Built To Last... The Economy

Throughout today - on every hour from now on (with some kind of interlude for PMQs) - ConservativeHome will be taking a quick look at each of the main principles of 'Built To Last'.  I've been in email contact with Steve Hilton, David Cameron's key adviser, this morning and the principles are open to amendment.  Sometime after today's discussions I'll submit a report to Steve and Francis Maude on the range of changes we all would like made.  We will also test the party's initial proposals and our amendments through the ConservativeHome Members' Panel (click here if you haven't yet voted in the latest survey - today is the last day for your vote to be registered).

THE ECONOMY

The first 'Built to Last' principle focuses on the economy:

"1.  A successful Britain must be able to compete with the world.

We will put economic stability and fiscal responsibility first. They must come before tax cuts.  Over time, we will share the proceeds of growth between public services and lower taxes - instead of letting government spend an ever-increasing share of national income."

This is the only principle I really take exception to (I'll be more positive for the rest of the day).  George Osborne was in Ireland last week to celebrate that country's economic success.  But the key lesson of Ireland is that they didn't achieve economic stability and then cut taxes.  They cut taxes and that got them to economic stability.  Taxes created the growth that avoids the instability and factionalism of a zero-sum economy.  David Cameron and George Osborne have been 100% right to say that tax must not be the Conservatives' only economic weapon (and John Redwood has made some interesting noises on what this wider competitiveness agenda might involve) but I hate to think that the 'stability versus tax relief' false choice might be enshrined in our party's constitution.

I'm also with the Taxpayers' Alliance on the popularity of tax cuts.  This was on the TA blog yesterday:

"We believe that the reason the Party has failed to make an effective case for lower taxes because they have pushed the wrong messages and we think that the Party should have made an adapted case in terms of how lower taxes can help ordinary people in their everyday lives (as the Daily Express has recently done in their campaign against inheritance tax)."

Conservatives should be using the whole parliament to make the case for economy-boosting tax relief - as David Davis proposed in the highlight of his leadership bid.  That isn't going to happen but let's not box ourselves into the Labour way of thinking about tax.

I think we should be thinking about adding a sentence on the ingredients for a growing economy... so that we have "proceeds" to share.

NOON ADDITION: This transcript of Andrew Haldenby's Today programme interview makes good reading.  Andrew, of the Reform think tank, puts the 'tax cut versus stability' false choice in the context of public service reform and monetary stability.

Comments

[Ted]

I'd just take out "They must come before tax cuts. Over time"
Statement "We will put economic stability and fiscal responsibility first. We will share the proceeds of growth between public services and lower taxes - instead of letting government spend an ever-increasing share of national income."

'They must come before tax cuts' is explicit in the first line if tax cuts would endanger stability so its an unnecessary part of the text. "Over time" is redundant as that's what "we will" means.

Think the shorter version is closer to what the party believes. This doesn't then limit our policy groups on tax, limit our Shadow Chancellor's room to maneouvre but does tie in with our later pledges concerning public services.

I know that those moths to the flame who want tax cuts and the case for tax cuts to be started now won't like it not being explicit but lets not start that row again.

[RobC]

I agree with Cameron on this one.

At the last two elections Labour has spun the story that they are the party that values public services, and that Brown has managed the economy very well. In following the ERM mess-up and 15% interest rates the Tories lost credibilty in managing the economy. Unless Tories explicitly state otherwise Labour will continue to spin the line that Tories only want to cut taxes and reduce spending on public services. Labour will then spin that this means the economy and public services are not safe in Tories' hands.

The Tories have to nuetralise this message, and the way to do it is to match Labour. Labour did the same in 1997 with public spending. Labour realised that there was a real risk that the electrorate would think that they would raise public spending astronomically when they first came into power. So what did they say? They said that they would stick to Major's spending plans. Excess public spending was neutralised as an issue.

Cameron needs to do the same with economic performance.

[Ted]

One of the reason's its hard to make the tax cut case without explicitly looking at stability is the Lawson boom & bust. There is a good arguement that Lawson's tax cuts undermined economic stability (though financial deregulation and interest rate controls had as much impact). The resulting inflation led to agreement by commentators, the Treasury & even the Labour Party that we couldn't resolve this inflation ourselves but needed the rigour of the ERM (fixed exchange rate & resulting high interest rates) to manage it.
It was only the fear of Labours economic mismanagement that enabled Major to hang on to power. Black Wednesday was the culmination of failure not the failure itself - people remember the high unemployment, high interest rates of the Lawson bust and the long search for the green shoots of recovery.

