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On the 87 manifesto, substitute Labour for Cameron's Conservatives and it all makes sense.

"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."

1. I don't think that Letwin promised a "huge expansion". I'd be interested to know how many people here, apart from you, think that's what he said.

2. Some departments will become more expensive and it's simplistic to think otherwise. Overall we can provide cheaper services. There's nothing inconsistent about that.

"But don't pretend he is just doing what Thatcher did." - Tory Guy

Sorry, when did I say that? Or make out that was the case?

"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" - James Hellyer

I never denied that Letwin had pledged to increase spending. Perhaps someone (not you or I) should go and find what Letwin actually said to clear this up. Myself and others don't remember Letwin using the words "huge expansion" - you seem to be the only one. Strange?

Sorry, again, where have I said that increasing spending is essential? I said that cutting taxes at the wrong time wasn’t a good idea – which is a completely different point.

In every case where taxes have been reformed and reduced there has been an increase in the amount of tax collected
So you want an increase in the amount of tax collected? Isn't that exactly what you get with the "sharing the proceeds of growth" formula.

I am in awe of the sheer pointlessness of this lengthy online debate.

I don't think that Letwin promised a "huge expansion". I'd be interested to know how many people here, apart from you, think that's what he said.
I don't recall Letwin saying "huge" but I do recall him saying that expenditure on the NHS and education would continue to rise. I can't remember whether he said anything about public expenditure as a whole. Sadly, I can't find the video on the Newsnight pages.

"In every case where taxes have been reformed and reduced there has been an increase in the amount of tax collected
So you want an increase in the amount of tax collected? Isn't that exactly what you get with the "sharing the proceeds of growth" formula."

No, it is an argument against the pointlessly timid "sharing the proceeds of growth" argument. We want--the country needs--lower taxes. They are now set to rise higher than Germany's for the first time in a generation, by the way.

It doesn't lose revenue to cut taxes so there is no downside. That means that the Conservative Party should stop pandering to establishment/media/Labour/LibDem opinion on the subject.

Mark Fulford:

1. I don't think that Letwin promised a "huge expansion". I'd be interested to know how many people here, apart from you, think that's what he said.

Chris Palmer:

Myself and others don't remember Letwin using the words "huge expansion" - you seem to be the only one. Strange?

I checked back while the programme was available online last week. I note that none of the people who insist Letwin didn't say that did likewis.

Rather than repeatedly accuse me of lying - because that's what they are doing - they should apologise and withdraw their accusations. I cannot be held responsible for their viewing skills, powers of recall, and lack of research.

And Chris:

Sorry, again, where have I said that increasing spending is essential?

I didn't say you did say that. Mark, however, did.

Sorry for the delay - got distracted trying to find box 15A.5 on my ruddy form.

Thatcher on tax cuts:
Yes, the Iron Lady made it very clear right from her first speech as leader that she planned to cut taxes. However, she never put a specific figure on it and as the quote above from the manifesto indicates she was always vague on detail. BUT she had spent 4yrs making the case for lower taxes as part of a general theme that Britain was going down the toilet and needed urgent surgery.

It's unclear whether DC is planning an updated version of that approach. The Osborne speech can be taken either way.

Portillo on tax cuts:
As Shadow Chancellor he advocated £8 billion cuts funded by the scrapping of the tax credits system. Frankly, he might as well as promised everyone a free lollipop and a house on the moon. The proposals were better than generally regarded - not difficult - being basedon an early version of the growth rule, but the specifics were a bit of a rag-bag and didn't really hang together (mangled in shadow cabinet). Portillo has become more of an anti-tax-cutter since he became a TV celebrity.

Letwin on tax cuts:
Letwin had a rough time over the 2001 proposals, and the James Review was really part of a wider attempt to shew how the growth rule would work in practise through a reconstruction of the machinery of government. The 2005 proposals (repay £8 billion debt; tax cuts of £4 billion) were deliberately less ambitious (James Hellyer might have another word for it). What the experience proves is that 12 mths before an election is not enough time to win this argument (particularly when the overall strategy is zig-zagging around). Still, at least we bounced G Brown into his own Gershon Review - so at least he thinks Labour were potentially vulnerable on that flank.

