Oberon Houston on the Telegraph's tax cut debate

Just got out of the Telegraph / C4 debate chaired by Jon Snow with Norman Tebbit and Simon Heffer for the motion "The Conservative Party should make tax cuts a priority at the next general election." Theresa Villiers and Matthew d'Ancona were debating against.

The motion was carried by a ratio of about 60-40. Both sides of the house agreed the need for taxation to be reduced, however the differences arose on when and by how much, the house pointing out that the need for a reduction in taxes was immediate and they needed to be significant. Both Lord Tebbit and Simon Heffer put this argument (as you can imagine) forcefully, pointing out that if you give the public sector money they will spend it, and they already had too much.

The other side of the house concentrated on the fact that the general public had consistently doubted the intentions of the Conservatives when they proposed tax cutting agenda and that due to rising levels of government debt, it could be very irresponsible to promise immediate tax cuts years before an election, however they pointed out that lower taxation would always be a long term objective.

When asked about spending north of the border, Tebbit was all for reducing it to that in line with those in England, conveniently overlooking North Sea oil revenue, but remembering that if Scots didn’t have extra English money to waste there might be one less pigeon coop up there.

Matthew d’Ancona focused on the point that it was better to have a Conservative Government that would reduce taxes, even if they were modest, to a Labour Government that would definitely and consistently increase them. Simon Heffer and Norman Tebbit were more of the opinion that winning over the public would never happen if we refused to have the debate.

A member of the audience afterwards made the point to me that whilst it was true that public services would always spend what they were given, to do the opposite and actually cut those levels arbitrarily would lead to an immediate worsening of public service provision. He argued that it would be much better to embed reforms before reducing spending, and he therefore didn’t support promises on cuts.

Comments

[NigelC]

I'm with the member of the audience

[EdR]

Me too.

Also, the case for lower taxes will be infinitely more likely to succeed if demonstrated in the context of sound economic management over a period of government, rather than a bunch of self-indulgent squawking from the Simon Heffers of this world.

[Michael McGowan]

Spot the straw man: who is talking about "arbitrary" tax cuts? Only those who believe, as an article of faith, that civilisation will come to an end if the state doesn't spend 42% of GDP.

The middle classes are gradually being beld white by Gordon Brown, as they are taxed more and more for less and less. Younger voters are espeically badly placed because they will have to pay from taxed income, high housing costs, university tuition fees (a tax in all but name) and will also have to foot the bill for unfunded state final salary pension promises from which they will never benefit. It seems that the Tories are quite happy for this state of affairs to continue. Hardly surprising when the Shadow Chancellor enjoys vast inherited wealth and is insulated from the harsh reality which afflicts millions.

[James Maskell]

Hear hear McGowan. Making the case for tax cuts is also called squawking by some commentators on this site. Bearing in mind Brown will be using his Chancellorship as part of his campaign, is it not right that we use his Chancellorship against him especially with reference to tax cuts, one of the most critical parts of it.

[TaxCutter]

Did anyone argue the basic point - individuals better spend their money on the services they choose, better than governments do.

Tax cuts are sound economic management - have a look at Australia's record in recent years where tax cuts have generated more revenues, that have generated more tax cuts - and strong economic growth

[David Sergeant]

"Spot the straw man: who is talking about "arbitrary" tax cuts?"

It seems to me that the usual suspects talking about tax cuts might be described as "arbitatrary" because they never bother to explain where the money is coming from, they just expect someone else to think of something to explain to a dubious electorate.

As for calling for tax cuts because the public services will "spend it", thats simply irresponsible. With that sort of argument no wonder the public don't buy tax cuts.

[Sonny]

For goodness sake let's be honest and say that we support tax cuts because they will make us richer. That's what conservatism should be all about - money going to the deserving hard working people, not the public sectir minions and benefits scroungers. And we will spend that money - on luxury items, school fees, even subscriptions to the local hunt. We should do this because this will increase wealth in the area, make us happier, and set an example for the workshy to say, look what you could have had if you had tried harder at school, or had come from better stock. Let's not let Mr Cameron water down the message that Maggie gave us - look after yourself (and your family) by getting as much money as possible and the rest of the (decent people)in the country will thrive too.

