Tories will announce fully funded tax cuts on Tuesday

So says Ben Brogan. Good to see us (finally) getting ahead of Labour on this one.

The Tory Treasury team believes that there is now real possibility for party unity. They were encouraged that the ConHome poll of members rejected tax cuts funded by borrowing. Much more important than that, the party believes that Labour could get itself into real trouble with voters if it takes the country even further into the red.  Polls and focus groups are suggesting that swing voters are very worried about the debts that Labour are building up. The message of David Cameron's News of the World article - LABOUR HAS MAXED OUT BRITAIN'S CREDIT CARD - will now be centre stage in the Tory strategy.

George Osborne writes for tomorrow's FT setting out what global leaders must do at their forthcoming summit.  He highlights six areas for action:

1. Relaxed monetary policy must be the "principal tool for stimulating demand";
2. There must be improved international regulation;
3. A stronger role for the IMF with more heed paid to its warnings;
4. "Colleges of regulators" to oversee, for example, credit rating agencies;
5. Some supportive use of fiscal policy;
6. Including use of automatic stabilisers - but no unfunded tax cuts that add to the structural deficit.

Comments

[ChrisD]

"Good to see us (finally) getting ahead of Labour on this one."

Or, it could be that the Tory Treasury team have chosen what they perceive as the best moment to launch their alternative to Brown and Darling's PBR to gain maximum media exposure?

"LABOUR HAS MAXED OUR BRITAIN'S CREDIT CARD" is one hell of a sound bite which deftly sums up the sheer amount of debt this government has accrued already. It also undermines Brown's argument that the UK is in a strong economic position with low debt, and therefore can afford to borrow even more at this time.

Well done!

[Cllr Stephen Ellis]

While the sums of money involved are incomprehensible, people are starting to work out for themselves that Brown's sums aren't adding up - and they know they'll be paying for it. You can't bail out banks by billions and increase borrowing without having to pay it all back somehow. The credit card analogy is a good one and something that most people hit hardest by the credit crunch will associate with.

[Raj]

Sounds excellent. Will await details next week.

[Ulster Tory]

Apologies for being persnickety, but should it not be MAXED OUT, not MAXED OUR?

[Patsy Sergeant]

Its a very strong, punchy statement, that even young people will notice - its good!

[Patsy Sergeant]

Whats the betting that Brown or/and his 'team' are up all tonight trying to come up with a sound-bite for tommorrow that will overshadow this statement!

[Malcolm Dunn]

Yes, if this is true.It's great news! It will be interesting to see how these tax reductions will be afforded.

[Henry Mayhew - ukipper]

If they are now prepared to adopt UKIP policy I have a few more for them.

It isn't just lowering taxes that's necessary, it is giving back ownership to the people. Their next move should be to move welfare and pension provision to mutual societies, but they are too thick to understand this one.

[Tony Makara]

"A stronger role for the IMF"

This is very important, further, a regular convention of the world's leading central bankers would be of great benefit and would faciliate forward planning for global macroeconomic policy.

I'm pleased that the party leadership will commit to tax-cuts while at the same time adhering to the principle of living within our means.

[DCMX]

This is a climbdown and all no less welcome for that.

[ChrisD]

"Whats the betting that Brown or/and his 'team' are up all tonight trying to come up with a sound-bite for tommorrow that will overshadow this statement!"

Patsy, listening to the BBC news just a wee while ago, it sounds like the government are now going to try and put something out tomorrow in an attempt to over shadow the Tories on Tuesday.

"This is a climbdown and all no less welcome for that."

I don't think that's fair or true, its all about timing with the PBR coming up and choosing a time when you will get the media exposure you are looking for.

Also, if the government try to lift these Tory proposals and put them into the PBR, they are still likely to be freshly associated with the Tories which makes it look like the government are nicking their idea's because they don't have any of their own.

Learning from the mistakes made by your predecessors, as well as trying to outwit the New Labour spin machine is important. Far more important than dancing to the tune of the Right leaning media at a time of their choosing.

[Votedave]

It is not a climbdown at all. It has been made abundantly clear that the Conservatives will not make unfunded tax cuts, but cut tax where it is responsible so to do. Labour's so-called tax cut plans will simply lead to more debt tomorrow.

[Libertarian]

This is humiliation for the Camerloons and their pet Social Democrat, aka Danny Finkelstein. Suddenly they discover tax and spending cuts after telling us that they are disastrous electorally.

Look at the Fink's record - joins SDP, advises Major and Hague and gets thrashed in Harrow. In any other industry but politics, he'd have been out on his ear.

What a bunch of they are a bunch of unprincipled, disingenuous opportunists. I simply don't believe a word that Cameron or Osborne says.

[Joe James B]

We must give businesses, and personal taxpayers, some of their money back. It is key to regenerating the economy.

They will bring in more tax revenue over time.
Of course, revenue doesn't flow in immediately, so we are restricted when the current debt (PSBR), aswell as total government debt is rapidly increasing, but I welcome this development, and we need to get it across.

