U.K. Tax Rebellion Reminds May Brexit Allies Remain a Threat

  • Government is under fire for raising taxes on self-employed
  • May defends policy but says vote on it won’t be until the fall

The growing revolt over tax increases in the U.K. budget is a reminder for Theresa May that difficult members of her Conservative Party haven’t gone away.

Just as she seemed to have tamed party rebels over Brexit, May found herself fighting a mutiny over taxes. And barely a day after the new policy was announced, she signaled there may be room for concessions.

May in Brussels, March 9.

Photographer: Jasper Juinen/Bloomberg

The public criticism of the tax increase -- and cries from May’s own side that it broke an election pledge -- showed that the so-called Tory awkward squad are only pacified so long as they agree with what the premier is doing. It’s this dynamic that risks forcing May into a damaging EU divorce deal.

“If they get this stroppy about a minor increase in tax for self-employed people, imagine how stroppy they’re going to get when Angela Merkel demands something significant in the Brexit negotiations,” said Rob Ford, professor of politics at Manchester University. “The only reason they’ve been behaving is that up till now she’s given them essentially everything they want.”

May was forced to spend a large chunk of her press conference in Brussels defending the tax increase for the self-employed, which affects several groups of traditional Conservative voters. Still, she said a parliamentary vote on the policy wouldn’t go ahead until the fall, and Chancellor of the Exchequer Philip Hammond would speak to lawmakers, businesses and others to “listen to their concerns.”

For more on the Brexit process as the start date approaches, click here

May could have been forgiven for thinking in recent weeks she had solved the problem that destroyed previous leaders of her party -- the willingness of Tory lawmakers to be difficult over issues in which they have an ideological or electoral stake. Efforts to rewrite the Brexit bill by pro-EU lawmakers had come to little while pro-Brexit members backed the premier.

Parliament March

She had worked hard to get that far. During the leadership election last July, some Tory lawmakers were so worried about the idea of May winning that they marched on Parliament. Having spent their careers fighting to get Britain out of the EU, they feared that May, who had campaigned to stay in the bloc, would betray them.

But in the months that followed her victory, they went quiet. After decades spent making life difficult for Tory leaders, they found themselves voting with their party, and demanding that others fall into line behind May. “She’s a great prime minister, doing a fabulous job,” said Steve Baker, an organizer of the pro-Brexit Tories who took part in the July march.

Another of the marchers, who asked not to be named, said that he’d initially had doubts about May, but that she’d put them to rest. Brexit supporters were being regularly invited to meetings in her Downing Street office, he said, and were confident that they were involved in the process.

According to James Cleverly, another Tory lawmaker who supported Brexit -- though not one who marched against May -- the turning point for colleagues was the prime minister’s speech in January where she set out her priorities for leaving the EU, putting issues such as sovereignty and immigration above trade. She said no deal was better than a bad one.

Personal Support

“The prime minister made it abundantly clear that she’s not going to accept any EU membership through the back door,” Cleverly said. “In doing so, she calmed the nerves of a lot of people who campaigned for Brexit, and bought herself a lot of personal support, which will see her through the inevitable bumps in the road over the next few years.”

But the complaints about the budget suggest May won less goodwill than she’d thought. Among the critics are some prominent campaigners for Brexit: former Justice Minister Dominic Raab and former Pensions Secretary Iain Duncan Smith.

“I would like to see this kept under review,” Duncan Smith told Sky News. “I would like to see the ball kept in play.”

The opposition to the budget move suggests that, far from having won allies with her policy toward the EU, May has simply bought off critics for now. That could change once she pulls the trigger on Brexit talks, expected by the end of the month.

She was warned about this possibility at the end of February by a previous prime minister, John Major.

“At some time, she will have to face down those who favor total disengagement -- and who have never accepted our role within Europe,” he said. “For some, a total divorce has been a decades-long ambition. And although -- today -- they may be allies of the prime minister, the risk is that -- tomorrow -- they may not.”

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