Everyone thinks they have “common sense”, but Boris Johnson’s may not be the same as yours or mine. But if you think it’s blindingly self-evident that only social democratic solutions can rebuild an economy plummeting into waters deeper than those of the South Sea bubble, beware. Prepare for a fight against the “common sense” of old enemies, battling not to return to the inequality-fuelling, environment-destroying normal, but to make it far worse.
In Wednesday’s daily briefing, the housing and communities secretary, Robert Jenrick, delivered this homily: “I do know that in every economic recovery in modern British history, the housing market has been key.” With this, he reopened the housing market and set estate agents free to be our prime engines of growth.
Off we go again, restarting an economy built on the quicksands of ever-inflating property wealth. After the crash of 2008, quantitative easing accelerated investment in already existing bricks and mortar, at the expense of falling investment in industry or anything else that might fuel our dismal productivity growth.
Today, again, the property industry is calling for the suspension of all stamp duty to kickstart the market. Britain already taxes hard-grafting work far more than unearned wealth. Tax on property and accumulated wealth has been eased time and again in the last decade’s budgets: families now pass on homes untaxed altogether, regardless of massive lifetime capital gifts.
Tax cuts on the sale of houses are piously claimed in the name of passing wealth onto the next generation, butinflating house prices benefit the older generation, while young people are locked out of the housing market. Angus Hanton, the co-founder of the Intergenerational Foundation, says a rising property market is the last thing the young need: “Young people need lower house prices and Covid-19 might make this possible. That means embracing falling house prices rather than protecting wealthy oldies in large homes.” Young first-time buyers already pay no stamp duty on properties worth up to £300,000, and a low rate on those worth up to £500,000. A stamp duty holiday subsidises buyers of expensive homes.
But that’s only a taster of what militant tax cutters will seek to gain from the coronavirus crisis. Read Allister Heath in the Telegraph as an emblem of rightist thinking: “We cannot let the left use Covid as an excuse for radical tax hikes. A long-term strategy for free-market growth is the only responsible way to cope with soaring debt.”
He sees in the Treasury document leaked to his newspaper, “a wealth and property levy, higher VAT, income tax and corporation tax and just about every other one of the modern liberal‑left’s wet dreams, repackaged neatly in a box stamped ‘Covid’”. Many on the left read the same Treasury document with equal horror, but for its public service cuts and public sector pay freezes. Heath accuses environmentalists of “enjoying the crippling collapse in GDP”, calling ministers “useful idiots” with their “absurd obsession with cycling … and relentless bashing of the car”.
As the left hopes that the economic shock of the pandemic will lead to a 1945 moment, he ripostes, “the answer from the government, the Tory party and right-leaning voters to all of these leftwing, statist proposals needs to be unequivocal: over our dead bodies”. Instead he wants tax cuts for companies and the wealthy, cuts in red tape regulation, cuts to foreign aid and public sector pensions, and a private not state-funded insurance social care system. Heath also asserts that, “it’s time to drastically re-engineer the state” – but not in a good way.
He would prefer a plan for “turning the whole UK (or the entire northern part) into a giant free port, radical pro-growth tax reform, the release of land for new suburbs, a privately financed road network and the legalisation of modern scientific techniques for agriculture”. The chancellor, Rishi Sunak, is already a free port enthusiast, so will that find some traction?
But here’s one surprise. He urges an end to the last decade’s balanced budget obsession: debt and deficits are no longer a problem. “If the choice is higher taxes or a one-off, large increase in the national debt, the latter is the least bad.” In a time of near-zero interest rates, higher debt is something the left would advocate too.
The difference is that the left would use debt to rebuild threadbare public services and invest in green technologies. Tax Justice UK is not pushing for tax rises now, but once over the worst it warns that we must “ignore the siren call for a buccaneering low-tax Britain and invest in strong public services, part paid for by higher taxes on the wealthy and companies”.
If that’s your “common sense” too, be well armed. Heath’s right has many government backers urging the US republican playbook of Ronald Reagan, George W Bush and Donald Trump: cut tax for the super rich and let debt rip for no productive or social gain. If property does get yet more tax boosters, that will be an alarming indicator of the government’s direction of travel.
• Polly Toynbee is a Guardian columnist