Tories in a muddle on tax

Yesterday's speech by George Osborne (still not on conservatives.com at the time of posting) was meant to produce clarity on tax.  It failed to do so.

The Daily Mail has complained about the muddled briefing of the speech (see graphic on right) but still thinks that the Tories are committed to reductions in the tax burden (hence the headline above).  The Daily Telegraph, meanwhile, has published a leader that is heavily critical of the Tory reluctance to be more specific about its intentions on tax:

"Mr Osborne pointed out that tax freedom day - the day when people stop working for the taxman and start working for themselves - this year falls tomorrow. Two years ago, it fell a week earlier. Such a shift of resources to the unproductive sectors of our economy will strangle growth.  The Tories seem happy to avoid the tax cuts that would help avert that catastrophe, because they wish to avoid the spending cuts demanded by prudence and fiscal responsibility."

The thing that is causing frustration at The Telegraph is that, again and again, George Osborne is correctly diagnosing the problem.  He understands that Britain has the highest tax burden in its history and that the "economic arteries are furring up".  "The Conservatives have identified the problem," concedes The Telegraph but appear afraid to enact the tax incentives that are necessary for Britain to compete in the global economy.  George Osborne thinks that tax simplification will help Britain compete and he is surely right but will it be enough?

Mr Osborne is reluctant to offer tax reductions because he doesn't think that the electorate will believe such promises.  He criticised those who "think the key to winning general elections is to make up-front promises of tax cuts" and stated "we have fought the last three [elections] on that promise and lost all three of them".  Both those two statements are misleading.  Few advocates of tax relief believe that they are the "key" to winning an election but those of us who are concerned about the declining competitiveness of the British economy, believe that tax relief can be sold to voters as part of a package of measures to protect growth and employment.  The second statement is more annoying.   We did not lose any of the last three elections because of our policy on tax.  The primary reasons Labour have won parliamentary majorities were Tory exhaustion and sleaze (1997), voters giving Labour the benefit of the doubt (2001) and Tories offering an unbalanced all-core-vote message (2005).

Goeorge Osborne has now boxed himself into a corner on tax and we cannot expect him to now offer the radical programme of tax relief that the British economy needs.  It is for the wider conservative movement - campaigning organisations such as The Taxpayers' Alliance and thoughtleaders like Reform - to build long-term public support for a smaller, less wasteful state.  The only thing we could ask of George Osborne is to drop the economic illiteracy that tax relief and stability are somehow in opposition.  There are certain circumstances when tax cuts might unsettle the markets but if David Cameron inherits a sluggish economy from a Prime Minister Gordon Brown, a lower tax burden - particularly on the country's wealth creating sectors - will be essential for economic health and stability.

Comments

[Chad]

I think that neatly captures the very essence of both the core strength and weakness of the whole Cameron project; they have clearly and astutely identified the 'WHAT', highlighting the core problems but have no 'HOW', solutions to solve them.

Telling everyone you know what the problem is, is vital, but if it is not accompanied by how you would do it better (in more than vague platitudes) then it is meaningless.

And no I do not mean detailed policies, but clear frameworks or approaches.

[arthur]

There can only be one Conservative view on taxation, it is the duty of a Conservative government to slash it too the bone. The public services, health, education, etc. privatize, lets see the end of state socialism. This nonsense from Cameron/Osbourne that Conservatives, can support a society where money is taken from the hard working and squandered on the feckless must end. Most people who live off the state only do so because they are to bone idle to heed Lord Tebbit's advice and, 'Get on your bike,'

[G-MaN]

I didnt find Osbourne in a muddle. Only the media is in a muddle because they obviously are not as intelligent as our Shadow Chacellor. He was quite clearly saying the tories would work towards a lower tax econamy (that sets us apart from Labour by the way), but would not lower taxes at the risk of public services.
This also deflects any questions about where money will come from if taxes were lowered 48hours into a tory govt, which in turn may change attitudes to our agenda economically. What's so muddley and complex?

[Editor]

Your views on tax, arthur, are the reason why the left have been able to paint tax cuts as being selfish - when, in reality, they are about fairness for workers, better value for money and economic competitiveness.

[Chris]

The muddle was in the briefing G-MaN

Its not clever to tell all newspapers one thing in advance of the speech - only for them then to discover via the Today Programme that the speech taken in full context says no such thing. they won't forget that in future.

The Tory press operation is a shambles!

[Chad]

The problem is though G-Man, that public services are at even greater risk through state income falling as our share of the global business pie falls.

Once the business and investment has fled abroad, it would take even more radical or risky measures to win it back again than if a sensible approach had been adopted.

The whole point is that George has no control over the global economy and business, thanks to technology, is becoming ever easy to relocate as we have seen.

Tax cuts are not a reward for economic stability, in the context of our historically high tax burden that George does recognise, they are the very catalysts for long-term economic stability.

George is acting like a shopkeeper refusing to lower his prices as more and more customers take their custom elsewhere. As his customer base dwindles, to avoid bankruptcy he will have to either:

1: Charge his remaining customers more and face a spiral of losing more custom.
2: Lower his prices to beat the competition (as matching alone won't tempt them back)
3: Borrow the shortfall off the bank.

Only one of those three solution has any potential for long term stability.

[Mark Fulford]

Arthur, I suspect that the more "true" or "tory" the e-mail addy or nom de plume, the less true or tory they actually are.

[Richard]

I agree with what Arthur says apart from his last sentence. I for one would like to see the end of state socialism. Unfortunately such rhetoric does not go down well with the electorate which is why I wouldn't advocate anything too radical.

As for Osborne, maybe someone should give him a copy of the Bumper Book of Government Waste.

