Lord Forsyth: Time for a touch on the tiller, George

Lord Forsyth of Drumlean is a former Secretary of State for Scotland.

Of course a lot can happen in two years, but the Eastleigh by-election suggests we might be heading for a Labour or Lib/Lab administration at the next general election as the centre-right vote is split by UKIP.   Both would ruin the country with their prescriptions for higher income taxes, wealth taxes and more borrowing. The stakes could not be higher and this month’s budget is George Osborne’s last chance to change course and tell the British people the truth about the scale of the problems facing our country.

The Chancellor should stop talking about austerity and start explaining how we restore prosperity. He should focus the Nation’s attention on our escalating debt rather than the deficit which is just the amount by which that debt is increasing. Boasting about cutting the deficit by a quarter is just misleading as the public think the debt and the deficit are the same thing.

A poll carried out by Comres for the Centre for Policy Studies last summer asked people whether the coalition were planning to reduce the national debt by around £600 billion, increase it by £600 billion, or neither reduce or increase it during the course of this Parliament. Only 10% got the answer right. A similar poll for ITN carried out at the time of the Autumn statement found only 6% knew the answer. Our National debt is forecast to rise by £605 billion from 52.5% of GDP in 2009/10 to 76.3% in 2014/15. Those intending to vote Conservative were found to be the most misinformed about this with two thirds believing the Coalition Government were planning to reduce the national debt. Interestingly UKIP voters were the best informed.

This is a major problem. How can we expect the public to accept that public spending is too high, that tough decisions are needed to protect the future of our public services, or that the size of the State is hampering growth if they believe we are paying down debt and the differences between the parties is just about pace?  And what will the voters think at the general election when they discover that debt and the costs of servicing it have soared?

Michael Forsyth: David Cameron is ending the uncertainty by enabling Alex Salmond to deliver the referendum the SNP promised

Lord Forsyth of Drumlean is a former Secretary of State for Scotland.

The SNP got 45% of the votes in last May's elections to the Scottish Parliament and won a clear majority of the seats. Our Liberal Democrat Coalition partners - who have consistently argued for more devolution to defeat the nationalists - lost every seat they had on the mainland and their share of the vote fell to a derisory 5.2% on the regional list. For Labour the scale of their defeat was unthinkable and unexpected. George Robertson had once assured everyone that devolution would kill Nationalism stone dead and Donald Dewar boasted that he had devised a complex electoral system that would ensure no party could ever get an overall majority. As a result there are few checks on the executive, no second chamber and a committee system under the thumb of the separatists who even insisted on taking the Holyrood position of presiding officer for their party.

Alex Salmond's stunning result was not a vote for independence but a vote against Labour when neither the Conservatives nor the Liberals seemed to offer a credible alternative.  When Annabel Goldie said she could do business with Alex Salmond many Conservatives took that as permission to vote tactically for the SNP and they did so in their tens of thousands. Salmond knows this and the last thing he wants is for David Cameron to enable him to fulfill his manifesto promise which was clear and precise:

We will give Scots the opportunity to decide our nation's future in an independence referendum.

Lord Forsyth: The Scotland Bill is a timebomb at the heart of the Union

Michael Forsyth is a former Secretary of State for Scotland.

During the second reading debate on the Scotland Bill, the Secretary of State for Scotland described the legislation as the largest transfer of fiscal powers from central government since the creation of the United Kingdom. He was right and it is being done with almost no one outside the political class aware of it. This is an appalling state of affairs as the Bill threatens Scotland’s living standards, her public services and the Union itself. It will certainly result in Scotland becoming the highest taxed part of the United Kingdom, and at the same time having less money for schools, hospitals and social services. It is the progeny of a deal put together by Wendy  Alexander, who panicked when Alex Salmond called for a referendum on independence, and Gordon Brown, who was afraid to meet the challenge. Ken Calman was a fine civil servant and my Medical Officer of Health when I was Secretary of State, but his report, which the Scotland Bill implements, is deeply flawed - and may yet prove to be the midwife which delivers independence.

There has been no real public debate about the impact of the tax proposals, and the Calman consultations involved less than a thousand people and a few leaflets. As Conservatives we shamed Labour in 1996 into changing their policy, to allow the Scottish people their say on a tartan tax of up to 3p.  They voted for it, but no party has used it. That was a power to levy a limited increase in just the basic rate of income tax in order to top up the block grant, determined by the Barnett formula. This Scotland Bill is a wholly different proposition. It requires the Scottish Parliament to set its own independent Scottish income tax, at basic and top rates to fund its expenditure after receiving a cut in its funding under the Barnett formula. It gives the Scottish Parliament the power to levy taxes on land transactions and landfill sites. It even allows the Parliament to invent new taxes and clears the way for the introduction of a local income tax.  Any new taxes will not require primary legislation at Westminster.

