Two opinion polls found overwhelming support for George Osborne's inheritance tax announcement:
- YouGov for The Sunday Times found that 66% of voters thought the £1m threshold for IHT was a good policy. Only 18% thought it a bad policy.
- BPIX for the Mail on Sunday found that 71% supported "the Tory plan to cut inheritance tax". Only 17% opposed it.
Opinion polls for The TaxPayers' Alliance (this year and last) have, of course, been arguing that lower taxation is a vote-winner. In tomorrow's Times, Anatole Kaletsky explains why he agrees that lower taxation is now vogue again:
"After many years of disappointment about public service standards, voters are deeply sceptical about promises from all politicians, regardless of party, to improve education, clean up hospitals or make the streets safe. This does not mean that voters are indifferent to policies on crime, health and education. They care about public services a lot and would reject any party that looked like doing major damage in these areas. They may not, however, attach much weight to any promised improvements until these are clearly demonstrated in their own lives. Tax cuts, on the other hand, are palpable as soon as they are announced. If the sums involved are substantial – and a potential inheritance tax change worth up to £240,000 certainly qualifies - a large, unconditional tax cut will, rightly or wrongly, outshine all other differences between the parties in the eyes of many voters. That discovery was last week’s true horror for Gordon Brown."
Kaletsky is surely right. 53% of voters told the TPA that more than £20 of every £100 that government spends is wasted. Labour will undoubtedly reform IHT in some way to try and steal the Tory thunder on tax but Brown has had a decade to do something about this tax and has done nothing. BPIX found that the Tories now have a 40% to 23% advantage on tax as an election issue. We're also 42% to 18% ahead on immigration, 35% to 24% on law and order and 28% to 24% on Europe.
What was clever about Osborne's proposals was that they were pain free on the UK electorate; Non doms paid, voters benefited. We need to take a slow burn approach to this, we've demonstrated our credentials, lets look for opportunities for similar high visibilty, low cost tax cuts and change the rules of discourse.
On the other side lets really forensically examine the CSR and PBR and go to town on Darling's black holes, waste and stealth taxes. Osborne has only promised a 2% year on year increase for three years, protecting NHS spending levels. That doesn't mean we can't hit hard at tax increases, at unaffordable promises.
Posted by: Ted | October 07, 2007 at 22:14
Two very simple rules.
1. Always make sure the tax cut is seen as fair.
2. Always make sure it is funded.
Can't go much wrong after that, provided it's part of a balanced manifesto - tax cuts alone don't win elections.
Posted by: Raj | October 07, 2007 at 22:16
Probably quite a good time to congratulate all those who work at the TPA for their sterling work over the past year. Tax is clearly back on the agenda, and it's clear the Labour party can no spin their usual cuts in taxes must equal cuts in services mantra.
Posted by: Jonathan Sheppard | October 07, 2007 at 22:19
It is essential that Cameron-Osborne understand that it was harder policies that turned things round for the party. We do not want a retreat from real tax-cutting Conservatism now that the danger of electoral annihilation has been lifted.
Posted by: Alan S | October 07, 2007 at 22:25
Alan S - I think there is a major danger of over-egging the tax pudding. Yes it helped, but from talking to people I think it was because it seemed to be part of a coherent whole rather than a policy in isolation. That is what all of us need to focus on otherwise we could find ourselves 6 months down the road back to the kind of self-laceration of this summer gone. I trust that none of us want that.
It is essential we learn the right lessons from this, not the ones that chime with our own particular take on conservatism. Otherwise we run the risk of feeling let down in future.
Posted by: James Burdett | October 07, 2007 at 22:57
Here's an idea -if the Tories are planning to go into the next election with a tax-cutting agenda, why not make a pamphlet on Labour's wasteful taxing and spending in the form of a payslip? With perforated bits to tear off etc. It would be eye-catching and attention grabbing -no-one can resist tearing a piece of perforated paper, so would then obviously read the content.
Posted by: Simon R | October 07, 2007 at 23:00
Tax, immigration, law and order, Europe - all the topics that Cameroonies have spent two years telling us are vote-losers. Nice to see sense finally penetrating the leaderships' heads, but wouldn't a few quiet apologies now be in order as well?
Posted by: Alex Swanson | October 07, 2007 at 23:11
Low tax, like the colour black, never goes out of fashion. As we are thinking about targeted tax cuts, how about this. Aim to raise the personal allowance over time to the poverty line salary of £14,000 a year. It's disgraceful that the very poorest start paying tax on income over £5,225.
Posted by: Paul Oakley | October 07, 2007 at 23:27
The beauty of the 'Europe' issue, which of course is a very poor name for the accelerating loss of our democracy and freedom, is that it can hang around Blair's pledge to hold a referendum.
