.S. Eliot, it is January, and not April, which is “the cruellest month”.

Like many people I pay income tax on my main salary through the PAYE system. But I also earn a small amount extra through freelance journalism and occasional consultancy work, which is not taxed at source.

So I have to calculate these earnings and pay a chunk of them to HMRC. Ouch! It is a small amount compared to my PAYE payments, but it always hits hard.

Don’t get me wrong, I have no objection in principle to the idea of taxation.

It is right that those who can afford to pay support the destitute and infirm. That is a foundational precept of Christianity and many other religions.

It is a mark of a civilised society that we pay collectively towards health and social care, education, benefits for the poor, defence and the criminal justice system.

But it is the sheer amount we are expected to pay that seems out of proportion.

Take me for example. I am far from rich, yet in the tax year 2021-22 I paid well north of 24 per cent of my earnings in income tax and national insurance alone.

If I added in VAT, council tax, fuel and alcohol duty and “green” taxes on energy bills, what would the final figure be?

I have never completed a detailed calculation, but I reckon it would be between 30 to 40 per cent. Frankly, that is ridiculous.

In contrast, the traditional “tithe” paid by Jewish and Christian religious communities was 10 per cent of total income. That sounds more like it.

And if it was good enough for the ancients, who took their obligations to help the less fortunate as a serious religious duty, it is good enough for me.

The Conservatives used to boast of being the “low tax party”. Indeed that probably explains why they have won so many general elections over the years.

The philosophy was that if you allowed ordinary workers to keep more of the money they earned they would spend it far more wisely than any bureaucrat or politician.

You are naturally more careful when spending your own money, than when you are spending other people’s.

This money would be spent on local businesses - builders, plumbers, shops, pubs and restaurants - who would in turn create more jobs, and those workers would pay more tax to finance the public services we want.

So low taxes, according to this theory, created a virtuous circle - more money in our pockets, more local jobs, more growth and prosperity and better funded public services.

But despite the electoral success this has brought them, the Conservatives have completely abandoned this low tax philosophy.

Indeed, Mr Sunak didn’t even mention reducing taxes in his speech this week, and instead his government has imposed the highest tax burden on ordinary citizens since the 1940s.

I suspect that there are millions like me who still find the low tax, high growth plan attractive. The Conservatives have made it clear that they are no longer interested in our votes, so where do we go?

Right on cue, this week the Reform UK party leader Richard Tice popped up with a plan to raise the starting rate of income tax to £20,000 - something that would have a transformative effect on the working poor.

To be paid for by "cutting government waste", according to Mr Tice, as he vowed to “completely reshape politics in the UK”.

Reform UK won’t win the next election, but they could inflict fatal damage on the Conservatives.

The alarm bells are ringing loudly for the Tories. Is anybody listening?