John O’Connell: Presiding over the biggest tax burden in 70 years is surely a legacy Johnson must be keen to avoid

2 Feb

John O’Connell is the Chief Executive of the Taxpayers’ Alliance.

Boris Johnson is an admirer of Winston Churchill, to put it mildly. Churchill has a wartime legacy that Johnson knows he can’t match, but it’s hardly a secret the Prime Minister himself wishes to be remembered through the ages. He’s now tackling a once-in-a-generation crisis. But there is a little-known achievement of Churchill’s post-war administration which Johnson should try harder to emulate.

New research from the TaxPayers’ Alliance finds that the tax burden now stands at its highest sustained level – based on a five-year average – since 1951, when the UK was still demilitarising after the second world war. This was a level which Churchill was determined to cut, explaining in his election manifesto of that year that “British taxation is higher than in any country outside the Communist world.”

These are different times, but presiding over the biggest tax burden in 70 years is surely a legacy Johnson must be keen to avoid. The tax burden next year will be an estimated 34.2 per cent as a share of GDP. That will be the highest single year score since 1969-70, when a rise in consumption taxes to discourage imports at a time of foreign exchange difficulties saw a one-off spike during the last full year of the second premiership of Harold Wilson. In the first year free of the European Union, we are paying as much tax as we did in the years just before we joined.

Repairing the public finances after the hammerblow of Covid doesn’t have to mean tax increases. The objective for Johnson – and Rishi Sunak, of course – should be to create the conditions for a boom in growth. That means giving the private sector – currently on its knees – the room to stand tall. With that will come investment, growth and jobs.

But official forecasts say that the Prime Minister will be levying taxes at levels likely to be higher than they have been since Clement Attlee. Any tax rises in the March Budget will put that figure even higher.

Traditionally, increasing taxes is the hallmark of Labour prime ministers and this is then countered by their Tory successors. Churchill’s encore administration shaved off 4.5 percentage points from the tax burden following the Attlee years, before Heath arrived in the shadow of Wilson and reduced taxes by another 3.9 percentage points. Margaret Thatcher sliced off another 0.8.

These assumptions can no longer be taken for granted. Since Thatcher departed, when the tax burden was at left at 30.4 per cent, Tory tax cuts have been negligible and the burden has ratcheted up. During Churchill’s post-war government, taxes were lower than they have been under each of the last three Conservative prime ministers. Gordon Brown cut the tax burden more in his three years than they’ve managed in eleven.

Some might now be thinking that the British public, like the oblivious lobster, is unperturbed by continuous tax increases. But we know that Jeremy Corbyn, with his manifesto delivering an extraordinary estimated tax burden of 37.3 per cent, pushed too hard and was rejected by the electorate – twice. And he wouldn’t be the first Labour leader denied office by the prospect of tax rises. Conservatives have almost always bent over backwards to promise that taxes wouldn’t go up under them.

Is it different this time, because of the Conservatives’ new base of voters? This argument can misunderstand the working class: tax cuts can be popular.

Polling from just before the 2019 election told us the new blue collar Conservatives want to see their taxes go down. A cap on council tax rises was supported by more than three quarters of those polled; around six in 10 C2DE voters strongly favoured cutting the basic rate of income tax down to 15p in the pound. About the same number wanted to see employers’ PAYE taxes reduced to encourage businesses to hire more people, with even more (seven in 10) wanting to abolish the BBC licence fee. All of these were compatible with the 2019 Conservative manifesto, and what’s more, were more popular with C2DE voters than their ABC1 counterparts.

With tax bills at around £24,500 per household, and data from the ONS showing the poorest families pay almost half their income in tax, cuts like this wouldn’t go unnoticed. They will certainly be critical to a post-pandemic Britain trying to restore growth and prosperity, as Churchill noted when he said “for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle”. With their commitment to opposing tax rises in March, and a renewed focus on fighting council tax rises, the Labour frontbench now understands that taxpayer value could hold the keys to Number 10.

