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Are you (a) someone who thinks expenses-gate was primarily about MPs? or (b) someone who thinks expenses-gate was primarily about the state?

On Thursday I wrote:

"I stand by my view that there should be no tax rises until possibilities for savings in the massively-expanded Labour state have been exhausted."

Danny Finkelstein responded on his Comment Central blog:

"It won't work like that. Sensible cuts, based on reform rather than just squeezing everything, take time. You need to bring down the debt fast. So if you need tax rises at all, you need them first.  It will be years and years before you have identified, let alone exhausted, all the possibilities for saving."

I agree that it'll take time to identify all savings (although it's also going to be difficult to produce reliably fast tax receipts) but there are a three big reasons why I believe I'm more right than wrong to focus squarely on spending.

Expenses-gate was a glimpse into how the state wastes taxpayers' money.  Expenses-gate obviously has massive implications for the standing of our parliamentary system but it is also a massive opportunity for all believers in small government.  This moment should be an opportunity to preside over a significant reduction in the size of the state (public spending is about to hit 53.4% of GDP).  The beginning of transparency at the BBC is proof that the Commons is not the only publicly-funded body to look after its own members at the expense of much more lowly-paid taxpayers.  The public mood on tax and spending has changed radically and, if properly led, it could change further still.  The Conservatives should be in a position to say that we are not going to take any more of your taxes until we've ensured that they are much better spent and that there is much greater equality between public and private sector pay.

I don't see sufficient resolve on spending from the Conservatives. The debt problem is fundamentally a problem of excess spending.  City fund manager Malcolm Offord has calculated that Total Managed Expenditure has risen - after inflation - by £219 billion over the last fifteen years.  That's worth repeating: £219bn.  The NHS is the public service that has benefited most from this massive splurge. As long as the Conservatives are committed to increasing NHS spending (after inflation) I cannot accept that they are really serious about spending control. I'm also worried by shadow ministers telling me that they still haven't had serious conversations with the Treasury team about their budgets. These frontbenchers are already limbering up to protect the budgets they will inherit.  They've gone native even before the civil servants have got hold of them.  Who is going to speak for the taxpayer in a Cameron government?  Too much of this Parliament was wasted playing me-too with Labour on public spending growth and then denying that cuts would be necessary.  The Post-Bureaucratic Age of transparent, Google government as well as the social justice agenda offer hope that the Tories can get a long-term grip on spending but I see no urgency or great plan for short-term cutbacks.  In the absence of urgency or specific sacrifices I fear that tax rises will be seen as the easy option...

...I worry that taxes will delay the return to debt-reducing economic growth.  Britain is not lightly taxed. Business is leaving Britain. McDonald's announced their decision to take their corporate HQ out of London for Switzerland in the last week. The 50% tax rate (which George Osborne invited with his equivocal response to the 45p band) is only going to make things worse. I do not think that there are easy tax rises out there. All tax rises endanger the British economy and if the next Conservative government does not ignite growth the debt problem will be much harder to escape.

The next Tory government must offer a spending reduction plan and a growth plan if it is to convince international investors that it will return Britain to fiscal sanity.  Time is no longer on the Tory leadership's side.  Back to Mr Finkelstein.  Please convince me, Danny, that the Tories are serious about cutting spending. I really want to be convinced. Honest.

Tim Montgomerie


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