Matthew Sinclair: The years of tax and spend are over

Matt Sinclair of The TaxPayers' Alliance welcomes a Labour MP's call for lower taxes and lower spending.

First Alan Milburn argued that the number of civil servants should be cut by a quarter; a measure which could save billions that might then be returned to taxpayers’ pockets.  Today in The Telegraph Denis MacShane tells us that the answer to Gordon Brown’s problems is “obvious: cut taxes and spending”.

Former ministers are coming out of the woodwork to acknowledge what ordinary people have long understood: government wastes a lot of money and ending that waste could make room for tax cuts.  MacShane says that he does not “know of a single minister who privately does not despair at the waste of money on pointless projects, publications, or legions of press officers that add no value.”

TaxPayers’ Alliance polling (PPT) shows that two thirds of the public think that the Government wastes more than one pound in every six that it spends.  Fifty-three per cent think that it wastes more than one in every five pounds of government spending.  MacShane and Milburn confirm that Ministers, as well as ordinary people and the TaxPayers’ Alliance, think that if the Government did things more efficiently tax cuts could be delivered.

While it is encouraging that the Conservative and Liberal Democrat leaders have suggested they might try to find some savings they still cling to the Government’s spending plans.  MacShane’s comments show that the conspiratorial consensus between the three main parties over the medium term path of public spending plans is not based on any real consensus that the waste isn’t there.  If the parties were willing to be bold they know that it is possible to deliver better value for taxpayers.

Politicians are so scared of being accused of plotting “cuts” that they won’t give hard pressed taxpayers a break.  All we get are clumsy revenue neutral changes.  Ironically, at the same time as spending and taxes rocket many local services really are being cut and charges increased, as the TaxPayers’ Alliance demonstrated in our report The Great British TaxPayer Rip-Off (PDF).  The bottomless demand for resources to try and cover up the failures of unreformed public services is resulting in higher taxes and charges and service cuts.

The Conservatives should not renew their pledge to match Labour spending plans.  Doing so would betray the interests of taxpayers who have been let down by Labour’s splurging.  It would also not be politically astute either.  At last year’s Conservative party conference the potential of tax cuts to transform the political landscape was clearly demonstrated.  By mirroring the Government’s fiscal plans the Conservatives leave open an opportunity for the Labour party to stage a fightback in the polls by offering to leave taxpayers, suffering in an economic crisis, with a little more money in their pocket.

Denis MacShane is right – the tax burden needs to come down.  Taxpayers deserve a break and the public services have enjoyed more than enough largesse.