Very soon, there will be a fork in the road out of the pandemic – which way would Churchill go? Johnson should choose that same route.

Alistair Lexden: On this day, 75 years ago – VJ Day at Westminster

15 Aug

Lord Lexden is the Conservative Party’s official historian. His website can be found here

The American atomic bombs, which were to bring  the Second World War to an end, fell first on Hiroshima on 6 August 1945, and then on Nagasaki three days later. Japan’s unconditional surrender was announced on 14 August.

Clem Attlee’s Government, formed after Labour’s landslide election victory the previous month, had been in office for under three weeks. The dramatic news from the Far East reached the new Prime Minister in a rather haphazard  fashion. During the evening of 14 August, Jock Colville, Churchill’s Private Secretary who had stayed on temporarily to help his successor, “saw on the tape-machine at No 10 that Japan had surrendered. I brought the news into the Cabinet room where Attlee was closeted with Lord Louis Mountbatten[ later Earl Mountbatten of Burma] who was professing Labour sympathies.”

To Colville’s amusement, Mountbatten, the left’s new recruit and a byword for vanity, later told everyone that it was he who had broken the news to a grateful Attlee.

At midnight, the Prime Minister announced the terms of Japan’s surrender. All Japanese forces had been ordered  “to cease active operations [and] to surrender arms.” VJ Day had begun.

The thoughts of many grateful people in London turned at once to Churchill, who was living temporarily in a block of flats, Westminster Gardens (where 34 years later the bomb that was to kill Airey Neave would be placed under his car for subsequent detonation as he left the House of Commons). Early on VJ Day, a crowd gathered there “to see Papa and cheer him”, as Mrs Churchill wrote to her daughter, Mary. Later “ he got mobbed in Whitehall by a frenzied crowd.”

At 11am, Churchill, along with MPs of all parties, was in the House of Commons, which met that day in St Stephen’s Hall, normally used as a  thoroughfare from the St Stephen’s entrance to Central Lobby and beyond. The Speaker told the assembled members of “a strange coincidence. Curiously enough, the last time the House sat in St Stephen’s Hall was on 15th  August, 111 years ago exactly.”

The cause on that occasion was the fire that destroyed most of the Palace of Westminster. On 15 August 1945, the Commons used this temporary refuge because the chamber of the House of Lords, where they had been meeting since the destruction of their own chamber in the Blitz, was needed for another purpose.

By happy chance, VJ Day coincided with the State Opening of the new Parliament, elected in July. The ceremony, severely curtailed during the years of war, was “restored to something of its pristine splendour by the revival of a carriage procession”, as George VI’s Private Secretary, Tommy Lascelles, noted in his diary.

“For the first time in history”, wrote George VI’s biographer, John Wheeler-Bennett, “two Speeches from the Throne were prepared, and signed by the Sovereign for the opening of Parliament” because the moment of Japan’s surrender had been impossible to predict. “ One version of the Speech alluded to the surrender, the other omitted any reference to it.”  Lascelles had “ a nervous moment lest Bill Jowitt, now Lord Chancellor, should produce the wrong speech out of his embroidered bag.”

The scene in the Lords chamber was recorded with characteristic panache and sharp eye for detail by the gay Tory MP, Chips Channon, in his famous diary: “It was crowded with peers and peeresses. The Ambassadresses, all wearing extraordinary hats, sat on the right with the Duchesses. Mme Massigli, the French, wore a white tea tray.”

No ermine was on display: “the many new Socialists looked dazed and dazzled, and I was sorry for their sake that the peers were not in robes.”

It was very much  a dress-down occasion: “the King [was] in an Admiral’s uniform and with his cap on. The Queen, in aquamarine blue, though dignified and gracious, was dwarfed by her Mistress of the Robes, the Duchess of Northumberland, who looked far the more regal of the two. The Crown was carried on a cushion.”

