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Building a Conservative Majority (15): Reintroduction of the 10p tax band

By Tim Montgomerie
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The raising of the income tax threshold may not have been the policy of the Conservative Party at the last election but it's been the policy of the Conservative movement for a long time. Lord Forsyth advocated it when he chaired a tax commission for George Osborne at the beginning of the last parliament. Lord Saatchi recommended it in a Centre for Policy Studies paper before that. Norman Tebbit has always been a big advocate of lifting the low-paid out of the income tax system. Other supporters have included Janet Daley, Charlie Elphicke, Robert Halfon and, on ConHome's own pages, Edward Leigh.

Unfortunately, however, the Lib Dems can justifiably claim the lion's share of the credit for it being part of the Coalition Agreement. As we go forward the Tory leadership needs to craft its own tax policy that appeals to the blue collar Britons who don't currently think that we're on their side.

Cutting tax on entrepreneurs and corporations was the right thing for George Osborne to do in the last Budget in order to get the economy going but we must declare very loudly and clearly that tax cuts for the working poor will be our priority as the economy picks up. My suggestion is we reintroduce 10p as the starting rate of income tax. At first, of course, it will have to be a very narrow band but as resources allow it should be our flagship tax policy as soon as we've fulfilled the Coalition commitment to raise the threshold to £10,000.

There is some talk that the Coalition might over-fulfil the £10,000 promise and lift the threshold even higher, taking more people out of tax. I think this would be a mistake. We don't want too many people not paying income tax. We want most Britons to feel the burden of the state's expenditure. We also need a policy that the Conservatives clearly 'own'. Although George Osborne gets much of the credit for the threshold policy in the eyes of voters - because he's the guy who gets up and announces it - too many people see it as a policy forced on the Conservatives by Team Clegg.

Norman Lamont was the first person to introduce a lower starting rate of income tax. He introduced it at 20p (if my memory serves me right). Gordon Brown then introduced the 10p band before abolishing it in one of the defining moments of the Labour years. A blue collar Conservative Party that cares for the low-paid should reintroduce it.


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