I don't buy the theory that OL's heart wasn't in the 2005 proposals, but it's quite possible he thinks that we've tried that and it doesn't work. Perhaps someone should ask him.

where next?
The argument that the voters have conclusively rejected tax cuts is not proven. What was rejected conclusively was the Conservative Party, and I don't think things got as far as the manifestoes.

I can live with four years of speeches saying that tax cuts are necessary as soon as prudently possible. Provided that there is actually going to be a four year campaign making the case for lower taxation we don't need specifics on tax. The growth rule is in practice the only real way we can get a grip on public expenditure in the medium term: it's like a supertanker; they need about 20 miles to change course.

Where we will need specifics is how we propose to turn round the supertanker. Perhaps that will be the role of the Redwood policy group? Britain in 2010 will not - thank God, I hope - be in quite the same mess as Britain in 1979: which means making the case now.

2. Some departments will become more expensive and it's simplistic to think otherwise. Overall we can provide cheaper services. There's nothing inconsistent about that.

Except like Letwin you keep referring to health and education as if they are a one homogenous lump. That's fundamentally different from saying "spend more on schools", for example.

An expansion in health or education spending is a total increase, and not a nil net gain or a reduction!

And on the subject of Newsnight:

Sadly, I can't find the video on the Newsnight pages.

They take each programme down when the next one airs.


'It doesn't lose revenue so there is no downside'-Tory Guy on tax cuts.If that were true wouldn't every single economist in every country in the world be advocating them?

It's like being on a time warp on here sometimes. if we want to the country with a replica of the 87 manifesto, we would be slaughted again. The conservative brand is tainted and it's only when we've won back the public trust, that we can start to argue our position again. Until then, we must go with what the British people trust in the main. We were only able to run with the manifesto in 87 because the Labour party were a shambles.

Consumer spending won't cause inflation unless the ratio of paper money to real wealth changes. Inflation only happens when supply can't match demand.

Since cutting tax increases real wealth, it's far more likely to cause DEflation.


I think that that is very well put, William.

It doesn't lose revenue to cut taxes
But we need to lose revenue because the overall burden is unsustainable.

Very good and persuasive post William.

James Hellyer might have another word for it

Timid? Cowardly? Pathetic?

Three for the price of one ;-)

I don't buy the theory that OL's heart wasn't in the 2005 proposals, but it's quite possible he thinks that we've tried that and it doesn't work.

He has said in interviews since then that tax cuts are a loser at election time.

Personally I think the way it was handled in 2005 meant the proposals had no credibility. The cuts offered weren't real cuts that people could appreciate, but rather things like tinkering with stamp duty limits that wouldn't obviously benefit the majority or the stimulate the economy.

Unveiling the details of the "cuts" themselves late on also meant they were lost in the campaign mele. It's as much about how they were handled as the proposals themseleves.

So detailed proposals are needed needed earlier than a few weeks before an election. Otherwise I agree that you only need to argue the principle and direction now. The indication seems to be that we won't even do that.

They take each programme down when the next one airs
Actually there are lots of back editions of Newsnight still on the BBC website. Sadly the one we are interested in wasn't one of them. (If I believed in conspiracy theories - whcih generally I don't - I would conclude that the BBC had lost interest because it hadn't produced the punch up that they wanted).

"It's like being on a time warp on here sometimes."

Arguing with Cameron's supporters is like Groundhog Day. They make a false claim about what the Tories said in the past, one goes back and refutes it, and then the person refuting it is stuck in a time warp.

"if we want to the country with a replica of the 87 manifesto, we would be slaughted again."

No one is advocating that, so you are answering a point that no one has made. The point is having plans to cut taxes, along with other sensible policies that address the country's problems is not a vote loser.

"The conservative brand is tainted"

Because, among other things, we lied about tax and raised tax. Getting our brand back means apologizing and offering credible reasons why it won't happen again. Cameron's vagueness does the opposite....

"and it's only when we've won back the public trust, that we can start to argue our position again."

...meaning that this is exactly the wrong way around.

"We were only able to run with the manifesto in 87 because the Labour party were a shambles."