[David Sergeant]

" Let's not let Mr Cameron water down the message that Maggie gave us"

Maggie gave us two messages. You balance the budget books when you cut taxes, or spend money. And you don't, as an opposition, go in to an election promising tax cuts.

[Michael McGowan]

David, the money will come from the umpteen hundreds of trillions of pounds which the Government of this country spends every year. If you think that the money cannot be found, then you must inevitably be arguing that every penny spent by Gordon Brown has been well-spent.....in which case why aren't you saying "Vote Labour"? Or do you think, like those Lib Dems whom Oliver Letwin wants to form a coalition with, that the tax burden is not high enough?

[David Sergeant]

Michael, The public have made it clear that they don't buy the argument that the money will come from government spending without some cuts in services. Brown will make sure everyone sees this and he has been running very public economy drives for a long time. My point was that Maggie famously was accused as running the country's finances like a housewife "don't spend what you havn't got". Tax cutters have got to be specific, and if they were Brown would imediately do something in that area.

[Michael McGowan]

It speaks volumes for the Conservative Party's total lack of imagination that this question is so hard to answer. What about the James Report? Are the Tories now saying is was a total fabrication?

If the public really do believe what you say they believe, David, (which incidentally I don't believe), then the Tories are doomed.

[UKfirst]

Great to hear Tebbit's call for tax savings by leaving the EU which appeared on the 6 oclock news on BBC1.

Big cheer from the audience! The non-brain dead wing of the party.

[David Sergeant]

"If the public really do believe what you say they believe, David, (which incidentally I don't believe), then the Tories are doomed."

Of course they believe but only because they only hear the other side. It is so much easier to equate tax cuts to sacking nurses than indeterminate greater prosperity in an indederminate future date.

You can work it if you are the government. If you are the oposition you get elected then work the finances like Maggie did. I have to say I am incredulous that any one interested, as you must be, thinks tax cuts are the be all of the Conservative party. A much more important job is sorting out the mess in the public services; "stability".

Talking about tax cuts now in incompetent and irresponsible to the point of dishonesty. No wonder the BBC showed Norman Tebbit and the lunatic fringe, it should help ratings for Labour.

[gordon-bennett]

Here is a simple example showing that you can increase spending and at the same time cut taxes. Given that nulab spends £4 million pa on special advisers, cut the number of sa's by half saving £2 million pa. Increase the Police budget (for example) by £1 million pa and return £1 million pa to the taxpayer.

The trouble is that when you scale this up you are proposing to cut public sector jobs and those people wont vote for you. That's why nulab put them in there in the first place. So you have to keep your tax cutting plans under wraps until you gain power.

[Michael McGowan]

David, I for one do not think cutting taxes is a magic bullet. You made that one up. Your last paragraph is just a rant. As for sorting out the mess in public services (the mythical "stability"), just how is that going to happen given that David Cameron has ruled out any meaningful reform? Is the Tooth Fairy on the A List?

The fact that people have never heard the other side of the tax-cutting argument can be blamed on one organisation: the Tory Party. Haven't they had enough time yet in opposition to get their act together?

[James Hellyer]

Tebbit was all for reducing [spending North of the border] to that in line with those in England, conveniently overlooking North Sea oil revenue...

Scottish people really need to get off the whole oil hobby horse. Taking the oil price averaged over the last 5 years, if Scotland got no subsidy from England and was allowed to keep all the tax raised on North Sea oil and gas (which would never be the case) Scotland would still be £7 billion a year worse off than under the current arrangements. Only with oil at $100 a barrel and with all of the UK's rights transferred to Scotland does Scotland come even close to filling the huge void in its finances. Even with oil and gas at the ruinously high prices of recent months England transfers to Scotland more than the UK's entire tax take from oil. State spending in Scotland is higher than any developed country in the world at 52% and no matter how you cook the books Scotland cannot afford it on its own.