With the Sun's support, this should be the no. 1 issue for the Tories for the next three months imo. It is cost-free and does not look like a sell-out to the Right.
Posted by: Henry Mayhew - Ukipper | October 07, 2007 at 23:40
Some good comments above. Lower taxation per se is not back in fashion but directed tax cuts which are seen as fair will always be in fashion. That is what we should have learned from all this. Anything more and the idea of cutbacks will haunt us again.
As for Alex Swanson, two points. 1. Crime/Law and Order was not really a big factor at conference. David Davis only made it to 9 on this website's impact list. Europe was only key in that we have promised a referendum, the general issues have not really been debated. I can't deny that tax was key but only in the way mentioned above. Granted on immigration. But 2. None of this would have chimed with the electorate in the absence of the decontamination of our party that has happened primarily due to DC and his advisers. So no 'quiet apoligies' should be demanded, nor should they be given.
Posted by: Matthew | October 07, 2007 at 23:41
It's about time Dave and George started explaining basic maths to the electorate
The impact of the IHT change and stamp duty at full cost ie no tax take from non dom's is only a 0.5% impact on government income on todays income figures. Any book keeper with no accounting skills can manage a 0.5% variation against budget in their sleep. Anyway, the Treasury has contingencies far greater that 0.5%
Secondly, with Yellow's tax regime, each 1% of economic growth brings in c£15bn of more tax, cumulatively a year. Its very simple to increase spending as a total number, without increasing the %.
So over a 2 year period, the Treasury takes in an additional £60bn+ of our money in taxes in total, with only 2% of economic growth
So a government can spend the same, by reducing the tax % take, with any kind of growth
Assuming Yellow doesn't completely cock it up and shrink the economy, there is a reality to reduced tax rates, hence in effect a cut, whilst increasing spending.
It's simple mathmatics.
Posted by: nadders | October 07, 2007 at 23:46
No, Alex Swanson - it is you who should be apologising to the leadership for being such an unstrategic dunderhead.
When David Cameron became Conservative leader he inherited a Party with a tarnished brand and an (unfair) reputation as being gratuitously nasty to minorities. This was proved by the research commisioned and presented by Lord Ashcroft (no leftie he).
DC has spent almost two years correcting this impression (and ignoring cries of "speak out on immigration NOW!" from the likes of you) precisely so he will now be listened to when he says we need to curb immigration.
He has pursued an intelligent course which serves the objective long-term interests of the right and the UK as a whole. You might want to say sorry for doubting DC, Osborne, Gove and the other right-wingers who lead our party.
Posted by: Common Sense | October 07, 2007 at 23:55
Couldn't agree more with Matthew - the decontamination strategy employed for the previous two years has been crucial here. We all saw the research after the 2005 election which showed people liked our policies but not our party. Although the focus on the environment/ changing the way we select candidates/ avoiding an obsession with Europe and immigrants has been unpopular, it has changed people's perception of us to the point that now when we talk about these issues people are not afraid to support them.
Posted by: Chris Heathcote | October 08, 2007 at 00:14
In order of importance this is why the election was cancelled:
1. Brown's cowardice
2. Tories looked united and ready to battle
3. The inheritance tax announcement
4. Brown's backfiring Iraq trip
5. Dave's speech
It's important we understand why things improved for us.
Hint: IT WAS NOT HIGHER TAXES ON AIR TRAVEL!
Posted by: Umbrella man | October 08, 2007 at 00:42
The big danger with these tax cuts long-term is the charge that they're designed for the have-somes rather than the have-nots. I think it would be dangerous to go wild, announcing tax cuts all over the shop. Cameron has worked hard for credibility as a moderate pragmatist, not the newest right-wing ideologue leader. But I second Paul Oakley's proposal above. It mustn't be spun that Tory tax cuts are only for the middle classes.
Posted by: Gordon's Missing Bottle | October 08, 2007 at 00:42
From UK Polling Report: "The tax pledges are not an unadulterated success for the Tories though, 32% of people think their sums don’t add up, with only 22% confident that they all square. Despite the fact that the Conservatives have not pledged to reduce the overall tax burden - the pledges were based on extra taxes elsewhere - 27% of people think that a Conservative government would mean lower taxes than a Labour government. 13% think a Conservative government would mean higher taxes."
Posted by: bluepatriot | October 08, 2007 at 01:07
Well, I know one thing Brown is going to do. He is going to deliver tax cuts, significant tax cuts, which will be implemented before the next General Election.
Posted by: Goldie | October 08, 2007 at 05:10
Oh Common Sense 23:55, what a poor choice of name.
Few would argue that if the election had been called a month ago, the Tories would have been wiped out. That was not strategic Cameroon genius, it was a clearly unbalanced agenda that would have increased Labour's majority.
