We did not lose the last two elections because we promised tax cuts

Two of the most threadbare arguments are being wheeled out by opponents of the Tory Tax Reform Commission's recommendations:

1. The Tories would be foolish to offer tax cuts as they didn't win the last two elections; and
2. The kind of tax cuts recommended by the TRC will only benefit the wealthy.

THE TORIES WOULD BE FOOLISH TO OFFER TAX CUTS AS THEY DIDN'T WIN THE LAST TWO ELECTIONS

Rebuttal points:

• The Conservatives lost the last two elections for all sorts of reasons but tax policies were not the lead factors.  In 2001 voters were still ready to give Tony Blair the benefit of the doubt and in 2005 Michael Howard's pitch was too unbalanced.  Mr Howard offered a thin manifesto and emphasised 'core issues' like immigration too much and did not talk enough about the justice and quality of life issues that David Cameron is rightly championing.
• It was too early to sell lower taxation in 2001 and to a lesser extent 2005.  Voters were still ready to believe that extra taxes would produce commensurate improvements in schools and hospitals.  In 2006 - and certainly by 2009 - voters are more open to the idea that their taxes have been wasted and they deserve a refund from Labour salesmen who promised too much and reformed too little.
• The Tories played a very uncertain trumpet on tax before the last election.  'You cannot fatten a pig on market day' was Lynton Crosby's famous advice but that is what the Tories attempted to do with their eve-of-election tax plan.  Only months before the General Election Oliver Letwin - then Shadow Chancellor - was telling the Tory Conference that he wouldn't make promises of tax cuts that voters wouldn't believe.  When, a few months later, he did say he could afford £4bn of tax cuts it was no surprise that unconvinced voters remembered his earlier hesitancy.

THE KIND OF TAX CUTS RECOMMENDED BY THE TAX COMMISSION WILL ONLY BENEFIT THE WEALTHY

Labour are saying that only a third of Britain's poorest citizens will benefit from the TRC package while Britain's wealthiest people would benefit by at least £1,000 each year.  This analysis ignores the dynamic effects of the tax package recommended by Lord Forsyth's team.  Some of the taxes that are least socially just - like council tax - were outside the TRC's remit. The main focus of the TRC was on business and other forms of taxation that - when cut - can boost the economy.  Until the dynamic effects of tax cuts have been considered - on higher growth, job creation and extra long-term revenue for the Exchequer - it is difficult to say whether the TRC package is regressive or progressive.

GEORGE OSBORNE'S RESPONSE

Interviewed on this morning's Today programme the Shadow Chancellor made it clear that he would not be diverted from his existing position on tax.  He would take no risks with peoples' mortgages or with the nation's public finances and there would, in consequence, be no unfunded tax cuts.  All tax cuts, he continued, would have to be paid for by other tax increases.  He highlighted environmental taxes which, he promised, would rise as a percentage of revenues under a Tory government.  He questioned the focus on tax cuts as a way of boosting the economy.  He argued that low interest rates and low inflation were the basis of a strong economy although he accepted the case for simplification of the tax system and had invited Price Waterhouse to investigate reform options in this area.

The leader writers in this morning's Daily Mail offer some comfort to the Shadow Chancellor:

"While we applaud Lord Forsyth for identifying some eminently sensible areas of fiscal reform, it could be that Mr Cameron is wise to avoid committing to tax cuts.  He can be certain, after all, that Labour - and unfortunately a majority of the British public - will construe these as cuts in public services, most particularly the NHS."

Comments

[Serf]

The Conservatives lost the last two elections for all sorts of reasons but tax policies were not the lead factors.

Following the loss of confidence in Conservative powers to run the economy, even those who wished for tax cuts in previous elections, didn't believe what they were promised.

[Andrew Woodman]

I still can't believe John Hayes called Donal Blaney was far right wing for suggesting we recommend tax cuts. When Cornerstoners give up the argument, you have to wonder if Brown and Balls have won the argument.

[EdR]

All Tories want tax cuts. Most politically-astute people expect to get tax cuts from a centre-right government. But few people generally (including on the right) tend to believe or necessarily trust specific tax promises. And that's why the centre-left have a built-in advantage on this. They don't have to persuade people that taxes are good for them; they just have to dissuade people that tax cuts are credible. "Sums don't add up", "uncosted", etc. dripped to the media for a few months, repeated verbatim by Newsnight presenters, and that'll be enough doubt in a lot of people's minds to put them off voting.

The way Labour ingrained huge taxes and public spending back onto the public was by doing and not saying: by implementing tax rises, by increasing public spending, and then making the argument for continued government growth off the back of that. The way Osborne must convince people of the benefits of a low-tax economy is by doing: shrinking the state in a way that doesn't affect public services, shrinking the tax burden, targeting those benefits to the people most hard-done by under the current system.

Sure, he could aggressively campaign for tax cuts; but it would energise the existing Conservative base (which is seen much less positively than the Cameron brand) while scaring the horses in non-aligned sections of the electorate, the ones who swing seats -- people who aren't convinced tax cuts wouldn't affect their jobs and illusion of economic security. Plus, it's playing into Brown's hands: he loves chances to steamroll people with a barrage of dodgy stats rattled out so fast that nobody gets to question them, the hidden catches buried deep in the small print. He does it because it's fairly effective -- and anyway, he can always deliver a pre-election tax cut (andraisetaxesheavilyinthesmallprint) to take the sting out of the argument if things get too heated for him.

I think there's a time for a sustained public campaign to convince people of the merits of tax cuts. But the time for that is in government with the economy stable, with businesses growing. I'd much rather see a slower but steady shrinking of the state under a Cameron government than the inevitable smash-and-grab under Brown.

[Chad]

But Cameron has no problem at all with massive unfunded spending promises.

[Old Hack]

At the conference during the economic debate I used the handset provided to send the following text message:

"A low tax economy is more efficient and competitive. Lowering taxes helps stimulate the economy to provide higher tax revenue for government."

I waited in vain for it too appear whilst all the Cameroon claptrap about economic stability got through to the conference hall screen.

We may be on a marketing mission to woo middle of the road floating voters, but quite frankly we are kidding ourselves if we think we can get by on generalisms and flannel whilst Labour sink their teeth into what the Tax Reform Commission suggests.

We may have lost seats in the last couple of elections by not being upfront and/or disingenuous with the electorate about tax - but not by saying we'd cut taxes.

I see no change on that front from our Treasury team. They have got to get their act together and pitch their case with conviction. Nobody is convinced by the current charade.

[Geoffrey G Brooking]

"We did not lose the last two elections because we promised tax cuts"

Yesterday a television station did a survey in the centre of Basildon and asked voters in the marginal seat whether they would prefer tax cuts or a better NHS. A massive majority said that they would rather see a better NHS.

Given that Basildon effectively won us the General Election in 1992 does this survey, as unscientific as it may be, answer the burning question?

[Andrew Woodman]

'Yesterday a television station did a survey in the centre of Basildon and asked voters in the marginal seat whether they would prefer tax cuts or a better NHS.'

Why is this an either or question? Surely the last few years have shown that just pumping in money doesn't work.

[Mark Wadsworth]

I (and presumably most others who have pointed today) think that GO fails to stick to the script.

It sickens me every time somebody calls for tax cuts and journalist hits back by saying "So, you'd cut the NHS then?". Nonsense!