[Andy Peterkin]

Well, I thought he made encouraging noises last night about cutting council tax, and, hopefully he'll soon look at cutting IHT, which it would be more honest to call the Death Tax.

Death should not be a taxable event.

[Ed R]

Ireland got its tax bill effectively undersigned by the EU through vast numbers of EU-sponsored programmes which meant it could cut taxes and get the benefits of the spending. We don't have that luxury, and we do have to win back the trust of the voters. You can do it the ideological way and spend a lot of time and money campaigning on the virtues of radical tax cuts, which Labour will refute with ludicrous scare stories; or you can get into power and make targeted tax cuts as a tool of growth and gradually say, "look, you've seen we know what we're doing, and we think tax cuts are the way to go here." Which is basically what Brown did in reselling tax & spend to people over Labour's first term.

[johnC]

'We will put economic stability and fiscal responsibility first. They must come before tax cuts.'

Rubbish. Nothing is more stable than economic slump and stagnation. We need to recover the dynamism and vitality of the 1980's and this can only come through tax cuts. With a growing GDP the overall tax revenue increases despite falling in percentage terms, as it did during Nigel Lawson's chancellorship when he was able to cut taxes and accumulate budget surpluses at the same time.

[Paul W]

Danny Finkelstein in the Times today:

"Tax cuts can stimulate economic growth, of course, but at times tax cuts and stability can come into conflict, even if only for a period. Why else did Margaret Thatcher’s Government raise VAT in its first Budget? Sometimes, governments do have to choose and Tory governments choose stability first."

[Chad]

"1. A successful Britain must be able to compete with the world."

100% agreed. But how do you do that with an uncompetitive tax environment? The text does not seem to qualify the title.

I would like this statement qualified as follows:

1. A successful Britain must be able to compete with the world.

We will invest in Britain by increasing our competitiveness in the global economy to enable us to share these increased revenues to both increase spending on public services and lower the overall tax burden.

"

[Ted]

The economic vitalism of the 1980's died in the bust of 1989 to 1992. The growth we have had since 1992 was in initiated with freedom of exchange rates but continued by Ken Clarkes tax increases to bring public finances back under control. Voters who remember the boom & busts prefer stability - our effort must be to get stability with higher growth.

I believe in a smaller share of state spending as proportion of GDP, I believe that we should aim towards lower taxes but with high levels of personal debt & lowish interest rates cuts in personal taxation now would most probably lead to inflationary pressures = higher interest rates = recession as personal debt payments kill growth. That's why successive Shadow Chancellors have fought against tax pledges.

We do however need to cut significantly business taxation and costs. But that's not a great slogan is it "Vote Tory and cut Tesco's taxes". Better to say "A successful Britain able to compete with the world" & promise to halt the rise in share of govt spending as proportion of GDP.

[Andrew Woodman]

There is of course the argument about spending better what we collect. What's happening regarding the James review now. Is it to be discarded?

[johnC]

Yes, but I thought this was supposed to be a statement of core principles. I would have expected the core principle to be 'we will cut taxes unless the budget deficit we inherit makes it impossible in the short term', not 'we will not cut taxes if the budget deficit makes it impossible'. It seems odd to have as your first guiding principle what you are not going to do.

[Ted]

JohnC - on that I agree which is why my first post suggested just dropping the negative and leaving the positive.

[Michael McGowan]

The crucial issue is how do we raise growth rates and productivity; and how do we create an economy which produces high added value goods and services in the teeth of intensifying competition from the likes of China and India. As the US and Ireland realised yeasr ago, we simply cannot compete with those economies on price, especially with our high tax and regulatory burden. To date, we have been able to compete on value in some areas (especially services) but as their highly traditional education systems (no course work and debased exam results in India and China) mass-produce highly-skilled graduates who are willing to work for much less than ours, our competitive advantage will steadily erode. Blair and Brown haven't got a clue about how to deal with this problem. Indeed, they don't care if everyone else lives in a low-growth "stable" economy so long as they get to line their pockets. But are Cameron & Co any different....?

[johnC]

Ted - I agree with this. But I'm still unhappy about just warbling on about the 'proceeds of growth' without clearly stating the principles on which a future Conservative government would create economic growth. Surely those are core principles too.

