Liz Truss, our new prime minister, promoted low taxation rather sooner than her defeated opponent Rishi Sunak, who was promising it later. The so-called mini-budget on Friday 23 September did as she promised, cutting taxes and abolishing the top rate, while at the same time not allowing the Office for Budget Responsibility to assess the economic impact of the policy.
Scrutiny of this seductive suggestion is needed, though. It certainly sounds good, superficially at least, to taxpayers. It is said to be about stimulating investment and growth, which sound like the sort of thing an economy needs. But who loses out? Why is it attracting criticism?
Low taxation is a part of a political philosophy sometimes referred to as Small State: a libertarian idea in which the individual citizen should be free to do pretty much as s/he pleases, in life and with their money, without relying on the State to provide services like healthcare, education, transport, though always maintaining national security without doing harm to others.
Libertarianism is a political philosophy credible to some, including leading lights in the current Tory firmament, but this credibility needs challenging. One of the ironies of the Right is that it demands less government, but fights with tooth and nail to make sure that such government as there may be is in their hands. Supporters want to protect their own liberties but care little for others.
The liberty of the libertarian
But hold on a minute! When these ideas were being dreamed up a century ago, how many of what kind of citizen even had the vote? Only men, for certain; and men of property too. This comfortable elite may not only have relished the theory then, but their heirs and successors today are now running the country. How many of today’s citizens really have the opportunity to enjoy the liberty of the libertarian, free from the rigours of earning a living for a family, paying rent or mortgage, caring for relatives or those with disabilities?
What do those who carry such daily burdens feel about a low tax economy which offers them no public services, no free healthcare, no public transport, no safety net, whilst the money they pay for private services and the money the government borrows goes to wealthy private investors and big business? Dependency may be alien to the libertarian but is familiar and real to the majority. So yes, we would all like to keep more of what we earn and pay less taxes; and we can admire those who can make their way without relying on society to help, but the right to do these is not automatically accompanied by the means.
A second irony is gender-related. Not only was the philosophy developed among men who were allowed to vote but even today it is noticeable that it is the Right, mostly led by men, which tells women what they can and cannot do with regard to their own bodies in relation to contraception or abortion. If every individual should be entitled to their own freedom, what business is it of anyone else to interfere in the most personal of issues? Libertarians in theory; authoritarians in practice. Popes. Ayatollahs. Dictators.
Weakness of capitalism
The last three years have illustrated in technicolour the weakness of capitalism and the risks of the low tax/Small State theory in particular. Without a constant and sufficient flow of revenue to the Exchequer, when tax-payers’ money has all been creamed off to private sector investors, whence comes the collateral or liquidity through which to raise the billions needed when the nation is hit by a pandemic, the need to supply arms for war-fighting, a financial crash or energy cost crisis?
As so often in politics, the ‘philosophy’ around which parties weave their policies is really more to do with one clique or another retaining and enhancing its power than with the good of all. Liberty was and is only for the wealthy and powerful, spouting its hollow promise to trick camp followers to help them keep it and the wealth that delivers it to so few. There is great risk that this superficially attractive theory becomes the political reality in this country where, I believe, most citizens like to look out for one another, even if this means paying tax, the alternative to which being that the citizen will have to fund their own education, healthcare and social care themselves – and that will cost whatever the market chooses to charge them. Some liberty!
