NEXT week’s Budget presents a real opportunity to reboot Workers’ Conservatism – to offer everyone, whatever their background, a chance to climb the ladder of opportunity.
This Budget should have a relentless focus on cutting the cost of living, building a skills-based economy, dealing with (“burning”) social injustices and providing affordable housing to the millions of our citizens living in inadequate accommodation.
First, the Chancellor needs to show that tax cuts, in the shape of corporation tax, work not only for businesses, but for everyone, as they boost investment and increase employment.
The extra revenue raised from lower taxes should be redistributed; either spent on poorer communities or on cutting taxes for the lower-paid. Between 2016 and 2017, corporation tax cuts led to a 21 per cent increase in tax revenues. Why not create a Capitalist Redistribution Fund with a website directed at the public, detailing how that money is being spent to improve the lives of the disadvantaged?
Second, the Government must get a grip on a number of issues relating to the cost of living – the bane of people’s lives. To build on the fuel duty freeze, why not go further and help people with other costs of transport? Scrap hospital car parking charges (costing £200m) by dipping into the £1bn that has been promised from savings in NHS procurement each year. Even finding £200m to scrap this stealth tax from the annual extra £20bn pledged to the NHS would not be the end of the world.
And why not, as children’s cancer charity, CLIC Sargent, suggests, provide a £5m bursary for parents of children with cancer, so they can afford to travel for medical treatment? These two gestures alone, to help people with NHS transport costs, would do more to show working people that we are on the side of the NHS than a much greater number of far grander gestures.
For many, train fares are increasingly unaffordable. Yet the Government seems to suggest that it is impossible to cut ticket prices. If we are not to go down the route of nationalisation, let’s give tax allowances instead to those earning below £30,000 and who regularly commute or buy season tickets, in order to get to work. Why not impose a fine on failing railway companies, and use that money to fund lower cost travel for those struggling with commuting bills?
We know that Jeremy Corbyn has made a significant pitch on childcare. The Conservative response to this should be to recognise that less well-off parents are unable to work because they are struggling to find affordable childcare.
Meanwhile, we are handing out concessions to wealthier families. The upper eligibility threshold for the two key childcare provisions (30 hours of free childcare for three to four-year-olds and tax-free childcare) is £100,000 per parent. This means that a couple earning £200,000 are entitled to 30 hours of free childcare and tax-free childcare on top of that. This is simply not justifiable when disadvantaged children need support.
The Chancellor could reduce the current threshold, and redirect funding to those families in real need of support, either by boosting the childcare element of Universal Credit, or by extending the availability of 30 hours of free childcare to more families, such as non-working couples.
Of course, the above are all smaller ticket cost of living items, but the Treasury mustn’t shy away from the bigger challenges as well – the elephant in the room being the international development budget. If cut from £14bn to £5-6bn a year, some of this money could then be used to help those out of the Universal Credit poverty trap, while also being used to cut taxes further for lower-income workers.
Other parts of the overseas aid savings should be invested in vital public services, such as our schools, skills, roads, infrastructure and increasing police numbers. The Prime Minister could add that the aid budget will increase at a time when there is economic plenty and our debt and deficit are fully under control.
At a time when the UK gives aid to countries like Rwanda, and that country then spends millions sponsoring Arsenal football club, there is a clear case that hard-pressed taxpayers’ money could be more carefully spent at home.
But there’s an even bigger elephant than the international development one – and that, of course, is the amount of money that we’re planning to give to the European Union. We’ve already agreed potentially to hand over £39bn of taxpayers’ money to Brussels.
If the transition period for leaving the EU is extended by a year, that could cost up to £15bn, on top of the £39bn. Just imagine if we weren’t handing over £54bn to the EU, what that money could be used for to stimulate our economy, with both extra spending on schools and hospitals, money for tax cuts and more lowering of our deficit. As a Lords committee has said, there’s no legal obligation for Britain to give the EU this money. So, Philip Hammond, why not be bold, and keep taxpayers’ money at home?
Robert Halfon is a Conservative MP, Chair of the Education Select Committee and President of Conservative Workers and Trade Unionists.