We were able to do so because we had already won, twice, on a tax cutting platform (that also included other sensible, workable ideas).

---

"If that were true wouldn't every single economist in every country in the world be advocating them?"

No but just because the majority of them disagree doesn't mean they are right. Just ask the 364 economists who wrote to The Times complaining about Thatcher. On second thoughts don't bother, they probably still believe they weren't wrong. We don't need the current deference to establishment opinion.

The 1980s tax cuts produced more revenue. That is a fact. There is no downside to tax cuts and therefore no reason for fashionably wrong opinion on the subject to be appeased by Cameron in the manner that the Conservative Party fashionably went along with the mistaken conventional wisdom for a generation before Thatcher.

"Rather than repeatedly accuse me of lying - because that's what they are doing - they should apologise and withdraw their accusations."

James, I am endeavouring to get a copy of the program. If Oliver Letwin promised huge expansion, I will apologise profusely and publicly.

"An expansion in health or education spending is a total increase, and not a nil net gain or a reduction!"

Yes. But government can still spend less and deliver tax cuts by making greater savings in other departments. In my government, the 3,000 strong department that distributes farm payments would go. As would the ODPM and the DTI.

Furthermore, just because NHS spending should increase, that doesn't mean that we don't tackle waste in the NHS - for example overspend on drugs.

"James, I am endeavouring to get a copy of the program. If Oliver Letwin promised huge expansion, I will apologise profusely and publicly"

...and then defend him anyway.

Cameron's people are very lucky to have so many party members willing to follow them wherever they go.

But government can still spend less and deliver tax cuts by making greater savings in other departments.

As health, eduction and social secrity account for 55% of spending, without tackling spening there, it's hard to see how meaningful overall reductions can be made.

In my government, the 3,000 strong department that distributes farm payments would go. As would the ODPM and the DTI.

Add the Scottish Office, the Welsh Office, the Northern Ireland Office (they all have assemblies - why do they need ministries?), the DfES (except ofSTED), and most of our senior defence staff.

James/Mark
I had another go on the Newsnight website and found the right video. Letwin said that we are committed to a "huge expansion of spending on the health service".

Thank you, Rob. That's exactly the line I was thinking of.

Tory Guy, I know what you are saying is true and tax cuts do generate growth. What I'm trying to say is the great unwashed have swallowed the line - tax cuts=bad public services. We are an untrusted brand who won't be believed by the public if we try and make the tax argument at this point. We've done it at 3 elections and failed after all. It's all very well being idealogically pure, but we won't win an election.

"huge expansion of spending on the health service".

Presumably that will pay for about as many tax cuts as we have seen since 1997.

If there is no downside Tory guy you still haven't answered why everybody but everybody would not advocate them.
Isn't it more true to say that tax cuts will only provide more revenue in a rapidly growing economy?
Mrs T successors had to raise taxes sharply when it slowed.

Woody, you may be wasting your breath. You and I treat this as the politics of winning elections in a democracy; many of the 'purer' Conservatives on this site think it's a question of winning a debate in the Students Union.


Andrew I think it's been pretty well demonstrated that we weren't offering tax reductions in 2005, and such reductions as we offered in 2001 were put forward by people who didn't believe in them (and who promised to push up public spending in any case).


No, Victoria Street, it's just that some of us think there's more to politics than just toiling to provide people like you with the fruits of office.

If there is no downside Tory guy you still haven't answered why everybody but everybody would not advocate them.

The left believes in redistribution of wealth in he interests of equality, and others accept the Treasury line that tax payers' money belongs to it.

But, Sean, convincing me is not what this is about. Convincing the public is what this is about.
And by the way, there are no fruits of office if you don't win office; for me, for you, for anyone.

Convincing the public is what this is about.

Victoria, how do you plan on convincing people when you never dare advance your own viewpoint? Please explain.

I get so frustrated with the people here who continuely try to rewrite the past to suit their own ends. Like the idea that we ran on a "tax-cutting agenda" at the last 2 elections and lost. Or that we were "extreme right-wing" and that that failed so we need to do something new. Or the frankly ludicrous idea that the public has rejected vouchers for education when most people know nothing whatever about the policy. I could give more examples. But the point is that that the self-styled "modernisers" are always extremely tendentious whenever they try to present their case.

