A flat tax rate is an “attractive idea”, which the Conservatives would aim for if in power, Kemi Badenoch has said.
The leader of the opposition made the comments on Monday while standing on a Robin Hood pantomime set at the London Palladium, which owner Andrew Lloyd Webber had lent to farmers and business owners so they could stage an event protesting against changes to inheritance tax.
Referring to the pantomime taking place after the event, Badenoch said: “I was going to joke that [chancellor] Rachel Reeves is like Robin Hood – but she takes both from the rich and the poor.”
A flat rate of income tax would mean a tax rise for basic ratepayers and a huge cut for higher earners if the change was fiscally neutral.
When asked if she would abolish tax bands and put in place a flat tax if in power, Badenoch said it was an attractive idea that a Conservative government would aim for after “rewiring the economy”.
She said: “This is an idea that I’ve heard many times. It’s very attractive, but if we’re going to get to that sort of scenario, there’s a lot of work we need to do first-hand. At the moment, we are a welfare state with a little bit of a productivity attached to it. We’ve got to turn that around. We cannot afford flat taxes where we are now. We need to make sure we rewire our economy so that we can lighten the burden of tax and the regulation on individuals and on those businesses that are just starting out, in particular.”
Conservatives have called for a flat tax before. When he was shadow chancellor, George Osborne flirted with the idea. Greg Hands, former chief secretary to the Treasury, argued in favour of a system that “gets rid of all the bands and taxes everyone at the same percentage of their salary”.
The vast majority of developed countries use a graduated tax system where people who make less money pay a lower rate of income tax than higher earners. More than 20 countries around the world, including Hungary, Romania, Turkmenistan and Bolivia, have a form of flat tax system where everyone is asked to pay tax at the same rate.
Others speaking at the event included the shadow environment secretary, Victoria Atkins, who vowed the Conservatives would reverse Labour’s tax changes if they got back into government.
She said: “You are the families that work day in day out. Your children are on the farm as soon as they can squeeze a pair of wellies on to their feet. You are the families that this Christmas Day will be having your fun and enjoying Christmas Day, but you’ll also be out on the farm, feeding livestock, making sure that everything is ticking over whilst everybody else is enjoying the Christmas lunches that you and our farmers have produced. You are the families that continue working well beyond retirement age, because that’s what farming is. It’s not a job. It is a way of life. It is a vocation.”
The Liberal Democrats’ environment spokesperson, Tim Farron, also spoke against the tax changes, saying: “I am incensed by the family farm tax, the change in inheritance tax rules that will [have an] impact not just actually on farms [but] many other small family businesses.
“And the simple fact is this: the narrative that is put out there is that these are wealthy, wealthy people who should be paying inheritance tax like everybody else. And that’s a complete nonsense … the typical farmer in my community is sitting on a farm that may be worth millions of pounds, and typically they will be earning significantly, significantly less than the minimum wage.”
