More tax anxiety

Concerns about Tory tax policy are reaching a crescendo. Yesterday's ToryDiary post which highlighted concerns from other quarters attracted a one hundred-comment debate.

The Independent is not surprisingly portraying it as a split between right-wingers and modernisers.

The Times expresses consternation at yesterday's new 'stability' focused approach outlined in the Financial Times, highlighting dynamism as more important.

There were some positive aspects of George Osborne's speech, such as emphasis on reducing the long-term demand on the state, but nothing radical enough to satisfy most economic commentators.

The Telegraph has good reason to wonder what happened..

"While he was running for the party leadership Mr Cameron promised to lead a "crusade for capitalism"; his lieutenant, George Osborne, spoke enthusiastically of the flat tax. Once he had won, Mr Cameron announced he did not believe in "isms" such as "capitalism", and yesterday he and Mr Osborne ruled out the flat tax."

The bold policies may yet come as the economic competetiveness policy group was only launched yesterday, but there is only so long Cameron can go with "comfort conservatism" on tax. We will need to make the argument for lower taxes to reassure the grassroots, and win the argument for the future of our economy. Or as the TaxPayer's Alliance puts it:

"The stakes are high. The future of Britain's economic competitiveness is at stake. Whilst MPs and the media may take a while to appreciate the implications of Britain's growing reputation as "just another dysfunctional EU economy", it will not take long for serious international investors and high-tech firms to come to that conclusion."

Deputy Editor

Comments

[GrahamD]

I think he might be making sounds about stability etc in preparation for a low-tax agenda that we can sell. Here's hoping

[Sean Fear]

Frankly, I wonder if more than a tiny minority of MPs actually care whether Britain has a successful economy or not.

Most of them seem to regard everything we earn as the State's, and anything that isn't taken in tax as a gift from the State.

[malcolm]

I'll probably be shot to pieces on this blog but I think it is a sensible approach to take.
Tax cuts have not been ruled out but it is likely that any Conservative gov't is going to inherit a huge deficit.We could make that worse as Bush has done in the US or try to establish stability and a reputation for economic competence (which our party does need to reestablish)first.
International investors and the markets generally seem to value fiscal responsibility above all else so it will be interesting to see what reaction this speech gets from City commentators.

[Rob Largan]

Osborne sure looks odd in that photo, almost like a young Paul Merton.

Lets hope they get the message on tax. Few are advocating committing the Conservative Party at this early stage to specific tax cuts. What is alarming to see is the reluctance of both Cameron and Osborne to make the economic case for tax cuts. By saying that priority is on stability, they are effectively saying that tax cutting, damages stability. If they are genuinely "making sounds about stability etc in preparation for a low-tax agenda that we can sell." they are only making things harder for themselves in the future.

[Mark Fulford]

The majority believes that they are doing OK financially and that all politicians are liars. When we tell people that we’re not doing OK, they have two choices 1) believe us and get terrified by the amount of debt they’ve accumulated or 2) believe that we’re liars. It harms us to rubbish the economy too much.

When we tell them that we’re going to change everything, we introduce uncertainty – and fear. That’s a vote loser. Our strategy has to be baby steps. If we’re too bold, we’ll lose support.

[Rob Largan]

Cameron and Osborne dont need to come out and pronounce that the economy is in trouble or that they are going to make sweeping changes if elected. They should be simply and effectively sending out the message of how hypothetical tax cuts initiate growth and lift people out of poverty. The message should be, the economy for now is ok, largely thanks to the golden legacy we gave Labour in 1997, but 'you aint seen nothing yet'. With tax cuts the economy could grow far more successfully and sustainanbly.

[Rob G]

The weakness with the "sharing the proceeds of growth" approach is that it seems to rule out reducing public expenditure in order to eliminate waste. I hope we will move away from that apparent position.

But Osborne's speech reminded me of one important fact that we must not forget. Interest rates since 1997 have been much lower - and more stable - than they were under the Tories. Gordon Brown may not deserve any credit for achieving that but he hasn't (so far) destroyed that stability. I haven't done a precise calculation but I would be pretty certain that, since 1997, I have personally gained more in reduced mortgage payments than I have lost in additional taxes. I would still favour responisble and sustainable tax reductions to support economic competitiveness. But the "stability" message is very important. A lot of people may not favour tax cuts if the price is a doubling or trebling of their mortgage payments.

[hayek's grandad]

The population are not ready to be told that tough measures are needed because it's not obvious to them that they are required yet. When times get tough (as they inevitably will) then they will be ready for a message that tax cuts are needed to stimulate the economy no matter what the effect on services.

DC is correct to have read that message and heeded it.

People feel happy to pay these levels of taxes at present as they still feel well off so nobody wants to hear that the NHS and education services need to be cut back. However they do want to hear about how they can be made better. We must explain to the electorate how we will make these services better if we are to win the next general election. We must show them how we will replace the wastefulness of the nanny state with competitive markets and how this will give people value for money.

