Over the last two days we have been discussing the Finance Bill in the Commons. It has given me the opportunity to remind the government just how successful Ireland has been by setting low company tax rates. The Irish economy has grown much faster than the UK economy as a result, and has generated more tax revenue from the lower rates. Today we learn that more large companies are thinking of leaving the UK for a more favourable tax jurisdiction â€“ they donâ€™t have far to go given the Dublin offer.
It gave the chance to speak out for the motorist, highlighting the successive tax raids this government has launched against people driving to work, taking their children to school, and bringing heavy shopping back in the boot.
It allowed me to expose why so many people think green taxes are a scam, because the government does not always undertake proper carbon accounting, or decides to increase taxes that cannot have the desired impact on peopleâ€™s behaviour. The decision to lift Vehicle Excise Duties on older cars is a good example of this.
During the course of the debates it also reminded me that Labourâ€™s most successful campaign in opposition to the last Conservative government was surprisingly for them an anti tax campaign. Labourâ€™s attack upon the Community Charge led to the removal of a Prime Minister, and the decision to abolish the tax. It meant I as Local Government Minister had to perform the last rites for the tax, and introduce the slightly less unpopular Council Tax.
It is instructive to look back at why this greatest Opposition campaign of the last thirty years worked. Labour decided early on to rename the tax the Poll Tax. In a rare foray into Englandâ€™s rich and argumentative history, Labour at one fell swoop conjured images of the Poll Tax riots of the fourteenth century, and the injustice of taxing the poor that hazy memories might manage. The attack worked because the Poll Tax brought a lot of people into paying a local tax who up to that point had avoided it. Labour thought it was time for another Peasants’ revolt, time to unfurl the banners of 1381.
The Conservative government adopted the Poll Tax (against my advice) because opinion polling told them people said they would pay more for better services, and because some households had three or four earners but still only paid one lot of rates. Why not give them all a chance to contribute to local services which they said they valued? I never thought making so many more people pay tax would go down well, and for once Labour also thought a tax would be unpopular. They were right.
It is interesting that 18 years on from the great Poll Tax rows, the Labour government is so desperate to get its hands on more of our money that they are now taking more income tax from low earners,(poll tax on working) taking more VED and petrol tax from low income motorists (poll tax on wheels) and taking more Stamp duty from people trying to buy a home (poll tax on home).
One of the things we need to do to get the message across to the government that they are taxing too much is to change the names of the taxes. I would like your contributions so the taxes can be more accurately described. I have some proposals for starters:
Income Tax – Work Tax
Stamp Duty – Homes Tax
Petrol and diesel duty – Travel Tax
Congestion Charge â€“ Poll tax on wheels
VAT – Shopping Tax
Capital Gains Tax – Enterprise Tax
Corporation Tax – Investment Tax
Climate Change Levy â€“ UK industry Tax
Tax on interest and dividends â€“ Savings Tax.
Click here to read the full text of John’s contributions to the Finance bill.