Tag Archives: tax and spend

Lord William Wallace

Tax to invest, or cut taxes to neglect?

By Lord William Wallace | Tue 7th December 2021 - 9:01 am

The weekend media have been full again of Rishi Sunak’s promise to return to tax cuts before the next election: cutting income tax and VAT further to win over – as Conservatives hope – wavering voters. But is it possible that the majority of voters would now prefer good public services, and targeted spending on long-term projects, to tax cuts that will squeeze public services further?

Martin Wolf in the Financial Times the other week argued that ‘we have to accept higher taxes to fund health and social care’, pointing out that the UK is still a modest spender on health compared to similar states. But it’s not just health that needs investment. The ‘Levelling Up’ agenda implies a generational commitment to higher investment in education, infrastructure, and economic innovation in the UK’s poorer regions. ‘Red wall’ seats the Conservatives won in 2019 will be lost again if all that happens is a trickle of money for specific local projects.

The contradiction between Sunak’s fiscal austerity and Johnson’s and Gove’s grand ideas about levelling up is becoming the deepest fault-line within the Conservative government, and a major threat to its credibility. November’s announcement of cutbacks in investment for northern rail was greeted across the region as a betrayal of promises to promote economic revival.

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