[a-tracy]

Ted: But that's not a great slogan is it "Vote Tory and cut Tesco's taxes".

But Ted why would they say that, no-one says 'Vote Labour who allow a tax dodge which is being exploited by a host of retail giants' which allows them to undercut small shops on our High Streets do they?

Oops there I've said it.

[Chad]

Well said Michael. There is no stability in erosion of global competitiveness.

The "sharing proceeds of growth" is being used over and over by Labour to accuse the Tories of cutting spending on public services, using the argument that Labour will spend it "all" on public services so any "sharing" with the taxpayer must mean less for public services.

Labour will continue this theme and it could be effective.

We should go for the aim to increase spending on public services and reduce overall taxation by making Britain a formidable global player.

I am sure that everyone will understand that you can both raise spending and lower taxes if you raise the amount of money coming in.

[Ted]

a-tracy I'd hope that in our taxation policy we look at simplifying taxes, removing tax dodges, lowering corporate taxation, supporting competition policy (in retail & media ownership). My sisters are about to set up and run a community shop and I'd prefer a level playing field vis a vis Tesco.

In our principles I'd be happier with an explicit statement on aiming for a smaller state but I think if you take out the negative bit about tax its sufficiently conservative taken in context of other principles.

[Mark Fulford]

Since 1997 the government has won in selling the story that it inherited under-funded and under-invested schools and hospitals. Following failures in the economy while it was under our control and the ’97 sleaze, it’s entirely understandable that the electorate is ready to swallow every word of Labour’s spin that Conservative tax cuts = cuts to essential services.

David Cameron and George Osborne are absolutely right to give Labour no room to repeat the same successful attack. Not only is it arguable whether tax cuts really do create stable economies, the topic is a proven Achilles Heel.

I’ve been to two David Cameron events where he’s talked passionately about the benefits of empowering people and reducing the role and control of government. It’s an argument that you’ll never hear from Gordon Brown and one that inevitably leads to a reduced tax requirement. As James Cleverly quoted yesterday, “sell the sizzle not the sausage”.

[Chad]

But Mark, Labour are already accusing David Cameron's approach of meaning less for public services, presenting expenditure as a zero-sum game, so any sharing with the tax payer must mean less for public services.

[Donal Blaney]

I saw a great bumper sticker the other day in Florida: it read:

"If 10% is good enough for God, it should be good enough for the IRS"

If only we had included our pledge for flatter tax (I would prefer a flat tax personally but I will bear with George Osborne on this to start with) then I would have been happier.

Like the Editor, this is my major concern with regard to the speech yesterday. If we are bleating about stealth taxes and over-regulation (as we have been for years now) surely voters are entitled to ask what we are going to do about it. Saying that we will share the proceeds of growth (in what percentages: 1% tax cuts, 99% extra public spending?) is meaningless waffle. If we were to say that we will abolish Death Tax, Capital Gains Tax and flatten income tax to 28% with no tax on the first £10,000 then that is a very clear statement.

And before any Militant Cameroonists say we should not be so open about our tax plans, I ask why not? We were not open in 1997, 2001 or 2005 and we allowed Labour to attack our proposals. I take the view it would be preferable to make the case time and time and time again for lower taxes and that lowering taxes stimulates much needed economic growth.

[Mark Fulford]

Donal, how much tax cut do you propose?

[a-tracy]

I believe that the consequences of making companies less profitable by taking too many taxes and over-regulating are:

Small manufacturers closing,
Small shops closing,
Pushing up wage differentials has forced larger manufacturers like Dyson and Doultons to move to locations out of the UK, otherwise no-one could afford to buy their cleaners/pottery,
Lower returns to shareholders results in millions of people in private pensions saving plans having their pensions return quartered,
and Endowment savings plan returns have been halved.

Have the policies of this government nothing to do with any of the above?

[William Norton]

Like others posting here, I accept the broad thrust of this - but there could be a problem with the phrasing of the reference to tax cuts. Aside from Gordon Brown making attacks along the lines of "Tory cuts", there is a genuine issue: how stable does stability have to be before you cut taxes? If it's 99% stable, you'll always find someone who claims it could be 99.9% (or however you measure it). We'll be back to the days of 300 economists writing letters to the Times etc.