The truth is that these "modernisers" are (ironically) totally behind the times. They have no foresight about what this country needs in the future, and constantly refer to what they thought the public wanted back in 1997. This is because the doctrine is 8 years old, so it is bound to have dated by now.

If, in 1997, they argued that the public were sentimentally attached to the NHS and wouldn't abide major overhaul they might have a point. But that is because the public didn't yet realise that a huge increase in spending would fail to offer improvements.

The public is ready to move on and is prepared for change. The modernisers are behind the times.

If, in 1997, the modernisers said that a "tax-cutting" agenda wouldn't have worked, again, they might be right. But that was because we had a prosperous, growing economy and "public services" were failing. People (mistakenly) thought that taxes were -- relatively -- low and that that was why the public services were failing. They were sold on the idea that the problems were due to underinvestment, so they figured, "I am willing to sacrifice a bit more of my money for the sake of better healthcare".

But they are starting to realise just how their money is being wasted, and they are feeling the pinch of taxes alot more than they did in 1997. They are less convinced that taxes are better spent by the government than themselves. Once again, the modernisers are behind the times. They are thinking of the situation in 1997 not 2005 (much less 2009).

Cameron could easily sell tax-cuts because he doesn't look like he wants to kill your first-born. Stephen Harper just won the election in Canada with a smaller government message (and this is a country far more left-wing and welfare dependent than we are), despite frantic attacks from the Liberal Party trying to portray him as a scary right-winger ala George Bush. Part of the reason this failed is that Stephen Harper looks and sounds normal and moderate and so the Liberals are the ones who ended up looking unhinged.

Harper's bravery, common sense and honesty worked.

I daresay that Michael Howard could have offered much less than Harper, but appear more extreme. He always looked desperate and opportunist. The reason for this is he was just saying what he thought the public wanted to hear. Cameron could end up going the same way.

The truth is that this country badly needs to cut back the size of government, introduce radical reform of welfare, education and health (and not just tinker with them), and to cut the overall tax burden. These things aren't optional things that we can adopt or dump depending on whether our leaders think the public will like them. The situation of this country *demands* it. If we don't do those things we will all end up like Scotland, or even Russia.

Cameron is a good communicator, he could easily sell this relatively simple agenda. If he did this we wouldn't all be bickering about what he stands for, we would *know* what the Conservatives stood for -- and it would be suitably different from the Labour Party. Our opponents wouldn't be able to demonise this message because Cameron comes across a moderate and normal. Just as in Canada, it is our opponents desperate demonization attempts that would look unhinged (just as our demonization of Blair in 1997 backfired). The message is simple enough and true enough to sell itself. You'd be surprised how unfamiliar the public are with our age-old Tory values.

Unfortunately, rather than selling this inspiring message that would genuinely offer to change Britain for the better, we are offering instead "no change" and "more of the same" because we think the public are too scared of anything else.

This cowardice will get what it deserves: defeat.

Very sad.

Our party is wasting an opportunity to change Britain for the better and all because we've been hijacked by this dated and moronic "modernising" agenda which takes absolutely no notice whatsoever of what Britain needs *now* (so how ironic is it that they call themselves "modern"?), is entirely rooted in past perceptions of what the public wanted 8 years ago, and was devised by people who have no love for conservative values (Portillo, Maude et al).


Victoria Street you're absolutely right. We need to instinctively ask when considering our discussion - how does this appeal to the non-aligned voter, rather than does it appeal to my confirmed toryism

At the last election most voters did not believe that Conservatives would DELIVER tax cuts - a lack of trust issue.

In order to win an election an opposition party must appear as a credible party of Government. That means having credible positions on ALL issues.

The priority therefore is to establish a basis on the issues we lack credibility on. for instance the environment, global poverty, social justice, financial responsibility, transport, social security etc.

NOT tax cuts, immigration or crime.

This is good politics.

Letwin said that we are committed to a "huge expansion of spending on the health service".

