Is Hammond about to shake the money tree?
HE one fiscal measure that no MP from any party is publicly raising in the run-up to the Budget on November 22 is tax cuts. The Conservative Party’s historic mission to drive down government waste and let hardworking taxpayers keep more of the money they earn appears to have been abandoned.
Thatcherite free-marketeers on the Tory benches are dismayed at the position the party has found itself in. “How did we get here?” one backbencher on the Right of the party asked me this week.
“We keep talking about the need for a free-market, low tax economy yet don’t seem to be doing anything about it.” Some Tories note that their widely criticised general election manifesto was the first the party had published without any specific tax cut promises for families since 1966. Mrs May did not suffer quite the meltdown that Edward Heath endured back then but she certainly did not get the result she bargained for.
Concern is growing that Mr Hammond’s response to the surge in support for Labour at the election will be to offer a slightly more sober version of Mr Corbyn’s vastly ambitious spending plans.
Raising Government borrowing they warn, only leads to higher taxes in the long run. The Chancellor’s critics worry that touting big-state solutions to the challenges facing the country will only encourage interest in the Labour leader’s even bigger state solutions.
FEAR is growing that a Tory Budget built on borrowing simply legitimises the path to a Marxist government led by Mr Corbyn and his shadow chancellor John McDonnell.
Thatcherite Tories were heartened to hear Mrs May attempt to defend free-market capitalism in her party conference speech last month. Unfortunately, the message was largely lost through her coughing fit on the day. They hope she will find her voice on the issue over the months to come.
“We need to learn again how to make the case for free-market solutions,” the Tory MP told me. “Somehow, because free markets and low tax have been pretty much unquestioned since Margaret Thatcher was in Downing Street, we have lost the habit and need to start again.”
With the next election not due for another five years, Tory MPs hope they have the time to revive their mission to attack Whitehall waste and lift the tax burden. But none are expecting that vital work to begin when Mr Hammond performs his trickery with magic money tree economics next month.