Also, it would be helpful to clarify that cutting waste and making necessary reforms are not "cuts" in public services or attacks on the principle of state provision/organisation. The final reference to NOT spending an ever increasing share of national income makes plain that a Cameron Tory Party won't be writing a blank cheque for the state.

What this statement is rightly trying to emphasise is the element of judgment and trade-off involved in fiscal policy. Perhaps this could be clearer with the following alternative:

1. A successful Britain must be able to compete with the world.

We will put economic stability and fiscal responsibility first. The level of taxation at any time should be set so as to balance what is required to sustain a world-class competitive economy with what is needed to maintain world-class effective public services. Over time, we will share the proceeds of growth between public services and lower taxes - instead of letting government spend an ever-increasing share of national income.

[Ted]

Donal
- it's not a case of not being open, it's a case of having a realistic personal tax policy. As I said currently the state of public finances, personal debt etc makes cuts in personal tax risky whereas corporate taxation cuts would be good. In 2008 or 2009 what will the situation be?
- I do think we can talk now about simplification and removing stealth taxes - an open, fair and simple tax policy.

[Chad]

We must not lose sight of the fact that we need to appeal to the masses not just politicos and keep one-step ahead of Labour.

The message must be short, clear and appealing otherwise people will just turn off.

Why not thwart Labour by promising to increase public spending by increasing our competitiveness?

All the points of waste, spending more effectively simplification etc etc are spot on, well-thought out and intelligent, but may fall on deaf ears.

Think of the headlines; "Tories pledge to spend more on public services." Qualified by increased income from improved competitiveness to avoid boxing ourselves in, and then there would be no need for any unrealistic need for specific pledges.

Now that really would get people listening. We don't want to scrape victory, we want a platform for many parliaments to come, so we really need to win hearts and minds, and Labour are already exposing the "sharing the proceeds of growth" approach.

It would seem that Cameron could appease the low-taxers, and increase public spending by basing his argument on increasing our global competitiveness whilst also avoiding making pledges that cannot be met.

[Donal Blaney]

If we campaigned on a platform of

- abolishing Death Tax
- reducing corporate taxes
- simplifying the tax code (flatter tax)
- removing certain stealth taxes

then I would be happy with that in the short term

[Daniel Vince-Archer]

"Ireland got its tax bill effectively undersigned by the EU through vast numbers of EU-sponsored programmes which meant it could cut taxes and get the benefits of the spending."

I may be wrong here (and it wouldn't be surprising if that were so - my eyes tend to glaze over when discussing economics), but I'm sure I read that Irish tax levels are pretty similar to our own. As the comment above says, Ireland can thank generous European Union handouts for much of its prosperity in recent years.

"We should go for the aim to increase spending on public services and reduce overall taxation by making Britain a formidable global player."

No Chad, we should be looking to manage spending on public services more effectively before we start talking about increasing spending. Continuing to throw good money after bad down the drain (apologies for the mixed metaphor) will resolve nothing in the long-run, apart from the concerns of the army of bureaucrats and middle-managers infecting our bloated public sector that they might not be able to afford a new conservatory for their second homes in the country.

[Serf]

I second William's proposal. It covers all angles.

I would also like a statement that attacks GB sheer complexity of tax code, with reference to the millions of poor people caught up in a problem they are not able to understand.

Perhaps add the line.

We will simplify the Tax & Benefit system, so that it brings the greatest benefit to those with the greatest need.

[Chad]

I do agree Daniel, but I don't think it will be a vote winner.

It just seems to me, that we need to clearly outmanoeuvre Labour, and with this approach we can do it without being committed to increased spending that we cannot afford (as it is tied to increased revenues).

Of course over time, we can benefit from improved efficiency etc, but we need to show a clear committment to not just be better managers, but to capture the public's imagination.

People expect Tories to spend less, and Labour are already reaffirming this with the "sharing the proceeds of growth" approach.

If we promise more, Labour can question our maths or strategy, but we would have secured the headlines and the initiative.

We've got to think about the man in the street. He won't believe the "better for less" line however much we try. I'm thinking in terms of a big win, not scraping a tiny majority, and possibly becoming a single-term government.

Why not start with "more" then evolve into "better" over time when in power? It's honest, but also clear and bold. That way we get the chance to govern and show we're better managers.

The public won't care about the actual monetary spend when they see improved services but unless we are in government, we will not be able to implement our policies.

I know the very thought of this will pain some, but let's focus on winning, not at all costs, but at least being pragmatic.

