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Conservative candidates missing the point about tax

August 3, 2022 11:25 AM
Originally published by Teignbridge / Newton Abbot Liberal Democrats

Martin Wrigley - Lib Dem Prospective Parliamentary Candidate

Martin Wrigley

No-one likes paying tax. I think we can all agree on that.

And the prospective leaders of the Conservative party have certainly made tax a key battleground as they bicker about who should be the country's next Prime Minister. It's said that one of them has put up tax levels some 17 times, and the other one would cut taxes and borrow more instead.

However, I think that they are both missing the point.

Governments and Councils are bodies that act collectively for all of us and use their financial muscle to tackle the jobs that are too big for individuals or companies. And to do that they need to gather taxes. The point is what they do with them and how effective they are.

One of the many things that came out of the era when Margaret Thatcher was in charge was the privatisation of the water companies. This was supposed to make it easier to raise capital to invest in the systems, modernise them and even make them more efficient - and so cut taxes (or water rates as was). Again, it missed the point, in my view.

Today our water company is under investigation by Ofwat over the amount of sewage spilled into our rivers. The systems are leaking and overflowing, and in desperate need of a massive overhaul. So much for the hoped-for necessary investment. Yet the water company bosses are paid massive bonuses, and the overseas investment funds that own the shares get big dividends generated from our water bills.

This privatisation and the focus on market forces hasn't given us consumers any choice, any benefit from investment or even reduced taxes (or water bills). Instead, it has taken away the public ownership of an asset and put it under stress to generate profits for its international owners.

Even Adam Smith - the father of market economics - says that marketplaces don't work for natural monopolies. We can see from the water companies that he was right about that.

Government has the responsibility to shape an economy that safeguards us, the citizens, and allows us to make a living and succeed. That involves government raising funding through tax, using that funding wisely for the communal good and not just selling off public assets for short term fixes.

As we face out of control inflation, a cost-of-living crisis and climate change heatwaves, I hope that the next leader and their government thinks about how they can use the financial muscle to help UK residents, invest in the future, and not just bribe electors with unfunded tax cuts.