Conservative Leadership Debate: What the Candidates Should Have Said
“Rutting stags” was how The Sun’s political editor, Tom Newton Dunn, described Tuesday night’s debate performance by the five Conservative candidates for PM. During an hour in which the candidates clashed, bickered and generally side-stepped the questions, the B-word dominated. No surprises there. But while no one expected to hear anything new on Brexit, we might have expected more from the candidates on their vision for public services. Heavy on spending promises, light on detail, here’s what the Tory leadership hopefuls could have said in response to the two public service-related questions.
Question: “What is your plan to lift the tax burden on the working classes?”
With the exception of Rory Stewart, all candidates promised tax cuts that would help ‘working people.’ Raising the personal allowance, cutting corporation tax, lifting the national insurance threshold, cutting the top rate of tax and replacing VAT were all proposed as means to this end.
It was unclear who the candidates see as the ‘working classes’, but Boris Johnson’s “head of the maths department” earning £50,000-plus surely wouldn’t meet many people’s criteria. Median household income in 2018 was £28,400.
Which, if any, of the candidate’s proposals would really help those on low incomes, and what more should they have said?
Universal measures won’t help the poorest
Jeremy Hunt promised to make the first £1,000 of income tax-free, while Boris Johnson promised to lift the national insurance threshold for the lowest paid. But these universal measures do little to help those on the lowest incomes. The poorest fifth of non-retired households receive an average of just £10,452 in taxable income a year (excluding cash benefits) – well below the current personal allowance threshold of £12,500.
Raising the national insurance threshold is slightly more helpful. But this change comes at a high price. Changing the employee entry threshold for national insurance contributions by £2 a week would cost approximately £300 million a year. Coupled with his plans to raise the 40p tax threshold from £50,000 to £80,000, Johnson’s proposals do not come cheap.
Raising the minimum wage was also discussed. Recent increases to the minimum wage have had a notable effect on the earnings of the lowest paid workers. But tackling low pay is not the same as tackling poverty. How many hours people work and the benefit support households receive matters too. The increase in the minimum wage in April 2016 did not reduce worker poverty in 2016/17 compared with a year earlier, because it was more than offset by cuts to benefits and tax credits.
Ending the benefit freeze is key
For poorer families, who receive a higher proportion of their income through welfare, benefit payments are essential in making ends meet.
The current benefit freeze – which has held most benefits and tax credits at their 2016 value, rather than rising with inflation – has made poor families poorer. The Joseph Rowntree Foundation estimates the support that people receive in 2019 is worth 6.5 per cent less in real-terms than it otherwise would have been, and the freeze has hit more than 27 million people.
The benefit freeze is due to end next year, candidates could pledge to end it immediately, or if they are really serious about borrowing more to spend on public services, how about a one off increase to some of those benefits whose value has been so eroded?
Question: “I have fostered more than 100 children. What would you do to reverse cuts that have affected children?”
Michael Gove suggested that he would bring education funding back to previous levels, which would mean reversing an 8 per cent real terms cut in total school spending per pupil and cost £3.8 billion. The former education secretary’s campaign pledge of £1 billion would not plug the gap – but more importantly, as with universal tax cuts, a blanket rise in spending is not the best way to help those in greatest need.
Rory Stewart and Sajid Javid also highlighted education as a key priority, but neither offered any detail on what they would do. Javid also mentioned local government, which has been particularly hard-hit by cuts, and said he would “reset spending”. Jeremy Hunt argued that early intervention could help prevent mental health problems and reiterated his commitment to ending illiteracy.
Boris Johnson also called for more education spending. Like Gove, his campaign pledge is not targeted and is set to miss the mark. Analysis suggests that his policies will equate to a 0.1 per cent increase in overall school spending.
No answer really tackled the questioner’s concern about the impact of cuts on the most vulnerable children – those likely to need specific services or support. Between 2010-11 and 2014-15, spending on children’s centres, young people’s and family support services fell by 24 per cent in England.
So, what could the candidates have focused on?
Benefit cuts are trapping people in poverty
The two-child policy, which stops households claiming child tax credit, or the universal credit equivalent, for third or subsequent children, has affected more than 70,000 low-income families. In addition, the household benefit cap, which limits the total amount of benefit received per household, unless they have someone in work or in receipt of certain disability benefits, hits larger families.
These changes, together with various other benefit freezes and cuts (for example to housing benefits), means lower living standards for hard-pressed families.
Children’s services could target support
Sure Start centres saw a spending reduction of nearly 50 per cent from 2010-11 to 2016-17, leading to 1,000 closures. Recent research has found that the centres have major health benefits for children in deprived areas, saving the NHS millions. By targeting additional investment in areas of high need, a new PM could deliver both long-term savings from improving outcomes, and benefit the most vulnerable children.
Mental health must be a priority
A 2017 study shows 1 in 9 children aged 5 to 15 suffered from a mental health disorder. Research also demonstrates that more than 100,000 children aged 10 to 17 have been turned away from mental health services. Candidates could have called for dedicated mental health specialists in schools that have high levels of mental health problems.
They could also have talked about ensuring all young people can access help at the earliest opportunity. Last year the Care Quality Commission found that “many children and young people experiencing mental health problems don’t get the kind of care they deserve”. And earlier this year the Children’s Commissioner pointed to a postcode lottery in provision, highlighting that: “the top 25 per cent of local areas spent £1.1 million or more, while the bottom 25 per cent spent £177,000 or less”.
The BBC debate should have been an opportunity for the Tory leadership hopefuls to present their vision for strengthening Britain. Instead, their ideas for tax and public service spending were un-evidenced and piecemeal – inadequate for the challenges ahead. In the week’s ahead, the final two will need to seriously step up their game.
This blog was co-authored by Dr. Luke Heselwood, Senior Researcher at Reform, and Imogen Farhan, Researcher at Reform