[James Burdett]

There is no point promising a radical tax reduction program if it doesn't command widespread support and you never win the election you need to inorder to implement it. Far better to win widespread support for more modest proposals and then actually get to implement them. You can always ratchet up the radicalism in office!

[James Maskell]

Osborne argues that by saying upfront, "we want tax cuts/relief/whatever", we will be giving Labour an open goal to say we will cut services. I dont buy that and think if anything that view lacks courage and conviction to make the case. I think you can sell it. Osborne doesnt have to specify. All he has to do is say that the Conservatives believe that the public are the best people to spend their own money, not the state. He only has to say that we should trust people with their money and therefore we believe in the principle of lower taxes.

No need to specify, and tells people we arent going to steal their money to squander it...no problemo.

[spagbob]

i dont know why all this moaning is going on. i reckon osbourne is jsut being smart. he knows that the conservatives havent been able to create a decent response to labours claims of spending cuts when they propose tax cuts, so he's not promising them. I reckon he will cut taxes very soon into a conservative government but he cant tell people that becuase of the claims that labour will make. Once elected, i reckon the conservatives will cut taxes, and they can do it by identifying the waste and therefore prove they can do it without cutting public spending.

on the issue of why economic stability and tax cuts are incompatible. this is not fully true, but with large tax cuts, it increases the amount of money circulating in the economy and that leads to increased demand which leads to inflation. as inflation rises, so must interest rates - hence economics stability and mortgages are put at risk. so its not economically illitereate to say that.

[JohnM]

Just to restate what I said on the main comments board, I stick to my view that I have to say that tax simplification is the first step to proving the case for tax cuts.

The electorate, in the main, really do not appreciate how highly taxed they are and that is due, at least in part, to the complexity of the tax regime which under Gordon has become more and more opaque and ever more difficult for people to understand.

If we do manage to simplify the tax structure, people might start to appreciate quite how much tax is being taken from them.

It's much easier to calculate the impact of a "real" basic rate of income tax of close to 37%+ (if one includes NI, pension fund taxes, push down local taxes and various other underhand elements to Gordon's massive splurge funding) than appreciate the many, smaller impacts of all the "little" taxes.

So, while it might not seem like it at first glance, I truly believe that tax simplification is a crucial step towards tax reduction.

We can sell tax cuts much more easily once people can see clearly the size of what's coming out in their weekly/monthly deductions.

No muddle at all.

[Rob Largan]

This does remind me of the 'Safety First' campaign ran by Baldwin in 1929. It was dull, uninspiring, gave people little real reason to vote Conservative, and we lost.

This short-term aim to appear trustworthy on tax, in the long-run is potentially extremely damaging, the constant use of the pharse stability before tax cuts, will only help to cement further into the public consciousness that tax cuts threatern stability, while anyone with an A-level in economics knows that is utter rubbish. This is the single biggest concern I have with the current leadership stratergy, for all the impressive and encouraging things they have done, they still lack the courage of their own convictions to make the case for a low tax, socially mobile and dynamic economy. So far Cameron has done very well in winning the Conservative Party a fair hearing, now he needs to give voters an alternative vision, a good reason to vote Conservative.

[johnC]

Of course we should be promising lower taxes. There is no need to be specific at this stage, but they should be the central plank of our whole economic policy. Without them the whole Cameron project looks shallow, vapid and opportunist. Is Osborne reluctant to do so because he genuinely doesn't believe in them, or because he is frightened of the consequences ? If the first he is beyond hope, if the second he is a coward. Either way he should no longer be Shadow Chancellor.

[Richard]

"on the issue of why economic stability and tax cuts are incompatible. this is not fully true, but with large tax cuts, it increases the amount of money circulating in the economy and that leads to increased demand which leads to inflation."

Er, what? Tax cuts mean that money goes to consumers instead of the government. It might lead to increased demand in some areas but there will be a reduction in others (consumers spend more, government spends less). Inflation is caused by an increase in the money supply which has more to do with bank creation of credit.

"he knows that the conservatives havent been able to create a decent response to labours claims of spending cuts when they propose tax cuts, so he's not promising them"

Which is why they ought to highlight the 80 billion identified by the TPA.

[buxtehude]

"i reckon osbourne is jsut being smart"

So very smart that the people listening get confused. Yes indeed. That's really good message management, isn't it?

We are turning tax into our Next Big Disaster, just as Europe was in the previous decade. In the process, we are showing we don't understant economics, have no genuine vision, and can't even be honest.

Very smart indeed.

[Oberon Houston]

There is one rule in politics that only the foolish break - never promise tax cuts. Honestly, I don't know how we have managed to mis-message this.

It is quite simple:

A. We are a party that aspires to lower taxation [than Labour], but we need to deal with specifics and tactics based on the real situation on the ground when we are in power, so don't ask us to commit to day-1 cuts, its the long term that counts.

B. Those of you that are worried that the above means 'at the cost of public services' can be reassured that we are committed to improving them, and will share the proceeds of growth between 'A' and 'B'.

C. We want to implement 'A' only in a way that maintains stability, because we understand that people cannot plan for the long-term if Govt. policy is wildly changing each day.

Am I missing something? ps, don't want to sound rude, but the 'Tax Cut Commando's' out there, don't bother posting a long-winded reply about why we should have a 0.0025% flat tax, because I will doze off.... Zzzzz

[christina speight]

It is the essential job of any party of principle to work out what it wants to do and IMMEDIATELY set about selling that policy.

This spineless lot have surrendered without a figh! Yuk! Who'd vote for a jellyfish.

There are pleny of examples world-wide where tax cuts not only are good in themselves but also increase tax revenue.