Providing choice in services and encouraging individualism and localism is conservative and something people want. Tax cuts and the reduction of the state is also conservative but something people don't feel the need for at present. Luckily for us if we can convince the electorate to allow us to deliver the former then will also be able to deliver the latter.

I'm certain that given the present environment this is the only way we will return real conservative values to the heart of government.

[James Hellyer]

Osborne's speech was poor stuff indeed. It rested on the flawed assumption that there would be growth to share - something that looks increasingly unlikely as eurozone countries become relatively more competitive, our growth falters below expectations and investment falls.

[Mike Christie]

"By saying that priority is on stability, they are effectively saying that tax cutting, damages stability."

I disagree, for years Gordon Brown has accused us of running a boom and bust economy. This approach is all about nullifying that argument. Brown has been given free rein for so long that his claptrap is taken as fact in many quarters.

Instead of trying to turn back the clock and have the arguments we should have been having for the last 8 years, Cameron and Osborne are taking a different approach.

Certain tax cuts are important, along with deregulation, in order to allow our business environment to become more dynamic. However, it would be easy for Brown to paint tax cuts as destabilising, causing inflation and higher interest rates.

We need to get away from the notion that we will cut taxes as a matter of dogma, and start from the principle that we will 'first do no harm'.

[Mark Fulford]

"...I would be pretty certain that, since 1997, I have personally gained more in reduced mortgage payments than I have lost in additional taxes." - Rob G

I like the symetry in this idea. Unfortunately, for those of us who bought after 1997, house-price inflation and bigger mortgages gobbled up the savings on interest rates.

[Sean Fear]

I don't believe we should concede any intellectual ground to Gordon Brown. If David Cameron is as good a communicator as we think he is, then surely he can persuade the public that a falling tax burden is a good thing (something which I think they're half persuaded of already).

[Richard Allen]

Those who think that we are going to see radical policies at a latter date are missing a very important point. One of a failures at the last two elections was that we tried to sell our tax cutting agenda in the last few months and thus made ourselves look oppurtunistic.

We need to start talking about tax cuts as a weapon of economic competitiveness now in order to have real credibility on the subject when the need for such an approach becomes more apparant.

[Mike Christie]

"One of a failures at the last two elections was that we tried to sell our tax cutting agenda in the last few months and thus made ourselves look oppurtunistic."

I disagree, the problem was that we tried to argue on the grounds of "We will cut tax because..." rather than "We will create a prosperous economy by..."

It is a well known fact that lots of people switch off half way through complicated arguments. We need to concentrate on what we want to achieve, then explain the tools that will do the job.

[Sean Fear]

At the last election, we weren't even offering to cut tax. We were offering to increase it by less than Labour were. Unsurprisingly, every opinion poll showed that people did not believe we would cut tax in government.

[James Maskell]

Yep, the case must be made early on. When a political party says itll cut taxes, the opponents ask which public services will face cuts. The case can be made. I think its right when you think about it. You can cut taxes and not cut public services, but does Joe Public believe that...I wouldnt bet my future mortgage (if I can get one that is) on it.

Its a radical step to cut taxes to increase growth and the public are still very much reluctant to believe it to work. Literally, the case must be made from now on for the next 4 years. Ram the message home each time.

[Richard Allen]

I disagree, the problem was that we tried to argue on the grounds of "We will cut tax because..." rather than "We will create a prosperous economy by..."

I said that it was one of our problems. The way we tried to sell tax cuts was certainly another one.

[James Hellyer]

Indeed, if you look at Osborbe's speech all he really pledges is the Letwin plan from 2005: growing public spending more slowly than the economy grows. Not only does this trend growth rule our serious tax cuts ever, it also falls back on the dubious assumtion that growth is here to stay.

[James Hellyer]

At the last election, we weren't even offering to cut tax. We were offering to increase it by less than Labour were. Unsurprisingly, every opinion poll showed that people did not believe we would cut tax in government.

Especially when we were pledging to match Labour's spending commitments and then upping them with ones of our own.

[hayek's grandad]

James - are you saying the reason we've lost three elections is because we haven't offered the public enough tax cuts?

[Rob Largan]

"are you saying the reason we've lost three elections is because we haven't offered the public enough tax cuts?"

Are you saying the reason we lost the last election was because we offered too large a tax cut?

[Frank Young]

This approach seems to be wholly sensible and there appear to be a fair number on this site who take that view.

We cannot allow ourselves to be caricaturised as the party of "cuts" in public services. Whether or not we can mould a lox tax political agenda is a debate for after a general election. At the moment restoring the peoples' trust in our ability to manage the economy competently is paramount. This is about trust, not the degree to which we can or cannot cut tax.

Gordon Brown needed to do a similar thing before the 1997 election, to convince people that Labour were no longer a high tax party. He did this by pledging to stick to Ken Clarke's fiscal plans; equally we seem to be making efforts to re-patriate the word "stability" as a Conservative phrase. History, again, will no doubt repeat itself. Where Brown made a great play on the word “prudence” he has shown himself to be anything but. Osborne will be the “stability” shadow Chancellor and likely a tax cutting Chancellor. Patience, it’s all about politics.

