Tory members want Cameron to join Obama, Key, Harper and Rudd in offering tax cuts

Given all that George Osborne has done for the Conservative cause, grassroots unhappiness at his performance is uncharitable. All of us also need to understand that the Brown bounce is NOT that considerable. The latest polling confirms that David Cameron remains on course to be Prime Minister. The time for a change message is working from Washington to Wellington. It will triumph in Britain, too.

But there should never be any room for complacency and Conservatives need to enthuse voters and they need to offer some recession-relieving, economy-boosting tax relief.  That's the message to emerge from the latest ConHome survey of grassroots members when we asked about the ideal fiscal policy for the downturn:

68% of members want lower taxes. 57% want tax cuts funded by tighter spending control (also to be used to reduce borrowing) and 11% are content for lower taxes to be financed by higher borrowing.

Commentators like Daniel Finkelstein have misrepresented the lessons from other countries (see here and here) and accuse tax cutters of being punks.  In reality tax relief is on the agenda of nearly every successful politician in the world:

Although we still believe in the multiplier (or supply-side) effects of lower taxation, last week we proposed that the Conservative Party should respond to Labour's (almost certain) irresponsible tax relief plan with a responsible tax relief plan; tax cuts financed by reducing waste rather than increasing borrowing.  We are encouraged that that position is supported by a majority of Tory members.  Before recession struck it was important that resources were shifted from the bloated state to the overtaxed private sector. That's why September 2007's Tory decision to match Labour on spending was so ill-judged. A shift to the private sector is even more important now.

Comments

[James H]

Well this is depressing. I myself don't for a moment buy that efficiency savings are either sufficently quantifiable, or possible to discover rapidly, to make tax-cuts on the back of them. The civil service has every conceivable incentive to demonstrate the impossibility of efficiency savings. They'd probably prefer service reductions. Besides, the bigger, currently identifiable, savings are already earmarked for the chop, with their money going into current policy commitments.

We can be pretty sure any labour tax-cuts will result in increased borrowing. All we need to do, surely, is strengthen the tory line on labour's debt addiction, and link it into explaining their 'tax-cuts' as tax deferred.

[Dave J]

If you think Obama's fiscal policy will REALLY amount to tax cuts, for anyone, you're dreaming.

[Cleethorpes Rock]

Obama's policy amounts to writing out checks (sic) to people, may of whom don't pay tax. It is therefore more analagous to a welfare benefit financed by borrowing. If Brown trys to pull the same trick over here, we need to jump on him, as James H says.

We also need to get away from the "efficiency savings" idea. Using a few fewer paperclips and turning off the lights won't save enough to make proper tax cuts. We need to talk about what the proper role of government is and cut the public sector accordingly.

In the US, McCain gained little traction on tax and spend because when challenged, all he could do was go on about examples of $2-3m "pork" projects he would cut, while still supporting $10bn a month going to the Iraq occupation.

If we want to be taken seriously, let's stop counting paperclips and start having a debate about what government should and shouldn't do.

[MrB]

I believe that Cameron and Osborne, like us, want taxes to be lower. However, that familiar attack line "Same old Tories" must linger in their minds. It was used with devestating effect in 2005 by Labour in response to a very modest tax cut. It's no wonder they're being cautious. Now that economic circumstances have changed though, it seems worth the risk. I hope they go for it.

[Patsy Sergeant]

I should have thought it is highly unlikely that Brown would have any intention of cutting expenditure on the public sector, anywhere, after all it is his party that has made this top heavy state apparatus. And then there is the benefit area, no wonder he finds excuses (Keynes) to continue borrowing or somehow making money.

Brown doesn't understand about the tax-payer, because he sees them, basically as a milch cow. Why would he understand about the delicate balance of a free market - where would he get the knowledge from, since he spent 10yrs happily (apparently) ensconced in an office devising ever more intricate ways to increase taxes.

Maybe the Conservatives should explain more often, to the ordinary Joe in the street, how much money goes on the public sector, and in language that he would understand, so that he wouldn't be so easily gulled into believing all the waffle about the grandiose ideas the Brown announced a week or so ago (many of them not new), to justify more borrowing.

[Louise]

The "no room for complacency" line is fine but I've yet to see anything ever come out of CCHQ to suggest that Cameron and Osborne are actually listening to this phrase and taking note of what you are saying. When they start offering up real manifesto pledges and campaigning solidly on the issues I will be the first to praise them, but I'm not holding my breath. They could have been holidaying in Corfu for the last few weeks and no-one beyond this site would notice.

The poll was probably taken before Glenrothes as well, and perceptions of electoral success may have altered since. The Telegraph was probably more accurate this morning, saying we need to do and say a lot more. My confidence in Cameron's ability to say something loud and daring is diminished by this poll, as over on CentreRight Louise Bagshawe is already crowing and telling us sceptics to stop moaning rather than taking anything discussed there on board like an intelligent politician should be doing. If she wants to win her seat then she should be out there getting some policies in order, not trying to bluff her way through abysmal electoral results in an area where we need to be really out gunning for Labour.

I would welcome proper tax cuts and I'm sure a lot of people would, but we need to get out there and say it rather than hide behind cute speeches and intellectual nit-picking. There is always a chance Labour might offer them too now, and the poll still says the PM and Chancellor are better placed to lead people through the economy than the Tory pair.