WHy can't GO (and Oliver Letwin etc and indeed Nigel Farage, who have all fallen into the same trap recently) not prepare an answer to explain that
1. the first aim is to cut government waste of £50 bn a year,
2. the answer to improving NHS is clearly NOT just shedloads more money at it
3. tax cuts can be VERY progressive - i.e. by doubling the personal allowance
4. oh, by the way, Brown is running up additional government borrowing of £40 bn a year. Spending has gone up 70% in nominal terms since 1998, from £5,500 per person to £9,000. What happened to Value For Taxpayers money?

As to what's been leaked so far, isn't this pretty much the same as what the Lib Dems suggested a month ago?

[david]

The Basildon voxpop, Always be careful about taking what people say at face value, it may not be what they really think. Also be careful about saying your opposed to pumping money into the NHS, it might look as if you believe in pumping money out: do you?

[Mark Wallace]

The Six o'clock news report was an either or between "The Environment, the NHS or Tax Cuts" and was thus a ridiculous distortion of the economic facts and a smear against taxcutters generally.

I have complained to the BBC, but seeing as they haven't properly answered my previous complaint (from June) goodness knows if I'll ever hear anything.

They have this appalling habit of replying to complaints saying "I am sorry you felt angry/cheated/lied to", which simply apologises for the complainants feelings, rather than for the inaccuracies or bias.

[Bob]

Only UKIP can claim to be the party of lower taxation because they will bring us out of European government and save us £115 million pounds per week. The 3 major parties are all pro a European government so we will continue to shell out. Expect bigger taxes if any of the big three win the next election.

[malcolm]

Agree about the BBC Mark, woke up to this morning to 'massive tax cuts' on radio 4 which had become 'drastic'when I switched to radio 5.Amazingly their website coverage this morning seems fair.

[Og]

With respect to GG Brooking 10.07, his is the sort of asinine posting that tells us how the tax debate gets corrupted: the MORE tax the government takes from you, the MORE benefit it can provide to you, and the happier you shall be!

Give me strength! What next? State-provided package holidays paid out of general taxation?

Public services should not be judged by How Much, but by How Good.

Admittedly the ERM fiasco is a memory that must recede before Tories can again hope to hold a consistent lead over their opponents on the subject of economic capability, but there is no reason in the meantime to forget that the great post-war economic argument has already been won - by the Right.

Lower tax economies providing good essential services make for higher GDP growth, higher tax revenues, better domestic and foreign investment, and greater social mobility. Higher taxing countries routinely end up with lower growth, higher levels of unemployment and a degree of public involvement with private life that is resented by the great majority.

I really don't think the Notting Hill set think like this. Our choice is between Brown, whose gameplan we know too well, and an Eton Socialist. Judging by Letwin's comments of the past few months, even the economically educated Right has been forced to throw in the towel in order to kow-tow to this economic drivel.

[Mark Wadsworth]

What ERM fiasco?

Joining ERM (supported by Labour and Tories alike) was a disaster, leaving again was a Good Thing. Another message that has to be driven home.

Albeit that we didn't leave, it was a rather undignified ejection.

[anon]

Perhaps some of the more economically enlightened individuals on this forum would be able to clarify something for me. I might be mistaken but if George Osborne is adamant in his belief that he will take no risks with peoples' mortgages or with the nation's public finances, then he must surely start to question the current unfunded future financial commitments that exist off the books as it were (PFI etc.), whilst at the same time start to raise public awareness about the increasingly unsustainable levels of government borrowing. In the event that he does not do this then is he really able to trot out his mantra of stability before tax cuts? Is he not just choosing to play fast and loose with the public finances on the basis that he like the current Chancellor will not be responsible for picking up the tab?

More importantly, based on current estimates what exactly does the government borrowing picture look like in 2009/10? A quick look at the ONS informs me that the public sector recorded deficits between 1991/2 and 1997/8 before moving into surplus in 1998/9. However, since 2002/3 deficits have been recorded. The Budget forecast net debt at the end of March 2007 is £493.0 billion.

[Sean Fear]

Geoffrey - well, it's rather a loaded question. Tax cuts and a better NHS are not incompatible.

Ed R - I think you have to make the argument for it in opposition. Unlike Labour, we won't have the benefit of a bureaucracy that shares our values when we next take office. Hence, we need to win public opinion over to our side.

Andrew - John Hayes has always been pretty left wing on economic issues.

[Jack Stone]

David Cameron should just bin this silly report. Anyone can promise tax cuts but unless you can say how those cuts can be paid for all it amounts to is nothing more than a wish lists.
All this report will suceed in doing is giving ammunition to our opponents and allow them to once again say that cuts are being planned in public expenditure and the NHS and education will suffer because of these tax cuts.
David Cameron should stick to his guns promise no unfunded tax cuts and continue to put economic stability and the public services first.

[Ali T]

I am always amazed to read the usual suspects continuing their attack on the reforms that DC is pushing through. Amazed and dismayed, because they seem to have completely forgotten the recent past.

They ignore the General Election defeats of 2001 and 2005, where the country rejected our policies, including the tax cuts that were promised. Lets be honest about this instead of trying to corrupt history to our own ends.

Astonishingly we lost in 2005 against a Labour Government that had run out of steam, which was being led by someone who no one trusted and whom voters knew through Gordon Brown would continue increasing the overall burden of taxation.

So why did we loose?

We lost because our tax policies were not trusted and our economic competence was doubted.

Voters wanted good services, including their local schools and hospitals. Nothing has changed!

Still reading many of the comments in the press today there are those who want us to repeat the mistakes of the past. They would have has lurch back to the right making us almost unelectable and gifting Labour with another election victory.

Is this what we really want?

The Tax Commission has done some thought provoking work in providing our party with detailed spending plans including areas where we can save, but the savings are just one option. The stated position of putting stability before tax cuts must remain our policy.

No one knows just how bad the economy will be at the time of the next election, nor if those areas our party has been highlighting will still require additional resources.

We were all appalled at our injured servicemen being left in open wards without the care they need, especially when Haslar Military Hospital in Gosport lies empty, but to open this will require money, lets not kid ourselves.

The current kit shortages and overstretch of all our forces must also be addressed. Why are we now spending less money on the RN than we did at any time since the 1930s, which has resulted in a fleet that is smaller than that of the French, dependent on the other nations navies when we are in theatre.

Many Conservative constituencies risk having their local hospitals closed, 1,000s of sub post offices face the axe and we must not forget the millions of pensioners who have been let down and who deserve so much better. This will all cost money.

Making economies and using money more efficiently is only part of the solution and yet there are those who would have us commit to cutting £21bn. Lets get real!

I was delighted that David Cameron and George Osborne are sticking to their guns.

We want stability first, good services and tax cuts. I would argue that they should be in this order.

So we must stick to our course and not allow a few from the right to change this as it would be a disaster.

[Michael McGowan]

"We want stability first, good services amd tax cuts". Maybe we do but I doubt whether voting Tory will get you any of the above. Indeed, to meet their major unfunded expenditure commitments and in their desperate attempts to refight the 1997 election, I think it highly likely that Osborne and Cameron will have to raise taxes significantly. Brown could well go into the next election promising to spend less han the Tories.

By the way, as we all suspected, the various Policy Commissions look more like talking shops whose views can be accepted/rejected at will by Osborne, Cameron, Letwin and the rest of the inner cabal.

