MPs reject Truss scheme for prison league tables

Hamstrung by manifesto pledges, the Government has little choice but to raise money on the quiet

LIZ TRUSS, the Justice Secretary, has suffered a fresh blow after a Commons report said her plans for prison league tables should be dropped.

The justice committee said league tables were “not a useful means” to assess prison performance and would “mask” problems within jails.

Ms Truss is already facing calls to be stripped of her role as Lord Chancellor after concerns about the performance of her department. In recent weeks, she has also been accused by the Lord Chief Justice of “misleading” the public over rape trials, while the President of the Supreme Court said she had failed in a duty to defend the judiciary.

The latest criticism came in a parliamentary report that reviewed government proposals for improving prison performance.

In its report, the committee said it encountered “mixed views” about the plans. It said: “In particular, there was some scepticism about the purpose of this approach in a prison context, where there is no consumer; about their value in driving governor performance, and about the meaning that can be attached to a single measure of performance.”

The report added: “In our view it is more important that the ministry seeks to understand more fully the factors underpinning poor and high performance and uses the learning to devise lessons to improve practice which are disseminated transparently across the estate.”

It would be unfair to blame Liz Truss for trying. As Justice Secretary, she has to oversee a prisons system rife with drugs and violence. The systemic disorder has become a running joke: HMP Wandsworth has acquired the nickname “Carphone Warehouse” because of the ease with which inmates can order supposedly banned mobile phones. Officers are woefully underpaid, leaving prisons dangerously short-staffed. More money is needed, but none is forthcoming. So in desperation, the Ministry of Justice has decided to raise money by charging people up to £20,000 to administer wills.

This is, in effect, a new death tax – an ingenious idea but one that is, unfortunately, illegal. The Justice Secretary has no authority to raise taxes. Only the Chancellor can, and even he needs the approval of Parliament. Ms Truss had sought to disguise her scheme as a “fee” rather than a tax – this, after all, works for the BBC – and she might have succeeded had a parliamentary committee not blown the whistle on her. She may try to go ahead anyway, and run the risk of a judicial review. But for the Justice Secretary to be hauled up for illegal racketeering is not the best look.

For a Conservative Chancellor to tear up his manifesto pledge on National Insurance isn’t a good look either, but this is what Philip Hammond resorted to last month. This debacle, which ended in the Prime Minister ordering him to abandon his tax rise, is born of a simple problem: the Conservatives were elected promising to keep taxes down but wish to keep government spending up. Mr Hammond is proposing to raise the tax burden to levels not seen in 35 years. But given the clear Tory manifesto pledge not to increase income tax or national insurance – a pledge he has reluctantly decided to honour – his only alternative will be stealth taxes.

Or, rather, even more stealth taxes. They have become the Tory weapon of choice in recent years, with death taxes something of a speciality. The era of low rates, as Mrs May once pointed out, has sent house prices soaring, meaning misery for everyone – except the taxman. Stamp duty has brought Britain the highest property tax revenues in the world and death taxes now rank among the fastestrising lines of government revenue.

When David Cameron came to power, the Treasury was collecting £2.4 billion in inheritance taxes; now, it’s closer to £5 billion. Not that anything has changed. All that’s required for a stealth tax to work its magic is for the Government to do nothing – in this case, to keep the inheritance tax threshold frozen at £325,000. It had been rising every year under Labour, like the thresholds for all tax rates.

But George Osborne worked out that if he stopped the automatic rise he’d catch a lot more people in higher taxes without having to say a thing.

Today, the Conservative Party has a peculiar relationship with taxation. It likes to be seen to lower it, while thinking of ever-more ingenious (and, in Liz Truss’s case, illegal) ways of increasing it. When Mr Osborne cut the main corporation tax rate, he made a great fuss but he said nothing about the number of people he was ensnaring in the top rate of income tax. By making sure the tax threshold rose more slowly than wage inflation, he caught 4.6 million in the top tax bracket, up from 3 million when he took office. Never had any chancellor, of any party, left so many people trapped in the top rate. It has eased this year, but only by a little.

Meanwhile, other taxes are rising all the time. Air passenger duty on long-haul flights has been creeping up, and taxes on new cars rose sharply this week. Then a peculiar tax on home and car insurance: this was 6 per cent until a couple of years ago. Now it’s 10 per cent and will rise to 12 per cent in the summer. This is odd, because the Government is supposed to be encouraging insurance. It’s also supposed to encourage saving, but an almighty pensions raid will likely be launched in Mr Hammond’s next Budget. And given that he hasn’t yet worked out how to find the money he was hoping to raise with a National Insurance rise, we can expect a few more ingenious wheezes on top of this.

In such an environment, private schools should be very afraid. The idea of charging VAT on their fees was being advocated by Michael Gove before Jeremy Corbyn took it up yesterday: the former education secretary was saying that the independent sector now served plutocrats, rather than the middle class. To be sure, day schools have increased their fees by 59 per cent since the crash, with boarding schools such as Abingdon charging £38,000 a year. To portray all independent schools as billionaires’ finishing schools is, of course, absurd – but it provides for a decent excuse for a tax raid.

It’s odd to hear certain Tories talk about Brexit as if it’s a ticket to a low-tax, lean-government, Singaporestyle future. Theresa May has no interest in this kind of Britain, and neither does her Chancellor. Mr Hammond talks about money that has not been taxed as money “lost” to the Treasury, which is odd language for a Tory. His personal vision of Britain’s economic future (should he keep his job long enough to realise it) would involve lots more infrastructure spending. Perhaps maternity and paternity pay for the self-employed. His plan is not to cut the tax burden, but raise it by an extraordinary £75 billion over the next five years.

There is an alternative. The Conservatives could take a long look at the cripplingly expensive “triple lock” pension pledge, and ask whether it’s needed now that the pensioners’ disposable income has almost caught up with that of workers. Then ask about overseas aid: does it make sense to have a law forcing the Government to spend such extraordinary sums? There are hard questions, too, about the way the National Health Service is funded and how prisons are dangerously underfunded.

But unless she wishes to hold an election, Mrs May is bound by the manifesto pledges of her predecessor. She probably will, now, kill off the new death tax. But the stealth tax agenda is very much alive.