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Should David Cameron announce tax rises before the general election?

The ICM poll for The Guardian published last week showed 73% of the public expecting taxes to rise if a Conservative Government is elected at the next election - and that was in a poll where the party is on 41% with a 16% lead over Labour.

So that is the context in which Andrew Grice of The Independent suggests in his column this morning that there is now a serious debate at the highest eschelons of the party over whether to announce tax rises in advance of a general election:

"There is a growing recognition among shadow Cabinet ministers that, if they win power, spending cuts could only be half the picture, as they would also need significant tax rises to fill the black hole in the public finances. That is why Mr Cameron and George Osborne won't rule out tax increases.

"The big debate among the Tory high command now is whether to announce some tax increases before the general election. Mr Cameron is reluctant to unveil a detailed "shadow Budget". But there appears to be growing support for some tax rises to be disclosed, in line with the Cameron-Osborne promise to be "honest" with the voters, while portraying Gordon Brown as "in denial" about the need for cuts (an attack the Prime Minister will try to head off by acknowledging the need for big savings).

"Announcing tax rises for Middle Britain before the election would be high risk. Tory traditionalists would hate it. They want tax cuts. But it could bring high rewards. The tax increases would be blamed on Labour mismanagement. And, if the deficit were brought under control, the Tories could fight the election after next on a manifesto based on tax cuts. It could be an attractive strategy."

In this post last month, Tim succinctly put the argument of what Andrew Grice would presumably characterise as that of the "Tory traditionalists":

"There should be no tax rises until possibilities for savings in the massively-expanded Labour state have been exhausted.  So long as the Conservatives are pledging to continue growth in the bloated NHS budget I cannot accept that those possibilities have been exhausted.  Without exhausting possibilities for savings, the tax rises will be steeper and the consequences for economic recovery and a 'brain drain' enormous."

Jonathan Isaby


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