James, so long as you accept that Letwin was talking about a specific department, rather than spending in general, I profusely apologise.

Frank

Totally agree and why John H above is almost completely wrong.

My point, James, is that politics is a combination of history, ideas and pragmatism. DC appears to have decided that he needs to tackle the history/image of the party first, put ideas on the side burner via policy reviews and wrap it all in a comfy pragmatism that doesn't scare the horses.
I happen to agree with this order of priorities, because I believe our biggest handicap is the public's distrust of the party and its unwillingness to listen to what we have to say.
By setting out to gain their trust that our objectives match theirs, DC hopes that they will eventually be willing to listen to what we have to say about lower taxes, smaller government, social justice, etc.
When the policy reviews come back with prescriptions of lower tax, empowering the voluntary sector to deliver social justice, and other solid Conservative policies, he may receive a hearing that his predecessors did not, because they did not do similar groundwork.

We need to instinctively ask when considering our discussion - how does this appeal to the non-aligned voter, rather than does it appeal to my confirmed toryism

No, you need to know what the public thinks so that you are aware of what has to be done to persuade them to your views. Simply adopting policies on the grounds that you think they might appeal - especially if you think they're wrong - does all parties a disservice.

You will never persuade someone that your argument correct by vigourously agreeing with them.

My point, James, is that politics is a combination of history, ideas and pragmatism.

Then why didn't you say that?

By setting out to gain their trust that our objectives match theirs, DC hopes that they will eventually be willing to listen to what we have to say about lower taxes, smaller government, social justice, etc.

And this is where you are completely wrong: Cameron is not showing that he shares objectives with the electorate (what Sir Keith Joseph called the common ground), he's shackling himself to the mechanisms that are failing to meet those objectives.

You can demonstrate a commitment to first rate healthcare for all without ruling large scale NHS reform for ever.

You can demonstrate a commitment to improving education standards accross the board without committing yourself to the schools system that's done more than anything else to undermine standards.

That's enslaving your future policy agenda, not connecting it to people's aspirations.


"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.)"


There is a big difference between price rises being brought about by shifting demand (people spend more on consumer goods than capital goods) and genuine inflation i.e an increase in the money supply. Cutting taxes will not result in an overall increase in the price level. It will lead to higher prices in some areas and lower prices in others. Julian also made this point very well above.

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

We shouldn't want the amount of tax being collected to increase. We should aim to reduce the tax burden down to at most 35% of national revenue if we are to stand a chance of competing with our economic rivals.

I posted this link on another thread. Cameron ought to take notice of the table on page 24. The general rules is lower taxes = more growth:

http://www.reform.co.uk/filestore/pdf/negativeimpact.pdf

Lastly, does anyone know if Cameron plans to abolish all the non-jobs advertised in the Guardian Society section? Everyone knows about this waste but the Tories have yet to comment on it. It's not as if those who would lose their jobs vote Tory anyway.

For a party which has been out of power for ten years and fundamentally mistrusted on the economy since 1992 the first step has to be to gain permission to enter a dialogue with the public not ram policies down their throat. We have tried ramming things down the electorates throat since 1997 without trying to LISTEN to them and look where that's got us.

We have tried ramming things down the electorates throat since 1997 without trying to LISTEN to them and look where that's got us.

Actually we tried "listening to Britain". By the logic displayed by some here, we should abandon all such projects because that didn't work.

'Listening to Britain' was tried a very short time after we had been trounced in the 1997 election. The country just simply wasn't ready for any type of dialogue with the Conservative Party.

The country just simply wasn't ready for any type of dialogue with the Conservative Party.

We could say the same about tax cuts.

I'm glad you agree we should argue for them now.

The truth is that the majority of people who are saying we shouldn't argue for tax cuts because it isn't expedient don't actually believe in their necessity in the first place. They argue in terms of expediency because they don't wish to argue about the merits of their political persuasion.

"They argue in terms of expediency because they don't wish to argue about the merits of their political persuasion."

This seems a convenient way of dismissing the people you disagree with. I am happy to argue my corner all day long:

I support tax cuts through reduced spending and the emphasis in the dialog on reducing government intervention, rather than tax cuts.