[christina speight]

Oberon - You've not been reading the economic figures lately.

Cameron would not be able to split "the proceeds of growth between 'A' and 'B'." because any growth is doubtful [we lag behind all our EU competitors for the tirst time] and without tax cuts there won't be any!

They're economic illiterates - all of them. They've got so much money they can't count themselves.

[Chad]

Hi Oberon,
You have to look at how Labour will attack the Tory plans and how effective those plans will be.

On first hearing, "sharing the proceeds of growth" sounds different, but Labour quickly picked up a useful attack that sharing between A + B (where A is tax cuts and B is public services) must mean less for B as it is a zero sum game.

This is not my argument, it is highly misleading, but clearly plays well. Do you vote for Labour who will give 'it all' to B or those nasty Tories who will give less to B to give some back to their chums A?

My solution, as discussed yesterday is to realise that 'no tax cuts' <> 'no public service cuts'. The Tories need to make a specific pledge to maintain Labour's plans in the next manifesto for a fixed period. I can't seem them doing it, and it will doom them to failure. People do not trust the Tories on public services and it will take something special like a specific pledge to even begin to change their minds).

Then, any tax cuts (funded by clearly and defineable areas where efficiency can be identified and achieved) will be seperated from public service funding and would help stimulate growth and stop the decline.

"C. We want to implement 'A' only in a way that maintains stability,"
You've fallen headfirst into the Labour frame. Our global competitiveness is not stable, it is declining.

So doing nothing, maintaining the status quo is not an option for 'stabilty'.

If Osborne argues that the economy after 9 years of Labour is stable, then it means that Labour, and particularly Gordon Brown have succeeded, so why vote them out?

Labour are controlling the debate on the economy and the Tories are using their spin and frames. This is a huge failure.

[Chris D]

"Tories in a muddle on tax" in the context of a criticism that the tories have failed to clarify their stance on tax.
Well I am going to stick my neck out and say that you could also call it "journalistic interpretation"
Just look at the two headlines, and read the articles, then in fairness pop over to BBC news24 and watch George Osborne being interviewed.
The daily mail got a "briefing" of the speech, the today programme got the whole transcript and the telegraph does not agree with the content of the speech. So the blindingly obvious conclusion is that the tories are in a muddle over their tax plans.

[Mark Fulford]

Rather than confused briefings, I wonder whether the Daily Mail has selective hearing, tax-cuts being their G&T.

On Thursday the Daily Mail interpreted “the taxpayer will be better off if the Tories return to power” as “a tax-cutting manifesto”. Today they claim it was bad briefing, even though Osborne’s message yesterday was identical to the message that’s been coming out daily since September.

[Oberon Houston]

Chad,

There is quite a lot of sense in what you say. I suppose a lot of this is about positioning rather than hard policy details. The huge distrust the public have for Tories running public services needs addressed. Now, you are correct that if the economy is shrinking, as it will most likely be due to Brown, we will need to cut public services, but, again, it needs to be measured, to reassure the public if for anything else. This way cuts can be clearly bracketed in a way people understand, and feel reassured by this.

Labour use public services as a political football against us in the most disgraceful way, and I wouldn't be surprised if Brown leaves us a huge mess to clear up, but again many are worried that we will throw the baby out with the bathwater, so pledges are the only effective way to counter this.

[Matthew Oxley]

Us not commiting to tax cuts (and hence annoying the right) yet having the national media imply we will cut them is the worst of all worlds.

This is good evidence that in our media age, you can't be all things to all people.

[simba]

Tax, Tax and more Tax is all there is to the New Labour. The harder you work the more they want to tax you. The more you are averse to hard work, the more benefits they want you to claim. However, I agree with George Osborne because the New Labour (and their BBC mouthpiece) have done everything possible to villify Margaret Tatcher's legacy incduling tax cuts and if Osborne as much as mentioned the word Tax Cuts, BBC would see their unreasonably huge salaries geeting cut and would go around looking for anybody who wants to "remind" people of the "bad old days" under the Conservatives.

I think the Beatles had Mr Gordon Brown in mind when they produced the song "Taxman". In case you have forgotten the lyrics, here they are:

One, two, three, four...
Hrmm!
One, two, (one, two, three, four!)

Let me tell you how it will be;
There's one for you, nineteen for me.
'Cause I’m the taxman,
Yeah, I’m the taxman.

Should five per cent appear too small,
Be thankful I don't take it all.
'Cause I’m the taxman,
Yeah, I’m the taxman.

(if you drive a car, car;) - I’ll tax the street;
(if you try to sit, sit;) - I’ll tax your seat;
(if you get too cold, cold;) - I’ll tax the heat;
(if you take a walk, walk;) - I'll tax your feet.

Taxman!

'Cause I’m the taxman,
Yeah, I’m the taxman.

Don't ask me what I want it for, (ah-ah, mister Wilson)
If you don't want to pay some more. (ah-ah, mister heath)
'Cause I’m the taxman,
Yeah, I’m the taxman.

Now my advice for those who die, (taxman)
Declare the pennies on your eyes. (taxman)
'Cause I’m the taxman,
Yeah, I’m the taxman.

And you're working for no one but me.

Taxman!

and you can listen here
http://www.eggmen.com/mp3/taxman.mp3

[Chad]

Hi Oberon,

And unfortunately that is where it all goes wrong for Osborne because, either:

* The economy is stable
Labour can simply argue that all those tax laws and inspectors that they have brought in (and clearly Osborne does not like) have clearly succeeded in creating that stability, so Osborne's criticism clearly suggests that he will threaten that very stability by sacking many of them. Tory cuts, tory cuts!