[James Maskell]

The reason why we didnt win the last election was because in general we sucked...

To explain we didnt argue the case soon enough. The economy is the key thing for 2009. Its likely theat the economy is going to downturn further and then we need to make sure the public know not only what Brown is doing wrong but what is needed to put it right. Tax cuts wont be accepted straight away. It takes persuasion. In the last election the case for tax cuts wasnt fully made.

[James Hellyer]

James - are you saying the reason we've lost three elections is because we haven't offered the public enough tax cuts?

Do you need to be recommended a good optometrist? I can't see that anyone said anything remotely like that.

[James Hellyer]

Whether or not we can mould a lox tax political agenda is a debate for after a general election.

It isn't, the likely state of the public finances require a serious overhaul of expenditure priorities. This would be difficult to achieve without winning a mandate for doing just that at the election.

[hayek's grandad]

Rob - No. I personally don't think any tax strategy would have won us any of the last three elections, and before you try and assume the corollary yet again… that doesn’t mean I think that a daft tax strategy couldn’t have lost us those elections.

People know where we stand on tax and the majority of people like it. However unless they trust us with the wider management of the economy and public services they will never return us to government. I don’t believe shouting the messages we already know people like louder and longer will help us. We have to address the reasons that people have for not trusting us with public services and the stability of the economy. If people are offered good services with low tax they will certainly choose it over good services with high tax, but you have to offer the good services first.

[johnC]

A Conservative party which made tax cuts a central part of its manifesto has just won a general election in Canada. Cameron and Osborne, please note.

[Jon White]

It's about PERCEPTION. Yes, Brown has stolen billions from Pension Funds, yes the ecomony is in a VERY bad shape, but the man on the Clapham Omnibus doesn't see that. Most people PERCEIVE that they are doing 'okay' financially under Labour. Most people also perceive (and as a recent guest of the NHS, I do have some sympathy with this view) that public services are better under Labour.
As a credable OPPOSITION we must offer an alternative. It would be very foolish to promise huge tax cuts now - we do not know the extent of the mess that Brown will leave us. But there should be a definition of what Cameron stands for: Does he accept the core (in my eyes) Conservative belief that as much wealth as possible (when it is, to quote Brown, 'prudent') be returned to the individual? If he does, and I hope that he does, he should declare that is his objective. Of course it won't happen immediately, and to promise such would be a gift for the Labour Party publicty machine and the majority left wing of the media in Britain.
We must sell the benefit of tax reductions for ALL, NOT just those at the very top.

[Rob Largan]

"People know where we stand on tax and the majority of people like it."

Why did a majority of people think we wouldnt cut tax at the last election then?

[tory guy]

"The Telegraph has good reason to wonder what happened.. While he was running for the party leadership Mr Cameron promised to lead a "crusade for capitalism"; his lieutenant, George Osborne, spoke enthusiastically of the flat tax. Once he had won, Mr Cameron announced he did not believe in "isms" such as "capitalism", and yesterday he and Mr Osborne ruled out the flat tax."

The Telegraph is confusing the desire of these two to win the leadership election with their actual views. Come on guys, don't be so naive. All the stuff before December 6th was just talk to get party members and right of centre MPs to vote for Cameron.

[Julian Morrison]

The most important thing about tax cuts is that they aren't complete in themselves. They have to be part of reducing the "public sector". Otherwise, you get US Republican style borrow-and-spend, which is just putting off tax rises. So, if you read the "commitment to stability" as meaning "no borrow-and-spend", then it's a good thing.

If D.C.'s plans for shifting the burden of welfare away from the state bear fruit, then tax cuts will follow as a natural consequence - the money simply won't be needed anymore.

[a-tracy]

Perhaps promising Tax Control is a better promise than cuts as this has been linked to cuts in service , a raft of fees, fines, tolls and taxes will soon leave people wanting better control than we have at present. We are out of control at the moment - promising costs on business that they can't sustain like extra bank holidays, extra holidays, and pensions tax to buy votes.

[James Hellyer]

Why did a majority of people think we wouldnt cut tax at the last election then?

Because we weren't offering tax cuts, but rather deferred tax increases.

[Rob Largan]

The reason we lost the last election is shockingly simple. We were useless. We went into that election with the only thing we had to say on education was 'school discipline'. All we could say about health was 'cleaner hospitals'. On every single issue we took the easy moderate option. Crucially we did not provide the electorate with a serious coherent alternative vision of the future. Our campaign was a poorly thought out one man band. That one man, Michael Howard was unpopular with the electorate. Some of our election posters were just plain embarressing. If we are not careful, we may well go into the next election offering little different except a more popular front man and a better set of campaign posters. The root of the problem, that lack of vision, must be addressed and soon.

[Sean Fear]

I think it's wrong to be overcritical of Michael Howard. The last election manifesto was timid, but Michael Howard pulled off a fair result, given the short time he had before the election.

[hayek's grandad]

James - "Do you need to be recommended a good optometrist? I can't see that anyone said anything remotely like that."

So do you think talking about tax cuts for the next four years will help us win the next general election?

