The free market is “the greatest agent of collective human progress ever created”. At first glance, this may seem like a direct quote from the renowned free market economist Milton Friedman. However, this is, in fact, a direct quote from our current Conservative Prime Minister, Theresa May. While it may surprise some, Mrs May has, on multiple occasions, claimed that she is a strong supporter of free markets.
However, if this is truly the case, why hasn’t she put her words into action? A key principle of free market economics is low taxation. It is the belief that when people have more disposable income, they spend more money and the economy consequently grows.
A free marketeer also desires the increased availability of choices for the consumer. The combination of more disposable income with a wide array of choices available to the consumer decreases the reliance of people on state-provided services. High taxation often goes hand-in-hand with people reliant on state-run services and, therefore, a narrower pool of choices exists for the consumer.
Once one has acknowledged that this is what the free market case looks like, a clear contrast appears between the policies of May’s Government and the-free market rhetoric she has used. For her words are just that: words. There is little with respect to current policy that supports the case that Mrs May is in fact a true believer in low taxation – one of the core pillars of free market policy.
The Taxpayers’ Alliance has released a report showing that the tax burden has reached a 49-year high, at 34% of GDP. This hits the poorest in society more than anyone else, with the bottom 10% of households paying an average of 49.5% of their gross income as taxes. And council tax makes up a significant portion of this.
This is terrible for many families in the UK who struggle to maintain a high standard of living due to a lower disposable income. The fact that, up until very recently, prices were rising faster than wages only exacerbates this problem.
So, what needs to change? To put it simply, the Conservative Party needs to make it adamantly clear that they are the party of low taxation. The current occupants of the opposition benches are the most left-wing socialists since Michael Foot. Jeremy Corbyn is already planning tax rises on those earning more than £80,000. Indeed, he also plans to raise corporation tax which, instead of benefitting the poor, will further damage productivity and employment rates across the country.
Many individuals across different income levels are opposed to Corbyn’s proposed changes. It is no surprise then that Jeremy Corbyn is seven points behind May when it comes to people’s most favoured candidate for Prime Minister. However, since the Conservative Party has shown no commitment to lowering taxes, there remains too close a difference between the two parties in the opinion polls.
The state should exist purely to maximise the freedom of the individual. Instead, the state is now crushing that freedom in its seemingly never-ending expansion.
The Conservative Party has an opportunity to embrace the free market – allowing individuals and businesses to spend their money how they see fit. They must take this chance while it’s still available to them and create a freer, more prosperous society for all.