Johnson’s recovery plan is a shortcut to bankruptcy
“‘Build Back Better’ will only Bankrupt Britain”
By Kieran Neild-Ali, courtesy of Taxpayers’ Alliance
For many people, these political party conferences have been a busted flush. A series of pre-planned and therefore pointless speeches, delivered deadpan to a webcam.
But as we face the worst recession in Europe, what the Prime Minister has to say about the nation’s finances matters. Since his election as leader, the Conservative Party has abandoned its core mantle of fiscal prudence. The days of austerity have been eclipsed by big spending commitments and grand government projects. Even before coronavirus enforced unprecedented state involvement in our lives and economy, Boris was committed to a spend, spend, spend agenda.
A continuation of this spendthrift agenda can only mean one thing for British ratepayers. That’s why we came out strongly against the pork barrel nature of the New Towns Fund and pricey pet projects like HS2. We unpicked the fallacy of Boris’ ‘New Deal’ commitment to build and invest in infrastructure – emulating President Roosevelt’s heavy federal state response to the Great Depression. We didn’t spare the government’s handling of public contracts from scrutiny either – lambasting the terrible waste of taxpayers’ money splurged under the watch of the Tories.
After the rancour of lockdown and the coronavirus, Britain has a national debt of £2 trillion, having borrowed a mammoth £173.7 billion between April and August. Ratepayers face the highest tax burden in 50 years. What the country needs now is an injection of business friendly reforms – cutting taxes and red tape to unleash Britain’s potential. So did the Tory conference deliver?
Rishi Sunak talked a good talk, appearing to blow the dust off the old fiscal responsibility manual. We heard familiar phrases like ‘balance the books’, and a commitment to “leave the public finances strong”. But instead of the promise of sensible economic policies, it appears the chancellor was only buttering the nation up for a tax hike in order to continue spending.
But did the PM have any aces up his sleeve – did he announce the cuts businesses and taxpayers are crying out for?
Sadly, any promise of a fiscal revolution was simply an illusion. Bojo did little to reassure anyone when he echoed former Prime Minister Clement Atlee’s ‘new Jerusalem’ speech. The parallels between Labour’s post-war socialist settlement and Boris’ own post-covid-19 plan were obvious; the state will play a major role in Britain’s bounce back.
Instead, the big announcement of the day was an extortionate £160 million investment in green energy. It’s a promise which comes on top of previous big ticket pledges, and can only leave the country in the red. Johnson admitted bail-outs and subsidies went against conservative ‘instincts’ but argued there was no alternative. This is simply not true. There is a clear alternative to lumbering state interference in the economy.
To boost jobs and growth, the government could have followed our calls to abolish national insurance contributions for employers and their employees – encouraging businesses to hire new staff in the face of a wave of redundancies. If Johnson wants more home-ownership, why not abolish stamp duty for homes under £1 million? The truth is that the modern Tory party seems more comfortable with borrowing billions for a spending commitment than ‘risking any revenue’ on a tax cut (a misnomer everyone thought was disproved years ago).
Sometimes the greatest and boldest reforms are the product of a crisis. Now is exactly the time for big tax cuts, with the VAT cut and stamp duty freeze delivering results across the country. Boris would do well to make these temporary policies permanent and reduce the tax burden.
Although there were encouraging soundbites, ratepayers need assurance that the Conservatives can rediscover the recipe for a real recovery. When the nation hangs on to the Prime Minister’s every word, it’s disappointing he doesn’t use this opportunity to rally the calls from across the nation, including his new ‘Blue Wall’ working class voters, for lower, simpler taxes and less government waste. The Tories need a realistic economic agenda, and it’s a shame they didn’t use their conference to properly set it out. You know it, and I know it: the Conservative Party cannot continue to spend until they’re blue in the face.
Kieran Neild-Ali is a grassroots assistant at the Taxpayers’ Alliance.