[James Hellyer]

So do you think talking about tax cuts for the next four years will help us win the next general election?

As part of the policy mix - yes, properly explained and targetted tax cuts are a good thing to offer.

[Frank Young]

I'm by no means on the same wing of the party as Howard, but lets be clear he did a very credible job in the short time he has as leader and deserves our admiration and thanks.

[Rob Largan]

"So do you think talking about tax cuts for the next four years will help us win the next general election?"

Nobody is advocating this. Over the next four years we must talk about a whole range of issues which we can interlink into one coherent alternative vision of Britain. Simply by being a pale imitation of Labour wont win us the election, thats for sure. We must set out our vision and then make the case, day after day, week in, week out. We should stand up and be prepared to act boldly. We must argue not merely for tax cuts, but for reducing the size of government all together. No issue should be left untouched, we must call for competition in health and education and market methods of sustaining the environment. We chose Cameron because he is a good communicator, he must use his skills to sell our ideas like never before. So fix bayonets brothers and get ready to go over the top for individual freedom, economic dynamism and social mobility!

[hayek's grandad]

I think most people already believe we'll deliver tax cuts as soon as possible. I think the time would be better spent reassuring them about our plans for the public services and our plans for economic stability, both areas where the public think we are weak.

I don't think we can talk about tax cuts outside of the context of stability and public spending without presenting the Labour party the opportunity to paint us as the 'slash and burn' party, which I think people will readily believe despite it being entirely untrue.

[Frank Young]

I'm afraid I depart from the excellent James Helleyer here. Tax cuts are instinctively something a Conservative chancellor will offer. The challenge now is to convince the public that we are the party of economic stability. The economy is safe in our hands. Naturally we will cut tax if we can afford it, but public services come first.

[tory guy]

"So do you think talking about tax cuts for the next four years will help us win the next general election?"

You can't just complain about taxes going up without having a strategy to reduce them. If you complain about them and don't have a strategy to reduce them you are the same as New Labour in opposition which, surprise, surprise, failed to cut taxes and indeed increased them in office.

Between 1975 and 1979, when the public had more faith in the government's ability to provide services, the Conservative Party criticized tax increases and announced they would cut taxes in government, explicitly spelling out that they intended to cut every rate of income tax. They had other policies, as they should have done on, but a commitment to lower tax was one of them. Thereupon began a 13 year period of political success, that saw the party score around 43% of the vote through four general elections and only came to an end when John Major decided to reverse policy, break his election promise and raise taxes. Here endeth the lesson.

[Chris Palmer]

Which is more important? The Conservatives gaining power at the next election and saying that they might not cut taxes (but then again, they might, depending on the state of the public finances.) Or, the Conservative party going down the same tried and tested route of saying that they will cut taxes, and therefore risk voters not trusting them with the economy and consequently not voting for them and the Conservatives not getting in to power. Definite tax cuts at the next election are a small sacrifice to make for being in power.

[James Burdett]

Massive specific tax cutting proposals are a dog that doesn't bark anymore. This was proved in 2 General elections and even more recently in the leadership election!! We need to show that as a party we have a fuller idea of how to run an economy, that we understand how to balance the competing needs of public services and private economic wellbeing. To borrow from a well known quote, Tax cuts aren't the answer they are part of our problem!!!!

[tory guy]

"Definite tax cuts at the next election are a small sacrifice to make for being in power."

Cameron's followers don't appear to believe that there is any need to argue their case. Who said ruling out tax cuts means the Tories will win the election? There is no evidence for this. There is, however, evidence for the contrary proposition.

[Michael McGowan]

I think that even the Oberon Houstons and Mark Fulfords of this world would be hard -pressed to describe Martin Wolff of the FT as a diehard rightwinger so it is worth taking note of what he wrote the other day:

There are a number of "decisions that will confront the next Government. How is a competitive and dynamic economy to be sustained? How is public spending to be controlled? How are public services to be improved? In the absence of a tough philosophy of individual responsibility, choice and competition, the drift towards a high spending, high regulation state will continue. Yes, Mr Cameron may well never get the chance to govern if his party is disliked. But he cannot govern effectively if he is consumed by the desire to be liked alone. Sticking to the centre is to define one's position by those of everybody else. Great politicians shift the centre ground. Baroness Thatcher did that. Given the challenges the UK confronts, Mr Cameron must be able to do that as well. Can he do so? Not by embracing every fashionable notion, however confused....."

Not much one can add to that really.

[libertorian]

Massive specific tax cutting proposals are a dog that doesn't bark anymore. This was proved in 2 General elections

The last two elections!? I must have missed those major policy announcements then.

[Sean Fear]

"I think most people already believe we'll deliver tax cuts as soon as possible.

Polling evidence suggests that most people didn't believe this at the time of the last election.

"Tax cuts aren't the answer"

If by that you mean, they're not the whole of the answer I agree. They are an essential part of the answer though.

I think that my very first point about MPs belieivng that what we earn is really the State's needs expanding on - it's a view shared by some Conservatives who post here.

