Brian Keegan: Tax policies at centre of UK prime minister election
Britain's Liz Picture: Candidates And Of In Party Hordle/itv Debate The Conservative A Truss Leadership For Rishi Jonathan Live Tv Sunak
The competition to replace Boris Johnson as leader of the British Conservative Party rightly attracts considerable attention on this side of the Irish Sea.
When An Taoiseach describes Anglo Irish relations as potentially at an historic low point, that is a real worry for Irish business as the UK is a significant trading partner.
Changes in political leadership determine changes in relationships; whatever you think of his policies, witness the positive impact of US president Joe Biden on US international relations.
The Tory leadership election will ultimately be determined by the Tory Party membership.
Essentially, the appointment of the prime minister will be within the gift of around 160,000 Conservative Party members; that’s about 0.3% of the total UK electorate, not all of whom may actually vote.
It’s not a typical electorate. According to British academic research from the Party Member’s Project and the House of Commons Library, the majority is male and aged over 50.
More than half of Tory Party members live in London or in the south-east of England — and they are well heeled.
ABC1 is sometimes used as a shorthand to describe the middle-class; people in this cohort are educated, with good jobs, and settled aspirations.
Perhaps it is for this reason that of the 11 candidates who originally threw their hat into the ring to become the next Conservative leader, nine of them had taxation policy as a key platform.
This is not surprising given that there are few government policies which have such a direct impact on voters.
It is safe to assume that given the demographic profile of the Tory Party electorate that the vast majority pay income tax.
Rishi Sunak and Liz Truss are literally asking these good folk to vote with their wallets.
The Irish and UK tax systems used to be very similar, but over the past 20 years they have diverged in many important respects.
While the Irish income tax system became simpler (and our system is now fairly simple by international standards) the UK tax system has become more complicated.
A UK voluntary charity known as the Low Income Tax Reform Group helps those who earn just enough to become totally confused with the system complexities but don’t earn enough to engage a professional adviser.
The UK government even supports an Office of Tax Simplification which aims to simplify the complex rules in the UK tax regime so that the confusion does not grow.
This is not the voters’ fault; it seems to have been a conscious decision of the candidates, many of whom seemed to have been short on other policies or ideas.
Will the outcome of this election will be helpful to Irish interests?
The best we can hope for is that the successful candidate can match the attractiveness of their tax policies with a desire to improve international relations, and in particular to work out an appropriate set of arrangements to make the Brexit-inspired Northern Ireland Protocol succeed.
This is by no means guaranteed because it seems three out of every four of the Tory Party membership had backed leave in the Brexit referendum.
The usual political mantra is that all politics is local. This time, all politics is fiscal.
- Brian Keegan is director of public policy at Chartered Accountants Ireland