Theresa May has said there will be ‘fair and balanced’ tax increases to fund a NHS spending boost
When, a couple of weeks ago, the Archbishop of Canterbury preached in favour of higher taxes, there was a widespread view that he didn’t know what he was talking about and could be safely disregarded.
But now that Theresa May has snatched the same hymn sheet, it’s impossible to be so sanguine. In a little-noticed newspaper interview yesterday, she said there would have to be ‘fair and balanced’ tax increases to fund a massive boost in NHS spending.
Profligate clerics are one thing: Justin Welby even ludicrously suggested that paying more in tax could make us happier.
But when a supposedly prudent Conservative Prime Minister places a foot squarely on the tax bandwagon, it really is time to head for the hills.
It would be less shocking if ours were a low-tax economy in which the Government zealously guarded every penny. In that case, most people would probably say, yes, we do need an improved NHS, so let’s all dig into our pockets on this occasion.
But Britain isn’t a low-tax economy. Far from it. According to the Office for Budget Responsibility — that’s the official Treasury watchdog — tax revenues are expected to account for 34.4 per cent of national income by 2019-20 —the most since 1969-70, when Labour’s Harold Wilson was running the show.
Harold was a great tax-and-spend merchant. For those of you who weren’t around in those days (and I can’t claim to have been a taxpayer then), let me assure you it wasn’t a great time for those who didn’t relish handing a large chunk of their earnings to the State.
Mind you, things got even worse in Harold Wilson’s third term in the mid-Seventies, when the top rate of income tax was 83 per cent. On unearned income, it reached an unbelievable 98 per cent.
Since 2010, when the Tories were returned to power with the Lib Dems clinging to their coat-tails, the tax burden has risen inexorably. Those in gainful work — only just over half of adults now pay income tax — have felt the greatest pain.
It’s true the Government has reduced corporation tax, paid by companies on their profits. Lo and behold, receipts from this tax have soared from £44 billion in 2014-15 to £58 billion in 2017-18.
Much less sensibly, in 2014 the then Chancellor, George Osborne, hiked stamp duty payable on many house purchases. Result: much of the housing market has atrophied, costing the Treasury hundreds of millions of pounds in lost revenue. Clever George.
![](https://i.dailymail.co.uk/1/2018/09/20/01/4409996-6187237-image-m-32_1537404280190.jpg)
![During Harold Wilson’s third term in the mid-Seventies, the top rate of income tax was 83 per cent](https://i.dailymail.co.uk/1/2018/09/20/01/4409998-6187237-image-a-33_1537404288591.jpg)
According to the Office for Budget Responsibility tax revenues are expected to account for 34.4 per cent of national income by 2019-20 —the most since 1969-70, when Labour’s Harold Wilson (pictured) was in power
Still, Britain under a Tory government can now boast that it has the highest property taxes (which include stamp duty, council tax and business rates) in the world. They are more than twice the average of developed economies.
The dear old Archbishop of Canterbury probably doesn’t realise that the overall tax burden is close to a post-war high. But I’m pretty sure Mrs May and Philip Hammond, the Chancellor, are perfectly well aware of this shameful fact.
Yet in recent weeks, Mr Hammond has been encouraging speculation about how he will squeeze out some extra income from an already highly taxed country. He might let rip on fuel taxes — already among the highest in Europe. Or he might mount another raid on pension tax relief.
It is surely beyond dispute that the Tories are no longer the party of low taxation. The best that can be said of them is that they are not — at least, not yet — contemplating the stratospheric tax increases that would be necessary to fund Jeremy Corbyn’s ill-conceived extravaganza.
Let’s agree the NHS needs more money, though an extra £20 billion a year has the ring of a back-of-the-envelope figure. Moreover, there is absolutely no guarantee that this vast amount, if forthcoming, would be efficiently spent.
Before the Government asks for any more cash to fund its plans, it should satisfy tax-payers that it has, so to speak, looked under the mattress and beneath the sofa cushions to see what hidden resources it may have neglected.
For example, we learned yesterday of claims that the coffee chain Starbucks effectively paid as little as 2.8 per cent tax rate in the year to October 2017. Despite earning profits of some £162 million, it contrived to shell out just £4.5 million in tax.
More from Stephen Glover for the Daily Mail…
All entirely legal, of course, as are the tax-avoiding measures of other huge American multi-nationals such as Amazon and Apple, which manage to run rings around a comatose HMRC. (That’s the same HMRC which hammers us if we are late in paying a few thousand pounds of tax.)
Do Mrs May and the sepulchral Mr Hammond realise how much ill-will and resentment they will cause if they pump taxpayers for more money while continuing to indulge voracious U.S. behemoths?
And then there is the question of foreign aid, which continues to rise year-by-year. Since it is set by law at 0.7 per cent of national income, it mounts relentlessly as the economy expands.
At the latest reckoning, £14 billion a year is being spent on foreign aid. Most taxpayers know that much of this is siphoned off by corrupt Third World governments or squandered on useless projects.
The latest, barely credible, example of feckless expenditure is nearly £16.5 million of foreign aid being spent to encourage Chinese investments in Africa. Why does China — the second biggest economy in the world — need our helping hand?
A further memo to Mrs May and Mr Hammond: there are many people who will reasonably complain about more taxation if they see resources being wasted on daft, lavish and unaccountable foreign projects.
Last but not least, the Prime Minister and Chancellor shouldn’t ignore Britain’s rapidly improving public finances. In July, the Government received £2 billion more in taxes than it spent. The annual deficit could turn out £13 billion lower than expected in this financial year.
![A couple of weeks ago Archbishop of Canterbury Justin Welby (pictured) 'ludicrously suggested' that paying more in tax could make people happier](https://i.dailymail.co.uk/1/2018/09/20/01/4409968-6187237-image-a-28_1537404208401.jpg)
A couple of weeks ago Archbishop of Canterbury Justin Welby (pictured) ‘ludicrously suggested’ that paying more in tax could make people happier
Granted, there is still a deficit, though a diminishing one. So the extra £13 billion is hardly a windfall. But it doesn’t make sense to load all the extra costs of the NHS on the taxpayer.
The self-same taxpayer, one might add, who has endured eight years of austerity — which has entailed worsening public services across the board — and won’t be happy being stung for more taxes.
Why has the Tory hierarchy forgotten that their party is supposed to be in favour of lower taxes — not least because they are one of the pre-requisites of a healthy economy?
Do they ever look at Trump’s tax-cutting United States, where a feisty growth rate of 4.1 per cent in the second quarter puts the EU, including the UK, to shame?
Perhaps they think they can get away with another comparatively modest tax increase because what Corbyn promises is so much more draconian. But that would be a dangerous thought. What is the point of the Tories if they uphold an ever bigger state?
I don’t know whether the NHS needs an extra £20 billion a year. I do know that the correct amount, whatever it is, should not be raised by adding to a tax burden already at near-record levels.
And while I understand Theresa May has her mind on other things, it’s very hard indeed listening to a Conservative Prime Minister talking so serenely about raising further taxes.