Contenders battling to be the next Tory leader have traded blows over who was the real heir to Margaret Thatcher on tax as voting was starting in the contest.
As several of the eight remaining candidates were on Wednesday morning scrambling to secure the backing of at least 30 MPs to get through the first round of voting, Brexit minister Jacob Rees-Mogg argued that Lady Thatcher would be lowering taxes if she were in charge now.
Taxes are set to spiral to their highest level since after the Second World War, partly due to the Covid pandemic and to plough billions more into the NHS and social care.
However, former chancellor Rishi Sunak rejected this argument, insisting that the “Iron Lady” prime minister would have supported his policy of taming inflation, focusing on economic growth, and then cutting taxes, ahead of the general election expected in 2024.
“We will cut taxes and we will do it responsibly. That’s my economic approach. I would describe it as common sense Thatcherism. I believe that’s what she would have done,” he said.
Mr Rees-Mogg is backing Foreign Secretary Liz Truss, who is seen at Westminster as modelling her leadership bid on Lady Thatcher who still dominates Tory politics more than 30 years after she left Downing Street.
Asked why leadership candidates were citing Thatcher, Mr Rees-Mogg told Sky News: “They think she is the golden ticket with the membership.”
Lady Thatcher was a deeply polarising figure in British politics and in wider society. Pressed on whether she is the “golden ticket”, Mr Rees-Mogg said: “The memory of Margaret Thatcher is highly regarded within the Conservative Party, certainly by people like me and many of our members.”
As tensions rose ahead of early afternoon voting in the contest:
- International trade minister Penny Mordaunt officially launched her campaign, stressing that “Whitehall is broken” and vowed to bring the “white heat of modernisation” to government.
- Former health secretary Jeremy Hunt said not enough focus had been put on the NHS so far during the leadership contest.
- Chancellor Nadhim Zahawi said he would offer Boris Johnson a job in his Cabinet if he wanted one.
- Mr Rees-Mogg stopped short of repeating accusations by fellow Truss supporter Nadine Dorries, the Culture Secretary, that Mr Sunak’s camp had lent some support to former Mr Hunt so that he got the backing of at least 20 MPs to enter the contest.
- In a further twist, some of Mr Hunt’s backers were in fact reported to have given their support to other candidates to try to get them into the contest.
- Attorney General Suella Braverman won the backing of senior Tory Sir Bernard Jenkin, chairman of the Commons liaison committee, who said she was one of the “bravest and most principled people” he had ever met.
- Double Olympic Gold medallist Lord Coe backed Kemi Badenoch, saying she had “the integrity and competency to restore trust in the Conservative party and connect it to real issues within the community”.
- In an impromptu press conference on Westminster’s College Green, soldier turned MP Tom Tugendhat ruled out doing any deals with rivals to drop out of the race. “This has got to go to a membership vote. It absolutely must go all the way,” he added.
- Transport Secretary Grant Shapps denied Mr Sunak would be a “socialist Chancellor,” a tag his opponents are seeking to pin to him.
- Health Secretary Steve Barclay became the latest senior MP to declare for Mr Sunak, saying he had“all the right attributes to take our country forward”.
- Amid the leadership frenzy, Mr Johnson was preparing for his penultimate Prime Minister’s Questions, and Home Secretary Priti Patel pulled out of appearing before the Commons home affairs committee, having decided yesterday not to throw her name into contest.
With tax still centre stage in the contest, Mr Rees-Mogg said Lady Thatcher had delivered “very significant cuts in taxation” after getting into No10. “So saying Margaret Thatcher would not have been a tax cutter is simply wrong,” he added.
The Institute for Fiscal Studies says there were two principal elements to Chancellor Sir Geoffrey Howe’s June 1979 budget, just weeks after Mrs Thatcher won power. “One was the very substantial reductions which were made in the higher rates of income tax. The second was the major shift from direct to indirect taxation involved in raising the standard rate of VAT from eight per cent to 15 per cent while reducing the basic rate of income tax and raising the tax threshold,” an IFS paper said. The basic rate of income tax was cut to 30 per cent (from 33 per cent) and the top rate from 83 per cent to 60 per cent on “earned income”, with reductions in public spending.
Sir Geoffrey said: “We cannot go on avoiding difficult choices.”
The IFS said that the 1979 Budget was tax raising overall, once all the significant changes were taken into account.
Lady Thatcher died in 2013 at the age of 87. Nearly a decade on, Tim Bale, professor of politics at Queen Mary University of London, said the current leadership race was “a contest between different strains of Thatcherism”.
Ex-Tory leader Lord Hague, a supporter of Mr Sunak to be party leader and Prime Minister, yesterday accused other candidates of wrongly using Lady Thatcher’s name for their push for swift tax cuts. He told Times Radio: “Her view was that tax cuts have to be earned. You still have to have a country that is creditworthy... you can’t let the Budget deficit get completely out of control.”
