Raab: Cut income tax for ‘fairer’ Britain
Tories must deliver Brexit and make people better off, say contenders to succeed May
THE basic rate of income tax should be cut by 5p, Conservative leadership candidate Dominic Raab suggested last night as the race to succeed Theresa May began in earnest.
In a debate with four other Tory rising stars, the former Brexit secretary set out a radical tax-cutting plan to “give working Britain a fairer deal” and reinvigorate social mobility.
Matt Hancock, Liz Truss, James Cleverly and Victoria Atkins urged the Tory leadership to put money back in voters’ pockets, solve the housing crisis and deliver Brexit to see off Jeremy Corbyn and Nigel Farage.
With Mrs May expected to announce her departure within weeks, The Daily
Telegraph debate on the future of the Conservative Party represented the first chance for Tory members to compare potential successors side by side.
Mr Raab, the main Eurosceptic challenger to Boris Johnson, put forward the most eye-catching policy as he said the basic rate of income tax should be cut by a penny each year, reducing from 20p to 15p over the course of a five-year parliament – the lowest basic rate in modern history.
Workers on the median full-time salary of £29,600 would save £854 a year, with those on £50,000 a year saving around £2,000 in tax.
He suggested the National Insurance employee contribution threshold should be raised to £12,500 in line with the personal allowance for income tax, saving the average full-time worker a further £462. He said: “We should cut the basic rate of income tax by a penny each year as Nigel Lawson did in the Eighties ... We, as Conservatives, are defending the enterprise economy and lower and middle-income, aspirational working Britain.” Mr Raab proposed to fund the tax cut partly by closing or merging government departments, saying the Department for International Trade and the Department for International Development should merge with the Foreign Office. Money would also be saved by the closure of the Brexit department once Britain leaves the EU.
Mr Raab added that he would examine whether it would be possible to abolish stamp duty on properties sold for less than £500,000 to stimulate the housing market.
He said the Tories had suffered a “loss of nerve” since 2017 and must “keep our promises on Brexit” to have any hope of moving on to other issues.
Mr Hancock, the Health Secretary, said the party would be “toast” at an early general election if it did not deliver Brexit. He agreed on the need for “significantly lower” taxes and said the National Living Wage needed to rise.
Ms Truss pointed out that the top rate of income tax, at 45p, remained higher than for almost the entire time Tony Blair and Gordon Brown were in power, and said the Tories needed to be more “enthusiastic”. She added: “Whatever you say about Donald Trump, he’s got a deregulatory agenda, a tax-cutting agenda and the American economy is growing by 3 per cent.”
Mr Raab, Mr Hancock, Ms Truss, the Chief Secretary to the Treasury, and Mr Cleverly, the Brexit minister, are all expected to mount leadership bids, though none confirmed to last night’s audience that they would stand.
Steven Swinford, Harry Yorke Jack Maidment
THE Conservative Party must “recast” Thatcherism “for the modern age” if it is to win the next election, Matt Hancock has said.
Speaking at The Daily Telegraph Future of the Party event, the Health Secretary said that the Tories needed to deliver Brexit as a “No 1 priority” and then “we have got to move forward”.
He said: “We won an election in 2015 by arguing the case that we have a plan to make you better off. Then we were distracted from that. I totally agree that the number one precursor to all of this is making sure we deliver on Brexit. Then we have got to move forward.”
Dominic Raab, the former Brexit Secretary, insisted that it was not all “doom and gloom” and warned that the Tories seemed to have “lost courage in our convictions and the basic principles of a free enterprise economy”.
James Cleverly, a Brexit minister, said the Tories had to unite the party and the nation. “That means looking at the kinds of things where people feel ripped apart – jobs, aspiration, home ownership,” he said. “We have been a party of Government for coming up to nine years. In the normal pendulum of politics we should be in our end game.”
He added: “We have got to be passionate about what we do. This is a party I love. We have got to communicate that. If we don’t, no one else is going to do it for us.”
Brexit
The Tories should be “love-bombing” voters who want a no-deal Brexit instead of accusing them of adopting an “extreme” position, Liz Truss said.
The Chief Secretary to the Treasury said that the Conservative Party needed to be reaching out to voters who are considering voting for Nigel Farage’s Brexit Party on Thursday instead of condemning them. She said: “Saying that you believe we want a no-deal Brexit is not an extreme position. We need to be more in the mindset of lovebombing rather than saying these positions are unacceptable.”