[Frank Young]

Go on then Sean, I suspect I may be one of those you're referring to.

[malcolm]

I am interested to know Tory Guy where your evidence is that promising Tax cuts is likely to prove popular with the electorate?
Unless my memory betrays me we didn't propose this in the 1979 manifesto.
Also who has 'ruled out' tax cuts? Nobody within the Conservative party as far as I'm aware.

[James Hellyer]

I must have missed those major policy announcements then.

Those well known tax cutters Michael Portillo and Oliver Letwin rolled out a few weeks before the election and enthusiastically offered their wares. How could you have missed it?

[James Burdett]

" They are an essential part of the answer though"

Not necessarily or at least not in all circumstances...

Now I seem to remember a certain lady making some rather perceptive comments about people who believe the solution is the same regardless of the problem. We need to deal with the world as is not as was!

[Sean Fear]

I can remember writhing as Letwin went to ground as soon as he was criticised.

Frank, Margaret Thatcher did indeed promise to reduce income tax in the 1979 manifesto. Much more importantly, the Conservative Party had put the case for tax reductions from 1975 to 1979.

[James Hellyer]

Unless my memory betrays me we didn't propose this in the 1979 manifesto.

Your memory betrays you.

Also who has 'ruled out' tax cuts?

Anyone who uses the "sharing the proceeds of growth" formulation. All that promises is to grow public spending at a lower rate than trend economic growth.

[James Hellyer]

We need to deal with the world as is not as was!

We are dealing with the world "how it is". It's a world where we've lost our competitive advantage against the eurozone. By contrast, you're acting as if we still have that advantage...

[malcolm]

The link doesn't work James.We can still reduce the rate of taxation if the economy grows.We do have to reestablish a reputation for economic competence first.

[James Hellyer]

Try this.

We can still reduce the rate of taxation if the economy grows.

What if it doesn't grow? Or growth is low? What if you want - and need - to offer more meaningful cuts?

We do have to reestablish a reputation for economic competence first.

And how does surrendering arguments to Gordon Brown achieve this?

[tory guy]

This: "Unless my memory betrays me we didn't propose this in the 1979 manifesto." happens time and time and time again on this blog. I accept that in Malcolm's case it is a question of memory but frankly for others who pst here it seems to be more of an unchecked assertion to sure up their faith in Cameron and/or confuse the issue.

For the record the Conservative Party's 1979 manifesto on tax:

"CUTTING INCOME TAX

We shall cut income tax at all levels to reward hard work, responsibility and success; tackle the poverty trap; encourage saving and the wider ownership of property; simplify taxes - like VAT; and reduce tax bureaucracy.

It is especially important to cut the absurdly high marginal rates of tax both at the bottom and top of the income scale. It must pay a man or woman significantly more to be in, rather than out of; work. Raising tax thresholds will let the low-paid out of the tax net altogether, and unemployment and short-term sickness benefit must be brought into the computation of annual income.

The top rate of income tax should be cut to the European average and the higher tax bands widened. To encourage saving we will reduce the burden of the investment income surcharge. This will greatly help those pensioners who pay this additional tax on the income from their life-time savings, and who suffer so badly by comparison with members of occupational or inflation-proofed pension schemes.

Growing North Sea oil revenues and reductions in Labour s public spending plans Will not be enough to pay for the income tax cuts the country needs. We must therefore be prepared to switch to some extent from taxes on earnings to taxes on spending. Value Added Tax does not apply, and will not be extended, to necessities like food, fuel, housing and transport. Moreover the levels of State pensions and other benefits take price rises into account.

Labour's extravagance and incompetence have once again imposed a heavy burden on ratepayers this year. But cutting income tax must take priority for the time being over abolition of the domestic rating system."

As for ruling out tax cuts, what I meant to say which is pertinent to this argument, is that tax cuts will not form part of the next Conservative Party manifesto. The modernisers campaigned hard against any such promise in 2005. They can hardly be expected to be less successful under Cameron when the next election comes along.

[tory guy]

shore up their faith, even...

[Sam Coates]

Nick Robinson wrote on this subject today

[Chris Palmer]

“Cameron's followers don't appear to believe that there is any need to argue their case. Who said ruling out tax cuts means the Tories will win the election? There is no evidence for this. There is, however, evidence for the contrary proposition.” – Tory Guy

Where is your evidence to suggest that giving voters the definite option of tax cuts will mean that the Conservatives will win the election? David Cameron and George Osborne have not ruled out cuts.

“Also who has 'ruled out' tax cuts? Nobody within the Conservative party as far as I'm aware.” – Malcolm

That’s right, they haven’t Malcolm. David Cameron and George Osborne have not ruled out cuts, though some posters seem to be having a fit because tax cuts have become a “depends” rather than a “definite.”

[Rob G]

Also who has 'ruled out' tax cuts?

Anyone who uses the "sharing the proceeds of growth" formulation.
Surely not. Using part of the growth in GDP to reduce tax means that tax goes down as a proportion of GDP - which is what we want.