* The economy is is decline
So all those extra staff are causing our economy to slide. Osborne has ruled out tax cuts to stimulate growth, so he can only be planning to borrow loads, or (seeing as he has highlighted the huge number of staff) will start slashing public sector staff. Tory cuts!, tory cuts!

Labour are in a very strong position, and Osborne has boxed himself in with his current strategy.

The public need a cast iron promise that the Tories will not cut public sector spending. With that assurance in place, Osborne can cut taxes to stimulate inward investment etc.

This is the real Tory clause 4 (as it involves real ideolgical pain, and is not a cosmetic change). You need to embrace the public sector, be its champion nots its enemy.

Until you do, the public will not embrace you.

[johnC]

'The public need a cast iron promise that the Tories will not cut public sector spending'

I would prefer a cast iron promise that the Tories will not increase public sector spending and throw good money after bad before there are structural reforms and guarantees that the money will not be wasted. More money will not make hospitals cleaner or schools more disciplined: that requires a new culture of responsibility, accountability and proper stewardship.

[Gareth]

We had a promise not to cut spending last time and the time before that. But, when coupled with a promise to cut taxes, the spending pledge is all too easy to rubbish.

However painful it may be(and as someone who would dearly like to pay less tax, it is pretty damn painful), we need to be self-denying this time.

[Mark Fulford]

You need to embrace the public sector, be its champion nots its enemy.

I thought you were Mr Small Government...

[Chad]

I am. But it is the catalyst for victory.

You guys want to win, and tell me you are prepared to compromise to win, and I think that if you do that then you will win.

You'll be more small government than Labour and you will be so grateful to me that you will drop this horrendous state funding plan, employ me to fix the IT issues, bring in tax cuts, then we will all be happy and in government for years to come.

Labour will implode, and every will be calling themselves progressives.

I have a dream!

[Chad]

"We had a promise not to cut spending last time and the time before that."

Yes, but the rest of your message was wrong. You need to get the whole package right.

Now most of your message is right. People are listening, but, in the back of their minds, there is that niggling fear of Tory cuts.

Sit back, take a deep breath. How much do you want to win? It's time to pledge to maintain Labour's public sector spending plans (ie those they propose in the next manifesto) for, ideally, one parliament.

[johnC]

'We had a promise not to cut spending last time and the time before that."

If there is at least £ 80 billion of wasted government expenditure perhaps it was this bit of the message which was wrong.

[william]

The reason we are in a muddle about promises about tax is not just that labour will accuse us of making service cuts if we promise tax reductions.

The other problem is that we are not addressing the real reason why public service is failing. It is the fact that bureaucracy has replaced caring - whether for teachers, police, medical staff or anyone.

They are all box tickers now, and there is no point in trying to take on the system any more. It's become too powerful.

No teacher dares to discipline. No police officer dares to harrass (even known criminals) and no doctor dares to offer anything other than the minimum advice. Teaching, curing and making safe streets is no longer the point.

We need to get the public services working again. That is the need that we are crying out for. Money is important but this is only secondary to this first priority.

To get the public servcies working, and the freeing of public servants to care once more in their jobs, many unhelpful laws must be repealed.

The HRA, the EHRA are only the first. All will need us to be released from the ECJ, so that we can return to the Common Sense of Common Law, a system of law which we understand.

If the EU will not relelase us so we can make our society work as it should once more, we will need to fight our way out - politically hopefully rather than militarily.

Once our public services are working again, then tax rates can be set at the most efficient rate where our economic growth is not limited by high tax, fraud and bureaucratic overload.

If we cannot explain to ourseleves what we mean, and people like Cornerstoners who want to address the real issues are told to be quiet, then the muddle at the head of the party will only get worse.

[Adam]

People keep going on about the £80bn identified by the TPA. This isn't 'real' savings that could be made though - until people have an idea of how they might (for example) sort of government procurement, or claw back overspend on projects that are currently ongoing you can't get your hands on large chunks of this £80bn.

[Chad]

You are right Adam. As pointed out before not all/most of the TPA wastage figure is achievable. I believe, however unlikely for many for being too geeky, but becoming more noticeable, that IT is the key.

We can save real billions and improve delivery and efficiency. With these billions we can cut IHT, raise the tax threshold, and grow the economy. All fully costed.

Labour are simply incapable of achieving this so cannot 'steal' the policy (though they will try but then we will be leading the debate) as they are incestuously tied to the very consultancies that are draining the system.

The public are only too aware of Labour's IT failure and huge waste. We can fix it. I bet an election hasn't been won on IT before but it could play a major role.

[Sean Fear]

"It's time to pledge to maintain Labour's public sector spending plans (ie those they propose in the next manifesto) for, ideally, one parliament."

That would be a pledge to waste money for one Parliament, then.

[Chad]

Sean,

I know you and many have real pain with this proposal, that's what makes it so important, a real clause 4 moment.

Just answer me this:
If Labour pledge to spend x forever (as that is what they do) or the Tories pledge to do x for just one term, which one would you be more likely to vote for?

[buxtehude]

Oberon,
"There is one rule in politics that only the foolish break - never promise tax cuts. Honestly, I don't know how we have managed to mis-message this."

Fine. Don't ever talk about tax cuts again, I'm happy with that.

BUT the party must talk economic sense. It must show it understands how to get growth, and how to get value for the tax we pay.

A coherent message on those things - not some idiot sound-bites that fall apart when scrutinised - is what we need.

I DON'T require a tax cut pledge.

I DO require some sign of intelligent leadership.

[John Hustings]

"I know you and many have real pain with this proposal, that's what makes it so important, a real clause 4 moment."

Chad, I don't think we need any "real" clause 4 moments.