Malcolm had a go at Donal on the platform thread for previously attacking the leadership and urged him not to do so again, but do you think the ubers would remain quiet and loyal if the new fluffy stuff was dropped? Of course not, they'd be catching the first train to Labour and causing max damage on the way.
So the lesson learned is that it is the agenda, the balance of policies that keeps both trads and ubers onside, not loyalty to the party or a leader nor union for the sake of victory. Whilst the policy agenda remains balanced, the rest will fall into place.
The Tory Party has made one small but important step. Please don't get carried away and ruin the good work.
Posted by: Chad Noble | October 08, 2007 at 06:23
It is instructive to see that so many people are losing sight of one thing. Why did this tax announcement work when others have failed? It worked for two reasons, one it was clear and simple to understand and presented as costed. Secondly and I think most importantly it was presented as being part of a purpose within an overall vision, not as an end in itself.
If anyone thinks that moving to slash and burn tax policies will push us higher in the polls, they are mistaken. Any tax plans have to fit into a coherent message about society and the role of the state. That is what David Cameron and George Osborne have started to set out, a coherent vision of the balance between government and individual action within which tax policy will take it's place. We have waited far too long for this kind of approach, for crying out loud let's not blow our own foot off by misreading the lesson.
Posted by: James Burdett | October 08, 2007 at 07:27
I've yet to see an opinion poll where people are crying out to pay more tax, and these polls for the MoS and the Sunday Times are hardly shockers.
I say to Gordon, be brave, don't scrap Inheritance Tax, ring fence it to help youngsters in the poorest communities get a decent start in life.
Posted by: Comstock | October 08, 2007 at 07:38
It's the 'balance' isn't it as most commentators above have noted? It helps unite us and keeps everyone on side.
Plus it appeals to a wider range of voters.
Keep it up!
Posted by: Steve | October 08, 2007 at 08:36
I'd like to say I was surprised to have people disagree with me, but sadly I'm not. It is my experience that the Left never admits to having been wrong about anything, and this seems to apply internally to the Tory Party as well.
The "decontamination" was based on telling the public that people who were concerned about immigration, Europe etc were extremists who were out of touch with the public at large. This clearly wasn't true. It wasn't the adoption of cuddly left-wing policies on the NHS or education that has brought a rise in support, it's been the adoption of exactly the "right-wing" policies that people like me have been advocating. As in the USSR during the 1980's, what has happened is that ordinary people have woken up to the fact that these things ARE important issues, and that debate on them has not taken place because it has been suppressed by an elite, not because the public doesn't want it.
People are prepared to listen to a party advocating these things not because it has been "decontaminated" but because the political weather has changed, and that's despite the Cameroonies, not because of them.
Posted by: Alex Swanson | October 08, 2007 at 08:44
I don't understand how "sharing the proceeds of growth", which implies gradual tax cuts, is compatible with a pledge to stick with Labour's spending plans and not to cut overall taxation?
Posted by: Simon Newman | October 08, 2007 at 09:01
Well I have to confess that I called the election wrongly these last 12 months. That's what comes of assuming that your enemy is any more terrifyingly clever or brilliant than one's own leadership. Brown has made a colossal error.
That said its important to point out, strictly entre nous, the people on one's own side whose reputation for political sagacity can now finally be laughed into oblivion. We have won through by offering tax cuts. That leaves a lot of people who have written on this site over the last year gasping like fish out of water. Malcolm, Scotty Changetowin and all the others. The tax cuts were "balanced" by a tax on non doms, a sham target. No one expects the maths to add up, of course but the principal of balance had to be rescued from the wreck of the Project. As Chad said above, what have green taxes contributed to the victory? - junking them has helped a bit, I suppose.
What is lovely is with what genuine surprise the hierarchy has realised that they have been talking tosh for eighteen months. First we were mad, then we were bad, then it was too difficult, now it was their idea all along.
Possibly the biggest example yet of the complete unimportance of being right in politics. Today Dave is a hero and Gideon a genius. Consistent, steady, principled and right eventually.
Posted by: Jonathan | October 08, 2007 at 11:17
Actually as a card-carrying member of the discarded right, (can I come back on the candidate's list now that CCHQ have been proved to be wrong about everything else?), I don't want the hierarchy to exhibit the zeal of the convert.
Tax cuts alone are not going to be enough. We still need a coherent plan for real reform and improvement of the public services. The time for this is now whilst we have momentum and before Yellowstripe has a chance to paint us as only interested in tax cuts. The answer is vouchers for both. Just trust me now on this, it will cut out the eighteen month wait.
Posted by: Opinicus | October 08, 2007 at 12:06