The Spectator’s Notes | 14 April 2012

People often tell opinion polls that ‘The Conservatives are the party of the rich’, and this worries party managers, because the rich are, almost by definition, few, and the voters are many. But would it actually be better, electorally, if people thought ‘The Conservatives are the party of the poor’, or even, which is often thought to be the best, ‘The Conservatives are the party of people like me’? Isn’t it a significant part of the Tories’ appeal that they carry the subliminal suggestion that, if you vote for them, you might get richer?

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For this reason, among others, the Conservatives need to be careful about excoriating tax avoidance. Of course people will agree when you say how disgraceful it is that the super-rich can get round taxes, but one should bear in mind that the rest of us resent such avoidance not because we are in favour of paying high taxes but because we wish we could get round them too. At what point does tax avoidance become immoral or, as the Chancellor of the Exchequer recently put it, ‘aggressive’? It is not easy to say, and it would be both illiberal and unconservative to let the Treasury define it as it went along, let alone — as now happens in some cases — retrospectively. Wherever tax rules permit any form of choice, the rational thing is to avoid the tax. If, for instance, a married couple consists of one top-rate taxpayer and one basic-rate one, it is sensible to hold any shares mainly in the name of the latter. Much-loved ISAs are tax avoidance schemes and not worth holding on other terms. One of the main reasons for the high price of houses is that there is no capital gains tax on the sale of principal residences, and so people pour money into them.