Would the King be able to control his stammer? Though troubled by it much less severely than in his youth, he was always the subject of some worry on the occasion of a major speech. Channon praised him:

“His voice was clear, and he spoke better than usual and was more impressive. But they say that the word Berlin had been substituted for Potsdam [scene of the recent conference of the victorious powers], which he could not have articulated.”

Lascelles called it “a dull speech” which put it firmly in the tradition of such declarations over the centuries, noted chiefly for the absence of fine, memorable language.

Apart from details of practical issues stemming from the end of hostilities, Parliament was told that it would shortly be asked to ratify the Charter of the United Nations in order “to maintain peace in accordance with justice and respect for human rights.”

The King’s Speech went on to make clear that the Labour Government’s legislative programme would fulfil the commitments that all parties had given during the war (and repeated during the recent election campaign), to the Beveridge proposals for full employment, a comprehensive social insurance system and a national health service. To them were added Labour’s own plans for nationalisation (including the Bank of England), housing , planning, and more generous trade union laws.

Looking back on the ceremony, Channon reflected that “the Labour people were subdued and impressed and everybody behaved in an exemplary manner.” A further speech was to be required from the King later in the day when he broadcast to radio listeners at home and abroad. It went particularly well. “Everybody commended it”, Lascelles recorded, “and agrees that he has never spoken so fluently and forcefully.”

During the afternoon the King had the less arduous duty of receiving at Buckingham Palace a delegation of ministers and service chiefs, led by Attlee. Churchill was asked to join them, but “said he wouldn’t come unless he could bring with him those of his former colleagues who had served in the War Cabinet”, as Lascelles noted in his diary. It was the only instance of party political difficulty during the day. “He came alone, half an hour after the others had gone.” The King commented later, “I wish he could have been given a proper reception by the people”, by which he meant an appearance on the Buckingham Palace balcony.

The Commons reassembled, back in the Lords chamber once again, at 4pm when Attlee repeated the Japanese terms of surrender “for I feel that it is fit and proper that they should be for ever on record in the annals of this ancient and honourable House.”

Attlee then moved “that this House do now attend at the Church of St Margaret, Westminster, to give humble and reverent thanks to Almighty God on the victorious conclusion of the war.”

Nothing marred the scene, which Channon recorded in his diary. “The Speaker, in full robes, led us through a good-natured crowd of cheering citizens. He was followed by Winston, who had a tremendous reception, and who walked with Eden, Attlee and Herbert Morrison.” After a short service, in which the Speaker’s Chaplain “moved the congregation to Thanksgiving and Dedication”, the bells of St Margaret’s were rung “in celebration of Victory.”

The last business of the House on this historic day began at 5.18pm. Attlee moved an address to the King “on the achievement of final victory.”  The new Labour Prime Minister used  his speech to extol the blessings of constitutional monarchy in Britain. “It is the glory of our democratic Constitution that the will of the people operates and that changes which, in other countries, are often effected through civil strife and bloodshed, here in this island proceed by the peaceful method of the ballot box.”

Churchill himself could not have put it better. He added a few characteristically extravagant comments, proclaiming that “a brighter radiance illumines the Imperial Crown than any which our annals record.” With the two front benches expressing full accord, the House adjourned at 5.35pm.

BIBLIOGRAPHY – John Colville, The Fringes of Power: Downing Street Diaries, Volume Two October 1941-55 ( Septre edition, 1987).  Martin Gilbert, ‘ Never Despair’: Winston S. Churchill 1945-1965 ( Heinemann, 1988). Hansard, Fifth Series, Vol. 413, First Vol. of Session 1945-46. Duff Hart-Davis(ed.), King’s Counsellor : Abdication and War: The Diaries of Sir Alan Lascelles ( Weidenfeld & Nicolson, 2006). Robert Rhodes James (ed.), Chips: The Diaries of Sir Henry Channon( Penguin edition, 1970. John W. Wheeler-Bennett, King George VI: His Life and Reign ( Macmillan, 1958).