[Sean Fear]

Ali, and Jack. The government spends £500 bn a year, a figure which rises inexorably. £21 bn amounts to 4% of that figure, over the course of four years.

Do you think that that £500 bn is so efficiently spent, that it is simply impossible to make a saving of 4% over the course of 4 years?

As a matter of fact, we didn't actually promise tax cuts in 2005. We promised a reduction in the rate of tax increases.

[Peter]

The report isn't silly Jack but you are. Have you really tried to read it or are you just relying on comments from Ed Balls. This plan is good as actually most of the proposals are neutral in tax revenues but as usual you throwing your toys out of the pram(like in the leadership contest) just because you don't really know what you are talking about?

[Adrian Owens]

The headline to this blog post is correct. We did not lose the last two elections because we promised tax cuts.

These proposals from the tax commission are a great first step. I would like to see a greater increase in the personal allowance. The proposed figure of just over £7000 is good, but as we are talking about 2013 for implementation, it's hardly likely to massively improve work incentives or greatly benefit our poorest.

We also need to reverse taxes that go against the Conservative grain e.g. insurance premium tax.

I'm relaxed about the current phrase used by the Leadership "no upfront unfunded tax cuts". The key word is unfunded.

After 12 years of Labour Government it will be easy at the next election to point to many examples of Government waste, put a cost on them and fund our tax relief proposals that way. It's what the electorate will expect. Just look at the BBC News Have your Say section today to see which point of view is most popular.

Where our frontbench have to be careful, is saying they will fund certain tax reductions by increasing green taxes. The purpose of green taxes is to change behaviour. Green taxes in that sense have relatively easy avoidance measures associated with them. If they succeed, people will change their behaviour. That's great for the planet, but the green tax take will then fall and the money used to fund tax reductions elsewhere will disappear.

That's why tax reductions at the next election should be funded by stating specifically which bits of the government machine the Conservatives will stop funding - then the charge of cutting frontline services can be more easily rebutted. There's a real appetite for this among the public.

Perhaps ConservativeHome could run a section dedicated to not only identifying 100 policies for consideration by the front bench, but also 100 pieces of waste that the Conservative party should scrap?

[Dontmakemelaugh]

"So we must stick to our course and not allow a few from the right to change this as it would be a disaster".

Posted by: Ali T | October 19, 2006 at 11:20

It would be a disaster if the Tories were elected and actually believed in what Ali T has written.

[Michael McGowan]

Sean, Peter, no point trying to engage Jack in debate. He never debates. He simply asserts. Every time he posts, he does Gordon Brown and Ed Balls a big favour.

[Jonathan Powell]

David Cameron should just bin this silly report. Anyone can promise tax cuts but unless you can say how those cuts can be paid for all it amounts to is nothing more than a wish lists.
All this report will suceed in doing is giving ammunition to our opponents and allow them to once again say that cuts are being planned in public expenditure and the NHS and education will suffer because of these tax cuts.

I disagree with this. As the Editor points out, we need to make the point that these tax "cuts" will pay for themselves through their dynamic effects on the economy. We could point to Ireland and Australia as examples of where this has happened. Thus they actually represent a type of tax refom -- raising the same amount of revenue in a different way. Exaclty the same principle as having more "green" taxes.

We want stability first, good services and tax cuts. I would argue that they should be in this order.

There's no reason why "stability" should be inconsistent with tax cuts. The "instability" which occurred during the last Tory government was primarily due to bad monetary policies, not tax cuts.

[James Hellyer]

Yesterday a television station did a survey in the centre of Basildon and asked voters in the marginal seat whether they would prefer tax cuts or a better NHS. A massive majority said that they would rather see a better NHS.

This is an example of the "Are you a heartless bastard?" effect in action! The BBC reporter proffered a false choice by claiming that improvements to health provision were incompatible with tax cuts. The result was that people had a choice of saying they favoured a better health service and no tax cuts, or that they were "heartless bastards" and put a few pence more in their pocket above the health of the nation. Guess which choice people were led to pick...

[Jason Hughes]

I think what the Conservative Party should really do is tackle this absurd suggestion that cuts in tax will lead to cuts in public services.

This is a political scourge which has been used by Labour to affirm their tax and spend agenda, which is crippling many of the middle-earning, and working class families in Britain.

I'm no economist, but I am convinced a more radical tax cutting agenda can be pursued, and any lost revenue can easily be regained by scrapping all of the wasteful measures that the current Government has towards to the public purse. Examples of which are seemingly endless.

Attitudes to taxation are one of the only battlefields of political ideology left on the British political landscape.

I hope the party does not miss the opportunity to put some crystal clear blue water between the Tories and the Government before the next General Election to demonstrate to the British people that the Tories will be fit for government.

The key component to achieving this is to show that tax cuts will not lead to cuts in public services, and that the money in the Treasury does NOT belong to the Government, it belongs to the taxpayer, and should be spent wisely, and responsibly on his or her behalf.

[Mike Christie]

"it is tax cuts for middle-income people like myself that are important."

And who said we were the selfish party?!!?

"If we do not implement the Forsyth Commission in full, Cameron should resign or I will resign from the Party"

I hate to point out that Cameron was voted leader of the party, by the membership on a platform of 'stability before tax cuts' and 'sharing the proceeds of growth'. Why should he resign for sticking to his guns?

You feel disenfranchised because someone you didn't support won a fair election.... democracy sucks doesn't it!

Do you really think 'it was tax wot lost it'? Personally I think our complete failure to talk in any meaningful way about any issue besides crime, immigration and how terrible life would be if Labour got back in were far more deciding factors.

Cameron and Osborne are not saying they won't cut tax, they are saying they won't cut tax if it will have the effect of pushing up interest rates. They have both stated clearly and unambiguously that they favour lower taxes.

As a rough guide, a 2% (from 5% to 7%)rise in interest rates would cost a family with a £100,000 interest-only mortgage over £170/month more. You'd need a heck of a tax break to offset that.

Just a 1% rise in interest rates would undo the benefit of a 2% cut in income tax for many people. We need to constantly re-assure people that we won't take risks with the economy that could cause a jump in interest rates.

[Mike Christie]

"What ERM fiasco?

Joining ERM (supported by Labour and Tories alike) was a disaster, leaving again was a Good Thing. Another message that has to be driven home."

True, but the fiasco was that in a determined effort to make a misguided policy work, a Conservative government drove interest rates up to 15% which led to people losing their homes, going bankrupt etc.

That sort of thing tends to stick in the memory...

[James Hellyer]

I hate to point out that Cameron was voted leader of the party, by the membership on a platform of 'stability before tax cuts' and 'sharing the proceeds of growth'.

And also because of his association with one George Osborne, who like Cameron was at that stage dallying with flat taxes...

[NigelC]

I am with Sean at 11.37.
Any decent businessman could cut at least 1% from costs each year for 4 years by improving ways of working.
We need a commitment to methodically improve performance and productivity in Government (not by cutting jobs but by embracing new ways of doing things).

This can be shared between improved delivery of public services and tax cuts as described as the economy grows.
We need to avoid promising unfunded tax rate reductions and be wary of the economic cycle and what the state of the books are when we win power.

We need a coherent business plan laying all this out as would be expected anywhere else outside the Westminister village.

