Show us you are a tax cutter, George. Please.

Tim Montgomerie

This morning's papers (see today's newslinks) are full of stories of higher taxes. 750,000 (some papers say 850,000) extra paying 40% income tax. Some families paying marginal tax rates of 70% and more. The Sun continues its campaign on higher fuel duty. In yesterday's papers a variety of business organisations called for economy-boosting tax relief.

Some time ago I argued that George Osborne shouldn't raise taxes until he'd exhausted possibilities for spending restraint. Britain is not an under-taxed nation, far from it. Labour let spending get out of control (even before the bust). Messrs Osborne and Alexander should have done more to eliminate NHS waste, pensioner benefits should have been better targeted, Britain's contribution to the EU should have been frozen, the growth in aid spending should have been slowed, the Barnett formula should have been reviewed.

These things haven't happened and unnecessarily higher and economically-damaging taxes are the result.

What can George Osborne do to reassure Middle Britain that he does understand the pain of rises? Can he reassure Conservatives - who remember his decision to match Labour's spending splurge - that, at heart, he's a tax cutter?

Four ideas for the Chancellor (that wouldn't hurt his overall deficit reduction strategy):

1. The most immediate thing he can do is bring relief to the motorist in his March Budget. He should honour the promise to introduce a Fair Fuel Stabiliser. Andrew Lilico writes about the FFS for today's Telegraph.
2. Get rid of the 50p tax rate by introducing a less economically pernicious tax on wealthier Britons. Perhaps a higher council tax band for very large houses or some adjustment of the tax on banks. It will largely pay for itself anyway.
3. Give a big speech setting out, to use Boris Johnson's words, the direction of travel on tax. Give the nation hope that a lion's share of the proceeds of growth (when they are restored) will go to taxpayers.
4. Fourthly, enter the intellectual marketplace on taxes. Make the moral case for lower taxation. Make the case that tax cuts have dynamic effects and can, in part, pay for themselves. Make the case that lower UK taxes are essential to compete with lower taxed nations.

10am Postscript: I should have mentioned this from yesterday's Sunday Times (£): "The income tax threshold is already set to increase by £1,000 to £7,457 from April 1. However, Osborne is expected to raise it by about a further £500. Details of the additional concession are still being worked on, but it marks a victory for the Liberal Democrats, who have been arguing within government for tax cuts for the poor." That would be good news.