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Joe Armitage: On entrepreneurship and tax cuts, David Cameron is another Margaret Thatcher

Joe Armitage is Chairman of Medway Conservative Future and Deputy Chairman (Political), Rochester East Conservatives. He’s also on a gap year interning for a Conservative MP. Follow him on Twitter.

Screen shot 2012-09-18 at 12.49.34On the one hand, some people claim that David Cameron and Margaret Thatcher are cut from the same cloth. The Leader of the Opposition even went so far as to say Cameron was a “Child of Thatcher.” On the other, there are those within the Conservative Party who believe that David Cameron is not a conservative, that his policies are centrist and that he has abandoned conservatism: this, to me, is nonsense. The policies of the Coalition Government have produced encouraging results such as job and business creation, but they’ve also brought about an atmosphere which fosters growth, and it’s inevitable that the green shoots will appear.

Ed Miliband recently told the Daily Telegraph that “Thatcher created an era of aspiration". It’s true, she did - but I also believe in decades to come, it will be said of Mr Cameron that he, too, is responsible for creation an era of aspiration. When you look at the mission of Lady Thatcher’s government and compare that mission to that of David Cameron’s government, there are many similarities. The Coalition is dedicated to promoting hard work, self-determination and expunging Britain’s dependency culture. That is also true of Lady Thatcher’s aim of self-reliance, individualism and rolling back the state in accordance with negative freedom.

When you look at the policies of this Government and compare them to Lady Thatcher’s, one can see that the challenges are very similar challenges. In 1979, when the first Thatcher Government came to power, the highest rate of corporation tax was 52% and the highest Income Tax threshold was a hernia-inducing 83%. These levels of tax were discoursing growth, aspiration and self-development. When David Cameron’s government came to power, corporation tax was 28% and income tax was at 50% - obviously far lower than under Callaghan but too high nonetheless. But what did both of these Conservative governments do? Lady Thatcher reduced the main rate of corporation tax from 52% to 30% and the small companies’ rate from 41% to 25%. Similarly, in the first year of this Cameron-led government; corporation tax has been reduced from 28% to 24% with an aim of 20%.
Income tax tells a similar story. Lady Thatcher reduced it from 83% to 60% and then down to 40% before leaving office. Mr Cameron has reduced it from 50% to 45%, with it being held  under review. As illustrated, the direction of both of these governments is ideologically comparable - to reduce the size of the state to ensure that entrepreneurship and private enterprise isn’t crowded out, and to cut taxes to allow room for aspiration and self-development. The Conservatives now, like the Conservatives of the past, are on the side of people who work hard and want to make something of their lives. It’s clear that the Government is striving to amend Britain’s work ethos into a something-for-something culture rather than a something-for-nothing one.

One year on, and you can already see the birth of Mr Cameron’s aspiring generation: an estimated 904,000 apprenticeships starts have taken place since the Government took office, and the number of people starting apprenticeships has increased by over 60 per cent in 2010-11. It’s striking that, just as under Lady Thatcher, entrepreneurship has started to come through, with over 450,000 start-ups in 2011 alone. As Lord Young’s report on entrepreneurship in Britain indicated, there would be approximately 900,000 more businesses in Britain if it had the same culture of entrepreneurship as the US. It is encouraging that in just over two years of this government over a million jobs in the private sector have been created. This proves that it’s not the job of the Government to create jobs; it’s the job of the Government to step aside in order for jobs to be created.


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