I just think we're trying to be too intelligent about this, and the message will be lost.

Just a thought, I didn't expect it to be popular.. ;-)

[Richard]

"One of the reason's its hard to make the tax cut case without explicitly looking at stability is the Lawson boom & bust. There is a good arguement that Lawson's tax cuts undermined economic stability (though financial deregulation and interest rate controls had as much impact). The resulting inflation led to agreement by commentators, the Treasury & even the Labour Party that we couldn't resolve this inflation ourselves but needed the rigour of the ERM (fixed exchange rate & resulting high interest rates) to manage it."

The Lawson boom and bust occurred due to an increase in the money supply which was channeled into unsustainable investments and therefore had to be liquidated to prevent further inflation. This had nothing to do with tax cuts.

Secondly, and I know I continuously bring this up, why do Cameron and his allies not mention the £82 billion wasted every year? (£83 billion according to the ECB.)

Thirdly, the Tories should pledge a bonfire of business regulations from bureaucratic inspections to the European Social Chapter.

[Michael McGowan]

Predictably, the Cameron/Mark Fulford argument simply ducks the real issue: competitiveness. You can't consider competitiveness without considering tax and regulation, both of which are onerous costs. Pretending that tax has no impact on competitiveness is like believing in perpetual motion.

Even if the Tories ever win office, are we seriously pretending that David Cameron, having spent years parroting the false choice between stability and a lower tax/regulatory burden, will then do a handbrake turn? Of course he won't because he doesn't want to be a one term PM and if he changes tack, his fair weather media friends and the left will turn on him.

So, on present form, we are looking at a ten-year time lag before the Tories summon up the courage to tackle the competitiveness issue. Do they think that the US, Chinese and Indian economies are going to be put on hold while the rest of the world waits for the complacent board of UK PLC to catch up?

[DavidB]

We must make the argument for lower taxes, not accept Labour spin/lies. Labour cannot attack a tax cut as "for the rich" if it's targetting the less advantaged. How about a bigger personal allowance and abolishing the lower band of income tax by setting it to 0%? These are tax cuts that helps everyone, but particularly lower earners. I'd like to see Labour try to attack these, especially since they created the lower 10% band in the first place.

Economic stability needs low taxation. And growth needs it even more.

[DavidB]

We must also always show where the money is coming from to cut taxes. Sadly few believe the huge amounts of public money wasted, and wrongly believe it amounts to cutting services. Others even have sympathy for the civil servants that would be sacked, not understanding the difference between real employment and unproductive employment (an argument we have always failed to make, as people still fail to understand that miners weren't in productive employment but paid to mine coal which we paid to get rid of).

So maybe £7bln from ending EU funding, and th £36bln/£37bln identified as waste by the ECB and Taxpayer's Alliance. Then we can say an extra £22bln for schools and NHS, and £22bln for tax cuts targetting lower income earners and small businesses. We could call them welfare tax cuts.

[True Blue]

I agree with McGowan. We should definitely be competing head-to-head with the Chinese and Indians.

We have a bloated welfare state, a national health service, our defense expenditure is vast, we spend far to much to maintain roads and railways and waste money on educating people whose education is of no value to the economy.

Let's cut taxes, abolish the minmum wage and stop spending money on all this wishy-washy liberal nonsense, then we'll have a chance of competing on a level playing field with Indian and Chinese workers earning 30p a day.

Mr McGowan - I salute you!

[a-tracy]

True Blue - I can see what you're getting at, however, if we keep pushing up our costs without considering the consequential job losses in the wealth creating sector to whom are we going to sell our products and services?

The service sector is often put forward as our great hope for the future but these jobs are the easiest to move when India and China have caught up educationally with the West (this is not too far off) why should they not compete for service jobs in the banking community etc.

There are regions of China where wages are growing caused by demand for their skills and the 30p per day amounts that you quote were in the past. The danger is that they're producing modern factories with committed workforces who will outstrip our productivity relatively quickly.

[Mark Fulford]

Predictably, the Cameron/Mark Fulford argument simply ducks the real issue: competitiveness. You can't consider competitiveness without considering tax and regulation, both of which are onerous costs.

Absolutely they're onerous. I've never said that they're not and I'd have thought that it's an absolute given that any Conservative wants to reduce regulation - just as I want to pay less tax.