[Michael McGowan]

Mike, continuing to follow the Gordon Brown model of sluggish growth and huge unfunded off-balance sheet public sector pension and PFI liabilities is undoubtedly taking risks with the economy and interest rates. How are Cameron and Osborne addressing this plus the asset price bubble which is impoverishing the under-30's who are also being told to fund their university tuition and the babyboomer final salary pension schemes from which they have been locked out?

Either DC and GO raise taxes (assuming no growth) to pay for these liabilities or they stimulate growth by a judicious mixture of tax cuts and interest rate cuts. The latter is much less painful than the former.

[Ted]

We didn't lose the last election because of tax cuts or much else in our manifesto but because only 32% of the voters believed we would make better government than the alternatives, why? - we were on yet another leader, the campaign was undermined by divisions and lack of clarity in messages and the dog whistle stuff only served to re-inforce the NuLab/Lib Dem messages we were right wing and determined to go back to 1992. Michael Howard may have been a good leader from point of view of stabilising a failing party but he was never seen by most voters as a potential PM.

I have read the Tax Commission proposals and report and it's good stuff. It is in complete alignment with "sharing proceeeds of growth" as it looks to reducing the proportion of GDP taken by tax over the period of a parliament not reducing the take in real terms. It identifies ways to reduce the unfairness of tax on lower paid and of increasing competitiveness.

The report must have been known to the leadership in last few weeks and yet again they have been wrong-footed by not preparing the ground for it - its perfectly aligned to Osborne's messages in that it clearly states timing and application should depend on economic conditions.

As Conservatives we surely believe that we need fairer simpler taxes - irrespective of whether these do cut taxes overall, So lets give message we will aim to take people out of tax, we will make taxation fairer and more transparent. We surely believe economic prosperity depends on keeping investment and businesses domiciled in the UK - say that.

We also believe in public services and that these should not be starved of necessary resources while delivering value for money and not waste.

Brown & Balls should be defending why they have an over-complex and unfair tax system, why performance & delivery have failed to meet targets while wasting billions of public funds, why business confidence in them is continuing to fall.

[Mike Christie]

Michael, I agree with your assessment of the challenges faced in the economy, as yet Cameron and Osborne are not outlining any policies to address them.

So far we agree.

However, in common with every other area of policy, the party leadership are trying to address the fact that we have lost THREE elections in a row.

We need a fundamental re-evaluation of how Conservative principles apply to the challenges of 2009, not 1979.

The simplistic approach of promising tax cuts that (due to the growing problems like PFI) may turn out to be unaffordable in 2009 is not one that the electors will buy, and certainly not if they think that those tax cuts will have a negative impact on either the quality of public services or mortgage rates.

Personally from a quick guesstimate I'd be worse off if I paid no income tax at all but interest rates went up by 3%. I'm sure I'm not alone in that.

[deborah]

Well said, Ted.
We should major on simplification of the tax system and taking the low paid out of tax altogether.
People recognise that complicated systems are expensive to run.

[useful]

Mike Christie says - "Cameron and Osborne are not saying they won't cut tax, they are saying they won't cut tax if it will have the effect of pushing up interest rates. They have both stated clearly and unambiguously that they favour lower taxes."

I wish people would take note of this, as most moaning is uncalled for and as Michael Mcgowen says, this is NOT "continuing to follow the Gordon Brown model of sluggish growth", but it is a clear moderate stance to take which we should all understand and support.

[Given Up]

The BBC has a massive vested interest in high tax, after all that is what the licence fee is.....their behavior and arguements should be treated the same as the Chairman of BAT's on smokeing.

As to green taxs unless they are levied on an income basis, they are a punative tax on the poor....not smart at all.

The Laffer Curve demolishes the idea that all tax cuts must be funded by cuts in services/spending, the idea is pure bunkum and again should be treated as such. There are more than enough real life examples out there, where tax cuts have generated MORE income. Look at the US rigth now, where recent tax cuts are generating far greater revenues.

Anyone who argues to the contrary, is either a socialist, has a vested interest, or does not understand the subject

[Crighton]

No surprise that the Tory leadership refuses to endorse the recent tax-cutting proposals.

In the unlikely event that the current Tory leadership should gain office it is, if recent promises from the leadership are to be believed and paid for, almost certain that taxation will need to rise.

In the absence of any structural reforms of major spending departments or taxation policy the increase in spending will need to be met by an increase in tax levels and/or new taxes, stealth or otherwise.

The question for the Tory leadership is how can this be done whilst gaining/retaining public goodwill?

Labour has shown one way this can be done, through taking advantage of the of the British public’s willingness to support good causes. One only has to note the sums raised for relief of disasters, charity appeals etc., to see this goodwill at work.

By pitching tax increases along the lines of ‘would you pay a little extra tax for a much better NHS, or whatever?’ the tax take can be increased and people can feel good about it!

However, there is a difficulty. At some point the expectation of improvement needs to be met – for example the NHS really does need to get better.

What for the Tory leadership provides their opportunity to increase taxes whilst leaving people feeling good?

Green taxes, they hope. Even better than Labour’s choices of ‘good causes’, the timescale for showing whether or not such green taxes makes any difference to the environment is such that the expectation for improvement is no longer an issue!

Indeed such are the changes in global carbon emissions, that even by doing nothing the proportion of the UK’s contribution to the total global carbon emissions will decline. It’s working – we can feel even better!

A politician’s dream – no need to frighten the voters by nasty tax cuts, no need for difficult structural reform and the extra money required is raised with people feeling good about it!

On the other hand, the effect on the overall standard of living, GDP, jobs, etc., is a different story – but who really cares?

[Jon Gale]

OF COURSE taxcuts did not lose us the last election. It was a combination of many factors:

1) It was Iraq War that made Labour unpopular, yet we also supported it so many felt they couldn't vote for us. As a ConHome monthly poll showed even many tories were against the war.

2) It is one of the great unfairnesses of the last few decades that Michael Howard is hated by much of the public (despite his fantasic record on crime) - "something of the Night" "Dracula" and thus anything he did was automatically 'far-right' to a lot of people. As an illustration a month or two ago Labourhome.org said:

“Let's get one thing straight. Labour enjoyed another big-win at the election last May because of one factor, Michael Howard: the dome-headed shadow-crawler who could send a chill down your spine just by appearing on a neighbours TV screen (you didn't see him, but you could feel he was close).".

3) Our polices like the Patients Passports and education vouchers were easily misrepresented by labour as taking money out of public services and only helping the rich. Our £35bn Tax cuts/slower spending also reinforced the Tory cuts to public services myth promoted by labour.

4) We spent too much time on immigration, and even we we tried to move away Labour and LibDems brought it straight back with attacks of (implied) racism or "fantasy island".

5) A general perception of the Nasty Party reinforced by all the above. Even policies the public like became less popular when they heard it was Tory Policy.

We need to address all these things to become popular again. It is mostly about perception.

