New Tory, Old Story

The Tax Reform Commission’s proposals for changes to the British tax system clearly show that, though Comrade Cameron may claim that the New Conservatives care about public services, their primary objective is to help their friends by cutting taxes for the wealthiest in society.

The Commission’s proposals will result in personal and corporate tax cuts of up to £21bn. These cuts will have to be funded from either cuts in public expenditure, increases in other taxes or a mixture of both.

The Tories claim that they can raise the £21bn from green taxes. Green taxes are by nature regressive - they will have greater impact on the poor than on the rich. One example of a green tax is a road tax based on the fuel consumption of the vehicle. The rich, who can afford this green tax, will continue to drive their gas-guzzling SUV, MPV and 4X4. It is the poor, who can only afford older, less efficient vehicles, who will really face the pinch.

Most economists agree that green taxes can only raise a small amount of revenue. The Tories, even though they won’t admit it, will have to cut public services if they are going to deliver the cuts in personal and corporate taxes. They won’t make cuts to the glamourous public services, such as health and education, which are the darlings of the middle class. Instead, they will focus on the less glamourous public services, such as social security, social services and social housing, whose main beneficiaries are the poor.

The Tories claim that these tax cuts will help everyone, including the poor. However, the poorest in society pay little, if any, income tax. They do not pay inheritance tax because most do not own their homes and those who do own homes haven’t reached the threshold at which inheritance tax becomes payable, despite the vast increases in house prices. They will not receive the alleged benefits resulting from the cuts to corporate taxes because they, on the whole, do not own shares or have pensions.

The people who will benefit the most from these tax cuts are the Tories’ friends - the fat cats in the City and on company boards.

The tax cuts will achieve the prime goal of Conservatism. The gap between the rich and poor in society, which is already at its greatest since Victorian times, will be widened.