I agree with those who say that now is not the time to promote tax cuts as an end in themselves. But I am still not persuaded that we should accept the notion that public expenditure has to go on growing, albeit less slowly than GDP. I think it must be worth trying to persuade people that there is a real difference between public expenditure and public services, and that we can reduce the former without damaging the latter. All we need are some clear examples of public waste that could be eliminated.

[William Norton]

Speaking from personal experience and pain: people may not jump for joy about a promise of tax cuts, but perhaps a promise to reduce the number of people who have to fill in these blasted self assessment forms would be a sure-fire winner? That would also be a sueful entry into the simplification argument.

[James Burdett]

"We are dealing with the world "how it is". It's a world where we've lost our competitive advantage against the eurozone. By contrast, you're acting as if we still have that advantage."

Not at all, most people who are likely to vote are not as worried about our competitive advantage with the Eurozone as they are about whether their child is going to have to compete for a place in a decent school. So tax reductions come lower down their list of priorities than say public service investment and improvement.

[malcolm]

OK James your memory of the 1979 election is superior to mine!I stand corrected.In my defence I also note that we promised to simplify VAT.We did, we increased it ....massively!
In answer to your other point.If we go into an election at a time of recession do you seriously think that a tax cutting message will be believed by anyone outside our 'hardcore' support?
I really do not see that we are 'surrendering' to Gordon Brown on anything.It is part of George Osborne 's task to destroy the image of Gordon Brown as a competent chancellor.It is still quite early days yet but I would suggest that the signs are good.This has been beyond the capabilities of any Tory financial spokesman since 1997.Perhaps that is a testament to the skill of the Tory spokesman but it is nevetheless a fact.
Tory Guy I am very interested to know which modernisers 'campaigned hard' against any promise to cut taxes in 2005 and when?

[RobD]

It is only right that we should appear cautious on this matter at this stage. We can not afford to be seen as the party who will cut public services. We know we can improve health and education without spending more but do the general public believe us?

[tory guy]

"Where is your evidence to suggest that giving voters the definite option of tax cuts will mean that the Conservatives will win the election?"

1970, 1979, 1983, 1987 and 1992

(Not forgeting, of course, what a record of tax increases and having no credibiliy on the subject yielded in 1997, 2001 and 2005)

"David Cameron and George Osborne have not ruled out cuts."

They and their allies, like Oliver Letwin, campaigned vigorously against the tiny tax cuts that were included in the 2005 manifesto at the eleventh hour (and then promptly ignored by the party and said Shadow Chancellor for the duration of the campaign). If you believe that the modernisers will be less successful in excluding any commitment to tax cuts in the next manifesto while David Cameron is leader I think you are being somewhat naive.

[Mark Fulford]

"and only came to an end when John Major decided to reverse policy, break his election promise and raise taxes. Here endeth the lesson."

It came to an end due to sleaze and in-fighting, not taxation.

"I think that even the Oberon Houstons and Mark Fulfords of this world would be hard -pressed to describe Martin Wolff of the FT as a diehard rightwinger"

Michael M, from the article you quote I disagree with Martin Wolff's suggestions 1) that David Cameron doesn't believe in individual responsibility and 2) that he is defining his position by those of everybody else.

David Cameron is a very clever communicator. Instead of talking directly about tax cuts – a conversation that repeatedly gets misrepresented as cutting services - he's talking about providing better, cheaper services. It is much harder for the opposition to attack that line, even though the result is the same tax cuts.

In any event, talking about savings before tax cuts is getting things in the right order. We can’t advocate borrowing to fund tax cuts because that will be portrayed as risky imprudence.

To anyone who cares about tax cuts, it's pretty obvious that o

[Sean Fear]

James, if our economy is unable to grow at a respectable rate, due in part to a high tax burden, where do you think the money will come from to pay for public services?

[Mark Fulford]

That last line was not supposed to be there. It was a cancelled thought, along the lines... to anyone who cares about tax cuts, it's pretty obvious that our policies will deliver them.

[libertorian]

Also

1983 Manifesto-

Further improvements in allowances and lower rates of income tax remain a high priority

This means lowering taxes on capital and savings

1987 Manifesto-

# We aim to reduce the burden of taxation.
# In particular, we will cut income tax still further and reduce the basic rate to 25p in the £ as soon as we prudently can.
# We will continue the process of tax reform.

1992 Manifesto-

To continue to reduce taxes as fast as we prudently can

Interesting.

[James Hellyer]

Not at all

So they want to lose their jobs as companies relocate overseas or lose their market shares?

Get in touch with the world "how it is", please.

[James Hellyer]

he's talking about providing better, cheaper services

Apart from when he and Oliver Letwin commit to a "huge expansion" in public spending for those services, obviously.

[92 manifesto]

"We will make further progress towards a basic Income Tax rate of 20p."

[Chris Palmer]

"1970, 1979, 1983, 1987 and 1992

(Not forgetting, of course, what a record of tax increases and having no credibility on the subject yielded in 1997, 2001 and 2005)" - Tory Guy

So now you're saying that it was a question of credibility rather than tax cuts themselves? William Hague in 2001 said he’d increase taxes did he?

