Episode description

As tax rises hit pay packets next month is this an end to traditional Conservative low tax policy? The UK government has so far defied calls from across the political spectrum to shelve the planned 1.25 per cent increase in National Insurance, despite millions of households grappling with a rising cost of living at a time of great economic uncertainty as war rages in Ukraine. A greater proportion of the nation’s income will go to the taxman than at any point since the 1950s. Yet Brexit was billed by some as the UK’s chance to go it alone and create its own economic model, a “Singapore on Thames” – a low tax, light touch economy to attract outside investment. Instead, corporation tax is to increase from 19 percent to 25 per cent by 2023, while a new £12 billion annual levy to fund the NHS and social care comes in from April, initially in the form of higher national insurance payments. Prime Minister Boris Johnson has broken his election manifesto pledge not to raise such taxes to meet, he argues, the cost of supporting the economy through the pandemic. His chancellor hopes this will permit future tax cuts. But with policy priorities such as levelling up and a transition to net zero, and the realities of an ageing population, BBC Economics Correspondent Dharshini David asks whether we're seeing a fundamental shift in traditional Conservative low tax philosophy and whether that's a temporary choice - or an unavoidable permanent reorientation? Guests: Sir John Redwood MP Sir Charlie Bean, professor of economics at the London School of Economics and Political Science Lord Nick Macpherson, former permanent secretary to the Treasury Dame DeAnne Julius, distinguished fellow, Chatham House Dr Jill Rutter, senior fellow, The Institute of Government

Producer: Caroline Bayley Production Coordinators: Maria Ogundele and Jacqui Johnson Sound: Graham Puddifoot Editor: Hugh Levinson