[Sean Fear]

Chad, I can't see the point of promising to do something which is damaging to the interests of this country, simply because Labour promise to do so.

I draw no distinction between excessive public spending under a Conservative government, and excessive public spending under a Labour government. I'll leave that argument to the US Republicans.

[Chad]

"Chad, I don't think we need any "real" clause 4 moments."

John, I'm not seeking to invent one, but pointing out that one exists; until the public trust the Tories on public services, they will not win an election.

[malcolm]

It's becoming clearer now why Osborne is receiving some unfriendly press today from usually friendly newspapers.SPIN!Have we not learned anything from the past 9 years?The public and I also suspect the media are heartily sick of the semantic manipulation Nulabour have indulged in so much.
Probably naive of me but can't we be better than that.ie Say what we mean and do what we say.

[Chad]

"Chad, I can't see the point of promising to do something which is damaging to the interests of this country, simply because Labour promise to do so.
"

Sean, would you ever be prepared to take one small step backwards to enable you to take four big leaps forwards?

If net-net you are helping the interests of the country, surely it would be foolish to not make one backward step to make that progress possible?

I keep hearing that Tories are pragmatists not ideologues, but on this one, massive, elephant in the room, trusting the Tories on public services, many heels are being dug in deep.

[Sean Fear]

Chad, if we've been wasting peoples' money for one Parliament, we'll get dumped at the end of it, so all we'll get is one step backwards.

I'd rather demonstrate the benefits of controlling public spending sensibly from the outset, and then appeal to them for a second term on the basis of our record.

[Chad]

"Chad, if we've been wasting peoples' money for one Parliament, we'll get dumped at the end of it, so all we'll get is one step backwards.
"

Hi Sean, your use of language does help display what a thorny issue this is for Tories. Many people in the country (who arenot currently voting Tory) do not consider spending on public services a waste at all, but an nvestment.

It is that Tory mindset that is stopping the public from trusting you. that is why it is such a challenge, and why Labour will not be sweating too much.

[Jack Stone]

Since Mr Blair became Labour leader he as successfully painted any promise cuts in taxation as cuts in health and education so much so that personally I believe this as been a large part of why we have lost the last three elections.
The priority for the party now, especially when the public servise are in the state they are, is to convince people of our intention to improve public services not to give tax cuts.
People have got to get over this obession with tax cuts. I personally believe our priority should be making our health and education services the envy of the world not cutting taxes.
When we speak of tax cuts I am afraid all the electorate seem to have the impression, even if it is false, that we are simply Robin Hood and his merry men in reverse!

[Sean Fear]

Well, it's what makes one a Conservative rather than a social democrat. I believe that public spending at its current level is wasteful. My years as a local councillor only deepened my conviction that Government wastes money at every level, on things that are of no value to the public, or even counterproductive.

[Sean Fear]

And following on from this, I note that almost every successful Conservative campaign in the London Borough elections was based on a promise to keep council tax lower than their opponents would do. That approach was not unsuccessful.

[Chad]

You know Sean, I completely agree. 100%

For me, when I joined the conservatives it was small government too, but that has gone out the window.

But, you can't cut costs and improve efficiency until you win an election, and you won't win an election until the public at large, who have long bought into New Labour's frame that public service 'spending' as 'investment' (of course it is up until the point it becomes wastage) trust you with public services.

So it is a tough choice. I completely agree. It is not about how you or I would 'rather' do it, but how you need to do it to actually get in power, and bring about change.

And indeed, we know that London/South-East and the rest of the country are very different places. Sure, the Tory message is crack-cocaine in London, but in the rest of the country?

I'm not trying to tell you what I want, but what I think the people in those seats that are not voting tory want. If you would rather stick to your guns, then of course, that is your right, but if you do not address their concerns, and get them to trsut the Tories on public services, then you will not win an election.

For all the good work, when it coes to the election, Labour will blow you away (well beat you anyway) on a public sector platoform

[Sean Fear]

By the time of the next election, I believe that Labour will have tested to destruction the belief that pouring money into public services at the rate which they have done leads to an improvement in their quality.

[Richard]

"People keep going on about the £80bn identified by the TPA. This isn't 'real' savings that could be made though"

Fair enough. What about the 30 billion highlighted in the James review?

Secondly, if the Tories don't commit to cutting taxes then which one of the three major parties will represent those who want lower taxes?

[Oberon Houston]

The difficulty with the "TAX" message just now is that to many people, they are only at the very early stages of realising that Taxation might be too high.

Generally speaking, economically Britain 'seems' fine to most people and after Labour has spent 8 years spending their money on improving Public Services, which is what they wanted, we Tories can then alarm people if our language is very hostile to institutions like the NHS, and we then connect this to cuts in spending and reduced taxation.

Mrs Blogs [ho ho], might then think ‘wait a minute, my money has been spent over the last 8 years improving the NHS, which is what I wanted. The Tories now want to run it back into the ground and give the money they save to rich people, what the point in that?

Its about messaging, and reassurance, and that’s where Cameron’s understanding is spot-on, and old crabby codgers like Tebbit completely miss the point, probably because they have never tried to put themselves into another persons way of thinking – too arrogant to bother with that probably.

[Richard]

"I personally believe our priority should be making our health and education services the envy of the world not cutting taxes."

Higher taxes are not needed to do that. Less state involvement is the key.

[Richard]

By the way Jack, surely the best way to make funds available for superior public services would be faster economic growth? And I wonder how that could be achieved - cutting taxes maybe?!

I think we have to prove to the electorate that a)there is waste out there (and we should be able to highlight it) and b)tax cuts are good for the economy and therefore for the electorate.

