Dr Lee Rotherham: In Defence of Lower Taxation

Dr Lee Rotherham is co-author of the Bumper Book of Government Waste, a light-hearted look at state squander, due out on 2 February. He fought the eponymous seat of Rotherham in 2005 and unleashed butlers in St Helens South in 2001.

Conservatives seem at the moment to be living a twilight moment, or perhaps rather a Ray Harryhausen one. Shrouded in mist, our eyes pierce the gloom to behold a dark form glide softly from across some Acheron shoreline, a haunted barque to transfer us to the mythical realm of policy.

Noone seems to quite know yet where we stand...

Are we a party of selective education? Apparently not, unless you’re in Ulster.

Europe? A vast field, seemingly taboo.

What about our position on ID cards? Well, that one was also a veto subject from the whips for any candidate wishing to put it in their campaign literature in the last election.

With the flood that overthrew the Duncan Smith leadership, only a bare raft of beliefs seemed to have survived, the ideological flotsam considered ‘safe’ enough to carry the weight of a battered party. Clearly, Michael Howard’s inner circle feared that the survivors would end up following the fate of the Méduse, the frigate immortalised in the dark painting in the Louvre by Théodore Géricault, with the lean and the plump eyeing each other up in a death struggle. Better then to campaign around small concepts than great ideologies. Far less risk in the run up to last June.

And now, of course, we find ourselves once more in the half-light of policy reflection, with several working groups set up to thrash about in policy waters, to suggest ideas which may – or may not – be taken up at the close of day.

But what about one of the key fundaments of Conservative philosophy, the cause of lower state expenditure? Or to use the seemingly politically incorrect term, “lower taxation”. Where stands that today? It's not just Murdoch who is inspecting the tea leaves in the Osborne porcelain.

A year ago, a death hush would have descended in public gatherings with the use of such a phrase, and indeed it famously cost the head of more than one candidate, to be impaled upon spikes at Traitor’s Gate.

How have we come to such a fix, where stating even the possibility of significant tax cuts is enough to bring anathema and damnation from the party that was its erstwhile synonym? John Redwood alone seemingly stands, as the metaphorical outpost in Acre after the collapse of the Kingdom of Heaven.

There is a generic perception that we live in a modern, caring, compassionate society that doesn’t send destitute women half naked down coal mines, but where part of the payment for this is that the state (ie the taxpayer, ie you) picks up the tab. Since we don’t want to see primary school children forced up chimneys, there is an automatic presumption that even the slightest reduction in the state’s take is a dastardly retrograde step towards the world of top-hatted bemonocled monopoly icons.

There is of course the principle of the occupied field behind this, that works as well for tax take as it does for federal constitutional law. But in part I also attribute it to a consistency in the message from the Left. For the whole of the Eighties and Nineties, commentators and the voting public were bombarded with similar messages on how tax cutting was evil as it was a form of theft from the needy. Thatcherism, and Reaganism for that matter, were portrayed as selfish policies for a narrow set. By the same principle that operates in North Korean prison camps, the constant blare of the loudspeakers over two decades have left a Manchurian imprint. “Eighteen years of Tory misrule” equates in part at least to a period of perceived starvation of the public services, with nurses reduced to rags, firemen begging in the street for bread, miners being shot by paramilitaries … you know the retro-mythology. Never mind the new wealth that tax reductions saw brought into the increased public coffers. Never mind that later under John Major’s neo-Heathism we saw return to tax, borrow and spend. It is glorious Ceaucescu psyops.

Recently, I have been engaged upon the arduous yet entertaining task of writing a book with Matthew Elliott - that Scarlet Pimpernel of the TaxPayers’ Alliance. The centre of gravity of the work rests with the sheer quantity of wastage that is daily leaching from all levels of government, from your local council (indeed, even at parish level) through regional bodies to Parliament, and beyond to Brussels. The straightforward conclusion that emerged was that the money could and can be better spent, and better yet if it had not been spent by government at all. Some waste was comic, others tragic, yet more scurrilous.