Bevin, the working-class John Bull who stood up to Stalin and has no successors in today’s Labour Party

11 Jul

Ernest Bevin: Labour’s Churchill by Andrew Adonis

Andrew Adonis has chosen a magnificent subject. Ernest Bevin was recognised by everyone he met in the 30 years before his death in 1951 as a tremendous figure, a man of power who invigorated any transaction in which he took part, “a working-class John Bull”, as Winston Churchill put it, who did not allow anyone, Stalin included, to push him around.

From 1945-51 Bevin served as one of the great Foreign Secretaries. The brilliant young men who worked for him at the Foreign Office respected and adored him.

This book carries a photograph, which one could wish had been reproduced larger, of the last of his private secretaries, Roddy Barclay – tall, thin, alert, languid, deferential, wearing an elegant double-breasted suit, a grave demeanour and a moustache, “a clever man who chose not to seem clever” as his obituarist in The Independent put it – holding a paper for the Foreign Secretary and indicating on it some matter of importance.

Bevin is sitting at an ornate desk, a massive figure, head on one side, cigarette in the corner of his mouth, pen held, as Adonis points out, like a chisel, giving the paper his undivided attention and probably about to deliver a brutally funny retort.

In Adonis’s best chapter, entitled “Ernie”, we get Bevin at the height of his powers, with Barclay and Nico Henderson preserving some of the best things they heard him say:

“If you open that Pandora’s Box you never know what Trojan ‘orses will jump out.”

Or of a speech by Nye Bevan:

“It sounded as if he’d swallowed a dictionary. ‘E used a lot of words but ‘e didn’t know what they all meant.”

One of the reasons why Bevin has faded from the public mind is that his name is so similar to Bevan, who eclipsed all others to carry off the glory of founding the National Health Service.

Unless one is an expert, one has to make an effort to remember which Labour politician is which, and although Bevin was a big figure for a longer period, and had greater achievements to his name, none of those achievements is so easy to explain or to approve of as the NHS.

He was born into rural poverty in Winsford, a remote village in Somerset where another Foreign Secretary, Boris Johnson, was to spend part of his childhood.

Bevin’s mother, Mercy, whose photograph he kept all his life on his desk, was single, and died when he was eight. He left school at the age of 11 and became a farm labourer, which he called “a form of slavery”. His favourite poem was “The Deserted Village” by Oliver Goldsmith:

Ill fares the land, to hastening ills a prey,

Where wealth accumulates, and men decay.

At the age of 13, Bevin managed to join two of his older brothers in Bristol, where he became a drayman, a Baptist preacher, a socialist and a trade union organiser, and before the First World War made common cause between the Bristol carters and dockers.

He was an organiser and negotiator of genius and in 1922 founded the Transport and General Workers’ Union, which he built into the biggest union in the world, all the time fighting off attempts by Communists to take control.

This was his school of politics. He saw that Churchill’s decision to go back on the gold standard in 1925 had “pushed us over the cliff” and was a disaster for wages, which would have to be cut if British industries were to survive.

Hence the General Strike of 1926, precipitated by proposed cuts in miners’ wages. It is good to be reminded of the remark by Lord Birkenhead, who as F.E.Smith had won a name as one of the most brilliant Conservatives of that or any other generation:

“It would be possible to say without exaggeration of the miners’ leaders that they were the stupidest men in England if we had not had frequent occasion to meet the owners.”

Adonis calls F.E.Smith “the Boris Johnson-esque Tory extrovert of the day”. One sees what he means, but the description isn’t quite right. Smith was harsher than Johnson, and had a more cutting wit.

If Bevin had been able to take charge of the union side of the talks with the Government, the General Strike might have been averted. He was not dominant enough at the start of the crisis to do that, but had emerged by the end of it as a “leader of leaders”.