[christina speight]

But nobody here has taken up the real challenge I posed, that if you believe that no growth is likely with the current rates of tax, the tax cuts are not just an option they are essential

It is the job of the Tory party - if it can rid itself of all these wet Cameroons - to get to grips with that, formulate a policy to sell it and give THAT to the rfest of us to carry out. All those on this blov who are so defeatist that they cannot face up to doing what's right should not be in the party at all.

[christina speight]

But nobody here has taken up the real challenge I posed, that if you believe that no growth is likely with the current rates of tax, the tax cuts are not just an option they are essential

It is the job of the Tory party - if it can rid itself of all these wet Cameroons - to get to grips with that, formulate a policy to sell it and give THAT to the rest of us to carry out. All those on this blog who are so defeatist that they cannot face up to doing what's right should not be in the party at all.

[Richard]

"All those on this blog who are so defeatist that they cannot face up to doing what's right should not be in the party at all."

I wasn't aware someone appointed you to decide who should and shouldn't be a member of the Conservative Party.

[David Belchamber]

If the NHS, schools, government departments etc were to be really efficiently managed (viz Chad and his comments on IT), vast savings would accrue after a few years. Then you could talk about cutting taxes - but only after these monolithic organisations have actually shown tangible improvements.
Can the tories actually convince the electorate that they are the people to do that?
In the meanwhile, I would promise to simplify taxation; Gordon Brown is unlikely to pinch that idea.

[Mark Fulford]

But nobody here has taken up the real challenge I posed, that if you believe that no growth is likely with the current rates of tax, the tax cuts are not just an option they are essential.

First, we're not in a situation of no growth.

Second, you're assuming that tax reduction is the only lever for stimulating an economy. There are others, such as reduction of red tape and risk.

Third, individual tax rates can be adjusted while maintaining the overall take. Business tax reductions can be compensated by income tax rises.

[arthur]

I'm sorry that people can't accept that someone who thinks like a Tory and speaks like a Tory is not accepted as a Tory. What are some of the people on this site saying? That the only way to power is to pretend that the Tory party is a socialist party, and then when in power tear of the mask!
That would mean one term in power then defeated in another 1997 landslide: very clever.

[christina speight]

Richard - Please don't be a pompous prat. If you don't believe in lower taxation then you're no Tory It's only a question of having the guts to fight for it.

All like you are like the French who surrendered in 1940 pleading solidarity. Luckily we had a (Tory) pm who had princoples and fought for them. You, it seems would have surrendered.

I never thought I'd read such spineless defeatist drivel on something setting out to be Consrtvative.

[Yet Another Anon]

>>>>The public need a cast iron promise that the Tories will not cut public sector spending. With that assurance in place, Osborne can cut taxes to stimulate inward investment etc.

This is the real Tory clause 4 (as it involves real ideolgical pain, and is not a cosmetic change). You need to embrace the public sector, be its champion nots its enemy. <<<<
A different plan will inevitably mean that regardless of the overall amount of spending that some things will have more money spent on them and some things less, given the level of the PSBR there is no scope for maintaining levels of spending while cutting taxes, to do that would increase the National Debt putting up Debt Interest repayments and limiting scope in the event of some future emergency in terms of leeway to borrow money.

Surely the first priority should be towards putting the books into surplus and then towards tax cuts focusing perhaps on lowering Income Taxes on people on Low and Middle Incomes while cutting public spending by scrapping Tax Credits and replacing much of currently free Education, Health and Welfare with Low interest Loans thus recouping money from those who have benefitted from the availability of such schemes.

[Richard]

"If you don't believe in lower taxation then you're no Tory It's only a question of having the guts to fight for it."

Only if you have a very narrow definition of what a Tory is. Many Tories at the end of the 19th century wanted higher taxes (through tariffs) to fund a welfare system and stronger military. This is not a view I subscribe to but I recognise that the Tories are a broad church.

[Richard]

"All like you are like the French who surrendered in 1940 pleading solidarity."

Actually if you read my previous posts you would see me arguing that we should make the case for lower taxes. However I also accept that those with an alternative view have a right to be in the party.

[Adam]

For crying out loud:
- the James Review didn't identify £30bn of savings, it took Labour's own predicted savings of £20bn as read, and added £10bn (and even that takes some assuming of what can actually be achieved).
- the level of tax isn't the big problem - the complexity of tax and where it falls is. That should be the priority of the party - fixing the bits that are really badly broken, not chasing dreams of reliving the Lawson budgets for thrills.
- no-one has mentioned yet the chronic public sector borrowing at the moment. Before any government can contemplate cutting tax, spending cuts first need to plug this gaping chasm in the public finances. Quite how widening that chasm any more is a good idea no-one has yet been able to explain to me.

I make no apology for being a fiscal conservative, who thinks governments should at least try and balance the books. If that means no tax cuts, so be it.

[Jack Stone]

I am afraid if you say to people that the way to make the health service better is to have less state involvement they will think that you are going to privatise it and you may not like the fact but most people think that if that happens they will have to pay to use the health service and simply people will not vote fo that.
If you want to promise to privatise the NHS you will have to face the fact that you will stay in opposition.
Banging on about tax cuts is what lost us the last three elections. If we go on about it again we will lose again. I am afraid its about time you fellas faced facts!

[buxtehude]

Jack, learn the difference between facts, opinions and predictions.

"Banging on about tax cuts is what lost us the last three elections."

We didn't bang on about them; we actually said not very much, not very well. Lots of other things helped us lose those elections.

"If we go on about it again we will lose again." That depends on whether we 'bang on' about 'tax cuts' or whether we have a proper economic debate about growth, threats from abroad, investment, etc etc. I don't want to talk about tax cuts, I want to talk about how our tax-and-spend strategy will help this country.

