Cameron's Ctrl-Alt-Del on frozen party relations

A bunch of new appointments and a more aggressive tone indicate that the Tories' campaign for re-election has already started.

Are the Tories getting their act together? In my column for this week’s magazine I note that there is a strain of optimism surfacing in the Conservative parliamentary party. It has a number of elements. There is new solidarity forged in collective mourning for Margaret Thatcher. Labour look disoriented and increasingly divided. And, crucially, there are portions of red meat being doled out by Lynton Crosby, the pugnacious No 10 campaign chief, to keep backbench tummies from rumbling angrily.

David Cameron, it seems, has also finally taken to heart the accusation that he neglects his party, choosing to float presidentially above the fray, thinking a bit too much about statesmanlike preening and not enough about securing a Conservative victory. Tory rebellion this parliament has often had an ideological impetus but it has also been exacerbated and prolonged by personal animosity towards the Prime Minister. There are MPs who feel slighted, passed over, sneered at and generally unloved. Cameron can’t do much about the hard core of ultra-zealous dogmatists who pray for his defeat – the Tory Trots – but there aren’t enough of those to finish him. He can, meanwhile, launch a charm offensive with the rest of the party.

Much has been made of his collegiate behaviour in the weeks of Thatcher mourning – sending friendly notes to MPs, raising a glass in tribute in the Commons bars; taking tea with the troops. Tory parliamentary flesh is being systematically pressed by the leader for the first time many can remember.

There have also been notable appointments. Before the Easter break, John Hayes, a bumptious Tory traditionalist with a direct channel to some of the ruddier-cheeked corners of the parliamentary party, was moved from the Energy department (where his scepticism about climate change was causing mayhem) to become a “senior” Cameron aide.

Now Jo Johnson (Boris’s younger brother) has been named as the new head of the No 10 policy unit. Johnson is respected across Westminster for his moderation and intelligence. He doesn’t have the flamboyance of his elder brother but that doesn’t mean he is any less ambitious. One credential that has raised a few eyebrows is the widespread suspicion that Johnson is a bit of a Europhile. That, in the words of one (more explicitly “out”) pro-European Tory is “the love that dare not speak its name” in the party, so it is hardly surprising that Johnson’s pragmatic inclinations towards Brussels are not worn on his sleeve. His private views are described to me as “eminently sensible; he gets it” by someone in Westminster whose approval would be considered a mark of disgrace by serious Tory eurosceptics. That could cause problems down the line.

Separately, a new policy “advisory board” has also been created, with input from a diverse range of MPs including veterans and 2010 newbies: Peter Lilley, Nick Gibb, Jesse Norman, Margot James, Peter Uppal, George Eustice. There are reports that Steve Hilton, Cameron’s old head of strategy will be involved – although that makes the whole thing look as much like a ruse to get people talking about a grand gathering of the Tory tribe as a substantial new institution. Hilton is not one for sitting comfortably on committees of any kind; Cameron is not really one for listening to them.

Of the MPs brought in to advise the PM, perhaps Norman is the most remarkable. He co-ordinated last year’s rebellion against House of Lords reform, for which he was rewarded with a ferocious bollocking from the Prime Minister and exile to political Siberia (“the new honourable member for Vladivostok East,” as one of Norman’s friends joked at the time.) Norman had once been considered a rising star and a shoo-in for a government post. After the Lords reform episode a No 10 insider told me that “Jesse Norman will never get a job in government under David Cameron.” That the ban looks to have been lifted is evidence that what we are seeing is a very deliberate, thorough effort to reset the leader’s relations with his party.

Will it work? We have been here before, notably after Cameron’s big European speech, when the Tories looked gleefully united for all of a week before talk of a leadership coup emerged. Nonetheless, this feels slightly different. There is a clearer and more explicit recognition among MPs that party discipline, coupled with a hint of good economic news, would put more pressure on Labour at a time when the opposition’s unity looks more brittle than ever. Again, Crosby’s influence here is crucial. A perennial criticism of the Cameron operation has been that it is not party political enough; that it likes the trappings of power but lacks a ferocious appetite for blood.

George Osborne has a relentless political game-playing impulse but he has a day job trying to run the economy. What has been missing, say some Tories, is the feeling that there is someone inside No 10 who wakes up every morning thinking about nothing other than how to hurt Ed Miliband and deliver a Conservative majority. That person, they now say, is Lynton Crosby. What he has done, in effect, is set the party on a war footing with suitably aggressive messages, triggering a Tory loyalty reflex. More than one Conservative has said to me in recent weeks “the campaign has started already.” They don’t mean the vote for county council seats on 2 May. They mean the big one in May 2015.

David Cameron tweeted this picture earlier of his new policy board, including Conservative MPs Jo Johnson, Jesse Norman and Margot James.

Rafael Behr is political columnist at the Guardian and former political editor of the New Statesman

Getty
Show Hide image

Taxation without benefits: how our tax system increases inequality

We often hear the progressive income tax used as a proxy for all tax when it actually accounts for just over a quarter of the tax take.

Tax may not be the burning issue on everyone’s minds over the next month, but the Panama Papers leak has proven that the thorny issues of who pays what, and what level of tax is fair, are ones that are never too far away from the public consciousness.

One of the most important annual publications on tax is the Office for National Statistics’ Effects of Taxes and Benefits on Household Income. Published today, it shows, among other things, the proportion of income paid in tax by people at different points on the income spectrum. This may sound like the natural domain of the data nerd, but it actually tells us some rather interesting facts about our system of taxes and benefits.

First, the good news. Our much maligned welfare system is in fact a beacon of progressiveness, drastically reducing the level of income inequality we see in this country. In fact, overall, taxes and benefits are quite substantially redistributive. Without them, the income of the richest 20 per cent of households would be 14 times higher than the poorest 20 per cent. With them, that gap falls to only four times.

The benefit system as a whole decreases the Gini coefficient, the most frequently used measure of inequality, by 14 percentage points. For anyone who sees taxes and benefits as a key component in reducing economic inequality, or boosting the incomes of the poorest, or, frankly, tackling social injustice, this is rather welcome news.

But now for the bad news.

While our welfare system is undoubtedly progressive, the same cannot be said of our tax system when looked at in isolation. The poorest face a disproportionately heavy tax burden compared to the richest, paying 47 per cent of their income in tax, compared to just 34 per cent for the richest. Last year (2013/14) this difference was 45 per cent – 35 per cent, and the year before (2012/13) the gap was 43 per cent – 35 per cent. So while the proportion of income paid in tax has fallen slightly for the richest, it has increased for the poorest.

While some taxes like income tax are substantially progressive, those such as VAT and Council Tax are not. Even after adjusting for rebates and Council Tax Benefit, the poorest 10 per cent pay 7.1 per cent of their income in council tax while the richest 10 per cent pay only 1.5 per cent.

Should this matter, if our system of benefits continues to narrow the gap between rich and poor? Well, yes, not least because that system is under severe pressure from further cuts. But there are other good reasons to focus on the tax system in isolation from the benefit system.

Polling by Ipsos MORI has shown that the public believes that the tax system by itself reduces inequality, and it is often spoken of by politicians as if that is the case. We often hear the progressive income tax used as a proxy for all tax, for example, when it actually accounts for just over a quarter of the tax take.

Understanding why the tax system does not by itself reduce inequality is therefore important for both thinking about how tax revenues could be better raised, and for understanding the importance of the benefit system in narrowing the gap between the richest and the poorest.

John Hood is Acting Director of the Equality Trust