[David Belchamber]

Mark Wadsworth @ 10.31 combines both common sense and knowledge of the issue, a compelling combination, when he suggests:
"WHy can't GO (and Oliver Letwin etc and indeed Nigel Farage, who have all fallen into the same trap recently) not prepare an answer to explain that
1. the first aim is to cut government waste of £50 bn a year,
2. the answer to improving NHS is clearly NOT just shedloads more money at it".
Surely, with the GE possibly as much as three years away, we can at this stage do no better with tax than to put it into context (something that DC has been good at on most other issues).
Some suggested contexts:
1. Nulab wastes a great deal of taxpayer's money (see Mark above). If we can identify and eliminate most of it, tax cuts can be funded.
2. Nulab is managerially incompetent (see Mark above).
3. tories favour the small state, so they traditionally cut taxes; labour goevernments favour the large state, so traditionally they tax and spend.
4. we agree with Nulab's incresed funding for essential public services (esp schools and hospitals), so we should give a promise to match Brown's spending plans on these over the next few years.
5. Brown goes in for obfuscation, complexity and stealth; we will simplify the tax system (that can be said now) and be more transparent.
We must be much more positive about the tax system, without as yet promising any detailed cuts.

[Jon Gale]

Given Up,

"The BBC has a massive vested interest in high tax, after all that is what the licence fee is.....their behavior and arguements should be treated the same as the Chairman of BAT's on smokeing."

The licence fee it totally separate from taxes - tax cuts dont make the licence fee go down, raising taxes doesn't make the licence fee go up. It is totally separate.

[Chad]

Mike Christie wrote:
"Cameron and Osborne are not saying they won't cut tax,"

But, George Osborne said:
"Mr Osborne said he would adopt some of the ideas [from Lord Forsyth's report] but said other changes - such as higher green taxes - would mean the overall tax take would not be cut."

So Osborne has clearly pledged not to reduce the overall tax burden. Just for the record.

[John Hustings]

How dishonest can you get? During the conference before the leadership election, George Osborne was telling us about the growth producing effects of lower taxes, and told us to look to Ireland and India as examples; and now he denies it all and says growth is produced by low inflation and interest rates.

How have his views changed so quickly?

[Michael McGowan]

Mike, I'm sure you're right that rocketing interest rates would swallow up any tax cuts you benefited from but I don't think you will find any post of mine which advocates "simplistic tax cuts".

What I want to hear is how Cameron and Osborne are going to address the dire long-term implications of Gordon Brown's bleed-the-public-white-to-grow-the-public-sector policies. To date, I remain to be convinced that they even regard this as a problem. Even less do they seem to have a solution. They are too busy refighting the 1997 election.

[Michael McGowan]

John, why are you surprised? In the last 18 months, George Osborne has both promoted and rubbished flat taxes. He has the political consistency of a weather vane. He will seemingly say anything. Like Don Giovanni, he also seems to believe what he says.....but only when he says it.

[Chad]

Well Michael, what we know for sure:

#1 Osborne has confirmed that he will not cut the overall tax burden.

#2 Cameron has promised billions in new spending.

#3 Osborne has not pledged not to raise taxes.

Something will have to pay for #2 and I guess that will be #3.

Tax'n'spend Tories.

[James Hellyer]

How have his views changed so quickly?

John, a cynic might assume that last year Osborne said what he thought the voters in a leadership election wanted to hear. This year, he's doing the same, but for a different election and a different audience.

[Michael McGowan]

Chad, Osborne's real message to business is "offshore, offshore, offshore". And so the hollowing out of the UK economy will continue...

Amazingly, I can even envisage voting for Brown on the basis that I trust them on tax more than the Tories and Oliver Letwin's friends in the Lib Dems.

[alex]

Labour will be translating the £21b of cuts to the Tories secret £21b of cuts as we speak. They'll break it down by constituency and say it means closing so many hospital beds and so many school places in each marginal.

It will be a lie, based on unsound economics and political deviousness.

But it will work.

[Andrew]

"#1 Osborne has confirmed that he will not cut the overall tax burden."

That's a pretty deliberate distortion.

[Chad]

"Amazingly, I can even envisage voting for Brown "
Yes, it sticks in the craw doesn't it Michael, but I bet millions are thinking the same.

What's wrong with a little innovative thought? Get out on the streets and ask the public this question:

Government Efficiency: What %, if any, of our taxes do you think the government wastes?

Take the mean of the answers, apply it to the current tax take and I'm sure £21bn will look a very sensible and conservative figure and you'll have the public onside!

[Chad]

"That's a pretty deliberate distortion."

Huh? How?

[Chad]

To directly quote, Osborne's own words today:
"Any changes in taxes will be revenue-neutral"

That means, NO CUTS.

[Andrew Woodman]

The problem with this sort of announcement is you're caught betwen a rock and a hard place and end up nowhere. On one hand you will have Labour doing as Alex says and coming up with the cost in hospital beds, and you have those desperate for tax cuts put off by Osbourne saying the tax burden will remain the same. Could end up costing a lot of votes.

[EML]

Nobody will believe a word we say on taxation until we have had a term in office to show that we can still manage the economy.

Cameron is right to keep pushing the moderate message whilst we are still in opposition.

But that's no reason why we shouldn't have a fresh look at which areas should and should not be taxed - just as the Tax Commission is doing.

Both Cameron and the Commission are doing a good job.

[Jack Stone]

This report is a complete own goal.Forsyth and right-wingers like him are nothing more than our very own suicide squad. It as given our opponents something to use against us right up to polling day.They will continue with the tory tax cuts line and it will put us on the back foot when we should have our opponents on the defensive.
I suspect our excellent shadow chancellor and leader will end up bining most of the report and we will rightly go into the election without any up front tax cuts.
If we don`t and are foolish enougth to promise tax cuts we will simply lose.

[Michael McGowan]

It is a measure of the extent of the Tories' nervous breakdown that there are so many posters on this thread who can only counsel despair. The shattered confidence of the Tory Party will be Tony Blair's only legacy.

Take some prozac and get a grip. It is also a non-starter for Cameron once in office to do a U Turn on tax. He has already boxed himself into a corner and will be slaughtered by the very people he has spent so much time courting if he backtracks. There is no alternative to the systematic point-by-point relentless rebuttal of Labour's lies, peddled remorselessly by the BBC. It will be a long hard guerrilla war which has not even begun. You would have thought that even the Tories would have worked this out after ten years....

[Michael McGowan]

Has anyone yet discovered a policy of the Labour Party with which Jack Stone disagrees? Sean Fear has always regarded him as a troll. I am not sure about that but Jack's only complaint about Labour sseems to be that they are not leftwing enough.

[James Hellyer]

The thing that surprises me most of all is how the Party seemed caught off guard by the Commission's report. They must have been aware of both the timing and contents of the report, and yet still hadn't got a coherent line by the time it hit the press yesterday.

I mean, was it really a surprise that Labour would claim we wanted to wreck the economy? Or that the BBC would ply a line on NHS cuts? Yet there seems to have been little in the way of reasoned response and rebuttal.

And I thought Cameron was meant to be good at PR?

[anon]

"It is a measure of the extent of the Tories' nervous breakdown that there are so many posters on this thread who can only counsel despair. The shattered confidence of the Tory Party will be Tony Blair's only legacy".

Michael, I don't think its a legacy of dispair I just think perhaps its a reflection of the inability of politicians of all parties to think outside of the Westminister bubble.

As I have posted before we still have the question that given the timebomb of public finances that awaits the winner of the next GE do we honestly want to be in power at a point when all of Gordon's chickens come home to roost? Would it not be better to opt out and then allow the reality of Labour's dismal management to really come home to roost?

[Jonathan Mackie]

I've not read the all this thread but picking out some of the points of interest.

2001 and 2005 we lost because we weren't economically credible. I was a candidate in both and had some interested comments following Letwin and Flight going off message.

