Cameron's 'u-turns' disturb No Turning Back group

David Cameron received a grilling from the right-of-centre No Turning Back Group last night.  A dozen of the party's more Thatcherite MPs expressed serious concern at the Tory leadership's repositioning on tax and grammar schools.

David Davis and John Redwood were at the meeting and offered their own support to Mr Cameron but the overall mood of the meeting was "deeply antagonistic" according to my source.

Unlike the socially conservative Cornerstone group of Tory MPs - which is very committed to the new leader's social justice agenda - the NTB is widely regarded as unreconstructed keepers of the Thatcherite flame and are unenthusiastic about any rebalancing of the core messages.

Lord Ashcroft, who now has responsibility at CCHQ for polling, addressed a full meeting of the parliamentary party this morning.  He was unable to report any seismic improvement in the Tory brand - the problems of which he identified in his Smell the Coffee General Election report.  He was able to show that target voters were more receptive to at least listening to Conservative spokespeople, however.

Comments

[wasp]

Both sound like good news. The unreconstructed Thatcherites need to get reconstructed and anyone that thought there was going to be a seismic shift was living in cookoo land

[Selsdon Man]

Thatcherites care about the poor too. Several have advocated moving beyond core messages. Persuasion and effective advocacy are required. Antagonism is counter-productive.

[Tory T]

I presume that when Selsdon Man says "antagonism is counter-productive" he's talking about the irrational and disproportionate antagonism that some (not all) NTB members have to Mr Cameron. I wish some of them would actually look at the 1979 manifesto that ushered in 18 years of Tory rule. The Constitution of Liberty it ain't.

[Selsdon Man]

This is not 1979. We have take to take Thatcherism to its next stage.

I advocate and practise reason rather than personal abuse or antagonism. Sadly, Tory Thug, you tend to live up to your name.

[Sam Swann]

Why would the so-called unreconstructed Thatcherites believe David Cameron's solutions go against the core values of Thatcherism? David Cameron is an advocate of marriage, the family, and the voluntary sector - in response to our social problems. This is indicative of a self-help conservative ideology dedicated to helping people but not running their lives or handing them blank cheques, not a statist, tax-and-spend liberal one.

[stevie]

these messages from right of centre groups only reinforce the centre ground meesage that has people like me coming back to the tories

[Richard]

"these messages from right of centre groups only reinforce the centre ground meesage that has people like me coming back to the tories"

So you are prepared to accept higher taxes at the expense of economic growth?

[Daniel Vince-Archer]

"So you are prepared to accept higher taxes at the expense of economic growth?"

Some of us aren't prepared to accept lower taxes at the expense of economic stability and security.

[John Hustings]

"Some of us aren't prepared to accept lower taxes at the expense of economic stability and security"

High taxes do more harm to the economy than low taxes. Look at all the most successful economies around the world, and reflect on their low tax rates. Contrast that to the sluggish economic performance of the European countries whose tax rates are high.

Take a look at Ireland for the most obvious example of how well low taxes can help an economy. It has transformed itself into a richer country than Britain in a relatively short period.

[Richard]

"Some of us aren't prepared to accept lower taxes at the expense of economic stability and security."

Economic instability is not caused by low taxes but by the nature of the financial system: http://www.mises.org/tradcycl/monbuscy.asp

[Richard]

This is probably a better and simpler explanation: http://www.mises.org/tradcycl/austcycl.asp

[Jaz]

Thatcherite economic policy wasn't exactly a shining example of economic stability and security.

You see in the world of politics people recognise that they didn't suffer huge unemployment that we had under the bust periods of the 80's

[Sean Fear]

"You see in the world of politics people recognise that they didn't suffer huge unemployment that we had under the bust periods of the 80's"

Ah, if only we could return to the good old days of the Closed Shop, nationalisation and economic decline! What a pity that Thatcher brought that to an end.

[Jaz]

Sean, the past is the past. Thatcher made the reforms necessary, even labour recognises that. We conservatives need to recognise that we need to avoid the harsh recessions that were pushed further by significant tax and spending changes.

I have no quarrels with the economic changes that Thatcher made..I don't think Osbourne has either. What matters now is that we need to promise the public that we can have longterm stability and growth..Which means we cannot promise massive tax cuts, or spending increases..

