An occasional column for all Conservatives over 45, whether paid up, fed up or just lapsed.
"The spirit of self-help is the root of all genuine growth in the individual."
Samuel Smiles, Self-Help (1859) Ch. 1.
"There are few ways in which a man can be more innocently employed than in getting money."
Dr Samuel Johnson, 27 March 1775 in Boswell Life, vol. 2.
For those of us brought up on that sound Conservative principle of self-help, this Government's stealthy attack on our finances is proving very costly. Gordon Brown, with his ever-longer Finance Acts and ever more desperate efforts to plug loop-holes, is rapidly becoming the Chancellor from Hell. I wonder if all those Middle England voters who flirted with Blairism on 1st. May 1997 thought it would turn out like this? Here is a list of stealth taxes so far:
The removal of mortgage interest tax relief.
The abolition of the married couples allowance.
The removal of the age-related married couples allowance where neither of the married couple were aged 65 before April 6, 2000.
The abolition of reclaimable dividend tax credits for non-taxpayers.
The reduction in the level of tax-free savings that can be made each year. Under PEPS and TESSAS it was £12,000. Under ISAS it is £7,000, reducing to £5,000 on April 6, 2001.
The removal of tax credits on UK dividends for pension funds meaning that pension contributions will need to be increased to provide the same level of benefits.
The removal of the dividend tax credit after April 5, 2004 for PEPS and ISAS (it has already been reduced to 10% from 20%).
The gradual increase in taxation of company car fuel.
The increased levels of stamp duty on house purchases.
The failure of the higher-rate tax threshold to increase at the same rate as earnings. Since 1997, an extra 220,000 people have to pay tax at the top rate.
The failure of the inheritance tax nil-rate band to increase by the rate of inflation meaning more inheritance tax is payable – especially on the death of property owners.
The National Insurance burden on employers has increased due to the increase in both rates of NIC and the threshold at which it stops.
The removal of tax relief on all maintenance payments except for older people.
The proposed removal of the facility to carry forward unused relief for personal pension.
It should be noted that many of these stealth taxes are directed at families and older people, the very "forces of conservatism" that Tony Bliar so reviles. We are being stealthily parted from our money gained in "innocent employment" and having it redistributed in some politically correct agenda which was not in the manifesto. And of course, I have not mentioned the eco-terrorist led tax attack on fuel prices. John Redwood recently drew attention to this when he famously asked Gordon Brown the price of a litre of petrol and how much of that went in tax. Gordon didn't know the answer and neither did anyone else on the Government Front Bench. But then, why should they? Neither Gordon nor Stephen "Bozo" Byers (Minister responsible for the car industry) can drive. And as for John "Two Jags, Four Homes" Prescott, enough said!
The problem I have with all of this is that the rot was started by two Conservative Chancellors: Norman Lamont and Ken Clarke. For example, the Conservatives were first to reduce the real value of mortgage interest relief and married couples allowance by restricting these allowances. Whatever did John Major and his "complicating Chancellors" think they were playing at? No wonder they lost the confidence of Middle England and the 1997 election.
Will Michael Portillo turn into a great reforming and simplifying Conservative Chancellor like Nigel Lawson?
Will he attempt to turn the Lamont/Clarke/Brown tax ratchet back a good few notches? The evidence sofar is not encouraging. Perhaps we should club together to buy Michael a copy of "A Guide to the Simplification of the British tax system"*. The next general election is probably less than a year away. So lets start to hear it from the Conservatives that low taxation is back on the agenda. Lets hear it that supporting your family, buying your own home, saving for your old age, passing wealth to your children and those other thrifty Conservative values are what make us different from the trendy Islington Mafia of Tony Bliar. Less PC and more WI, please!
"A Guide to the Simplification of the British tax system". Jacob Braestrup. Adam Smith Institute.