But for that section of the party – and an even larger section of the electorate as a whole – that sees the issue of our EU membership (if not necessarily the way that exit was handled) as a done deal, there is a more significant split. to a question of fundamental ideology: do the Conservatives still support small, low-tax state government, or have they effectively become a social democratic party that promotes government intervention and high taxes? Perhaps counterintuitively, the two sides of these contested areas do not coincide. Liz Truss, who backed Remain, is now seen as the potential savior of the Tory Right with a clear commitment to small tax policies and relatively traditional social attitudes. While Penny Mordaunt – who actively campaigned for Leave – is, whether she likes it or not, so socially liberal as to be almost unmatched by the Labor front (which her supporters present as an asset). At some point, hopefully very soon, the party will have to decide which of these arguments is more important not only to its own electability but also to the future of the country. The answer to this should be obvious. Anyone who knows reality must see that the struggle over what government is—what are its proper responsibilities and limits—must trump all. And this may be the last possible moment in which it will be possible to have it. So I was less shocked by the campaign’s misery than many commentators claim. His vitriol may be troubling, but it’s not surprising. This is now a life and death struggle to preserve the philosophy which, within living memory, saved this country from despair and decline. Over the past two years, perhaps because of the Covid emergency, the Conservative Party in power has embraced not only government intervention – which might have been understandable in the circumstances – but increased reliance on benefits (sometimes known as ‘targeted aid’), public sector power and forms of taxation that positively discourage inward investment (corporate tax). Rishi Sunak, who backed Leave, led a deliberate program of tax increases in what he saw as the start of sound money and paying down unacceptable levels of debt. He is said to have done this in the face of resistance from Boris Johnson, although this has now been called into question by Tom Tugendhat. Whatever the historical truth, the fact remains that Mr. Sunak, determined to save his credibility as a future leader, is ready to defend it to the hilt. He has dismissed as wildly irresponsible the promises made by his opponents to cut any tax immediately. But at the same time he insists that he is, by conviction, in favor of lower taxes. Just not yet. It implies that this is simply a disagreement about timing, not a principle. He may mean it very sincerely, but it is a delusion. Once established, the fiscal mechanism that uses high taxation to fund new forms of government intervention and encourages expectations of selective relief only for the “least well off” is nearly impossible to dismantle. They create a permanent dynamic of poverty traps and disincentives to ambition and innovation. That was the major — in fact, the only — point of real conflict between the candidates in Friday night’s televised debate. Only when the issue of tax cuts hit the fan did the urgency of their personal differences come into any kind of focus. Rishi Sunak who had started out with that air of outrageous self-deprecation that his team seems to think is charm, was reduced to something that looked like genuine indignation. Defending his insistence that promises of immediate tax cuts were “fairy tales”, he may have sounded desperately defensive, but at least it was possible to get a glimpse of the man behind the slick presentation. It was almost nice. Another revelation was the underwhelming performance of Penny Mordaunt, whose famously disarming honesty seemed to leave a void where the economic policy recommendations should have been. He resorted to the vague assurance that he was indeed in favor of cutting taxes, but would not say how – because such detail could only be dealt with in a “major fiscal event” like the budget. But he’s an awful cop. We are having this debate now because it is vital to know exactly what the next prime minister thinks is possible. Everyone on the panel agreed on the need both to help households that were about to be hit by a catastrophic increase in the cost of living and to encourage growth in the economy. Tax policy must be central to this work. It is imperative to find out – at least in general terms – what each of these prospective heads of government intends and how they justify their commitments. The only one who did this with genuine fervor was Liz Truss. Not only did she stand by her original insistence that it was better to extend debt repayments than to punish ordinary workers by taxing them more when the price of basic goods was about to rise exponentially. He also had knowledge of the context of these price increases – the war in Ukraine and the debt levels of other major countries. As it warmed up more, it lost that faintly robotic stiffness it had started with and became more convincing. This is what we need to see now: real people engaging in a real struggle about what really matters.