I run two businesses and 80% of my income is derived from exports. I'm flattered that you associate me in the same slash as David Cameron, but I take exception to a lawyer lecturing me on competitiveness.

[Rob Largan]

I have been banging on about this stability over tax cuts thing for quite a while now. This document in its current condition would enshrine a Labour spin on tax into our constitution.

Out of the entire document, this is the one thing I would certainly change.

[Michael McGowan]

In that case, Mark, you clearly don't know very much about law firms....even if you can do a Google search. My firm is a highly successful international law firm which competes head to head with a cluster of other highly successful international law firms. We have a very demanding clientele, who are very price conscious. Most of what I earn too comes from invisible exports. A priority for our clients (and therefore for us) is how to make the most of technology and the developing economies to cut overheads (including payroll and other business taxes) and drive up productivity. Three to five years from now, I doubt whether international banks are going to accept that they should pay high fees to have expensive UK law graduates sit in expensive offices producing and advising on fairly standard legal documents when there are droves of hard-working, highly-qualified English-speaking graduates emerging from the universities of India and China, who can be trained to do the same work for a fraction of the price.

Either the UK adapts its high-tax and regulatory model to the global economy or it will have the necessary changes imposed on it anyway....and probably quite brutally. Your children and mine don't have the luxury of waiting 10-15 years while David Cameron and George Osborne emulate King Canute, safe in the knowledge that their trust funds will always bail them out.

[Mark Fulford]

Michael - I've enough good lawyer friends (both good friends and good lawyers) to admit that the legal profession isn't all bad ;-)

As True Blue was saying (I think), we can't expect to compete head-to-head with India on wage bills. I don't think we should aspire to compete with them on safety at work, etc, either.

[True Blue]

Unless you cut wages at the same time as cutting employees' taxes, you aren't going to be any more competitive. Is that what you are proposing?

There are plenty of ways of competing with other countries, but paying the lowest wages isn't really the solution.

I'm in favour of low taxes, and I don't think Cameron goes far enough, but this is a red herring.

[a-tracy]

Who is saying we should compete head to head with India and China? However many people say they don't condone cheap labour but then expect to pay £2 for a t-shirt and £4 for an iron. Instead of supporting British manufacturers and pay the true cost of making the goods they desire. You can't have it both ways forever.

As the cost of labour in India and China rises, the cost of the goods we import (which includes transport costs and environmental damage) will rise. Because they're starting from a low cost base these Labour cost increases will produce relatively high increases in purchase prices here in the UK.

When this starts to bite we will start to see the true cost of our social model and those oh so secure public sector pensions may end up back in the melting pot. If we can't generate the taxes to cover them and fund the health service which do you think is going to go first when it's our children that are in control.

[Michael McGowan]

The whole point about offshoring - whether you like it or not - is to cut all overheads: wages, rents, taxes and some regulatory burdens. Add to that the benefit of an increasingly highly-educated, English-speaking workforce and a pretty stable democracy based on the rule of law and the result is win-win for international investors:lower costs and higher productivity.

Your comment about Indian safety at work standards, Mark, is a cheap shot. Factories and call centres set up in India as part of the offshoring drive have tended to have high standards of workplace safety, which is one reason why Indians are happy to take jobs in them.

[Mark Fulford]

a-tracy, which regulations do you want to reduce?

[Mark Fulford]

Sorry, forget that last question.

[a-tracy]

Oh Mark you really don't want to get me started on my favourite subject!

There are some regulations I completely agree with as long as they apply to everyone and one-man bands aren't excluded and thus used to keep the costs down. All that happens is that legitimate companies that apply the rules and regulations get priced out of the market.

[Richard]

"Factories and call centres set up in India as part of the offshoring drive have tended to have high standards of workplace safety, which is one reason why Indians are happy to take jobs in them."

It's just a pity that everyone gets fed up with being put through to them. Abbey National bucked the trend when they withdrew from India. Still, if it keeps costs down then I suppose it's a small price to pay.

[Rebel]

This is the most important --and the worst-- of the principles. It's bad because it's completely incoherent. And to the extent it's not incoherent, it's wrong.

To wit:

"A successful Britain must be able to compete with the world" is contradicted by:
"We will put economic stability and fiscal responsibility first.They must come before tax cuts."

