In a leadership race whose silliness almost beggars belief, the two far-right contenders seem obsessed with establishing their Thatcherite credentials without, as far as I can see, any idea of what Thatcherism really was. Take this obsession with lowering personal income tax rates. When Margaret Thatcher came to power in 1979, the top rate of income tax was 83%. In his first budget Sir Geoffrey Howe reduced it to 60% and the basic rate from 33% to 30%. They decided it would be bad to just lower the top rate, even though it was absurdly high. But to balance the books they had to increase the VAT. They had pledged not to double VAT – campaign pledges were serious in those days – so they increased it from 8% to 15%. In the 1988 Budget, my old friend Nigel Lawson cut the top rate to 40% and the basic rate to 25%. These days the basic rate is 20% and the top rate remains at Lawson’s level, apart from the additional rate for incomes over £150,000, which is 45%. This story puts into context the absurdity of Truss and Sunak’s obsession with cutting today’s tax rates – she now, he later – when the nation’s infrastructure and public services have become an embarrassment. Current tax rates are miles and years away from the situation faced by the Thatcher government in 1979 and are low by international standards. By the way: do these zealots really want to emulate the “achievements” of the Thatcher government in presiding over a doubling of the inflation rate, to close to 20%, between 1979 and 1980 – accompanied by the biggest recession since the second world war – and an unemployment level that rose from under 1.5 million in 1979 (when Tory posters proclaimed ‘Labour doesn’t work’) to more than 3 million by 1986? Do they not realize, as they chase the chimerical “opportunities” of Brexit, that Kenneth Clarke, a decent Tory, described her contribution to the formation of the European single market as Thatcher’s greatest achievement? Subscribe to The Best of Guardian Opinion Get out of your bubble. Sign up for our daily selection of opinion pieces and see things from a different perspective Privacy Notice: Newsletters may contain information about charities, online advertising and content sponsored by external parties. For more information, see our Privacy Policy. We use Google reCaptcha to protect our website and Google’s Privacy Policy and Terms of Service apply. A modern Macmillan would be tempted to say: “Let’s be honest about it: most of our people never had it that bad.” Speaking of decent Tories: I’m afraid there aren’t many influential ones left, thanks to the slaughter of non-Brexiters under a Prime Minister of whom a former friend recently remarked: “No other Prime Minister has done so much damage in a while.” We used to take decent Tories for granted. When they said it was a Tory nation they meant it. Any concessions Tras makes to the poor should be taken away from her as she continues to propose tax cuts for people who don’t need them. and I’m afraid that Sunak, after the credit he won for helping those struggling during the pandemic was recently discovered: yes, he was caught bragging that he was actually “breaking even” by redistributing Treasury funds from poorer to richer areas. Britain is now suffering from the progressive attack on the public sector that began with Thatcher and continued with the Osborne austerity program of 2010 and beyond, which has now imposed the biggest financial crisis in many people’s lives – and on top of the Brexit disaster. That Tory nation great Harold Macmillan is often credited with telling the British electorate in 1957 that “you’ve never had it so good”. Well, he never said that. What he said was: “Let’s be honest about it: most of them [my italics] of our people never had it so good.” He continued: “The Conservative party is not a party of any class or section … and we cannot forget that certain sections of our people have not shared in this general welfare … we cannot, as a national party, see their interests sacrificed.” With the current cost of living crisis, driven by the addition of external supply-side cost increases, a modern Macmillan would be tempted to say: “Let’s face it: most of our people have never had it this bad.” In the face of this, none of the contenders seem to have a solution. Furthermore, they are unwilling to admit that the Brexit they promoted (in Sunak’s case) or accepted (in Truss’s case) is a disaster, severely damaging the investment they claim to be defending, with ripple effects on output and, yes, the tax base skill. If either of them had any serious leadership qualities, they would have to admit their mistakes and admit that we should return to the single market championed by their supposed heroine – er, one Margaret Thatcher.
