Tax and spend cannot become a Tory habit

AS the tumult and the shouting over Partygate dies, our political class is finally able to turn its full attention to an issue that really matters – the cost of living crunch.

Despite a desperate rearguard action by the combined forces of Labour and the BBC to keep Downing Street gatherings at the top of the agenda, the country is thankfully moving on.

With a comprehensive £21billion aid package to help families struggling with energy and food inflation, Chancellor Rishi Sunak attempted to seize back the initiative yesterday.

After much debate, he slapped a 25 per cent windfall tax on oil and gas giants, combining the proceeds with a huge public handout to help ordinary consumers through this squeeze.

An energy bill discount of £400 for every household. Those on the lowest incomes to receive another £650. Additional one-off extra payments of £300 for pensioners and £150 for those on disability allowance.

When added to the £150 rebate for those in council tax bands A to D, this adds up to a maximum of £1,650.

It is the sort of colossal redistributive programme more associated with socialism than conservatism, and there are very real fears it will push inflation even higher.

The Daily Mail would not normally support such massive giveaways and we have serious concerns about this one.

These are not normal times, however. Our poll last week showed how much families are suffering and how strongly they support the windfall levy. But tax and spend splurges like this cannot become a habit. They discourage investment, threaten jobs and restrict growth.

BP is already saying it will review its UK investments because of the levy. At a time when we are trying to beef up energy security, that is troubling.

In the two years to the next election, Boris Johnson must reach for more lasting solutions if he is to win public trust.

This Chancellor has raised taxation to its highest level since the 1940s – with more green and corporate tax rises in the pipeline. It’s time for a reset.

Though Partygate has unquestionably inflicted damage on the Boris brand, it is not irretrievable. The PM will be judged principally on how he manages the economy in these perilous times.

As a populist measure, yesterday’s handout was justifiable – necessary even – to show the Government is listening. But such shorttermism won’t win the next election.

For that Mr Johnson will need to get back to fundamental Tory principles – tax cuts, low inflation and strong public finances.