ConservativeHome's Bournemouth 2006 Conference blog

Wat Tyler: Not Today Thank You

Very interesting fringe meeting last night on the Case for Lower Taxes. During the Q&A, someone “closely associated with” the Forsyth Tax Commission more or less confirmed they were recommending £19.5bn of tax cuts.

He also said the Commission did not accept such cuts would conflict with economic stability. They are easily affordable, even without counting the offsetting revenue growth tax cuts almost always generate, or the longer-term dynamic effects of lower taxes on economic growth.

As we blogged yesterday - and this week’s debates have put it up in seafront lights - the supposed conflict between tax cuts and stability is not an economic point. It is entirely political. Our top team fears that by arguing the economic truth, they would risk being portrayed as taking Britain back to boom and bust economics. It’s a sad commentary on our political process.

Two other interesting fringe events. First, Reform’s session with Andrew Lansley on the NHS, where Andrew gave a very clear presentation of the Party’s health reform agenda. Unfortunately, it is exactly the same agenda that Labour is so unsuccessfully pursuing already – tax-funded, free-at-the-point-of-use, centrally rationed treatments (NICE), commissioning “gatekeeper” GPs, and payment by results for hospitals.

Never mind all those fabled policy reviews: we’ve already ruled out the most exciting innovative ideas that could make a real difference. No competing social insurers, no co-payment, no putting the money in the hands of consumers. Apparently, to persuade voters “the NHS is safe in our hands” we have to avoid promising the only solutions that would actually work. There’ll be more of the same in David Cameron’s final speech this afternoon.

It’s pretty much the same in education. At yesterday’s lively Bow Group fringe, the splendid Chris Woodhead went up against David Willetts. With a lifetime of experience in education, Woodhead persuasively argued the case for giving the power to parents rather than politicians and bureaucrats, and giving ordinary state school parents the same rights enjoyed by rich parents in the independent sector. In other words, school vouchers.

But Willetts is not going to deliver anything like that. Confessing he’d once been “mesmerised” by vouchers, he’s now talking a very different language, the language of political control over not just the curriculum, but also school organisation (e.g. the vogue for synthetic phonics, and streaming). What’s the difference from Labour’s policies? None, other than “well, we’ll jolly well do this stuff, whereas they just talk about it”. Hmmm.

Do we really want an education system where the only choice most parents have is at the ballot box, between competing management teams offering virtually indistinguishable top-down policies?

PS Thanks to our esteemed Editor, Tyler nearly got famous this morning with a slot on the Today programme - I got my hair done and everything. Sadly, I was “stood down”: they must have taken a look at my telly tax rants on Burning Our Money and added me to their dangerous nutter list. Ah well.

Wat Tyler: The Big Beef Speech

It was exactly what we’d seen on the tin - George Osborne’s big platform speech reiterated the points he’d been making all week - “I want lower taxes” but “there’s no such thing as a tax cutting Shadow Chancellor”.

And this was very much a speech about returning to power, not economic policy. His opening words were about how for the first time in a generation we have a real chance of returning to government, and how we’ve only got here because we’ve “changed to win”.

But to fully convince voters, “we must win the argument on the economy”. Which to George means not only ruling out tax cuts “at the expense of public services”, but also making sure we don’t risk people thinking we will take chances with economic stability. So this is an issue of managing perceptions, not of making difficult economic choices, still less of implementing traditional Conservative principles.

Of course, the only reason we even have this problem, is our wretched experience with the ERM. That catastrophe racked up mortgage rates and lost us our long-held reputation for economic competence.

And the supreme irony is that ERM membership was something a Conservative government did against the instincts of many, many Conservative members, who never wanted it in the first place.

Unsurprisingly, the biggest applause of his entire speech was when he pledged Cameron’s Conservatives would never join the Euro. But it isn’t lost on party members that here we have another leadership pursuing an economic policy which is contrary to the instincts of many of them.

So was there anything for beef-eaters? Not much, it must be said. But there was one phrase that stuck out - “we will deliver more than we promise”. It was hardly a dog-whistle, still less a commitment. But combine it with George’s repeated assurance that “over an economic cycle, the state will consume a smaller share of national income”, and maybe, just maybe, lower taxes remain on the menu.

Latest news from "the beef hunt", by Wat Tyler

24 hours in, and still not much sign of that elusive tax beef. In fact most of the actual debate on tax and spend is taking place well away from the platform and out of earshot of party leaders.

True, when George Osborne spoke at his first fringe meeting, he kicked off with a reassuring “I believe in lower taxes”. But when questioned by members about specifics, he fell back on “sharing the proceeds of growth”, and “not taking risks with stability”.

As various people are saying, that formula may be designed not to frighten the horses, but it leaves an awful lot of questions unanswered. What if in the high tax/high debt world after Labour there is no growth? Do we cut real spending? Do we borrow? Do we increase taxes- even though that would hamper growth still further?

And even if there is growth, how do we allocate the proceeds?

The only answers are coming off-piste, well away from the leadership: for example, the CPS plan for pegging the trend growth of spending below that of GDP (a restatement of the Reform Growth Rule, espoused by David Davis during the leadership contest).

There is no doubt about the instincts of most members attending Conference. They want to see smaller government, and lower taxes. And Senator John McCain’s well-received platform speech yesterday has had many looking ruefully across the Atlantic, where a Presidential hopeful is evidently not at all embarrassed to put tax cuts right up front on his pitch.

But we just know there’s beef around here somewhere - we can smell it. And the No Turning Back Group’s “Case For Lower Taxes”, along with the Taxpayer’s Alliance finding that the average family pays a staggering £600,000 tax over a lifetime, have whetted appetites even more keenly.

So the hunt’s still on. And we look forward to George’s platform speech tomorrow, where members will be eager for him to explain how government can possibly make Britain more competitive without cutting taxes. Gordon Brown has tried most of the other levers already, and as we can all see, they don’t work.

Wat Tyler: On the trail of the beef

“Greener, more family-friendly, more local”. Excellent. But after ten months of David and George, for most party members here on the Bournemouth prom the big economic question remains unanswered - what are we really going to do about tax and spend?

Labour have whacked Britain with billions of extra taxes. By 2008 their own projections show the tax-GDP ratio 4 percentage points higher than in 1996-97. And that’s on top of their huge wobbling mountain of public and private debt.

So while “sharing the proceeds of growth” was a neat holding statement, history says we will not have that luxury. Brown’s legacy will be a sluggish unbalanced economy, where all the choices will be tough.

Alongside that, voters are already asking why we’re paying so much for such woeful and wasteful public services. And they want answers that go beyond “trust me”.

Recent polling evidence points the way. August’s TaxPayers’ Alliance poll highlighted the contempt in which voters hold politicians. But the poll also told us there is strong support for some real beef - lower taxes combined with fundamental public service reform - if only politicians could be trusted to deliver it.

Yesterday’s worrisome Telegraph/YouGov poll underlined the same message – voters aren’t dumb, and even with a likable telegenic leader like David Cameron, “trust me” is no longer enough.

Which is why we must all hope those reports of an “almighty bust-up” between Lord Forsyth’s Tax Commission and our Shadow Chancellor are wrong. Especially since the Commission is reportedly proposing exactly the kind of dynamic tax radicalism once espoused by George himself.

So this week, George is firmly in the spotlight. From platform to fringe, we’ll be listening intently to what he has to say, and finding out what members think about it. It’s time to wake up and smell the beef.

Wat Tyler edits Burning our Money.