[christina speight]

If you all remember all the weak-kneed brigade ("wets") told Maggie Thatcher that you couldn't reform the trade unions or the law relating to them and you couldn't cut taxes.

Well Maggie had guts, not like this spineless bunch. She put two fingers up to the lot of them, did it anyway, was hugely popular for it and won umpteen times. This lot are terrified from doing what's right and haven't the guts to fight for anything. Yuk!

Glad they weren't around in 1940.

[Sean Fear]

Well, we did offer a modest tax reduction in 2001, although Michael Portillo's heart was hardly in it.

OTOH, we certainly weren't offering tax reductions in either 1997, or 2005. It's rewriting history to suggest that we were.

[Graeme Archer]

Christina Speight - you go too far. Debating tactics around how to elect a tax-reducing government has nothing to do with whether a person would have fought fascism in the 1940s.

[Giffin Lorimer]

At this point in the political and economic cycle, Osborne is right to position us as a safe alternative to Labour. It's vital that voters don't feel threatened by us; as Labour falls into the midden of incompetence and corruption that it has built, amid scenes of bitter factional infighting, we want them to see us as saviours, not just 'the least worst alternative'.

Any dramatic change to the economy has immediate negative repercussions, irrespective of the longer term benefits. There is no evidence that people want to jeopardise their jobs and homes and they understand that any big change could have adverse consequences for them. This is especially true of the large number of people in recepit of government largesse. They have big mortgages, big credit card borrowings and the economy doesn't feel vibrant - look at retail sales. It would be very easy for Labour to portray a tax cut promise as voodoo economics.

We need toi factor in the cost of change. All change requires additional resources - so you either stop doing something or you spend more to keep doing one thing while building the alternative. The constant policy churn under Labour has squandered huge sums of public money and is a key reason that services are getting worse while spending increases.

We need to set a course and move steadily forward, rather than trying to do everything in one term. Remember that most of the privatisations took place under Major, not Thatcher - it can take a long time for the benefits of policy changes to be felt and if we plunge the UK into a recession in our first term we won't be given the chance to see through the changes we all want.

[Richard]

"If you want to promise to privatise the NHS you will have to face the fact that you will stay in opposition."

Less state involvement doesn't equal full-blown privatisation. There was an opinion poll a while back which showed a majority of people would favour a less statist system. What do you make of this Mr Stone?

[a-tracy]

Jack "If you want to promise to privatise the NHS you will have to face the fact that you will stay in opposition."

Jack the only people privatising the NHS are the Labour Party and it hasn't lost them an election yet! Before they came to power we had a NHS dentist that we saw every six months if for nothing more than a check up, scale and polish for a reasonable charge. Now the majority of quality dentists who have practised for years will only see you if you're private i.e. private insurance or private pay as you need to use at sky high rates.

If you want to oppose anything Jack it should be our pay more for less Labour Party. If all you're offering is more of the same then more people will just say "what's the point, we're going to get screwed whoever is in power".

Jack, what exactly do you tell potential voters that the Conservative Party will do differently to New Labour with the Health Service or do you really think it's hunky-dory as it is?

[Sean Fear]

"Jack, what exactly do you tell potential voters that the Conservative Party will do differently to New Labour with the Health Service "

Jack would say we should spend even more.

[William Norton]

Probably slightly off-thread, but in 2001 and 2005 we were making the same basic promise of increasing spending in aggregate and taxing less in aggregate, i.e. % of GDP taxed would fall as the economy grew.

In 2001 the intention was to spend £8billion less than Labour after 2 yrs and return the saving in lower taxes. These plans fell apart during the campaign - probably not because of their intrinsic merits. I forget the exact timing of the announcement of the proposals, but they would have come out after January 2001 (I remember that much, because my father died while they were still being finalised). Say, no more than 4 mths before the election.

In 2005 the intention was to spend £12 billion less than Labour after 5 yrs, use £8 billion to repay debt and return £4 billion in lower taxes. Laugh if you like but I don't think these plans fell apart. People may not have believed them, and largely ignored them, but I don't think they fell apart. The plans were announced in January 2005: 4 mths before the election (although there had been a rolling waste campaign for about 11 mths).

As part of this the intention was to make savings via the James Review, totalling £35 billion. Working on a different basis Gershon had found "efficiency savings" of £22 billion. We took individual items from Gershon totalling £16 billion in areas e.g. internal productivity where he had access to data you could only get if you were actually running the dept. The balance of £19 billion we found ourselves and calculated on a very conservative basis. In reality James Review savings (assuming Gershon achieved in full) would have cashed out at over £40 billion.

It's a difficult judgment call as to how much detail you provide. In 2001 we were detail lite and got savaged for it. In 2005 we took the view that we had to provide back-up for our claims - some people say we overdid it.

In both cases the fundamental problem was a basic credibility gap for the Conservatives. I don't think the detail (or lack of it) in the tax plans had any effect on the actual outcome of the election.

[christina speight]

Faint hearts all round. Remember that Maggie with Geoffrey Howe's first budget caused wails of anguish but she was right. The tax cuts came after that dose of medicine. She was not lily-livered. She knew what was right and had the guts to go out and sell it. After a traumatic period we came out the other side triumphantly.

Too many here are unwilling to stand up for their principles and admire Cameron for having none.

And Graeme - I didn't go a inch too far. If you don't have people who are prepared to put principles first you end up like the French in 1940, capitulating to evil.

[matt wright]

A number of commentators here have hit the nail on the head. Many voters equate tax cuts with service cuts and Labour have helped to implant this message. It is harder than some imagine to achieve efficiencies and many voters are involved in managmenet and recognise this. Pledges to cut income tax are therefore hard to sell. However I do think that the simplification and reduction of corporation tax especially on small and medium sized businesses could be sold in order to grow the economy and help fund more public services.