Slashing the beaurocracy of government may sound like a cracked record, but there are a number of big areas which I believe could be done away with almost completely.
And it would have very little affect on services.

[libertarian2]

These funded tax cuts are excellent news. Not only will it sound wise and yet decisive to voters, but it will mean that the Tory party is, finally, out-flanking Labour again. Nothing could have been worse for us than for Brown to get a second bounce because we sat back and let him set the agenda.

[pp]

Superb article - worth reading the whole thing (it isn't that big) no summary can convey the detail.

re: libertarian @ 23:19
"they are disastrous electorally."

As long as the public chose to beleive that the naked emperor was clothed, there was little mileage in actively arguing with them - there are none so blind as those who wll not see.

Now that the majority seem to be waking from their stupor - they may be rather more responsive to the truth.

[Tony Makara]

If the stories about Labour borrowing to fund tax-cuts is true, then this should be portrayed repeatedly as yet another extension of Gordon Brown's credit-economy. The plans will look reckless and opportunistic when balanced against Conservatives practical and prudent tax plans.

[StevenAdams]

Thus is good news, but the presentation is crucial. The fact is that Cons haven't been ABLE to announce tax cuts for some years, due to NuLabs successful portrayal of taxcutters as service cutters. In these circumstances, it was prudent to present policy (truthfully) as less radical in order to regain trust, i.e. share the proceeds of growth (which the thoughtful will understand as real terms tax cuts).

Now the game has changed though. People no longer listen to tax rise=service rise arguments, having been let down by deteriorating services and having seen what higher taxes is doing to our economy.

However, don't mistake this for merely savvy timing and presentation. The truth is that the world HAS changed since 'sharing the proceeds of growth'. Whereas that would've been a measured way of letting in the over-stretched rubber band economy, the band has already snapped and the only way to rejuvenate consumer confidence and personal finances is to give people back their money.

One final comment to Henry Mayhew: the Conservative Party was a tax cutting party before UKIPs founder was eating solid food. Don't flatter yourself into thinking that ANYBODY follows the dead and rotting corpse that is UKIP.

[Opinicus]

It's "maxed out" but it's a very good soundbite.

Osborne's prescription however doesn't bear much analysis, does it?

1) Monetary policy yes but what of fiscal policy?
2) How does Britain's key role as a world financial centre benefit from letting our envious enemies and partners in the EU (where not co-terminous) regulate it?
3) This is piety not seen since Sunday School. If we ever get to 2006 levels again I am sure that the IMF's stern warnings will make a deep and lasting impression on the frenzy of greed that is capitalism enjoying itself.
4) OFCOCK-UP perhaps.
5) Now that's what I call a winning slogan for 2010.
6) Equivocation on top of timidity. The smack of firm government and fierce leadership.

[Opinicus]

@StevenAdams

One final comment to Henry Mayhew: the Conservative Party was a tax cutting party before UKIPs founder was eating solid food.

...but not so much since
...and that's what we complain of.

[Joe James B]

The government will come forward with their own tax cuts "paid for" by borrowing, as Tony Makara and others have said.

This is obviously a trick to make it difficult for the Tories to oppose.

We should stick to our proposals and judge it for ourselves. If we just re-act politically to what the government does, then there will be trouble ahead.

[Opinicus]

@Joe James B

Slashing the bureaucracy of government may sound like a cracked record but

Its not a cracked record, its pristine and still in its original sleeve. Its never been tried.

It can't be done, not in the sense that it isn't possible but in the more important sense that no one (on current offer) will do it.

[Adam in London]

Sounds good, but it needs to be handled carefully.

Judging by Osborne's 6 areas for action, it would seem that (apart from the automatic stabilisers) he does not see fiscal policy as a means to play around with a demand in the economy (that's the job of monetary policy). Implying therefore, that fiscal policy will be focussed towards the supply side. Maybe corporate tax breaks and a shift in remaining spending towards things like transport and energy.

That has the potential for a strong message. Whilst Labour seek to re-inflate the bubbles of the old economy (which got us into this mess) the Tories seek to restructure the economy so it performs better in the future; whilst Labour seek to borrow their way out of crisis caused by excess borrowing, the Tories aim to hold borrowing down as much as possible; whilst Labour see big capital projects rushed through and bodged in order to give a boost to demand, the Tories want to ensure they're sensibly done to ease and improve supply; whilst Labour are concerned only with immediate pain relief, the Tories want to nurse the patient back to health.

[StevenAdams]

@Jonathan:

Fair comment, but the previous para's in my post attempts to explain why.

[David (One of many)]

"This is obviously a trick to make it difficult for the Tories to oppose."

I don't see why - there's a clear distinction between borrowing to cut taxes and cutting waste you don't need in order to do so. It's like selling old records on eBay to pay the bills - rather than taking out another loan. And, if Labour try to steal the tax cuts the Conservatives propose - either in form or name - it just proves a) the Conservatives do have policies, despite what Brown says b) they are good - so much so that the government steals them c) the government has run out of ideas. What's more, the public didn't fall for it when Labour fiddled with inheritance tax in light of the Tory proposals; there's no reason to suspect they'll suddenly fall for it now.