Men of imagination and intellect – David Lloyd George, John Maynard Keynes – recognised Bevin as a kindred spirit, more Keynesian than Keynes, someone who saw without needing to work out the theory that one answer to mass unemployment must be to leave the gold standard, while another must be to institute programmes of public works.

Men devoid of imagination – Stanley Baldwin, the Conservative leader, and Ramsay MacDonald, the Labour leader – formed a coalition to uphold economic orthodoxy and keep Lloyd George, who championed Keynes’s ideas, out of power.

In 1935, Bevin was instrumental in getting rid of George Lansbury, described by Adonis as “a 1930s Jeremy Corbyn”, from the Labour leadership. “Bevin hammered Lansbury to death,” as their Labour colleague Hugh Dalton put it. When reproached for brutality, Bevin said,

“Lansbury had been going about dressed in saint’s clothes for years waiting for martyrdom: I set fire to the faggots.”

Bevin supported Clement Attlee as the new leader, and in the years to come upheld him through numerous attempts by Labour colleagues to overthrow him.

In 1940, when Labour joined Churchill’s wartime coalition, Bevin came in as Minister of Labour and a member of the War Cabinet, and with characteristic dynamism set about mobilising the work force.

In 1945, as the new Foreign Secretary, Bevin was plunged at Attlee’s side into hard bargaining with Stalin at the Potsdam Conference, and saw at once – much quicker than the Americans – that here was a Communist who was trying to take control of Western Europe, and must be resisted.

There was no false modesty about Bevin. He knew what he could do. He worked incredibly hard, without showing off about it, and “used alcohol like a car uses petrol”. On the plane back from Potsdam, he told Nico Henderson:

“You see, I’ve had a good deal of experience with foreigners. Before the last war I had to do a good deal of negotiation with ships’ captains of all nationalities. These people, Stalin and Truman, are just the same as all Russians and Americans; and dealing with them over foreign affairs is just the same as trying to come to a settlement about unloading a ship. Oh yes, I can handle them.”

Adonis keeps saying, in a somewhat repetitive way, how crucial Bevin was in resisting Stalin’s attempts to neutralise or take over the whole of occupied Germany.

This is not really why we are interested in Bevin. He is a fascinating political personality. We want to read about Churchill whether or not it can be proved he stopped Hitler, and about Bevin whether or not it can be proved he stopped Stalin.

In each case, the more stridently one advances the claim, the more insecure one is liable to sound.

It is true that the creation of what became West Germany was a triumph of British statecraft for which Bevin deserves credit.

Every so often, when I was a correspondent in Berlin in the 1990s, I was reminded of this, but found it hard to dramatise events which had happened 50 years before.

And after all, the success of West Germany had an awful lot to do with the Germans.

Bevin did not get pious about the postwar settlement. He said of the Germans to General Brian Robertson, Governor of the British zone: “I tries ‘ard, Brian, but I ‘ates them.”

This book is dedicated to Roy Jenkins, “friend, mentor, inspiration”. Unfortunately, the disciple was in too much of a rush to maintain the high standards of eloquence and wit set by his master.

There are sentences in Adonis’s book which are too clumsy ever to have been written, let alone allowed to pass into print, by Jenkins.

But there is also a love of anecdote, and an understanding of the way it can illuminate history, which are worthy of Jenkins.

This book can be recommended to anyone interested in Bevin who lacks the time or will to read Alan Bullock’s three-volume biography, on which Adonis acknowledges his reliance.

Another reason why Bevin has faded from public view is that it is impossible to say who his successors were. The unions became a source of trouble more than of statesmen. Alan Johnson is the last major figure to have come up through one.

The mighty T & G merged in 2007 with Amicus and was renamed Unite the Union, led by Len McCluskey. What a falling off. Adonis concludes of Bevin,

“He was lionised in his day as the first of a new breed of ‘common man’ who would manage the British state in a new democratic era. But Bevin wasn’t the first of a kind: he was the first and last.”