We also lost the courage of our convictions and people questioned the merit of £8 billion here and there. If we are a tax reforming party which I believe we should be then lets do it properly.

PFI keeps being raised. PFI is not the issue and if the PFI values were added to the PSBR, then interest rates would rocket and the economy would collapse. The issue with PFI is about how services should be delivered. Do we want large hospitals when acute care can be provided elsewhere? PFI liabilities are preventing flexibility and effiency in service delivery.

I hosted a Lyons Inquiry seminar this morning with Sir Michael to discuss asset management. A huge number of contributors (from left leaning Councils as well) talked about local authorities accepting the place shaping role and being responsible for all public delivery in their area. I am coming round to this idea as I think it is a means of localising delivery and making it more efficient.

A further point to come out of my seminar this morning as from Sue Reid, head of Efficiency at DCLG. She reported that local government will exceed the £6.4 billion efficiency targets for 2007.

What we really need to do is look at how people want to access the public sector. We would be surprised. Once we know that we can set our spending and tax committments accordingly. We really need to be a bit more radical about how services are delivered rather than focus always on taxation and the implications for spending.

Green taxes, I have a real concern about. They are regressive and are likely to damage mobility. There are much better ways of addressing environmental issues through technology, emissions trading, etc than simply taxing behaviour.

[Stuart Raven]

Right. We can have tax cuts AND a better NHS.

AND we can talk about alternative funding for the NHS.

Michael wonders whether Jack Stone is a troll. I think he is, because he is simply programmed to come out with kneejerk opposition to any genuine conservative opinions.

A guy like that can't possibly have been comfortable in the party before Cameron got in.

You'd better not come north of the border, Jack. Scots Tories would make a haggis of you in five minutes flat.

[John Hustings]

"A guy like that can't possibly have been comfortable in the party before Cameron got in."

I'm not so sure, I don't think the Cameroonatics are a new phenonmenon. I think they've been around for years but are only now revealing to everyone what they really think.

[Og]

I wonder what attracted Jack Stone and Ali T (G, more like) to the Conservative Party in the first place.

Clearly it was not economics, unless Jack and Ali have joined only recently; these Tories evidently plan to contest the next election with the highest spending-to-GDP ratio EVER, and this after spending the last 10 years watching Brown turn the State into an obese, unfit couch potato. Why complain about stealth taxes for so many years when you have no plans to dismantle them?

And don't give me the rubbish about "waiting to see the books" after winning a general election. Any opposition worth it's name should know, within a percentage point, exactly what government spending entails each tax year. If it says that such knowledge is withheld, it should be making a big noise about it and lobbying to enforce or change the law on open government.

This is much bigger than the semantics of tax cuts; the soul of the Conservative Party is up for grabs, and as things stand the Cameroons are trying to sell it to the Devil, aka European Big Government Socialism.

The best story to come out of Eric Forth's Memorial service a few days back was an occasion when a Tory, at a Tory dinner, proposed the toast: "Death to Socialism" to which Eric immediately replied "especially in the Conservative Party".

He knew what he was talking about.

[Sally Roberts]

The reason that we did not win the 2005 General Election - although we did make gains in seats such as Hammersmith & Fulham - was that the perception that the Party had changed had not yet filtered through to a sufficient extent - especially in seats outside London. Added to this, the perception by many floating voters of Michael Howard was that he was "not to be trusted". Our immigration policy though sound in its content was presented in too hard a manner and also jarred uncomfortably with many who might otherwise have considered voting for us.

[Jonathan Powell]

Chad:

It depends how you define "tax cuts".

Osborne has pledged that the overall tax take will not be cut and that any changes will be revenue-neutral. This is entirely consistent with with cuts in tax rates, increased personal allowances, elimination of the death tax, taxes on capital gains and dividend incomes etc. All this can be done by broadening the tax base as in a Hall-Rabushka flat tax.

Furthermore, if we allow the changes to be revenue-neutral in the long-run then the principle is consistent with a reduction in the overall tax burden, paid for by supply-side effects over time.

[Chad]

Zzzzzz. Apologies Jonathan I think potential voters just nodded off.

[Jonathan Powell]

Which is why Osbourne is right to keep the message simple! It doesn't mean he is against what most people would regard as tax cuts.

[Prentiz]

This threat seems to be a fascinating mix of swivel-eyed loons "we lost because we didn't cut enough tax" and foolishly gloating UKIPites. The title of the article is right - we didn't lose the last 3 elections because of tax promises - or any other specific pledges - we lost it because the Tory brand itself was shot - what Theresa May referred to when she was talking about "the nasty party". A very large number of floating voters didn't trust us and didn't believe us. You only have to look at the polling where people liked our policies, until they discovered they were Conservative policies - when they hated them.

What Cameron is doing is changing that brand. Hence the terrible tree and the visits to the icebergs. And also hence the fact he wants to talk about the environment and NHS - not Europe and taxes. Posters on this site and other political people might see problems with that. Party members mightn't like it. But those aren't the people we need to win elections - its the floating voters, particularly women, who we've lost and need back to regain power. So is it any wonder that Cameron and Osbourne are ducking the issue - its not their job to try and educate the public about the benefits of a low tax economy - its their job to win the election so they can implement one.

[TomTom]

The last two elections were lost because of incompetent centralised campaigning focused on a leader and slogans..............elections are won locally and not with central control

[Peter]

I think we all know that Jack Stone is a member of the Labour party as quite clearly he hasn't even read the tax proposals where a large amount of the 40 items are either tax neutral or will actually bring in more tax.
With that I do agree with you Michael that it a waste arguing with him as he is quite clearly a plant but he is so bad at doing it.

[Peter]

The problem is Mike at the leardership elections last year George did side with the flat tax people, know you are saying he is against tax reductions. With that on your own comments can the real George Osborne please stand up. Know I don't agree with the last comment because I think you are actually distorting his comments to your own ends and that the tax review have actually calculated how they are to be paid for(in the long term) if you actually do get round to reading the 176 page report, which again Jack Stone needs to do as well.

[Dave (not Cameron)]

In response to Given Up:

For the Laffer Curve to hold true in the real world very high tax rates - such as a 98% top marginal income tax rate - have to be reduced in order to actually produce greater economic activity and thus higher tax revenues. Cutting a top marginal income tax rate from 98% to, say, 40% vastly impacts economic activity because high earners will be more likely to work additional hours. Most tax rates in many Western countries these days are now relatively low compared to 20-25 years ago. As a result, there is less scope for tax reduction to have a positive impact on revenues. As for the US, our government revenues are currently high because corporate profits have recently surged, not because our corporate tax rate is low. In fact, I believe that it is higher in the US than in Canada and several European countries - especially those in Central Europe that have adopted flat tax regimes. The Bush tax cuts were not free by any means; we have a huge fiscal deficit that has only just begun to shrink due to large spending cuts in, you guessed it, social services. Another country that demonstrates the trade-off between tax reduction and government spending is Hungary, where the government faces a second severe debt crisis in just over a decade because politicians have told voters they can have the best of both worlds. The Hungarian government is reluctant to cut spending on popular social programs but equally averse to putting up taxes. With a current account deficit of 10.1% of GDP it will have to do one or the other very soon. Politics is all about priorities - if the public want publicly-funded services then they will have to pay for them.

