Britannia Radio

TELEGRAPH   25.4.09
Margaret Thatcher's battle for lower taxes must be fought again
As we approach the 30th anniversary of Margaret Thatcher's 
government, we must remember the lessons she taught

By Charles Moore

Thirty years ago on May 4, Margaret Thatcher became prime minister. 
To get its readers in the right mood, the Guardian ran a sort of 
supplement a couple of weeks back. "It is justice of the most poetic 
kind," wrote Germaine Greer, "that Thatcher's is now the evil empire 
and Thatcherism a dirty word." According to Sue Townsend (creator of 
Adrian Mole), "She walked alone and friendless to school and back. 
She took these early experiences with her to Downing Street and had 
her revenge." Hanif Kureishi, the writer, said: "Thatcher, like the 
Queen, is basically vulgar. I'm glad she's still alive to see the 
whole thing collapse."

On the day she entered Downing Street for the first time as prime 
minister, Mrs Thatcher famously quoted words she (wrongly) attributed 
to St Francis of Assisi about bringing harmony instead of discord, 
truth instead of error.

These lines were prepared, and stagey. But she also gave an answer 
that was unprepared. As reporters jostled her, one asked if she had 
any thoughts at this moment about her own father. She said: "I just 
owe almost everything I believe to my father. He brought me up to 
believe all the things I do believe. and it is passionately 
interesting for me that the things I learned in a small town, in a 
very modest home, are just the things that I believe have won the 
election," and with that she passed through the famous door.

It is, indeed, "passionately interesting", and it may help to explain 
why, after all these years, some people hate her so much.

Without having Hanif Kureishi's exalted, exquisite, Nancy-Mitford-
style sensitivity for class distinctions, I do see that the 
combination of Mrs Thatcher's beliefs and her social origins (and 
perhaps also her sex) is toxic for people like him. [Moore has 
'sussed' out the vileness of Hureishi and is not afraid to say so! -cs]

People like Mrs Thatcher - state-educated, lower-middle-class, 
provincial, female - were not supposed to question the 1945 state-
socialist settlement. To its architects, such people were of no 
account. They were neither poor enough to attract romantic sympathy, 
nor grand enough to be entitled to power. They were expected to know 
their place.

By deciding that her place was at the top, and that the statist 
social order was wrong, Margaret Thatcher was being truly radical or, 
as Mr Kureishi would see it, vulgar. That is why, 30 years on, she is 
still worth so much powder and shot.

And that is why - though not in the way he means it - Mr Kureishi is 
right that "the whole thing" is now collapsing.

In his Budget this week, the Chancellor of the Exchequer announced 
that the top rate of tax would go up, just in time for the general 
election next year, to 50 per cent for those earning £150,000 a year. 
Now there will be a top rate, starting at the same point as before, 
and a tip-top rate.
It is true, surely, that you would expect an income-tax system to 
bear most heavily on the rich. That is why, even before Alistair 
Darling stepped in, the top rate was nearly twice the bottom one. It 
is less painful to hand over 40 per cent of a lot than 40 per cent of 
what is not really enough in the first place.

But when you put up the top rate by 25 per cent, as will now happen, 
you are not only driving potential payers away, you are also making a 
statement about how you think society should be organised. You are 
saying that money taken out of the hands of citizens works better 
than staying with its owners.

To a remarkable extent, that is what governments of both parties 
believe. The more sensible ones know that if they grab too much, they 
will eventually get less. But few truly think that the money they 
take would be better spent if they never took it in the first place.

Mrs Thatcher really did because she explicitly did not believe in the 
pursuit of equality. "The pursuit of equality is itself a mirage," 
she said, in a speech before she became prime minister. "Let our 
children grow tall, and let some grow taller than others if they have 
it in them to do so."

In the course of her time as prime minister, she more than halved the 
top rate of income tax, and cut the standard rate by a quarter. She 
was perfectly capable of putting up taxes out of immediate necessity 
(in 1979, she all but doubled VAT), but always the direction was 
clear. Your money is yours, and will do more good if it stays with you.

This message was effective. Voters came to see promises to increase 
the top rate as evidence that Labour was a tax-raising party for all. 
Top-rate rises were like the canary in the mine - evidence of poison 
approaching. Increasing the top rate, Philip Gould, the New Labour 
focus-group wizard, reported, "put us at political risk". There was 
some difference of opinion: "Blair thought it did, Brown thought it 
didn't", but the decision was made. In all three elections from 1997, 
Labour promised not to raise the top (or the standard) rate. It was 
because of Mrs Thatcher's success that this was so.

Now, thanks to debt, "the whole thing" has collapsed, and the rate is 
going up. You cannot make that change without changing the message. 
The message now - perhaps it is the message Mr Brown would always 
have liked to send - is a regression to the 1970s. The rich, by being 
rich, are anti-social. Equality is the desirable state, and only the 
state can bring it about.

So the difference between the parties from which Mrs Thatcher's 
Conservatives benefited, and which Tony Blair succeeded in closing 
down, has opened up once more. Mr Brown calculates that it will be to 
his advantage: the Tories will either have to oppose the rise - and 
be damned as the friends of the rich - or support it - and enrage 
their natural supporters.

This trap was first revealed in the Pre-Budget Report last autumn, 
when a 45 per cent rate was promised for 2011. Now that it gapes 
wider, David Cameron is unlikely to fall into it. He is saying that 
50 per cent is a rotten idea, but that high taxes on the average wage 
are an even more serious problem. In a party still repairing itself 
after years of discredit, this caution is necessary.

But, in making his calculation, might Gordon Brown have forgotten 
what people will think of his own party? Why does he think that 
abandoning the way he won before will make him win now? Will the 
pursuit of equality reconcile us on our collective journey down the 
road to ruin?

Within one generation - 30 years - we have built up and now knocked 
down a balance between public and private finances which worked. It 
worked because Mrs Thatcher put freedom before equality. She was able 
to make this argument because of economic failure. In times of 
plenty, people got bored and stopped listening. Now there is failure 
once more. It will be "passionately interesting" to make this 
argument anew.