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Monday 26th March 2012 | 11:00
The 50p rate cut makes Osborne’s budget a political pushmi-pullyu that may fail to win over the voters the Tories need
The year is 1867. A wide-ranging Reform Bill was passed by a minority Conservative government with radical support, to the astonishment of many political commentators. Explaining his unlikely triumph, Prime Minister Benjamin Disraeli cried delightedly “don't you see how we have dished the Whigs?” Centuries of Tory resistance to an extension of the franchise had been cast aside in favour of stealing Liberal clothes on one of their core issues and conversely detoxifying the Conservative brand among those for whom reform was crucial, but on other issues may have been Tories.
Fast-forward to 1983. There are Conservative MPs for Newcastle Central, Nottingham North, Leicester South, Darlington, Streatham and Lewisham East. While, admittedly, the SDP-Liberal Alliance split the Labour vote in many of these places, a more important factor was the ability of the Thatcher Government to provide a clear alternative to the welfare state among aspirant working class voters. The sale of the council houses formed part of an image of a party who helped everyone who helped themselves – and traditional Labour families came in their droves.
Nowadays, there are precious few Conservative councillors in big cities outside of London and Birmingham, let alone MPs. The 2010 general election saw just one gain for the party in the North East. From the 1980s boom onwards, the party has failed to connect in a meaningful way with working class voters and has maintained perceptions that they are for ‘the rich’.
So what does the Budget say for the Conservative brand? The creation of a truly universal non-means-tested pension not only gives all recipients an increase, but removes the hated form-filling exercises, often difficult and demeaning for elderly people. In such a way, it ties into long-held ideas that Conservatives want to project of Labour as bossy, bureaucratic and intrusive. Its advantages, if sold correctly, will at least in the short term, offset any electoral loss from the so-called Granny Tax, paid for by future generations of pensioners.
Perhaps the most important measure – in terms of its ability to change our political culture – is the announcement of a personal tax statement, explaining where every penny has gone. The hope is presumably that less well off voters, working and struggling to make ends meet, will see quite how much of their money goes into welfare schemes. The Conservatives will have looked at recent polling around the Government’s controversial cuts to housing benefit and ‘workfare’ scheme and been buoyed by the overwhelming support these receive among lower-income voters.
At the same time, the big strides made in increasing the personal allowance towards the magic tax-free £10,000 (now standing at £9,205) tie into this agenda of making work pay for those on lower incomes, while making welfare payments more onerous and miserly. It is easy to understand why the Conservatives have accepted the Liberal Democrat proposal with such alacrity.
Indeed, the new campaign group ‘Right Angle’, set up and chaired by rookie Conservative MP Robert Halfon (pictured) with a mission to “stand up for ordinary families - Britain's silent majority” has as its central campaign “Hands Off Our First £10,000”. Mr Halfon’s Harlow constituency has gone with the winning party in all but one general election since its creation in February 1974 – and is a seat in which it isn’t possible for a Conservative to win without making huge inroads among working class voters. In such a way, while the seat’s long-term trend is in a Conservative direction (Labour’s majorities there were bigger in 1974 than in 1997) it is demographically just the kind of seat Mr Cameron will need to win off Labour in order to gain a majority in 2015. Mr Halfon’s other key campaign, to slash fuel duty, seems tailor-made for such a seat, as does his support for a Conservative push among Trade Unionists. Tim Montgomerie, Editor of ConservativeHome, has argued along similar lines for a cut to fuel duty the adoption of the ‘mansion tax’, another Liberal Democrat-derived idea, to show they are a party on the side of ‘strivers’ not the super-rich.
What then of the scrapping of the 50p rate? Former Independent deputy editor Ian Birrell, a Cameron supporter, declared that the decision “sends missile into six years of Tory modernisation.” He may well be right. Mr Osborne may well want to see it as another opportunity to cast Labour in a mould of economic incompetence, but a tax cut for those earning over £150,000 detracts from the crucial ‘One Nation’ project.
In electoral strategy terms, the Budget seems something of a Conservative pushmi-pullyu.
An edited version of this article appears in this week’s House magazine.