Lord Forsyth of Drumlean: We must cut taxes to get growth to cut the deficit

Lord Forsyth of Drumlean was Secretary of State of Scotland between 1995 and 1997. He chaired the Conservative Party's Tax Reform Commission and is a member of the House of Lords Select Committee on Economic Affairs. He is also on the Board of the Centre for Policy Studies which today publishes his new paper (co-authored with Corin Taylor), Go for Growth: Cut taxes now to cut debt, which can be downloaded here.

Whoever wins the next election will be faced with unprecedented challenges. The UK economy is in dire straits. For too long we have living on our seed corn, and now we must consume less, tighten our belts and plant for growth in the spring. Public expenditure is close to half of national income, while tax revenue barely exceeds a third. This is not sustainable.

The Tax Reform Commission report, which was published in 2006, argued that public expenditure and taxation were too high and damaging the economy. It set out a programme over a Parliament to achieve lower, simpler and fairer taxes and stimulate growth.

I remember Ed Balls, then a Treasury minister, rushing round the TV studios denouncing the report as irresponsible and unaffordable. Its £20 billion price tag over the whole of a Parliament would shatter economic stability and put at risk spending on the public services, we were told. His words rang hollow then, but three years on the Government has doubled the national debt and has a deficit this year of at least £175 billion. It is clear that a great opportunity was missed.

The Chancellor’s deficit now has to be tackled if we are to avoid a vicious cycle of higher gilt yields and inexorably rising debt servicing costs.

Lord Forsyth of Drumlean was Secretary of State of Scotland between 1995 and 1997. He chaired the Conservative Party's Tax Reform Commission and is a member of the House of Lords Select Committee on Economic Affairs. He is also on the Board of the Centre for Policy Studies which today publishes his new paper (co-authored with Corin Taylor), Go for Growth: Cut taxes now to cut debt, which can be downloaded here.

Lord Forsyth of Drumlean: How Gordon Brown turned a global financial crisis into a British financial catastrophe - and what we must do to get the economy growing again

Lord Forsyth of Drumlean was Secretary of State of Scotland between 1995 and 1997. He is speaking alongside Philip Hammond MP and Irwin Stelzer at a Politeia fringe meeting - Banks, Booms and Busts - tonight at the Hilton Hotel, Deansgate, Manchester, between 6pm and 7.30pm.

The American commentator Willam Safire, who died last month, described Britain under the Labour Government before Margaret Thatcher became Prime Minister as a first class example of how to ruin a first class country. All Labour Governments leave office with unemployment and debt higher than when they took over. This Government has excelled itself.

Public spending has doubled and the national debt is projected to double to £1.4 trillion, but who believes education or health care is twice as good? It is true there are more new schools and hospitals but many of them have been bought on tick through PFI. The Government may claim the credit but they have not settled the bill. Our GPs may be better paid but it is harder to get a family doctor at night or at the weekend. There are more than 5 million people on out of work benefits and both the number and proportion of our youngsters not in education, employment or training is higher than when Labour took office.

People on the lowest incomes are paying effective marginal rates of tax of 90%. If you earn a £100 a week and double your income you will be allowed to keep just £5 or £6 of that extra £100 after tax and benefits withdrawal. If you were a private equity millionaire buying and selling companies and gearing them up to the gills over two years your marginal rate of tax was 10% thanks to a Gordon Brown initiative. The Government wasted £12 billion cutting VAT by 2.5%, but are imposing new taxes on jobs and savings with higher National Insurance contributions and by making some employers pension contributions a benefit in kind. This latter measure will see some people facing tax rates of more than 100%.

The economy Gordon Brown inherited was the strongest it had been for a century. Unemployment was falling by 50,000 a month and borrowing was £35 billion. Now borrowing, which is just taxation deferred, is out of control and treasury forecasts have the credibility of Billy Bunter’s postal order. The Prime Minister has turned a golden legacy to base metal. His golden rule turned out to be an elaborate con to justify borrowing at the height of a boom when revenues were pouring in from City bonuses and stamp duty.