A child can understand that Britain is over-taxed and over-regulated, and Labour has reversed much of the progress made by Thatcher. To compete Britain needs urgently and radically to reduce its taxes, reduce its regulation and the EU-imposed bureuacracy, and, thereofe, in the interest of "fiscal stability" it must reduce the state. If a Conservative government cannot be trusted to do *that*, then what is its point?

The "sharing the proceeds of growth" formula sounds good--to the economic layman. It's appealing and opaque enough to confuse some people and therefore probably so attractive to DC. But it's pretty incoherent once you start to think about it, since it's born from the elementary socialist fallacy that an economy is a fixed thing, that there is a "pie" to be divided, in this case the pie of "growth" to be divided by "spending" and "tax cuts". It completely fails to understand that an economy is a DYNAMIC thing and government policy, given the size of the state, extremely important in influencing the dynamic. Lower taxes and less regulation equals higher growth (and therefore possiblty increased revenues).

Don't we have growth TODAY? If so, then why no tax cuts NOW?

Brown will tear him apart.

[malcolm]

Goldie,yesterday you told us that you were giving up on the Conservative Party.'Bye then.

[James Maskell]

Tax cuts are required to boost the economy. I cant support this part of the proposals. Its too restrictive and is just a rehash of his previous speeches, not a distillation of the Conservative view.

[James Maskell]

When was that malcolm? I know Goldie declared rebelling but I dont recall a leaving Party post.

[malcolm]

Yesterday from Goldie(Rebel)'I'm just sick of it,no more comments from me.....and I won't be voting Conservative'.Well the bit about not making any more comments obviously isn't true and this was from someone who a few months ago was a vociferous Cameron supporter.I can't take the guy seriously.

[James Maskell]

That doesnt mean Goldie is leaving the Party though. Cameron was a breath of fresh air and I think some people, including Goldie clearly, have been duped by him.

[Sean Fear]

I think some people here display a lack of nerve. I am quite convinced that as soon as we start talking about reducing tax rates, Labour will scream about cutting vital public services.

But how many people believe Labour these days?

Why work from the premise that if we make our case confidently and honestly, people will disbelieve us?

[James Maskell]

If proposing tax cuts will make Labour come out saying we are to cut public services like last year, then we'd better start drilling the public with the case for tax cuts pronto and get there first.

[Richard]

"a-tracy, which regulations do you want to reduce?"

I can't speak for a-tracy but personally, for the sake of simplicity, I'd chuck the lot of 'em. Nowadays, any firm offering unsafe working conditions would find itself with few job applications or numerous civil actions. Therefore the need for safety regulation is unnecessary. Similarly, any other regulations that may seem necessary probably aren't because market pressure would maintain standards at a sensible level but without the nuisance of filling in forms, having inspections etc.

One particular thought came to me the other day - licensing. If you want to set up a taxi service, you need a license. Why?!

If I want to give people lifts for money and advertise those services why should I need a license? If people don't trust me then they don't have to buy my services.

[a-tracy]

Richard you have to be licenced so that you pay your taxes. Also to protect vulnerable people in-case you're a bad un, however, where I live it's the taxi drivers that are vulnerable to attack this past year.

[Ted]

The problem with licencing (for Taxi, Liquor, broadcasting or whatever) is when it is used to limit or control entry to a market rather than either to register, to check fitness or in some cases criminal records.
Bureaucracy sees licencing as a controlling mechanism - licencing should be a light touch activity to check the minimum standards are met and the presumption should always be for granting a licence.

[Daniel Vince-Archer]

"Cameron was a breath of fresh air and I think some people, including Goldie clearly, have been duped by him."

Goldie gets no sympathy from me.

You'll have to forgive my sudden attack of 'told you so' fever but Goldie and others who were paying attention during the leadership campaign and are complaining now about the path Cameron's Conservatives™ are taking only have themselves to blame for backing Cameron's leadership bid and they cannot say they were duped.

I suppose I'll be branded a hypocrite for saying this given my own U-turn on my previous vehement opposition to Cameron to cautious support of Cameron now.

[Mark Fulford]

Daniel, it’s not hypocrisy to shift your position – especially that particular argument is now history. Entrenched views are far worse.

[Serf]

Therefore the need for safety regulation is unnecessary.

I think all safety regulations could be replaced by a mandatory insurance, guaranteeing minimum payouts to injuries and death.

Then all safety employees would concentrate on reducing accidents rather than ticking boxes.

Too many accidents? Put the minimum payout up, premiums will go up, accidents will go down.