[John Hustings]

Jaz, which economic theory are you following?

[Jaz]

My line of thinking is the effect of inflationary changes caused by fiscal policy.

My macroeconomics is shakey, I do not know the extent to which fiscal policy has on inflation, but i'm guessing monetary policy has a more significant effect. In which case tax cuts wouldn't be as signifcant a problem as in the 80's when both fiscal and monetary policy were both used to achieve the same objectives (causing rather harsh cycles).

The credit for economic success mostly lies with the Bank of England.. I must admit, i'm more in favour of Gordon Browns approach to the economy than any Tory chancallor in the 80's despite tax rises. He hasn't used the economy as an 'experiment' to play with...

What's better? Lower growth due to higher taxation or myself and my friends out of jobs?

[Richard]

Inflation is caused by the money supply increasing thus leading in turn to a general overall increase in prices. Cutting taxes may lead to an increase in the prices of some goods but will lead to a decline in the price of others.

The simplest way to stop inflation is to ban banks from creating credit via lending money they don't have. This is a solution proposed by the radical libertarian Austrian school of economics. However, their call for a gold standard often gets them labelled as cranks which is a pity because they have a lot of convincing arguments on their side.

The Austrians hold that economic instability in the form of the trade cycle is caused by bank-created inflation. As more money is created the interest rate is artifically lowered, encouraging investment in capital goods when in fact there is no real demand for these goods. Recessions and Depressions are the inevitable result as unsuccessful investments are liquidated.

Obviously there's more to it than that but I'm not going to bore you all with an economics lecture.

[Matthew Oxley]

DVA, Stability shoudn't be an end in itself, you can have a very stable yet stagnant economy and this is what we heading towards now.

And as Richard has already pointed out, low taxes aren't necessarily the cause of instability.

[EU Serf]

......i'm more in favour of Gordon Browns approach to the economy than any Tory chancallor in the 80's despite tax rises. He hasn't used the economy as an 'experiment' to play with......

Gordon's experiment is a nuclear one with a reasonably long half life.

When you are living in poverty in your old age, despite having saved hard to look after yourself, remember that it was Gordon who destroyed everything that was competitive about the UK economy and stole your pension.

A massive increase in government spending on useless non jobs is nothing if not an experiment and none of us are wearing safety glasses.

[johnC]

Matthew and Richard are both right. The Tory reputation for 'boom and bust' in 1979-97 is largely undeserved and can be attributed to the ERM, not fiscal or monetary policy. Nigel Lawson's policy of shadowing the Deutschmark in 1987/88 led him to lower interest rates in order to maintain the value of sterling at precisely the time when the inflationary pressures should have led him to increase them. This led to higher inflation together with an artifically high exchange rate which hit exports during the recession of the early 1990s. Both would have been avoided had we stayed out of the ERM, not to mention Black Wednesday which finally destroyed our claim to economic competence.

[Account Deleted]

In 87-88 the economy was growing at around 4.25%, well above trend.

Nigel Lawson then cut taxes from 29p to 25p and from 60 to 40p for top earners.

Interest rates rose from 8% to 13.5% from the start of 1988 to the end.

To argue that what didn't happen was that the right of the party got over excited and went around declaring how everything was fine and that there had been a 'supply-side revolution' due to tax cuts is because some people want to make the same mistake again.

The ERM didn't help, but it was only a factor, not THE factor.

In the long term taxes have a negative but relatively small effect on growth. The US has been growing faster than the EU, but it has much higher population growth, reducing per capita growth, and also is running huge deficits with the rest of the world.

More important is what the government spends the money on - and the current evidence is that the government's spending has generally been wasted - if it was really making a difference in health, education, transport etc. then we would be in much more trouble electorally.

People don't want the state to wither and die. Neither do they fancy giving money to the government to waste on silly projects and public sector payrolls without justification.

What we have to do is to persuade people that, in the long run, we will run the economy and public services better and then we will cut their taxes, because, unlike Labour, we believe that people should only pay tax where there are strong moral reasons for society to prioritise certain types of good, (i.e. health and education, a MINIMAL welfare state) and not believing the government has an equal claim on individual's money alongside them.