[Matt Wright]

We may not have lost the last 2 elections specifically because of offering tax cuts BUT we weren't talking about what people were likely to vote about. We were perceived as not caring and engaging in our own obsessions. Most people are interested in health, education & crime. Generally they worry that tax cuts may equal service cuts and again generally they don't feel too badly off. I feel we keep approaching the problem from the wrong end by talking first about tax cuts. We should talk about how the system should be reformed to make services better and gain credibility for our position and prove we care. Labour are keen to get going painting us as irresponsible with the economy. Where we could look at simplifting and lightening taxes is on business so that more wealth could be generated to make the countryboth more competitive and better able to afford the services people want,

Matt

[Mike Christie]

"The problem is Mike at the leardership elections last year George did side with the flat tax people, know you are saying he is against tax reductions. With that on your own comments can the real George Osborne please stand up. Know I don't agree with the last comment because I think you are actually distorting his comments to your own ends"

Are you addressing me?

[Given Up]

John Gale and Dave( not Cameron)

Of course the BBC licence fee is a tax, it just happens to be paid to an organisation other than the Gu'mint....but you have to pay it if you have a TV....there is no choice in the matter. Consequently the BBC has a massive vested interest in the idea that Tax is good.

Dave

Real Tax Cuts Have Curves
The economy booms, and Arthur Laffer has the last laugh.

http://www.opinionjournal.com/extra/?id=110006842

Snip

Now we have overpowering confirming evidence from the Bush tax cuts of May 2003. The jewel of the Bush economic plan was the reduction in tax rates on dividends from 39.6% to 15% and on capital gains from 20% to 15%. These sharp cuts in the double tax on capital investment were intended to reverse the 2000-01 stock market crash, which had liquidated some $6 trillion in American household wealth, and to inspire a revival in business capital investment, which had also collapsed during the recession. The tax cuts were narrowly enacted despite the usual indignant primal screams from the greed and envy lobby about "tax cuts for the super rich."

Earlier this month the Congressional Budget Office released its latest report on tax revenue collections. The numbers are an eye-popping vindication of the Laffer Curve and the Bush tax cut's real economic value. Federal tax revenues surged in the first eight months of this fiscal year by $187 billion. This represents a 15.4% rise in federal tax receipts over 2004. Individual and corporate income tax receipts have exploded like a cap let off a geyser, up 30% in the two years since the tax cut. Once again, tax rate cuts have created a virtuous chain reaction of higher economic growth, more jobs, higher corporate profits, and finally more tax receipts.

This Laffer Curve effect has also created a revenue windfall for states and cities. As the economic expansion has plowed forward, and in some regions of the country accelerated, state tax receipts have climbed 7.5% this year already. Perhaps the most remarkable story from around the nation comes from the perpetually indebted New York City, which suddenly finds itself more than $3 billion in surplus thanks to an unexpected gush in revenues. Many of President Bush's critics foolishly predicted that states and localities would be victims of the Bush tax cut gamble.

[Stuart Raven]

The usual Cameroon tripe about "The Nasty Party" paraded above.

The public didn't go off the Tories because they cut taxes and oppose immigration. They went off us because we were perceived as incompetent and sleazy

Cameron hasn't changed the party. You only have to read the trenchant views of all the taxcutting non-clones on here to know that! He has just monkeyed about with the party's "image" and what he has done will blow up in his face when the BBC and the Guardian wheel out any number of unreconstructed Tory reactionaries around election time.

What I really detest is the patent phoneyness of the Cameron stunt.

[ratbag]

This "nasty party" calumny was dreamed up by seriously deranged chairwoman May. It wasn't true but everyone keeps repeating it as if it WERE true and then wastes a lot of time saying how "nice" Cameron is in contrast. THAT isn't true either. But May did her dirty work and wrecked the joint.

[C List and Proud]

All this - and I was actually there this morning so listened to the q&a as well as the speeches, which was pretty much a re-hash of this tired debate - confirms to me that David Davis was right in his assertion that we needed to forget about policy reviews and branding and get on with a four year election campaign to win the intellectual, then the public arguement in favour of the policies which we want to impliment.

If you think it through, it makes sense. This is what we want to do, this is what it will cost and this is the tax regime we will adopt to pay for it.

The public knows it is over-taxed, it just won't accept that you can reduce their personal tax burden without harming everybody else, (the "heartless bastard" problem). Unless we can make the case for reform in health, education and welfare which will see services delivered to higher standards at lower relative cost, then we can forget it.

That is why Cameron's pledge to never move to insurance based healthcare funding is so wrong. It rules out a system which is intrinsically more efficient. Why else did Germany extend their insurance based system to the East after re-unification, even with the mass unemployment there?

We've had policy reviews ad nauseum. We know what we want really and we know it will be more efficient and let us cut taxes in the medium term. Cameron has just wasted two years on a policy review which will probably recommend the same things Hague's review, ID-S's review and Howard's review recommended. Which was broadly, fund people, not service providers.

This whole thing reminds me of the yokel joke.

"I say, young man?". "Yer?". "How does one get to Oxford?". "Well, I wouldn't start from here.".

[David DPB]

"The public didn't go off the Tories because they cut taxes and oppose immigration. They went off us because we were perceived as incompetent"

And you aren't going to change that view if all you keep saying time after time on the economy is 'cut taxes, cut taxes'.

The question I'd like to ask is- is there any state the economy can be in when the right of the party won't ask for tax cuts? Because currently it seems that would only be the case if tax rates were at 0%. And even then I get the feeling they'd come up for an argument for negative rates.

[David DPB]

"we needed to forget about policy reviews and branding and get on with a four year election campaign to win the intellectual, then the public arguement in favour of the policies which we want to impliment."

So, where do we get these policies from without a process like the review? How will we win the intellectual argument without a serious approach to formulating policy? And how can you persuade the public of our argument when they have preconcieved ideas of whatever comes from the Conservative Party?

[Andy Mercer]

It's quite simple: "Tory tax cuts = Labour election victories".

It's not rocket science. If you want another 4 years of Labour sleaze and incompetence, put tax cuts in the Manifesto in 2009.

The electorate have spoken on no less than 3 occasions: they do not want tax cuts; they want improved public services. How many times do the public have to say this before we believe them?

[James Maskell]

Last year was there a General Election or a referendum on promising tax cuts? Im pretty sure it was a General election. You cant say that promises of tax cuts led to the Tories losing the election. Its a ridiculous argument to use which isnt based on logic.

[Opinicus]

@Andy Mercer
The electorate have spoken on no less than 3 occasions: they do not want tax cuts; they want improved public services. How many times do the public have to say this before we believe them?

Firstly the electorate is allowed to change its mind. Secondly if it has not done so a clever politician could change its mind. Thirdly, if it does not change its mind, it is still wrong and it will not be right even if it votes in a "Conservative" government on a high tax manifesto. Fourthly, as Labour have proved good public services have nothing to do with high taxes, except by accident. Fifthly, if both Parties offer high tax, high regulation policies, why not vote for the Party that invented them.

[ratbag]

It is economic illiteracy to ignore the fact that when taxes get too high revenue is never maximised. The TRC itself pointed to country after country where the effect of cutting taxes has been in fact to raise revenue. (Many of them Commonwealt countries and the nglosphere)

Equally the present tax arrangements are such that for an unemployed man to take a job he would lose benefits and in effect pay a 70% marginal tax rate - more than the very very rich. The social injustice in a big way.

