Tory MP Craig Mackinlay on defeating Farage and ‘horrible’ pension rules

CMackinlay

On a stage in Kent on the morning of  8 May, two men stood contemplating very different political futures. One represented the past of Ukip, while the other represented its future, even if that was not clear at the time.

On the right was Nigel Farage, the party leader who had promised to resign if he did not win the seat (he later returned to Ukip’s helm).

Standing at the centre was one of the party’s founding members. However, Craig Mackinlay wore a blue rosette on stage and won the seat of South Thanet for the Conservatives, securing one of the 2015 election’s definitive scalps.

Farage was left to contemplate the failure of his party to convert almost four million votes into more than a single Parliamentary seat, while Mackinlay was among the Conservatives handed what he admits was “a nice surprise” in the shape of a majority government.

It was the culmination of Mackinlay’s fifth attempt to enter Westminster, having lost in his efforts to win Gillingham in 1992, 1997 and 2005, and Totnes in 2001.

Despite such a track record, he admits with a grin he was always confident up against former stablemate Farage. “I never quite understood why Nigel stood against me. There are other seats out there he would have had a better chance at but I fought it like a dog and we got there by a reasonable margin,” Mackinlay says.

“He had the odd good day but, generally, we always thought we would get there. We did so much canvassing and we could feel it.”

A chartered accountant and chartered tax adviser, Mackinlay had been with Ukip since its earliest days, joining its predecessor The Anti-Federalist League, then led by London School of Economics professor Alan Sked.

It was the early 1990s: the UK was still struggling with the European exchange rate mechanism, interest rates reached  15 per cent and the country was in a recession.

“My clients were going bankrupt and I was thinking ‘what is this all about?’,” Mackinlay recalls.
“John Major was going off to Maastricht discussing new treaties and it was like a light went on. I thought ‘this isn’t right!’.

Then the founder of the Anti-Federalist League was on one of these Sunday politics programmes saying exactly what I was thinking. So we got together and it went from there.”

Sked and Mackinlay helped to create Ukip but, by the time the latter lost again in the 2005 election, he had come to believe the party was only taking Conservative votes and perpetuating Labour governments.

“Labour is infinitely more dangerous to our economy than even the EU in a short time. It does more damage in five years than the EU does in 20.

“Plus, I felt Ukip was going in the wrong direction. Now if you talk to people about purist things like democracy and sovereignty their eyes glaze over but when you start talking about open doors and migration they understand it. That’s why Ukip rose.

“But it’s got no policies. All it has is populist policies any of us could write on the back of a fag packet.”

And so Mackinlay defected to the Conservatives. Since coming into Parliament, he has already questioned the wisdom of a handful of policies, including auto-enrolment, which he says should be halted for small and medium businesses, and the liabilities for financial advice, which he suggests could be reduced for savings under £50,000. The latter issue, he says, is limiting access to advice for pension savers with limited savings.

“You’re not going to go horribly wrong with a pension fund of £20,000 or £30,000 but it’s a significant amount of money for people. The worry is these are people who probably haven’t got accountants, have probably never had an IFA, and have never had to worry about it.”

Mackinlay says he has seen instances of savers taking large sums from their pensions in a single chunk to pay off the remainders of a mortgage, only to find they had also incurred a new tax bill.

“I don’t know what the answer is but the FCA is almost the problem because it has created this horrible background for IFAs, who have to live with it. I am glad I’m not an IFA because it must be just horrific.”

Next in Mackinlay’s crosshairs is the Government’s plans to extend inheritance tax allowances to £1m when including a family home. A key Conservative manifesto promise, Mackinlay says the plan makes little sense.

“The whole concept is that it has to be related to your house to get  this additional allowance and it can only go to your children or grandchildren.

“But what if you haven’t had children? You might be a same-sex couple or you might have a nephew that has been great and done all the things a son or daughter might do. They’ll be exempted from that.

“Or whatever reasons you have in life: you might have decided you don’t want to buy a house and you put your money in Isas. Well, this doesn’t fit in with that, either.

“I want it simple. Just raise the limit for Christ’s sake and have done.”

The stance is emblematic of Mackinlay’s views on the UK’s tax system, which he argues needs overhauling for simplification. He estimates that, while the UK tax code runs to around 17,000 pages, the equivalent for Hong Kong is around 235.

It is a position he attributes to his years as an accountant. He remains a partner in a small firm in Devon.

Does that mean Mackinlay is planning to return to the business world at the end of the Parliament? “Oh God, no. This is hopefully me now, until I’m done.”

Five questions

What’s the best bit of advice you’ve received in your career?

During my training contract I was told to put the firm second. It is passing the exams first time that counts.

What has had the most significant impact on financial advice in the last year?

Pension freedoms.

What keeps you awake at night?

Nothing. I sleep like a log.

If I was in charge of the FCA for a day, I would…

Reduce bureaucracy and focus on core issues of investor protection.

Any advice for new advisers?

Understand your topic, particularly taxation issues.

CV

May 2015-present: Conservative MP for South Thanet and Work and Pensions Committee member

2011-present: Partner, Beak Kemmenoe Chartered Accountants and Chartered Tax Advisers

2007-2015: Councillor, River Ward, Medway Council

2005-present: Magistrate, North Kent Bench

1995-2011: Owner, Mackinlay Chartered Accountants

1994-1995: KWG Chartered Accountants

1989-1993: Assistant manager, Robson Rhodes Chartered Accountants