Bedlam broke out in the House of Commons during the 1985 budget statement. I saw it myself, as I had a privileged position in the gallery: my father, Nigel Lawson, was the Chancellor.
It was when he announced he was cutting the top income tax rate from 60 to 40 percent that the place erupted, with Labor cries of ‘this is an obscenity’. Hansard also notes that the meeting had to be adjourned because of ‘serious disorder in the House’.
The anger of the opposition was the… Conservatives‘ joy. That budget, by far the most radical led by Margaret Thatcher, is invoked by conservatives to this day – especially now, at the start of a party leadership election in which tax appears to be the biggest battleground.
On this point, Rishi Sunak has set up his booth as the narrator of hard truths.
In his resignation letter last week, he stated that both he and the prime minister “wanted a low-tax, high-growth economy and world-class public services, but this can only be delivered responsibly if we . † † make difficult decisions. I firmly believe that the public is ready to hear that truth. Our people know that if something is too good to be true, it isn’t true.’
At this point, Rishi Sunak has set up his booth as the narrator of hard truths
Aggressive
This was a defense of his strategy to bring the deficit – grotesquely swollen by the economic fallout of Covid-19 – under control, first with a manifest-breaking increase in national insurance to fund the ‘social care plan’, and now with a sharp increase in corporate tax.
(It is important to note, however, that under Sunak’s proposal to increase the levy to 25 percent, small businesses will be exempted through a ‘profit threshold’: about 70 percent of enterprises will remain at the existing 19 percent rate. Pay. )
Meanwhile, the rest of the almost comically numerous contenders are now in a separate competition to see who can be the most aggressive tax-cutter. One of yesterday’s headlines referred to a ‘call for massive tax cuts’ by some of Sunak’s rivals.
These include Sajid Javid, Liz Truss, Jeremy Hunt, Grant Shapps and Tom Tugendhat. Interestingly, all of these candidates campaigned to stay in the EU during the 2016 referendum campaign. Sunak joined the Leave team, despite great pressure from then Prime Minister David Cameron.
Given the overwhelming preference of party membership for that side of the argument, given that they remember who was in that trench with them and given that it is their votes that will ultimately decide who becomes leader. It’s obvious why so many conservative former remnants claim to be most loyal to the tax-cutting instincts of party membership.
Meanwhile, the rest of the almost comically numerous contenders are now in a separate competition to see who can be the most aggressive tax-cutter.
These include Sajid Javid, Liz Truss, Jeremy Hunt, Grant Shapps and Tom Tugendhat
And true to the legacy of Margaret Thatcher, whose Eurosceptic rhetoric (if not her actual decisions during her tenure) inspired many campaigning to leave the EU. As a boy, Sunak even wrote an article for his school paper complaining about Tony Blair’s 1997 election victory, precisely because the Labor leader was fully committed to the ‘European project’.
But where would Mrs Thatcher stand now on the issue of taxes and expenditure? I suspect she would have been wary of those promising “huge tax cuts” without specifying how they would cover the income shortfall except by borrowing even more.
Indeed, some of the candidates have simultaneously demanded much higher government spending on defense (rightly so), but without even suggesting in the least what budgets they would cut to find the countless extra billions being proposed.
They are all “cakeists” – that is, echoing Boris Johnson’s remark, which he always followed, that “my policy on cake is to have it and eat it.” Let’s not forget that our national debt is over 100 percent of GDP, compared to 83 percent before Covid hit, and this fiscal year the interest bill on central government debt alone is likely to be £85 billion.
It is true that tax cuts can have a stimulating effect on the economy. However, the problem we face is not a lack of demand, but inflationary pressures. Adding to that may not be the smartest move on the economic chessboard.
We should also not forget that when Margaret Thatcher took office, she considered her main tasks to be to suppress inflation and control public expenditure. My father’s tax cuts followed later.
Indeed, a number of candidates have simultaneously demanded much higher government spending on defense (rightly so)
They are all ‘cakeists’ – that is, echoing Boris Johnson’s comment, which he always followed, that ‘my policy on cake is to have it and eat it’
In the summer of 2020 I discussed this with Rishi Sunak. He told me he had read my father’s political memoir, The View From No. 11, had read again and wanted him to return to that address in London so they could meet.
I told Sunak that unfortunately my father, then 88, was not physically able to make the journey from his home in Sussex. In an instant, Sunak said he would get on a train to see him there, which he did one evening a few days later.
fake
And a few months ago, Sunak said this in a lecture to Bayes Business School, London: ‘The idea that tax cuts, without any austerity or substitute source of income, will stimulate the economy to such an extent that the budget balance improves, allowing for further tax cuts. † † is a false kind of vicious circle and emphatically not part of my thinking.” †
He added, “Not my words — Nigel Lawson’s.” Actually from my father’s memoirs.
Sunak went on to quote Margaret Thatcher’s own memoirs, particularly her account of the massively heavy budget of 1981: ‘I was shocked at the thought of withdrawing even some of the progress we had made in lowering Labor’s tax rates. to spin. Still, I knew deep in my heart that there was only one right decision, and it had to be made now.”
I’m fine with several potential conservative leaders promising immediate tax cuts. But only if they simultaneously indicate which budgets they would reduce and how would I consider them suitable for the position of Prime Minister.
This is an unfortunate own goal from the BBC
Never in the 145 years that England played test cricket had the national men’s team scored so many runs to win in the last innings as last Tuesday against mighty India.
I was of course looking forward to hearing the reflections on this historic achievement in the sports bulletins of the Today program on BBC Radio 4 the next morning. But there was nothing. The entire sports section of 7.30 am was exclusively devoted to the European Women’s Football Championship.
The 8:30am slot had five minutes, no less, on the same event. But again, no nonsense about the triumph of an England cricket team that had also just beaten World Test Champions New Zealand 3-0. This was the end of a remarkable revival under their new captain Ben Stokes; under the old management they had only won one of their previous 17 matches.
Never in the 145 years that England played test cricket had the national men’s team scored so many points to win in the final innings as last Tuesday against mighty India
I realize that after buying the rights to show all of the Eurofooty women’s matches, the BBC wanted to justify its investment.
But I was even more surprised that on Thursday’s 9:00 am news bulletin on Radio 4, just as it appeared that the Prime Minister had resigned, we were excitedly informed the previous evening about the England women’s team victory in their first round – a fact that presumably known by anyone who might have been even remotely interested. The BBC does not act as a balanced reporter on women’s football, balancing the interest and interest of the public against other sports and events in the rest of the world, but as a fully invested promoter – to the extent that news values go wild distorted.
The average attendance at matches in the top division of the domestic women’s game (the WSL) is just over 2,000, and for the Women’s Championship the figure is barely more than 500. Admittedly, a record 69,000 attended the opening game of the European Women’s Championship. But with ticket prices of £5 for children and £10 for adults, they are almost given away.
As is the BBC’s reputation for balanced sports coverage.