With the economy as it is, I don't support borrowing to fund tax cuts.

Ah yes, then why argue in terms of expediency? Argue the merits of what you believe!


The Times is clear about what it believes:

"It may be true that tax cuts have been portrayed as a euphemism for greed in certain quarters, yet those quarters tend to be economically illiterate. It cannot, by contrast, be credible for the Conservatives to contend that: (1) high taxes are hurting the country; and (2) they do not intend to do much about the problem for fear of imperilling stability. Despite the party slogan, “stable” China is being transformed by growth rates of 9 per cent a year. Britain will not secure close to half that figure without becoming more dynamic."



The Tories are stuck between a rock and a hard place. If they argue for tax cuts they lose the election. If they don't argue for them and win they become unpopular as the economy continues to stagnate.

The message needs to be loudly broadcasted that lower taxes = higher growth. Not enough people know or believe it. We should use all the statistics at our disposal to prove it and be prepared to refute any objections (like the "Sweden works" (it actually doesn't)) example.) We just have to accept that the electorate are wrong on this issue. That doesn't make us arrogant, it just means we have to argue better to bring people round to our point of view.

We also need to refute the "Gordon Brown has been our most successful Chancellor" myth.

The message needs to be loudly broadcasted that lower taxes = higher growth. Not enough people know or believe it...We just have to accept that the electorate are wrong on this issue. That doesn't make us arrogant, it just means we have to argue better to bring people round to our point of view.

I quite agree that we have to argue the case for lower taxes. It's just that we can't do it from inside the Party.

For all the reasons others have given, the Party will do whatever it must to get re-elected. So it's only going to publically espouse radical tax cutting after the public have been won round to the idea. And it's outside organisations like the jolly old Taxpayers Alliance who are going to be doing that work.

It's just that we can't do it from inside the Party.

You mean "we won't. We can and should espouse such beliefs using the party platform.

The reason other people don't want the party to espouse a tax cutting agenda seems to boil down to the point that they do not believe one is required, because if they did they surely would not want to fail the country by not advocating it.

“Tax cutting agenda” is too broad a description for the range of measures we can take to reduce tax.

I think that all Tories would agree with measures to reduce tax by reducing demand for public services and by reducing waste.

However, being Tory doesn’t mean being heart-and-soul behind using government borrowing to fund tax cuts. Taxation is running too high and getting worse, but it’s not at the level where we need to employ risky emergency measures to reduce it. I haven’t been convinced that supply-side economics necessarily deliver adequate growth. I am convinced that increased government borrowing has unpredictable risks and, with the economy as it is, those risks are not justified.

"I haven’t been convinced that supply-side economics necessarily deliver adequate growth."

High savings help produce adequate growth. It is notable that Japan's high growth rate after WWII was due to its high savings rate. Suffice to say lower taxation allows for higher savings.

The funds for this growth could be channelled into industry via expanding private pension funds and private health insurance making up for the cuts in government spending.

I also ought to add that the OECD estimates that for every 1% of GDP taken by the government, worker productivity decreases by between 0.6% and 0.7%.

As for government borrowing, this is clearly a bad thing and should be brought to an end along with the national debt. We should try and repudate as much of it as we can without damaging ordinary bondholders.

Amongst the large EU nations we now have the highest tax take, and Cameron has no plans to reduce it. What a poor policy.

Stability means more of the same - a stable productivity growth rate (one of the poorest in the OECD), a stable GDP growth rate, a stable tax take.

Remember Brown's commitment to no more "boom and bust"? What the difference with Cameron? In fact, if you consider most of Cameron's policy indications thus far, can any one tell me whats the difference between him and the government?

"Amongst the large EU nations we now have the highest tax take, and Cameron has no plans to reduce it. What a poor policy."

It's pathetic. Countries much more wedded to the idea of high taxes than this one are bolder than the UK Conservative Party. What a come down from the party that showed Europe how to do it.

Too true, we are in danger of Peel and Thatcher becoming bookends of the greatness of the Conservative Party. Why Cameron doesnt have the confidence in himself to stand up and lead the nation in a new direction is beyond me.

