Stephen Pollard

environment for businesses to prosper and boost the economy is vital. It is also, crucially, about the people employed by business, most especially the lowest earners.

Reducing the tax burden on earners “just about managing” is an honourable and moral task. When Mrs May took office as PM she stressed outside Number 10 that she wanted to help these people above all else.

The jury so far is out. She has spoken well but the actions of her Government are worrying. That appalling decision to increase NI for the selfemployed showed a complete lack of understanding of precisely the people most hit by the tax burden.

The worry of Mr Hammond’s remarks is this bigger picture. We seem to have moved back into a softer version of the 1970s where neither of the main parties challenges the prevailing tax and spend ethos.

When Mrs Thatcher became Conservative leader in 1975, she was regarded even by many in her own party as bonkers for suggesting that the state could be rolled back – that spending, red tape and taxes could be cut and that business could be freed to do its own thing.

We are not quite back there yet but Mr Hammond’s remarks

AND YET three times on Saturday Mrs May was offered the chance to rule out scrapping the triple lock and three times she refused. It hardly takes a genius to see what is going on.

The lesson of the past 40 years, since Mrs Thatcher and Ronald Reagan redefined what centre- Right parties should do in office, is that low taxes work.

Take corporation tax. We now have one of the lowest headline rates of corporation tax in the developed world – and by a long way the lowest in the G7. And although the Left scream about that, their anger is ludicrous: low rates have boosted tax revenue. Taking a smaller share of a bigger pot is much more effective than taking a bigger share of a smaller pot.

But it is not just about economics. In normal circumstances, when there is competition between two parties, if a centre- Right party behaves like a centre- Left party and raises taxes, voters decide that they might as well have the real thing.

That is what happened in 1997, after John Major’s Government raised taxes. And it is what happened in the US in 1992, when George Bush promised, “Read my lips, no new taxes” and then raised taxes.

These are not normal circumstances, of course, in that we have no real opposition. The current Government could make appalling mistakes in its tax policy – indeed it has – and suffer no ill- effects. But at some point there will be an opposition, and the political damage of a Conservative Government behaving like a Labour Government will be ruinous.

Which is why – politically and economically – the Government simply must stick to its tax pledge.

‘ Vital not to drop the triple lock on taxes’