This week's opinion: 5 December 2019

Making simple statements about tax is difficult. You need only look at the election campaign to see this. At his manifesto launch, Jeremy Corbyn said Labour’s policy is ‘for no increases in VAT, income tax or National Insurance for anybody earning less than £80,000 a year. There is no increase for 95% of taxpayers’. But if corporation tax rates increase and dividends are taxed at income tax rates, people drawing modest sums from family companies will see their tax bills rise. 

The Conservative manifesto boldly states, ‘we promise not to raise the rate of income tax, National Insurance or VAT’. It also says, ‘we will take further action to redesign the tax system so that it boosts growth, wages and investments and limits tax advantages for the wealthiest in society’. You don’t have to look to hard to see the potential for future tension between those two statements. Readers will recall Phillip Hammond’s problems when he tried to increase National Insurance for self-employed people, given the previous manifesto commitment. 

These are not political points. What they show is how difficult it is to articulate messages unambiguously. ‘No increase in tax rates’ might sound the same as ‘no tax increases’ but it is quite different. Similarly, sensible reforms to remove anomalies in the system have a nasty habit of creating fresh anomalies elsewhere. Much as we might want it, the political discourse is always going to be conducted in headline terms.

Whatever the election result I expect before long that there will be a row over whether a tax proposal contradicts a manifesto commitment: remember, you heard it here first.