To gain the trust of the nation we must be cautious. In the mind of the great British public, tax cutting equates to service cutting. That will NOT win us votes. He already has the votes of the party, he needs the votes of the nation.
However, I do share your dissapointment. At least a statement of belief is required - "Our aim is to reduce the tax burden". We should differentiate ourselves from Labour. I cannot understand, personally, the blanket dismissal of flat rate taxation. Whilst not completely convinced of it's merits, it is certainly an idea that should be explored. We should rule out nothing.

Peter Obtain, tax cutter, Rob Largan: you're clearly instinctive tax-cutters but, rather than trashing Cameron, can you argue why borrowing to fund tax cuts is a good idea?

Who says we have to? Cutting taxes in the long run leads to increased tax revenues. I am not demanding that we commit to cutting tax no matter what, but start making the case to the public of tax cuts in general.

"In the mind of the great British public, tax cutting equates to service cutting."

Exactly why we must make the case and start to lead opinions.

This isnt all about tax cuts, its about reducing the size of government altogether.

Rob, I think Cameron and Osborne share your view exactly.

Osborne said "...stability will always come before promises of tax cuts. If the public finances are in a mess then sorting them out will have to take priority over promises of tax cuts."

The promise of stability over tax cuts is basically saying that we won't borrow to fund tax cuts; any tax cuts have to be provided by savings (sorting out public finances) and growth in the economy.

"The promise of stability over tax cuts is basically saying that we won't borrow to fund tax cuts; any tax cuts have to be provided by savings (sorting out public finances) and growth in the economy."

The "promise of stability" misses the point. The best guarantee of stability is a dynamic economy which will require sizeable tax cuts to achieve. Since the tax cuts in the 1980s produced more revenue than they cost, they do not have to be "provided by savings"
and waiting for "growth in the economy" is redundant when its the tax cuts that expand economic growth.

If Cameron and Osborne took an interest in economics instead of trying to appease fashionable opinion, they might understand that. And lets not forget the last time "stability" trumped tax cuts: in 1993. The Tories lied and raised taxes "to protect public finances," stalled the recovery and totally blurred the difference between the two parties, to New Labour's enormous benefit. Four years later the voters did the sensible thing and asked us to leave. Let's not go down that road again.

If you took an honest look you'd see that supply-side economics is not a miracle cure and that untimely public borrowing can cause sickness.

Our models are so inaccurate that, although economics ought to be a science, it's still a dark art.

Mark Fulford: can you argue why borrowing to fund tax cuts is a good idea?

I've not given it much thought but try this:

If growth rates exceed real interest rates, borrowing to fund tax cuts would effect a redistribution of wealth from capital-owners to income-producers.

There might be an argument (not sure how good) that, assuming govmt can borrow more cheaply than its citizens, borrowing to fund tax cuts is a better way of stimulating the economy than letting people run up overdrafts on their credit cards.

"untimely public borrowing can cause sickness"

But if the tax cuts bring in more revenue, that isn't a problem, is it?

The real issue here is the opposition of the leadership and their followers among the activists to tax cuts.

It's when an economy is in recession or growing slowly that you need the tax cuts most.

Also if Cameron's spin doctors would stop lying about Mrs Thatcher that would help.

The record on her and tax cuts is the opposite of what they told Nick Robinson.

If you're in recession the worst thing to do is to try to reduce spending without cutting taxes.

"If you're in recession the worst thing to do is to try to reduce spending without cutting taxes."

That's right. Some of our leaders and some of our members need to learn how the economy works.

How long will it be before our party does the right thing by our country? "Moving to the centre" for the sake of it is not a politically practical or honourable proposition.

Here's another recent quote from Osborne, for all the doom-mongers

"Tax is crucial to the competitiveness of the British economy. In 2000, 20 out of the 30 major tax countries of the OECD had a higher corporation tax rate than Britain. Today, five years later, 20 have a lower tax rate. And if you don't think that matters, then consider this: companies locating in Britain have to achieve a 25 per cent increase in profits to achieve the same distributable income as the same company in Ireland, because of that country's tax regime"

Fear not, sensible tax cuts are still part of the plan...

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