Think again, Boris. Social care is a challenge, but there are better and fairer solutions than putting up taxes

Can Boris Johnson really be so foolish? If he follows through in the coming week, as threatened, and announces a brand-new Tory surcharge on top of National Insurance, it will be the biggest political miscalculation since Margaret Thatcher brought in the poll tax.

There’s no way around it: this new charge is a broken promise. The Conservative manifesto at the last election vowed not to raise rates for income tax, NI or VAT. It offered “a tax guarantee that will protect the incomes of hard-working families”. No such luck. Boris is raiding, not protecting, the pockets of hard-working families.

Worse still, the government spin seems to be that rather than raising the NI rate, Boris is adding his new surcharge on top. Has everyone in Downing Street lost their senses? There’s only one thing that could be worse for the Conservatives than breaking a clear promise not to raise tax - bringing in a brand-new tax and proudly claiming it as their own.

Perhaps the Prime Minister has been seduced. Siren voices are always ready to promise his party electoral ecstasy if it will only throw its low-tax reputation overboard. As a man with an appetite for history, though, Boris should know better.

The Conservative Party’s belief in lower taxes is not some passing accident or Thatcherite blip. As far back as the 1890s, the popular conservatism of the Primrose League gathered a huge national membership and reached parts of the country that have only just begun turning blue again. 

It did so with a double commitment: to defend patriotic traditions, and to fight for free enterprise. There is a bright blue thread that runs from the values of the League all the way to the enterprise culture that Nigel Lawson sought to cultivate in the 1980s. And it was Lawson’s proud boast that with every budget he eliminated another tax.

Free enterprise is the dynamo that drives the economy in an endless whirl of innovation and improvement. It is nonetheless deeply conservative, because enterprise is what you get when people put their own money and resources to the best use they can, instead of handing them to the state via tax.

The life of the conservative movement comes from the dynamic tension that results: between respect for the values of inheritance and tradition and openness to everything that enterprise can build.

Times have changed, we are told, after Covid. But this is nonsense. Even after the Second World War, Winston Churchill and Anthony Eden both kept tax levels far lower during the 1950s than the Labour opposition wanted. Yes, social care is a challenge, but there are better and fairer solutions than this.

The truth is, Boris and his advisers fear their new voters in former Labour heartlands. They believe these Red Wall Tories need to be showered with state spending and won’t object to higher taxes. This is a double misunderstanding.

First of all, high taxes and state spending drive out private enterprise. Boris cannot raise the cost of employers’ NI to help pay for social care without putting the brakes on job creation, including in his favoured regions. 

Greater government transfers are also liable to hold back local economies rather than lifting them up. 

A study in the United States found that when members of Congress gained the power to favour their districts with increased federal spending, the unintended consequences were severe. Private firms in the same state slashed both R&D and capital expenditures, while their employment growth and sales growth sank. You can’t level up via the taxman.

Secondly, everyone will feel the bite of the new Tory tax rises. That’s true even in constituencies that are net recipients of government support. 

The freeze on income tax allowances from next year and the new NI hike are both set to affect all income levels, especially with inflation on the prowl. As for the recent enthusiasm for nannying taxes on food, alcohol and even disposable nappies – it’s well-established that these hit those on low or middle incomes the hardest.

We can bring up all parts of the country together, and solve hard problems like social care, but only by trusting people’s common sense and enterprise. That requires an even playing field, not one distorted with complicated taxes and special favours. Levelling up is the right ambition, but what Nigel Lawson used to call “levelling out” has to come first.

A spendthrift Conservative party is a contradiction in terms. It will never be able to outdo those on the Left, who are increasingly convinced that the only limit on government spending is our imagination. 

Free enterprise remains the Conservative answer. To unlock the growth and innovation we need, the Government should focus on making our taxes low, simple and transparent, not inventing new ones. Read my lips, Boris: no blue taxes.

Marc Sidwell is the author of 'The Long March: How the left won the culture war and what to do about it'