So to David DPD I'd say - you're just WRONG and to Andy Mercer I can only say that is your opinion - it is not fact and there is no evidence to prove that the electorate don't want lower taxes - take Council Rax for one!!

[John Hustings]

I just watched Michael Portillo on This Week, and he candidly admitted that the official Tory line on "stability before tax cuts" is a nonsense, but that they are taking that line for political expediency.

Fair enough, the Cameroons are lying about their economic policy then, but why are the rest of us who refuse to indulge in those lies portrayed as "headbangers" and "extremists" just for saying things they themselves know to be true?

[Stuart Raven]

Well if that is what a 'moderniser' in the form of Portillo thinks, we can attach enormous weight to what he says.

I've noticed lately that a number of journalists (I suppose Portillo counts as one nowadays) who used to support the "Tory Modernisation" project seem to be rapidly cooling on Cameron. I wonder why?

C List and Proud is right. We have a fair amount of time and we should be doing what Sir Keith Joseph and the now sadly missed Lord Harris did all those years ago - making the intellectual case for an alternative to the morally bankrupt policies of the Labour Government.

As the economically literate on this forum have stressed again and again a lower tax burden will result in a revived economy and increased revenues.

Should much of that extra cash be ploughed into the bottomless pit of the NHS? I'm sceptical. We need to be looking at alternative funding for the NHS not the endless socialistic mantras which spout from the mouths of the beleaguered Cameron/Osborne double act and (it seems) from few others these days.

I just picked up the Telegraph and see that Cameron (or more likely some ghostwriting sidekick)has rushed into print to defend his inane 'stability before tax cuts' slogan.

The man must be running scared.

[Chad]

"but why are the rest of us who refuse to indulge in those lies portrayed as "headbangers" and "extremists" just for saying things they themselves know to be true?"

Lying to the public then abusing the people who agree with what you really believe in. If that is no a recipe for electoral disaster, I don't know what is.

Still, at least it gives UKIP clear water between the big3 with their low tax, pro-selection, controlled-immigration, medical insurance, small government domestic agenda.

[C List and Proud]

So, where do we get these policies from without a process like the review? How will we win the intellectual argument without a serious approach to formulating policy? And how can you persuade the public of our argument when they have preconcieved ideas of whatever comes from the Conservative Party?

Well, David, from the really good work done by people like Greg Clark when he was in the research department, Nick Herbert and Andrew Haldenby at Reform, the CPS, Civitas, Politiea and even IPPR, Frank Field and all the "reviews" that Blair's government has done, then shelved.

What is required is leadership. The intellectual rigour to take all this work that has been done, distill it into policy and then present it and argue it and argue it and argue it again.

The current "review" will produce some new "eye-catching initiatives" like wind turbines and tree planting - which are all well and good - but a real "leader" would be making the case for 20 new nuclear power stations to be built in five years to halve our CO2 emissions from electricity generation. They would be doing it now, because they believe it to be right and they would be out there making the case and winning the arguement.

Why do we continue to elect people to positions of power who don't know what they believe?

[C List and Proud]

I just watched Michael Portillo on This Week, and he candidly admitted that the official Tory line on "stability before tax cuts" is a nonsense, but that they are taking that line for political expediency.

I went to see Portillo present Conservative tax policy before the 2001 election. He explained how, as economic growth exceeded inflation, we could increase public spending in real terms, but the extra bit of growth over that would leave room for tax cuts in the medium term.

I don't think he actually said "sharing the proceeds of growth", but that is what it means. What Forsyth, to his credit, has pointed out, is that the "static" model of tax and public spending, which assumes that growth will always stay at the same level, whatever you do to the tax regime, is wrong.

If you reduce complexity and reduce tax rates, you achieve higher economic growth and that means higher tax receipts, even though the share of GDP taken in tax falls.

This is the arguement, in para 1.1.5 of the executive summary if you care to look. Everywhere they've done this, they have achieved higher growth, budget surpluses and a virtuous circle of lower taxes to boost it again.

Labour's manic fiddling and tax rises have caused a viscious circle of depressed economic growth, reduced tax revenues and led to massive borrowing - up again, by 10% over last year.

We might well have to sort out this mess when we get in, but some of Forsyth's menu will have to be implimented and to his credit, George Osbourne said he would take forward a number of the ideas for more detailed study.

[Stuart Raven]

Agreed.

One of the things that most irritates me about the current Tory "leadership" is its total lack of intellectual integrity.

Where Labour lead, they follow. Their only claim to "difference" is the highly questionable assertion that they will do it better.

How can one respect such a contemptible philosophy - devoid of principle, and guided by the emptyheaded banter of focus groups?

What Portillo said last night - "they're only saying it to get votes" (or words to that effect) - will soon become common currency among the electorate.

[Peter]

Mike I did mean you.
It seems the antis against the tax proposals firstly have not looked at the plan but just accepted Ed Balls view on it and secondly does everyone agree on the basic point if a proposal doesn't reduce the tax take we should all be in favour of it?

[Mike Christie]

Peter, as you did mean me, I'll take great exception at you accusing me of dishonesty and misrepresentation.

Also as I pointed out in an earlier post that both Osborne and Cameron had stated clearly that they were in favour of lower tax, I'm not sure what you mean by know(sic) you are saying he is against tax reductions

I find it ironic that you accuse me of distorting his comments to your own ends when you appear to claim I was saying the exact opposite of what I have said.

[Given Up]

The hard evidence is there to support Tax cuts, it is not theory.

What Portaloo said last night was terrifying in it's cynicism and terminally crass in it's stupidity. He and by assumption the Modernisers are prepared to lie intellectualy and factualy,just to obtain office in the case of tax cuts.....which leaves them wide open to the question, what else will they lie about.....

As to having a fear of the likes of Naughtie, Humphrys or Dimbleby the easy answer to them, is to throw their hypocracy in their face...... "well of course you like the idea of tax, you earn 1/2 million pounds a year from a punative tax on the poor such as single mothers"......

[Mike Christie]

"well of course you like the idea of tax, you earn 1/2 million pounds a year from a punative tax on the poor such as single mothers"

Oh I'd pay money to watch someone say that to Paxman, it would almost be worth the licence fee!

[Matt Wright]

A lot of you believe that the public can be educated relatively easily by politicians!!
You often quote Thatcher as if she was leading against the tide and winning anyway. She was a great leader yes but she was going with the tide (if she had consulted focus groups they would have said do what she did!!!) The country then was in real chaos with rubbish not collected, bodies not buried, endless strikes, industry a basketcase of unproductive and backward labour practices etc etc. This just isn't the case today even though we have some problems. The big issue was that our party under Thatcher reformed the economy and set it on a trajectory that labour now benefit from. The big issue now is slightly different. However sadly we became victims of our own success and ended up tired and perceived as selfishly individualistic. The brand became so damaged that people wouldn't listen to any of our messages properly. Of course we had to change that. Any talk of tax relief should follow a trajectory that aims to address how we better service our communities and make them more healthy in every sense.

Matt

[georgeN]

Regarding interest rates it is worth mentioning that the so-called Indepedence thatGordon Brown granted to the Bank of England is a farce. He appoints exceptionally dovish (ie. keen on low rates, accepting of high inflation) members to the rate setting commitee which effectively allow him to impose artificially low interest rates.
Indeed, inflation is nowhere near 2-3%