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Nadine Dorries MP

Nadine Dorries MP: Cutting taxes for the low-paid will do most to stimulate the economy

Growing up on a Liverpool council estate, I remember exactly when I decided where my political loyalties lay. It was the day before a general election. I was very interested in what was going on, but not old enough to vote.

Standing on the on the doorstep of our terraced house, watching a neighbour brushing the dust off her step and pavement into the gutter, I asked her, who are you going to vote for tomorrow? “Conservatives”, she replied. I responded, rather naively, in my then very heavy accent, “Conservatives, what have you got to conserve?” None of us had anything, not two pennies to rub together on the day before pay day and the notion of voting for a party with the name Conservatives seemed utterly ridiculous. “Because”, she responded, “they are the party for the family”.

Within a few years both my neighbour and mother had bought their council houses and it is safe to say, both families have never looked back. Margaret Thatcher was popular on the estate; regarded as having put down a helping hand and lifted people up from a life time of lodging with the state.

The home owning mechanism to help ambitious strivers is being re-introduced by this government and will hopefully be extended to Housing Association homeowners. The proviso being that money raised from sales will be ploughed into building further homes. Right to buy is a policy which sends out exactly the right message from a party which both understands and cares about those who want to improve their lot for both themselves and their family.

Under Labour, the poorest workers, those to whom every penny taken in tax mattered, paid hundreds of additional pounds of taxation every year following Gordon Brown's 10p fiddle.

I know how well that policy went down as I was stood in the members’ tea room at exactly the moment the kitchen staff were given their pay packets with the diminished bottom line. The disbelief that those who could afford it the very least were being made to pay more was articulated in a way which was embarrassing for the Labour members present. Not aggressively, but in a way which transmitted severe disappointment and betrayal. The message was very clear; you cannot improve your lot.

Policies do more than tweak a few pounds here and there.  They communicate in a way a party political broadcast never can, the true heart of a government and whether or not it really cares about hard working families.

I have travelled a great distance since my council house upbringing. I now know a number of people who live in houses worth more than two million pounds; each and every one a hard worker and a savvy investor. None are greedy, and all are or have been wealth-creators and employers in their own right. Almost each and every one has risen from humble beginnings and worked hard to get where they are today.

They send their children to schools where the fees are £30k per year per child, out of taxed income. They drive expensive cars and in summer holiday in Disney World Florida or Barbados and in winter ski on Blackcomb Mountain in Whistler or in Val d'Isère.

They don’t clean their own homes or do their own ironing and often have an au pair to help with the children, a gardener to help with the garden and a groom to look after the ponies.

As a Conservative MP, I am a passionate believer in lower taxation and in keeping spending under control. I wish the cuts in public spending were deeper and faster in order to aid a quicker recovery. As a priority, I also believe in doing all we can to stimulate growth and wealth creation.

To advocate a tax increase is an anathema to me. It makes me uncomfortable. The suggestion makes me want to itch; it sticks in the craw, not something I ever thought I would do. And yet, in the face of such a disastrous mess left by Labour, I find myself in the position of supporting a call to introduce some kind of wealth tax in order to benefit the lowest wage earners.

Specifically, I support Tim Montgomerie’s call for a £10,000 tax threshold for lower-wage earners, partly financed by an increase in council tax on larger properties. It may also be necessary to introduce a capital gains levy on the sale of properties worth more than £2 million.

There is no better way to stimulate growth in the economy than by putting money into the hands of those who have none. I know many young people earning very low wages who budget down to the very last penny. They can only barely afford basic necessities. Many working families are struggling to heat homes and buy food.

When freeing up money to plough back into the economy it’s an even better idea to put money into the hands of those who are about to buy their own council homes, as this is always followed by investment in home improvement and an upsurge in the DIY sector, creating jobs and unblocking a stagnant market. Money in the hands of those who have none also encourages saving and reduces levels of personal debt.

Money spent and ploughed back into the economy encourages confidence in the markets. Confident markets return a greater yield on investments and those who own homes worth in excess of two-million pounds are the first to benefit. In reality, the additional levy on council tax in order to fund the raising of the tax threshold on the lowest earners is a win-win situation, one which may ultimately make the two-million pound home owners better off too.

If George Osborne raises the tax threshold, he will go down in history as the antithesis to Brown. He will be the Chancellor who helped the poor and Brown as the Chancellor who taxed them. He will send out the right message.

Regardless of Liberal Democrat posturing and attempts to claim the policy as their own (Conservatives were talking about a £10,000 limit long before the Lib Dems) he will be written about and remembered as a Robin Hood Chancellor, and I imagine he wouldn’t mind that message one little bit.


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