Mr Raab accused Theresa May of attempting to “subcontract Brexit” to Jeremy Corbyn in her talks with the Labour Party. He said: “We spent several years saying Jeremy Corbyn was unfit to lead because of his views on the economy, from a security point of view, then we subcontract Brexit to him.”
Despite backing Mrs May’s deal at the last vote, he suggested he will not back it when it returns to the Commons next month amid concerns it is a “vehicle” for the customs union.
Mr Hancock said that the Prime Minister’s deal was a “route out of the European Union”. “I hope it passes,” he said. “I think it’s got a better chance than the so-called meaningful vote.”
He added that the Tories needed to “massively up our game” on social media as he highlighted the Brexit Party’s success.
Tax cuts and the free market
Mr Raab and Ms Truss clashed over tax cuts. Mr Raab proposed to take 1p off the basic rate of income tax and reduce it from 20 per cent to 15 per cent over time “to boost the pay packets of low and middle workers”.
He said: “That would really demonstrate as capitalism comes under attack by Jeremy Corbyn as never before that we as Conservatives are defending the enterprise economy and middle-income aspirational Britain.”
However, he suggested that tax cuts should be focused on low-earners and the “disenfranchised” rather than higher earners.
Ms Truss suggested that there needed to be tax cuts across the board. She said: “One of the reasons to cut tax on higher earners in corporation is because we do want enterprise, we do want to attract investment. And that’s why we’ve got to make the difficult arguments, not just the easy arguments.”
Mr Hancock said that the Tories should pledge to “end low pay in their next manifesto. He said that the “big debate” would be on pay and that the Tories needed to “put pounds back in people’s pockets”. He said the Tories must “look different” and “sound different” but stick to Conservative Party values.
Victoria Atkins, the minister for women, said that leadership candidates needed to “grapple with” the party’s failure to attract more younger female voters.
She said the party should start talking more about issues such as climate change and said that the Tories ought to make the case for free market economics at the next election.
She said that the party had to ensure that those that “create the wealth” were also investing in Britain.
‘We seem to have lost courage in our convictions and the basic principles of a free enterprise economy’
Tory leadership
Four of the five panellists refused to rule out standing to be the next Conservative leader. Asked whether he will stand, Mr Raab said he would decide on whether to stand “when the time comes”. Ms Truss replied “maybe”. Mr Hancock said that the time for a decision “has not come”, while Mr Cleverly said: “We believe in competition, don’t we?” Only Ms Atkins made clear she has no ambition to succeed Mrs May, responding simply: “No.”
One audience member suggested that Sir Graham Brady, the chairman of
the 1922 Committee of Tory backbenchers, should be installed as an interim prime minister.
Mr Cleverly said that Theresa May is “our interim leader” and that the party should “get on and deliver Brexit” instead of plotting to remove her.
He said that the leadership question should focus on the next “five to 10 years” rather than what is happening now in terms of sorting out Brexit.
HS2
Ms Truss suggested that funding for HS2 would be better spent on local transport and fibre broadband. “We need to think very carefully about this project,” she said.
Mr Hancock said that “we should not scrap it”, adding that he supported the project even though it cuts through his sister’s garden. He said: “We should invest in other transport links, east to west... it’s the countries that have good infrastructure that prosper in the long term.” Mr Cleverly suggested it would not be a “good look” for the Tories to scrap a project they have promised. Mr Raab said that he was undecided, adding that an alternative infrastructure project would need to be identified.
Social care
Mr Cleverly said that as someone of half-african origin, the UK’S approach to social care “just looks weird”.
“No one in my African family buys this idea that you package up your parents and send them off to a home,” he said. “We’ve got to take away the financial disincentives of families looking after themselves. Let’s deal with that first... that’s when the state can have a far more proactive role.”
Mr Raab suggested there should be a £100,000 “asset threshold”, after which people should not longer have to fund their care in old age. He called for “viable insurance polilcies” to help tackle the issue. Mr Hancock said that there was “unfairness for high earners” under the current care system. “One of the biggest unfairnesses is that some people have to sell their homes to pay for social care and others don’t,” he said.
Ms Truss said there were “huge disincentives” in the social care system that needed to be addressed. She said she was in favour of an insurance scheme to help people cover the cost of their care in later life.
“It is much fairer that you provide for yourself,” she said.
‘We want enterprise and investment and that’s why we’ve got to make the difficult arguments, not just the easy ones’