Take, for instance, the issue of the Government Car and Despatch Agency, which has only now crossed my desk. I calculate that the 85 cars known to be used, assuming they were all jags, would by themselves bumper to bumper cause a tailback 432 metres long (or, if you like, over a quarter of a mile). That means they wouldn’t all fit into New Oxford Street.

Part of the research involved looking at where the money came from. What absolutely shocked me was how the state’s tax take has exploded over what is in fact a relatively short period of time. Or to put it another way, what some would style “radical” reform to the present budget would only take us back to the days of Callaghan.

Detailed analysis of the known waste, and dextrous use of a calculator, added up to the sum of £82 billion pounds that is estimated as being misused every year.

Eighty two billion. 82,000,000,000. That’s a cosmic sum of money. Spectacular. Unfathomable. Well, let’s put it into context...

That’s about half the money the Beeb estimates the Pentagon has spent on “war spending “ since 9/11. 

£82bn would fund nine years of the US “Star Wars” defence project.

I calculate it would pay for 63lbs of rice for everyone on the planet if you bought it at  an exceptionally large supermarket.

You could buy off the entire US national megadebt in a century and own Washington DC (if the Chinese don’t get there first).

Or more surreally, if you believe that a million monkeys typing on a million typewriters could come up with Shakespeare, I calculate you could run that experiment for sixteen years without breaching animal welfare rules. It would be as meaningful as the projects the money’s presently funding.

The point is that this is a phenomenal waste of national resources that is going straight down the pan. As our book points out, these figures are incidentally backed up by research undertaken by the European Central Bank, looking at levels of national wastage from an entirely different, macroeconomic, angle.

So we can afford to be bold in reforming public finances. It’s not a question of attacking them, but of rescuing them.

The James Report was allowed to inch some way towards this. But we too rarely see from the Conservative benches a defence of the merits of low taxation. To their credit, we did see leadership contenders start to make the moral case. Lower taxes can generate increased tax take as well as generate wealth, crucially at the same time as lifting people out of poverty in a materially greater and more sustainable way. But this needs to be shouted from the rooftops, not meekly muttered as an apology for where the Party is sort of coming from.

Nor is it enough to expect that some campaign organisation like the TPA, CPS or the ASI, no matter how outstanding, will of itself carry the argument. Imagine the catastrophe if great men like Selsdon and Harris had never received the backing of individuals in and around the cabinet. There would have been no need to develop stealth taxation. It could have been carried out openly, and in greater depth. We would today be like Albania without the hats.

Our country, like most Western nations, is looking at a massive pensions crisis. It will hit us: this is inevitable. It will hit us harder if we continue to rack up state costs by employing useless mouths in politically correct jobs. It will hit us harder yet if we continue to desecrate private pensions funds. Were Gordon Brown living in a different century, he would deserve defenestration for his shameless raid for which he himself will escape all censure, because when the damage gets felt he will be long gone. For bare faced arrogance, let’s also remember the disgraceful lies that were peddled by the spin meisters in 1997 about Peter Lilley’s long-term pension reforms, where the Millbank pinnochios spread real panic about pensioners seeing their allowances cut. In any case, we will hit a brick wall unless we fix it now. Literally, every day that passes will make the final measures more grievous to endure. It is no comfort if the Italians, Belgians and so forth will find their wreckage worse.

Nothing is certain in life, but death and taxes. If we can lower the latter, then the rest becomes easier for all.

The country needs lower taxation. It needs it to fund long term private pensions. It needs it to boost the economy. It needs it as a motor to cut waste. It needs it as a lever to remove political correctness. It needs it as a means to force government to stop the slide towards a liability culture. It needs it as a mechanism to bring the poor out of poverty.

Today, the Westminster environment is confronted with a challenge as well as an opportunity. Lower taxation is a moral imperative. Now is the moment for the Conservative Party to stand up for its beliefs.