Andrew Tickell: The UK Chancellor is selling a lie

The basic reality remains unchanged: £25,971 is the average income of the ­average UK worker. Half earn more, half less. Some will work full-time, others part. But line us all up from the wealthiest to the poorest, and if you earn just under £26k a year, you’ll find yourself smack bang in the middle of the wage line. Most folk need a telescope to see the higher rates of income tax.

In British politics, a great deal of ­energy goes into convincing people that this is not the case. Some of this social distortion is wilful. Some is just born of ignorance. Both are pernicious. Social ­psychological data has shown that the rich tend to ­underestimate their wealth, and the poor underestimate their relative poverty.

If you exist in a particular social ­bubble, if everyone you know seems to have a ­similar level of wealth to you, if you ­consume ­media which confirms your prejudices, then it is all too easy to think you must be somewhere in the middle, that you must be ordinary, average, representative.

The politics of this distorted social ­perception turn rancid when an objectively wealthy coterie are propelled into power, carrying the victim-fantasy that £80k a year is a pretty ordinary salary and folk in their price bracket are bearing a damned unfair share of social burdens.

Distributive justice is pretty simple. It’s about deciding who bears the costs and makes the gains in our society. There are 67 million people in the UK, 47 and a half million voted in the last UK General Election. This mini-Budget might as well have been tailored for the wealthiest 600,000.

If his statement to the House of ­Commons last week is anything to go by, Kwasi Kwarteng is determined to use his new office to do right by his class, borrowing billions to fund tax cuts for the rich, to be followed by more welfare crackdowns and culture-war bullshit to distract the lieges from the fact they’re being robbed blind. This is the mission: distract, deflect and make off with the loot.

The winners and losers tell you ­everything you need to know about the social sympathies of Liz Truss’s ­administration. Almost half the gains from this week’s changes to personal taxation in England and Wales will go to the richest 5% of households. If you earn £200k, Kwarteng has just given you £5220 extra spending money.

And say you’re a careworn ­millionaire experiencing a cost of living crisis? Good news! With the abolition of the upper rate of tax, you’ve just saved £55,220 – almost double the average pre-tax ­salary of the ­“ordinary Brit”. According to the ­Resolution Foundation, an ­English ­taxpayer earning £20,000 stands to ­benefit to the tune of £157 from these changes to income tax thresholds and NI. The poorest? £22.12. I’m sure that’ll make a big dent in the weekly shop.

The regional implications for ­England are also eloquent about where the new regime’s priorities lie. This ­weekend, ­political hacks have been ­sonorously ­giving the last rites to the Tories’ ­“levelling up” agenda and the gestural pretence the party gives a damn about the ­constituencies it snatched from Labour at the last General Election. But it was always a slogan – not a policy.

Economic analysis of the net losers and winners from Kwarteng’s statement show that the cuts to personal taxes will ­disproportionately benefit London and the south east of England – with households in Surrey, Sussex and Hampshire gaining up to three times as much on average as folk in York, Cardiff or Newcastle.

“Levelling up” was always an enterprise in political marketing, just as “trickle down economics” is a shifty slogan to explain away why we should make the rich richer. “Trickle down economics” roughly translates to the unevidenced ­assertion that giving already rich people ­flipping great wadges of cash will eventually wet the whistle of the gasping and parched ­ordinary proletarians who the ­government have not seen fit to soak. It’s a public ­relations line. And when we find out the wealth has not, in fact, ­dribbled down but has pooled conspicuously in the wealthiest corners of British ­society, what are the chances the Tories will ­repent their economic error and retool the new tax rates, do you reckon?

But pretending these tax changes are about growth is a neat way of avoiding ­saying the quiet part out loud. Leading your defence of massive deficit-funded tax cuts for the rich by accusing your opponents of “the politics of envy” might seem just a tad abrasive, when you are addressing a country which is sliding towards a cold winter with rampant inflation, stagnating wages and sharply rising energy costs accounting for a greater and greater share of household budgets. So trickle down it is.

LESS has been said about the wild incoherence Kwarteng’s statement reveals within the Tory party. Just last year, 318 Conservative MPs voted in the House of Commons to introduce the so-called “health and social care levy”. Among the “aye” votes you’ll see a number of familiar names, including Liz Truss and Kwasi Kwarteng. The plan was two-stage. Justified as a necessary innovation to secure the long-term future of the NHS and social care, first National Insurance was hiked, to be followed in 2023 by income tax increases. Both of these innovations have now been scrapped.

You could be forgiven for thinking that the governing purpose of the ­Conservative Party is undoing the Conservative Party’s political choices.

David Cameron’s schtick was that the Conservatives had become the nasty party, anti-environmentalist and socially exclusive. His premiership was ­characterised by spending cuts and the contraction in public services. This was repudiated by Johnson. His big-spender pitch sold the idea that Tories were the ones to fix the destitution and decay their austerity caused after the last financial crash.

Now, we’re told, we’re finally ­getting a “true Tory budget” from Truss, who has suggested that “there has been too much focus on the distribution of income during the last 20 years”. This is your occasional reminder that Tory governments have been in power in the UK since May 2010.

The incoherence isn’t just limited to tax-and-spend. Since 2010, the Conservative government has been aggressively for and aggressively against the police being able to stop and search innocent members of the public, and have banned fracking and enthusiastically endorsed England getting the frack fracked out of it.

Jacob Rees-Mogg is currently selling a vision of Britain’s future based on the coal standard. And since we’re thinking about chopping and changing in Conservative politics, is it Truss’s position that the NHS and social care in England now isn’t facing a funding crisis?

True to form, the Scottish media have already skipped straight to the hyperventilating, lobbying for Kwarteng’s cuts to be passed on to Scottish upper-rate taxpayers, and platforming a range of voices from the monied interest in the country, threatening brain-drains and tax-flights if Nicola Sturgeon’s administration doesn’t give the wealthiest Scots the same ­unfunded tax breaks. They promise a dystopian future. The New Town will empty. Only ghostly loafers will be heard in the empty aisles of Waitrose. You will scour the streets in vain for a pair of crushed strawberry cords. Harvey Nichols will slip into silence.

Curiously, critics of the Chancellor’s announcements are simultaneously ­demanding the Scottish Government match his mistake, inventing pressure on Sturgeon to service the demands of corporate lobbyists and asset managers.

And once again I find myself ­thinking, wouldn’t it be nice not to live in a derivate society? Wouldn’t it be a grand thing if we could talk about tax policy, without treating Westminster as the ­default, ­demanding the devolved ­governments ­justify their divergences from the ­Whitehall canon? What is the point of ­devolution if our political observers’ first reaction is to demand uniformity, even with the most madcap scheme of the merchant adventurers in control of the UK?