David Cameron is trying to construct an image for the Conservative party which gives us a chance of winning at the next election. What are you trying to do?

[Sean Fear]

"What are you trying to do?"

Advocating the sort of policies that turned round our country's relative economic decline from 1979 till recently. What are you advocating?

[libertorian]

Advocating the sort of policies that turned round our country's relative economic decline from 1979 till recently. What are you advocating?

More New Labour it seems.

[Victoria Street]

My good friend IDS correctly spotted that a leader is defined by his first 100 days in office. What he didn't say, but I will, is that the leader has to decide what audience he wants to be defined by: you lot on CHome or the 45% of the electorate required to deliver a majority in the House of Commons.
The Boy David has, in my opinion, come to the correct conclusion that his first 100 days is best spent speaking to the uncommitted and the don't knows than to those of us on here for whom the number of angels who can stand on the head of a pin is a serious questoion.
This is politics.

[libertorian]

What he didn't say, but I will, is that the leader has to decide what audience he wants to be defined by: you lot on CHome or the 45% of the electorate required to deliver a majority in the House of Commons

There's nothing wrong with that. The problem is he has already begun to paint himself into corners over future policy. And the wrong corners at that.

[tory guy]

"David Cameron is trying to construct an image for the Conservative party which gives us a chance of winning at the next election."

Good luck. Let me know when he comes up with something real eg concrete plans to tax less and improve the appaling public services in this country. Tax and spend hasn't worked. It's time to try something other than reheated New Labour.

Thatcher regained credibility on tax lost for the Tories under Heath by being unambigously in favour of tax cuts from her election as leader to polling day May 1979 (and then delivering in government).

William Hague, unfortunately, perhaps partly thanks to Michael Portillo (whose views on these subjects are now more widely known) did not do this. Sometimes we had no policy on tax. Sometimes we had tax cut policies. Sometimes we dumped our tax cut policies (remember the tax guarantee). Never once were we convincing. Hardly surprising then that as we continued down this confused and muddled path that by 2005 only 3% of voters thought we would actually cut taxes. How's that for destroyed political credibility?

William should have apologized on behalf of the party for the tax rises which cost us every bit as much at the subsequent general election in 1997 as the ERM fiasco which he did apologise for (and for which he was not himself responsible either).

[Mark Fulford]

"Apart from when he and Oliver Letwin commit to a "huge expansion" in public spending for those services, obviously."

It's funny, when I search google for "letwin huge expansion", the only matches I get are attributed to James Hellyer.

[Chris Palmer]

"Advocating the sort of policies that turned round our country's relative economic decline from 1979 till recently. What are you advocating?" - Sean Fear

Till recently being 1992? Yes? The economy is a fragile thing. Decrease taxes at the wrong time and you increase consumer spending massively, causing inflation to rise - and so the cycle starts again (possibly.)

What am I doing? I am advocating caution, rather than full-steam ahead.

[James Hellyer]

It's funny, when I search google for "letwin huge expansion", the only matches I get are attributed to James Hellyer.

On last week's "Newsnight" special, Oliver Letwin pledged "a huge expansion in spending" on the NHS.

But I can see you aren't concerned with facts, especially when cheap shots are in plentiful supply.

[malcolm]

David Cameron,George Osborne....and Oliver Letwin campaigned vigorously against the tiny tax cuts...in the 2005 manifesto.Do you know something the rest of us don't Tory Guy?
Why did Michael Howard,Liam Fox,David Davis etc surrender to these 'modernisers'?

[tory guy]

"Till recently being 1992? Yes? The economy is a fragile thing. Decrease taxes at the wrong time and you increase consumer spending massively, causing inflation to rise - and so the cycle starts again (possibly.)"—Yet another hoary old myth.

This is exactly what I was talking about earlier. The people who disingenuously claim that being cautious on tax now is somehow what Thatcher did (wrong) or a recipe for being bold later (wrong) are also--what an amazing coincidence--those who are not really interested in tax cuts at all.

For those party members/bloggers here who are interested in tax cuts, I would advise taking everything the Cameroons and their followers say with a very big sack of salt.

[Esbonio]

Tory Guy

You are right to point the damage John Major's stealth taxes caused along with the ERM debacle. I remember writing around 1990/91 to the then Chancellor of the Exchequer (I think it was to Major)complaining about the rise in VAT and how inappropriate it was to raise a regressive tax just as the economy was heading for stormy waters. I got no reply so wrote again and finally got a reply from some civil servant economist informing me that raisng indiredct taxes accorded with government policy of encouraging saving and investment and noting that there was no sign of the economy being in trouble. The rest as they say.....

[Chad]

Should we not be arguing that high taxation is a symptom of nanny state centralisation as the state controls more and therefore needs taxes to run?

This way we can show that one natural result of moving away from a nanny state government is lower taxation.

We can then wrap validly frame two areas of valid criticism of this government, and show that we are not promising to cut taxes, but that lower taxes come as an additional benefit of freeing the individual from an over-controlling state.