Matt

[Julian Morrison]

He may not be able to cut taxes, but he can probably still flatten them. A flat tax, eastern-european style, would be a great step in the right direction, not least because of the sheer amount of complexity it would render obsolete. In its initial incarnation it could be made "revenue neutral". That allows simultaneous tax radicalism with "not frightening the horses". And with one big number representing the totality of the tax take, it would be that much easier for the voter to see how any cuts would improve ordinary people's lives.

[Richard]

"And Graeme - I didn't go a inch too far. If you don't have people who are prepared to put principles first you end up like the French in 1940, capitulating to evil."

High taxes are misguided and wrong. But evil?!

[Julian Morrison]

They are evil. Think of what the tax burden has prevented! You don't see the people that could have lived, or could have lived better. You don't see the inventions that never happened, the businesses that went under, the life chances lost. Evil isn't too harsh a word. The goal must be to return people's money!

[Richard]

"They are evil. Think of what the tax burden has prevented!"

I take your point but to me "evil" suggests something more deliberately destructive as opposed to the "evils" of high taxation which are due to the side-effects of flawed intentions. Besides, it's hardly on the level of the Nazis!

[christina speight]

Richard - I think you are being deliberately obtuse and hair-splitting!!! Principles are principles and if you don't defend them you end up capitulating to something really evil. Call it a slippery slope, call it the thin end of the wedge - - -0r call it the road to perdition.

[David Belchamber]

Matt @ 00.27 is absolutely correct: "A number of commentators here have hit the nail on the head. Many voters equate tax cuts with service cuts and Labour have helped to implant this message".
Blair is already saying this about Cameron.
However, if we concentrate our attack on how badly New Labour has handled the NHS, education, law and order, the civil service departments etc, we should have lttle difficulty now in getting voters to agree.
We then have to stress that, applying the same level of funding, we would get better value for the end users by efficient management.
If we can in practice save billions by reducing wastage (and I think that will take time), then we can actually start cutting tax.

[Giffin Lorimer]

We have 3 years to get people to understand that we aren't bad people who want to close all the hospitals and drive people into penury. However Labour have taken over the BBC and it's going to be hard to get a fair hearing on the radio or TV news.

So we have to have a stealth approach. Start with small steps: we aren't going to cut services to the needy. The promise of not guaranteeing tax cuts makes that credible to most people.

Once they buy into the fact that we are on their side, they will start asking how we plan to fix the mess that Labour made. We will then need the policies that are under development.

At some point, the slowdown in the economy and the growth in unemployment will get people asking how to create more jobs. Juvenile crime and joblessness are linked. We can then explain how high government spending destroys economic growth and jobs, and that reducing government spending (gradually, not slash & burn) will address the problem.

The key point: there is no point in offering solutions to people who don't think they have a problem. You have to wait until they are receptive and then talk to them. Be patient, hold to your principles and prepare.

[a-tracy]

We have had specific tax rises to go to the NHS since 2001 2% on every employed worker in the private sector. On an average of £20k pa that's £400 pa extra.

Yet services have been cut:

I've already mentioned the NHS dental services plus;
No more local OOH clinics outside of Mon-Fri 08:00 - 18:30;
No more Saturday morning clinics;
An OOH service that is overstretched and the public using ambulances like taxi's in the middle of the night.

You say the Tories aren't trusted with the NHS but this present government has done more to ration NHS services than any since I was born. So why haven't the Tories been shouting this from the rooftops, is it perhaps because the powers that be agree with it?

The main service we all use is our local doctors clinics, most men I know try to avoid these clinics like the plague, you'll only see how difficult it is to get a convenient appointment the next time you try.

Private doctors co-ops are setting up and are big growth businesses, but you have to remove the free service first, make it inconvenient and voila, a semi-privatised NHS. Taking a couple of hours off in the middle of the day to get back to your local doctors clinic isn't always convenient with commuters/workers, so if they're really worried about that lump behind their ear, finally they will pay up.

This new policy of getting people out of hospital as soon as possible and cared for by their own friends and family, with a new right to ask for time off work in order to do this in the future, will also reduce the NHS service to patients and I'm sure some people will be able to afford private carers to take over the nursing, but for those that can't tough.

So we pay TAX for these services, but then have to pay again in time or money when we or loved ones need to use them. We're paying more for less.

[Philip]

Any Conservative must want people to keep as much of their hard-owned money as possible, with a smaller role for the state, with law and order and protecting the public being its most important role.

However the problem as I see it is that voters have accepted the Left's assertion that cutting taxes will always = cuts in public services. Even Michael Howard's sensible 2005 election promise to fund tax cuts out of cutting wasteful spending while not cutting front-line services, was not accepted. Perhaps we need to get the message across that we are the party most likely to cut taxes, but will only do so without damaging public services or the economy. So Messrs Cameron and Osborn might have the right priorities on this. We may also need to convince people that the State is not necessarily the most effective means of provision of services.

[matt wright]

Whether we like it or not there are significant numbers of people who are happy to pay quite high taxes if that will mean they can live in a society that cares. We can argue about whether its value for money etc but that is there view. We have to bear it in mind,

Matt

[Richard]

"Whether we like it or not there are significant numbers of people who are happy to pay quite high taxes if that will mean they can live in a society that cares"

I suspect a lot of these people would actually prefer those higher taxes to be foisted on others.

[Richard]

"Richard - I think you are being deliberately obtuse and hair-splitting!!!"

No, I'm just not keen on hyperbole.