The 2012 Budget has gone down in history as an “omnishambles”. A series of controversial tax-raising measures were reversed, damaging the government’s credibility and popularity. Few remember, however, that the first row that followed George Osborne’s budget speech was a measure that was implemented, did not provoke a backbench rebellion, and became a settled part of our tax system. At least, until this week.
Age-related allowances, under which pensioners begin paying income tax at a higher level than everyone else, were introduced by Winston Churchill. In 2012, at a time when the personal allowance was rising quickly, Osborne abolished it. At the time, I was the Treasury minister responsible for tax and was an enthusiastic supporter of the policy. It was a sensible tax simplification and I could see no good reason why people of working age should have a lower personal allowance than pensioners.
Labour, however, sensed blood. The reform was quickly branded the “granny tax”. The Labour-supporting actor and pensioner, Richard Wilson, was pushed out onto the media to condemn the policy and given a VIP seat by Labour to watch the parliamentary debates on the matter. (“I don’t believe it,” I said to myself when I saw him in the gallery.) The shadow chief secretary to the Treasury, a promising young MP called Rachel Reeves, accused us of “picking the pockets of pensioners”.
Unusually for that Budget, we kept our nerve and stuck to the policy. In the three subsequent general elections, no major party suggested bringing back a higher personal allowance for pensioners. Now, however, the Conservatives have announced that the personal allowance for pensioners should increase in line with the pensioners’ triple lock (the highest of inflation, average earnings or 2.5 per cent) rather than be frozen as with the rest of the population.
The reason for this reversal is obvious and straight-forward. The Conservatives are struggling in the opinion polls; as their opportunities to win support narrow, so does their focus. They are concentrating their efforts on a particular part of the electorate that they hope is still persuadable to vote Tory.
These voters are disproportionately pensioners. In fairness, recent budgets have focused elsewhere (with cuts to national insurance – not paid by pensioners – and childcare subsidies) but now an election is called, politics not economics is all that matters.
The announcement on national service is also designed for the same audience. There is a respectable argument for introducing some kind of scheme for 18-year-olds, as happens in many northern European countries, to strengthen social cohesion. But the presentation of the policy – with the focus on military experience “toughening them up” – was clearly designed to evoke memories of the 1950s, even if most of today’s pensioners are too young to have direct experience of it.
Scrapping university courses and redirecting resources to apprenticeships will also appeal to a similar audience. There might be a case for this (although, as with the national service proposal, there are questions about the practicalities) but what is revealing is the intended audience.
It is no bad habit for a political party to have clarity as to who it is trying to impress. A confident and ambitious party will try to speak to the median voter, someone who has often voted for their opponent, an elector seeking reassurance that now is the right time to switch their vote. In this election, the Conservatives have a view as to who they are speaking to but it is to the few not the many. He or she is more often than not a pensioner, left school at 16, is socially conservative and is quite possibly tempted to vote for Reform UK.
The consequence is a series of policies that resemble Daily Express editorials. They either look like simple electoral bribes (a higher personal allowance for pensioners) or self-parody (national service). It does not convey a sense of great seriousness or a desire to appeal widely.
This does not mean that it is the wrong strategy to optimise the Conservatives’ performance in this election. The simplest way to narrow the poll gap with Labour – and avoid electoral annihilation – is to squeeze the Reform UK vote and to boost the enthusiasm of some of those “don’t knows” who look a lot like Tories. And, at least since 2019, Tory voters look a lot more like pensioners who left school at 16 and are socially conservative.
There are, nonetheless, two huge problems with this approach. The first is that these voters are already not numerous enough for the Conservatives to win other than in very particular circumstances (2019, during the Brexit deadlock and Jeremy Corbyn’s leadership, being such a case). The second is that the voters to whom the Tories appeal are a diminishing part of the electorate. Conservative support among younger voters and graduates of all ages is pitiful. The policy announcements we have heard so far are only going to make this worse.
There is, surely, a form of centre-right politics that can appeal to better educated and younger voters. But the strategic decision taken by the Conservative Party after the Brexit referendum, particularly in 2019, was to commit itself to become the party almost exclusively of baby boomers with few educational qualifications. Given that choice, retreating from that strategy now risks short-term catastrophe, maintaining it ensures long-term oblivion. The Tories’ policy announcements expose the reality of a party that currently has no good choices available to it.
[See also: Tory disunity is poisoning Rishi Sunak’s campaign]
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