POLITICS
Taxing times for the confused voters of Britain
NOEL MALCOLM
According to some Tory MPs — the certifiably paranoid ones, I suppose — Mr Kinnock had a splendid time during Mr Brian Walden's interview on ITV last weekend. That was not my impression. For the first 40 minutes or so he seemed awkward, edgy and irked, with moments when he was opening and closing his mouth like a goldfish. Only in the final section of the interview did he give the impression he was master of his brief.
Why so? Mr Walden's style of question- ing underwent no sudden change, remain- ing as repetitive and histrionic as ever. The great switch-around came in the subject- matter of the conversation: the first 40 minutes were spent discussing vague theoretical stuff about ends and means, while the final ten minutes were about Labour's tax plans. I cannot believe that most viewers found the theoretical argu- ment either interesting or even under- standable. Most ordinary people do not talk very much about 'ends'; told by Mr Walden that the ends of Messrs Major and Kinnock were similar, they may have understood that the two party leaders took the same size in trousers, or that they had both expressed a wish to be cremated.
If Mr Kinnock seemed more sure-footed when fending off questions about Labour's taxation policy, this does not mean that Labour tax plans are any more defensible than Mr Kinnock's theoretical ends. It tells us something, of course, about Mr Kin- nock that he feels awkward when confined to the realm of theory. Yet the fact that those final minutes were the only ones where the interview really came alive also tells us something about the political cul- ture we inhabit in this country. Most continental politicians love nothing better than to witter on about politico-socio- economic theory. They do it frequently in heavyweight discussion programmes on French or Italian television, which is one reason why ordinary people in those coun- tries are so uninterested in politics.
But in Britain the real hard currency of political debate is hard currency: my money and your money. Taxation plans are always among the two or three hottest topics in any general election campaign, and no junior minister can ever dare to give a press conference on any new piece of policy, however abstruse, without having answers at his fingertips to those predict- able questions: Will the average family be better or worse off?' — 'By how much a week?', and so on.
I was particularly struck by this fact when I returned from a holiday abroad last week and started to plough through the pile of British newspapers for the days I had missed. The great event of the week had been the 'council tax' announcement. This was a colossal about-turn in govern- ment policy, and raised all sorts of ques- tions about the arguments the Government had been using for years to defend its overhaul of local government — arguments about clarity and accountability, the role of local democracy, the difference between a tax and a charge, and so on. But from the newspapers you would think there was only one type of question that could possibly matter: how much would we pay, and how much less (or more) would that be than what we would previously have paid? Nobody can remember the distinguishing features of Labour's 'fair rates', and the only thing that has ever attracted attention to the opposition's scheme was their claim, which so smacked Mr Chris Patten's gob, that they could knock another £140 off the Government's figures. It is not so much a political debate, more a Dutch auction.
Am I being absurdly high-minded in wishing that people would think about some of the issues involved as well, or have I just been corrupted by a week's diet of theoretical, abstract editorials in foreign newspapers? Probably both. (And, of course, even if they did talk about the burden of paying taxes in Italy, they would be discussing a very theoretical matter indeed.) Our obsession with tax levels, and with all those questions which begin with 'How much', is a thoroughly healthy thing in a modern state, where government spending occupies between a third and a half of total national income. To adapt Dr Johnson, there are few ways in which an electorate can be more innocently em- ployed than in guarding its money.
And yet this national obsession has its drawbacks too. Our taxation system is complex, and most voters can only keep a very few bits of it in their heads. The basic rate of income tax and the rate of VAT are the only figures that everyone can remem- ber; and of these two the former carries far more political clout than the latter. I had some sympathy with Mr Kinnock when Brian Walden kept telling him that the Tories believed in cutting taxes, and he kept trying to explain that the tax burden on the economy had actually risen, from 34 per cent of GDP to 38, under Mrs Thatch- er. Admittedly, to give a proper explana- tion of those figures one would have to point to the colossal level of government borrowing under the last Labour chancel- lor: the more you borrow, the less you need to tax — until you have to pay your borrowings back. But Mr Kinnock's gener- al point, that people think only of base rate income tax and forget such things as the doubling of VAT, was fair. As for National Insurance, I doubt whether one person in a hundred could accurately describe how it is charged — and yet this is the second largest tax of all, yielding more than VAT or corporation tax and roughly four times as much as the present poll tax.
When Labour say that it is pure political theatre to concentrate on the basic rate of income tax, they have a point. Yet they are not without coups de theatre of their own. Mr Smith's plan to bring in a lower band below the present basic rate is electorally very attractive; but every tax analyst knows that you give more help to the low-paid by raising the tax-free personal allowance than by tinkering with low-rate tax bands. Under the last Labour government, the personal allowance actually fell. During the Thatcher years it has risen by 25 per cent: this, to someone on £8,000 a year today, is worth something like 3p off income tax. Again, I doubt whether one voter in a hundred has actually understood this fact.
But the other drawback of our tax- centred view of the world is more serious. When so much of our political news is about the government deciding to take away this much or 'give' us that much, when the news each Budget time is of the chancellor deciding that we should pay this for petrol and that for beer (almost as if we were buying it for him in the first place), the subliminal message we receive is both statist and fatalist: the government giveth and the government taketh away, blessed be the name of the government. Perverse- ly, the only time we all curse the name of the government is when it is not fully responsible for the rate of the tax. This is what happened with the poll tax, when the councils set the levels but the government received all the blame. I see no reason why the same thing will not happen with the poll tax's successor.
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