This would also address two of Murdoch's main criticisms of the government in one move.

The more we frame high taxation as a natural symptom of a nanny state, the more people will link lowering of taxation as a lowering of state control.

[James Hellyer]

Why did Michael Howard,Liam Fox,David Davis etc surrender to these 'modernisers'?

Michael Howard accepted the modernisers' credo that the party should lose its tax cutting profile. And his word was final.

As for the others, it was outside their briefs and by the time it was abandoned they were fighting the election.

[tory guy]

"Why did Michael Howard,Liam Fox,David Davis etc surrender to these 'modernisers'?"

The inverted commas suggest you don't believe in modernisers--a bit of a stretch at this point, don't you think?

Michael Howard, whatever his past politics, has fully signed up to the modernisers' analysis. Why else do you think he tried to rig the leadership election for David Cameron?

[James Hellyer]

Why else do you think he tried to rig the leadership election for David Cameron?

Because he hates David Davis and Dave's a nice guy?

... actually your answer is better.

[Sean Fear]

"The people who disingenuously claim that being cautious on tax now is somehow what Thatcher did (wrong) or a recipe for being bold later (wrong) are also--what an amazing coincidence--those who are not really interested in tax cuts at all. "

In much the same way that advocates of European politicial integration will always tell you that the next leap forward is merely a "tidying up exercise."

[Mark Fulford]

"On last week's "Newsnight" special, Oliver Letwin pledged "a huge expansion in spending" on the NHS."

I watched the program but didn't hear that.

Assuming they are his words, our health budget does have to continue rising, as does our education budget. Some departments need hugely more money, other departments can do with hugely less, and some should be scrapped altogether. We should aim for smaller government and better funded key services.

[tory guy]

This discussion is lacking some basic facts and realism. Look at how Cameron's people, on the party's payroll, make stuff up and pass it along to a distnguished journalist like Nick Robinson.

They have fed him a totally untrue line about what the 1979 manifesto said about tax cuts today. It reminds me of the time when they told him, and he broadcast, that Liam Fox was going to be well taken care of in the (post leadership election) reshuffle. That also turned out to be untrue just hours later.

They really operate as more of a faction than part of our party.

[Chris Palmer]

"On last week's "Newsnight" special, Oliver Letwin pledged "a huge expansion in spending" on the NHS." - James Hellyer

No, that's not what he said, and we discussed that at the time. Others should go back and read the thread.

"Yet another hoary old myth." - Tory Guy

No, theory.

"The people who disingenuously claim that being cautious on tax now is somehow what Thatcher did (wrong) or a recipe for being bold later (wrong) are also--what an amazing coincidence--those who are not really interested in tax cuts at all." - Tory Guy

I'm not sure what you're talking about when you mention others saying "Thatcher was cautious with taxes (wrong)"? Blathering as usual?

"a recipe for being bold later (wrong)" Ah, wrong says who? You? I would say that you are wrong - and then where are we at?

You (and others) seem to have the attitude: Blinkers on. Engine room full power. Unfortunately for you, the political road is never straight, and David Cameron's methods account for the twists and turns that we may encounter.

[malcolm]

I put the word modernisers in inverted commas only to signify that I was quoting from you,no other reason Tory Guy.

[tory guy]

"David Cameron's methods account for the twists and turns that we may encounter."

What he is doing is totally different from the approach we took when last in opposition, not just different on details but totally different in substance as well as style. If you want to argue for it, fine, I don't agree with you but that's fine. But don't pretend he is just doing what Thatcher did. In the end respectable people like Nick Robinson who kae their living out of quality and accurate information are going to stop listening to the Cameron spin machine if they are continually, and transparently, misled.

[James Hellyer]

No, that's not what he said, and we discussed that at the time. Others should go back and read the thread.

Chris, I rewatched it and was proven right.
Oliver Letwin promised a "huge expansion" in public spending.

The fact that you didn't hear this and cut lose with the snide rather than check your facts does you little credit.

[James Hellyer]

our health budget does have to continue rising, as does our education budget.

How consistent. So first you try and deny Letwin pledged to increase spending, by claiming I made it up, while now you claim that increase in spending is essential, which debunks your own "cheaper" services claim.

['87 manifesto]

The 1987 manifesto:

"In every case where taxes have been reformed and reduced there has been an increase in the amount of tax collected.

Labour totally fail to understand the benefits this brings to everyone. Today they openly threaten to raise taxation. To fulfil their plans, they would have to raise taxes substantially. Indeed, all the Opposition parties Labour, Liberals and SDP - would raise taxation. We believe that it is precisely the wrong thing to do.

It will be our aim to do the opposite.

In the next Parliament:

We aim to reduce the burden of taxation.
In particular, we will cut income tax still further and reduce the basic rate to 25p in the £ as soon as we prudently can.
We will continue the process of tax reform."

[johnC]

Thank you 87 manifesto for reminding me nostalgically of a time when the Conservative party had a leader of vision and courage who did not shrink from stating the unpopular but necessary truth. How very different from the home life of our own dear leader.