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William Wallace writes…Taking on the anti-tax movement

September 15, 2016 1:06 PM
By Lord William Wallace in Liberal Democrat Voice

If you read any other paper than the Guardian, you will have noted some days ago a generously-covered story about the enormous 'lifetime tax bill' faced by British families. The 'average UK household' in 2014-15 was estimated to pay £826,000 in direct and indirect taxes over their working life, while the top 20% 'will pay £1,686,970' - a curiously exact figure for an estimate, and a claimed rise of 4.3% over the previous year.

The story had no reference to any benefits that flowed back to taxpayers in return for this drain on their income: education for children (£180,000 per child or more in the private sector between 3 and 18), health care (say £100,000 per person, incurred most heavily in the last two years of life), and post-retirement benefits (state pensions of £6-9000 a year over 10-20 years, bus passes, etc.), not to mention contributions to all the public goods that make civilised living comfortable: policing, roads and railways, external security, welfare, market support and regulation. The reader is intended to understand tax almost as theft, rather than a worthwhile contribution to services received.Stories like this come from the TaxPayers Alliance, possibly the most influential think tank in Britain at present: an organization at the centre of a network of right-wing bodies with close links to the Conservative Party - and across the Atlantic to right-wing think tanks in the USA.

Matthew Elliott, the founder of the TaxPayers Alliance, took leave to run the No2AV referendum campaign, and has led the Leave campaign in the Euro-Referendum - using the populist promise of 'Let's spend the money on the NHS instead' in both campaigns, in contradiction to the TPA's opposition to public spending on health as much as on other services. The TPA's campaign's director, Robert Oxley, has just entered government as special adviser to Priti Patel: switching from campaigning against aid to advising the secretary of state on managing DfID. The Times, the Telegraph and the Mail carry TPA stories as often as they follow press releases from Migration Watch.

The TPA shares a building in Tufton Street, behind Westminster Abbey and close to Parliament, with other libertarian right-wing groups: the climate-change sceptic Global Warming Policy Foundation, Business for Britain, Big Brother Watch, Civitas, the European Foundation and Global Vision. The building is owned by defence companies run by Richard Smith, a businessman who is an active member of the Midlands Industrial Council with ties both to the Conservatives and UKIP. Their offices are apparently provided rent-free; we cannot discover which other rich British or American right-wingers fund it, since the TPA does not publish its list of donors. There are close links with Washington libertarian think-tanks. The TPA itself was modelled on Grover Norquist's Americans for Tax Reform, which campaigns to cut tax overall, including abolition of income and inheritance taxes. Norquist's most-quoted statement is "I'm not in favor of abolishing the government. I just want to shrink it down to the size where we can drown it in the bathtub."

You might think that the Guardian would have drawn public attention to this coalition of right-wing lobbies, their links to the libertarian anarchists of the Republican Party and the corporations that fund them; but it's too busy plotting the factional disputes within the Labour Party. So we need to challenge the steady drip of anti-tax stories that appear in our media ourselves. The Observer analysis, on September 11th, of the different 'tribes' of British politics flagged up the cross-tribe consensus that supports lower taxes, apparently without linking that to deteriorating public services. Sadly, we know that decent public services have to be decently funded. No government has dared to declare itself in favour of higher taxes since the 1970s; the only party which has risked addressing the issue was the Liberal Democrat promise of 'a penny on income tax' for education in our 1997 manifesto.

So how do we raise the question of higher taxation, without upsetting the mass of voters who want good public services but think that others should pay for them, and who hardly turn an eye when successive Chancellors suggest that Chinese investors will pay for the Northern Powerhouse or that more state assets should be sold off to fund current spending? A vigorous attack on corporate and personal tax avoidance will not bring in enough extra revenue; beyond that, taxes need to rise rather than fall to give our children a sustainable state and society. The TPA and its libertarian allies want instead to shrink the state and slash or privatise public services: Matthew Elliott's pretended commitment to increase NHS funding was one of the most transparent lies of both referendum campaigns. Its success in undermining public support for state spending, however, has made our task in defending fair taxes and justifying public spending a harder sell on the doorstep.

* Lord Wallace of Saltaire is a Liberal Democrat member of the House of Lords.