Jonathan Hulley: The Lib Dems won’t admit it, but their policies will lead to higher taxes for all

Jonathan Hulley is a Surrey County Councillor and Cabinet Member for Children Services, Families and Lifelong Learning. He is also a leading social housing lawyer and was the Conservative Parliamentary candidate in Twickenham in July 2024.

The Liberal Democrats have built their political identity on an illusion: that Britain can have it all – more welfare, Scandinavian-style public services, and an ever-expanding state – without having to explain to the public the real cost of their policies.

It is an attractive story, designed to sound compassionate, but it does not add up. Politics is about priorities, and it is about tough choices. You cannot promise everything to everyone without admitting who will pay.

Whether it is higher benefits, more NHS funding or expensive environmental schemes, their instincts are to call for more spending. But they avoid the harder question: who shoulders the bill? That is why former Twickenham MP Vince Cable’s recent article in Comment Central is so striking – because he has at least been honest about what such promises mean for ordinary families.

In what may be his most candid piece of writing in years, Vince Cable admits that Britain’s ageing population, sluggish economy, and rising deficit could force the government to raise between £20 to £30 billion in tax revenue in the autumn budget simply to keep the confidence of international lenders, including the IMF.

Politics, as Cable implicitly recognises, is about choices.

If you want Scandinavian-style public services, you have to be prepared to pay through the nose for it. However, Cable points out that taxes already make up almost 38 per cent of national income in the UK – the highest level since the Second World War.

And he is clear about what those choices mean for hard working families: “higher VAT, higher rates of income tax, and higher marginal rates on top earners,” along with a warning that new or expanded taxes on pensions and wealth could not be ruled out.

Cable was also refreshingly honest about something Liberal Democrat activists rarely admit. The party has long claimed that taxing “the rich” and big businesses could pay for welfare expansion, sparing ordinary voters. But Cable concedes that this is unrealistic, noting that “rich people are not idiots – they will move to minimise their tax liabilities.”

The same applies to businesses.

At the last general election, the Liberal Democrats claimed they could raise billions by taxing companies more heavily, but as the Institute for Fiscal Studies pointed out, this argument assumes businesses absorb the cost. Businesses pass higher taxes on to consumers through higher prices or to employees via lower wages. Cable himself now accepts that “penal taxation of company profits makes no sense if the aim is to promote investment.” And private sector investment is the only way to get our economy growing again.

These are exactly the trade-offs that serious politics require you to face. You cannot simply wish them away because they are politically awkward.

The deeper question Cable raises, even if he does not fully explore it, is whether Britain would ever accept the Scandinavian model he admires. Scandinavian countries have high social trust, cultural cohesion and a long-standing political consensus that high taxes are worthwhile because public services deliver value for money.

Britain is very different. Public trust in government spending is lower, and families already feel overtaxed and under-served. Asking them to hand over thousands more each year on the promise of Scandinavian standards of welfare will strike many as deeply unconvincing.

We know what happens when the government hands over large pay rises to the public sector. There are no improvements to the service, then they come back for more, and the union bosses in other industries threaten strikes to secure equivalent pay rises.

And here again, politics is about priorities. If we are to ask families to make sacrifices, we need to show them results, not simply expand spending in every direction without reform or accountability.

The Liberal Democrats know it is easy to stand on a platform of demanding ever-greater public spending. It is easy to promise free childcare, higher benefits, more generous pensions, and ambitious environmental schemes. But politics is about choices. It is about telling voters not just what you want to spend, but how you will pay for it.

We, Conservatives must be prepared to call them out on this and boldly offer our own vision of a low tax, high growth economy. A country that harnesses the power of the private sector to transform lives. A country that raises aspiration and delivers higher living standards. Lower taxes are the product of a bigger, more profitable private sector, which employs more people and pays more tax, even at lower rates.

As for the Liberal Democrats, they must stop pretending that Britain can have Scandinavian-style welfare without Scandinavian-style taxation. Because the truth is clear: under Liberal Democrat plans, every British family will pay the price, thousands of pounds more in taxes, every year, whether they choose to admit it or not.