Reigniting the flame of Thatcherism
BY ETHAN THOBURN
During times of crisis, it is all too tempting for some people to revert back to the failings and evils of Socialism. However, that would be the wrong move. If we must look to the past, then let us look at the example set by our party’s greatest peacetime leader – Margaret Thatcher. It is free market policies and economic freedom which will make Britain prosperous again; we mustn’t fall into the trap of protectionism, but instead reach out to our allies all around the globe – from revitalising our relationship with the Commonwealth, to rekindling the Special Relationship with United States.
Brexit gave us the perfect opportunity to become a truly global Britain again; now, as we forge a new future outside of the EU, we mustn’t overlook the chance we have to reignite the flame of Thatcherism.
Back in the 1980s, the economy was booming, yet less than a decade earlier we were an unproductive and inefficient nation, known for strikes and high taxation; inward-looking and declining. There is absolutely no reason why Boris Johnson cannot replicate a similar recovery strategy now.
One of the key ideas Mrs Thatcher promoted was the importance of more people keeping a larger proportion of their own money. She slashed taxes for all levels of income in order to increase consumption; this is exactly what we need today – a Budget full of tax cuts for everyone to encourage spending and consumerism. As Napoleon once famously said, “Britain is a nation full of shopkeepers” – he meant it as an insult but we should take pride in that; they are the backbone of Britain. If people aren’t spending money then we crush our shopkeepers, we crush our backbone. We need tax cuts to get us moving again.
Despite popular belief, support for tax cuts is high. According to a recent poll conducted by the Adam Smith Institute and Survation, 72 per cent favour reducing the burden to “boost economic growth”. Perhaps even more surprisingly, support amongst younger people – 18 to 34 year olds – is particularly high.
There is more we could do. Not only will income tax cuts benefit sole traders, the raising of the National Insurance threshold would be a massive boost to many companies, as well as to consumers. Take a look at the Thatcher government’s first Budget in June 1979. The then Chancellor Sir Geoffrey Howe made radical tax reductions: the highest band of income tax was slashed from 83pc to 60pc and the basic rate of 33pc down to 30pc. These days it’s unimaginable to think of those rates – but there is still room for further progress.
By 1988, Howe’s successor Nigel Lawson had successively cut the basic rate in three consecutive Budgets to 25pc, and the top rate of income tax was reduced to 40pc that year. By doing this, people had more money to invest and to consume, the economy was booming, and Britain was prospering from the removal of red tape and ancient, unnecessary regulations – as well as from the extra competitiveness fuelled by privatisation. British businesses expanded like never before, becoming globally competitive for the first time in a generation. By the time her third electoral victory was secured, tax receipts had actually doubled – proving that tax cuts can create extra money for social programmes, and other government endeavours.
When first elected leader, Boris Johnson promised to “turbocharge” Britain and take us to a “new chapter beyond Brexit”. We need to put our British businesses at the top of the charts on the world stage. Back in the late 1980s, Britain was a global leader in trade, the City of London established itself as the second financial capital of the world, along with New York, and British firms were some of the most successful in the world – recognised for their efficiency, productivity and quality. We should make it our business to be in that position again.
Our increased reliance on imports from China and the Far East has damaged the British economy and output. We therefore need to revaluate the situation and look at incentivising firms to set up manufacturing plants here in Britain to proffer jobs boost British output. The Conservative MP for Romford, Andrew Rosindell, spoke in Parliament recently about this very subject and detailed the need for more investment in the agricultural sector – now that we have left the EU and are no longer bound by the disastrous Common Agricultural Policy, we have the perfect opportunity to do this. Tax holidays for start-ups and some viable but struggling firms could provide the platform for British manufacturers to grow and attract new investment in the sector.
As former Brexit Secretary David Davis suggested in his column for the Daily Mail on 10th May, we need a combination of Reaganomics and Thatcherite policies mixed with elements of President Roosevelt’s New Deal. I would be particularly keen to expedite the introduction of free ports which would encourage international trade, and create wealth on a local and national level. Places like Teesisde, with their rich manufacturing history, are the perfect beachheads for this policy.
By cutting taxes for individuals, supporting businesses and embracing the many opportunities of Brexit, the Conservative Party can re-ignite the spirit of the 1980s and create a new, independent United Kingdom which truly is the envy of the world.
Ethan Thoburn is Deputy Chairman of South Tyneside Conservatives and an Area Officer in the North East of England. He is a regular writer for The Bruges Group. Follow him on twitter: @ethan_thoburn