[ChrisD]

"If the stories about Labour borrowing to fund tax-cuts is true, then this should be portrayed repeatedly as yet another extension of Gordon Brown's credit-economy. The plans will look reckless and opportunistic when balanced against Conservatives practical and prudent tax plans."

Tony, the government appear to be back peddling like mad on Sunday Evening. Timesonline reporting £15bn tax cuts? Don’t bank on it

"The Treasury and No 10 played down suggestions that the value of tax cuts could reach £15 billion - the level some economists say is needed to kickstart the economy - and called weekend briefings unhelpful."

Don't you just love the spin at the end. The Brownite cabal are well known for briefing, and then counter briefing the press.

[Henry Mayhew - ukipper]

StevenAdams

What is dead and rotting is your shadow chancellor's reputation, not ours.

The next elections (the Euros) are in June. Do even you have any respect for your MEPs with the exception of Hannan and Carswell? Do you think the British people do? Let us see how dead we are, you ten-year-out-of-office, deposit-losing, Etonian-ar*e-licking, freak.

[StevenAdams]

How pathetic.

[Tony Makara]

ChrisD, the incompetence means anything is impossible, including an ignominious retreat, as happened over the election that never was. This truly is a government that lists from one bad idea to another at an alarming pace.

The midnight news reported that Labour is looking at ways of ending lifelong social housing. This is very dangerous policy given than many people can never afford to buy. So in effect it would mean Labour breaking up communities as it engages in a game of musical chairs moving widows or those with adult children from a house to a flat and using the new criteria to weed out those who have become trapped on benefits, creating even more problems with homelessness and social breakdown.

This ill-thought out policy must be opposed because Labour, in typical short-term mindset, believe they can redistribute social housing to provide more living-space, when in reality the net result will be more homelessness and community breakdown.

[Matthew]

Great one-liner.

I think we would do well to use it with the fact that it is all the harder to get out of the red when the largest liability is in Downing Street.

But this is a fine line. Promise too much and people will be scared of cuts - they (rightlz or wrongly) don't believe you can offer tax cuts just by slashing bureaucracy. Promise too little and its tokenism. At least the latter doesn't undermine trust so lets tread slowly.

[GB£.com (33% of Tories disagree)]

"LABOUR HAS MAXED OUT BRITAIN'S CREDIT CARD"

This is embarrassing.

[Old Hack]

Well this is more like it. Since I've been fairly vociferous on aspects of Conservative economic policy, I should welcome any improvement.

That said, all this is reaction as opposed to proaction, and that is still not good enough. In other words, get ahead of the curve and stay there, rather than playing catch-up.

I'd also like to hear more about domestic regulation of banks and credit agencies. A college of regulators sounds like something that would settle at the lowest common denominator, which is not good enough.

We need to watch carefully how this plays. Part of the problem still remains the credibility of the messenger as much as the message itself.

We are far from out of the woods.

[pp]

ukiper - I think georges reputation stands up pretty well - I am looking forward to election posters contrasting osborne with mandleson (who will by then have resigned) and then contrasting browns judgement vs camerons.

Given that mandleson says that osborne being on a yacht for a few hours excuses mandleson spending days/weeks living it up at olegs expense - then it is clear that brown must be sniffing around for any tory action that he can use to 'excuse' his poor judgement in bringing mandleson back.

And now that it has been reported that mandleson DID discuss EU tarrifs with Oleg (and again mandleson has changed his story to fit the newly released facts), it is only a matter of time before gordons poor judgement on this is crystalised in the form of mandlesons resignation.

[Henry Mayhew - ukipper]

Thanks for that analysis pp. I think you have got the main points, bar one or two.

There are differing views on when it is appropriate for a leading politician to sue for libel so perhaps it is fair enough not to take on a Rothschild. What you perhaps miss is that our system operates on the basis that all honourable members are gentlemen. It is not thought the done thing to lunch with a privy counsellor such as Mandy and then to blab about what he says, especially in a way designed to hurt him.

This point may have passed 'civilians' by since they see politics as out-and-out combat, but it won't have escaped the notice of anyone at Westminster. George knows he has sinned, as do all his colleagues and opponents. It is most unfortunate for the Tories that he happens to be over-promoted, the shadow chancellor in a time of financial crisis, and of youthful and formerly bouncy mien.

[StevenAdams]

George may have broken some type if code, but that's irrelevant to the electors. They don't care about 'codes', but they do care about sleaze, and in this case it's quite clear that Mandy was the most compromised guest on that yacht.

(Editor - I'm surprised the post of 00:50 has been allowed to stay unedited, to be honest)

[resident leftie]

And over here, Dominic Grieve is promising increased taxes....
http://www.politicshome.com/Landing.aspx?blog=4407&perma=link#

[Henry Mayhew - ukipper]

What's wrong with it Steevo?

[StevenAdams]

Hey, attack the policy, party or argument - don't attack me.

Play the ball, in other words.