[Opinicus]

Although, I was with the 57% I agree with James H. "Efficiency savings" are totally unbelievable.

However, that leaves
1) Deregulation - abolishing quangos or more politically putting them into hibernation until the end of the emergency. When in 2-3 yrs time no one misses them they can be abolished without shrill protest. Get Hilton to ask his focus group whether they would rather pay less tax or have a White Fish Authority - it might surprise him. If by any chance someone does miss them (other than the sacked quangocracy) then they can be reinstated when the economy picks up. Worth any sum DC has the guts to achieve.
2) Abolish the Barnet Formula. Worth £10b
3) Abolish regional government in England (see 1). Worth £1b
4) Clamp down on health tourism. Worth £200m
5) Clamp down on benefit fraud. Worth £4b
[6) Pull out of the EU Worth £10b in net contributions, £20b gross, £10b in food costs out of CAP (OK, OK just dreaming)]

Anyway that's a minimum of 5p off income tax in five sentences. And health and education are still sacrosanct.

[m dowding]

Dear fellow Conservatives, the MSM guided by Labour, for some weird reason, wish George gone. ( Mandy is in love with him and was shocked to be rebuffed). Let us to a man and woman scream to keep him. If the opposition are so passionate, (back to Mandy)to destroy him, all the more reason not to!!!!!
I love George!!!!!!!

[m dowding]

By the way, Louise is a troll and I claim my £5.
50p since I posted, inflation, shitty.

[Alan S]

I have no time for those who think that every penny is spent well by the state. If you freeze public expenditure it would force on the public sector the same economies every family is currently making.

[Old Hack]

I've just listened to a BBC podcast of Cable being interviewed on the Today programme.

Cable is a chancer in the grand tradition of the Liberal Democrats. He's all too fond of his own opinions, let alone voice and was behaving like some sort of economic guru, which of course is not true.

That said, Cable has actually been doing his job, which is to punch poltical points, including this hypocritical and bogus b******t about Lib Dem tax cuts. Lib Dems would u-turn on tax cuts just like they did like they did on Lisbon referendum. Their promises are worth less than a US sub prime mortgage bond. Yet Cable is *doing his job*!!

Is it 'uncharitable' to expect George Osborne to do his?

With great respect Tim, at this moment in time, we cannot afford this paralysis, this vacuum at the heart of the political agenda.

No one is saying banish Osborne to the back benches, but dammit, we cannot afford a passenger in this key position. Osborne has failed in more ways than just policy. That cannot be recovered quickly enough and a change must be made.

[YMT]

People are just miffed that our stratospheric rise in the polls and reputation seemed to have been halted by the media circus surrounding Osborne and the ill judged meeting with the Russian, but getting rid of Osborne won't make the taint go away.

Osborne should be on the front bench but not as Chancellor, he doesn't have the gravitas to make a powerful enough public impression and we are clearly making little political capital in the area at a time when the party should be able to use the downturn to make massive gains with the electorate, it feels like we are losing the argument because our side isn't making enough noise and what we do say is weak.

[Alan Phillips]

Am I alone in thinking that the financial crisis is one that actually presents an opportunity?

If you take United Kingdom PLC and look at it as a business, a financial restructuring would seem to me to be a feasible and sensible option. Why do you have to follow the guideline that are in place?

Why for example, must we continue to bail out the free-loaders? Why can't benefits for the able, be a more attractive option than work? How much more work must be shipped abroad, because the operating benefits are so much better? yadda, yadda, yadda...

We need to set a new agenda, one which allows enterprise, one that rewards employment, both employer and employee. Imagination, common sense and setting a narrative for incentivising changes for the the better. There seems to me, an acceptance of NuLabours bad policies in many areas, change them. Look at some simple policies that may not save ANY money, but through the change in themselves, improve lives, maybe upping the speed limit to 80/90 mph after 21:00 until 06:00 on motorways. Actually there's a case to be more friendly to the motorist, they pay enough, why not offer them something nice in return for a change...

[Patsy Sergeant]

One has to remember Old Hack @ 08.28 that Vince Cable doesn't have to 'fight' for airtime especially on the BBC, he almost gets ushered in to interviews, and then allowed or even encouraged to say whatever he wants!! One cannot say that ANY Conservative Shadow Minister has that luxury on the BBC at least!!

[cjcjc]

Surely no can believe that either Cameron or Osborne has been cutting an impressive figure during the crisis.

The failure stems from the "sharing the proceeds" nonsense, which has boxed them in.

While I cannot stand Brown, I see no *positive* reaason yet to vote for Cameron.

[John Coles]

Gideon Osborne should be thinking along the lines proposed by Jonathan (0109), but he won't, it's too radical, too Conservative. He is supported in his inertia by Oliver Letwin, who is wedded to the "share the proceeds of growth" mantra and, because of his demanding day job, lacks the time and inclination to re-think policy.
If these two politicians could be either re-educated or sidelined and Finklestein's malign drivel ignored, there might be the chance of a truly Conservative economic policy being adopted.

[Nicholas J. Rogers]

I think that with his pump-priming spending splurge Brown has presented with an enormous opportunity which we aren't taking enough advantage of.

In a recession people will have to tighten their belts, and it will be very easy to parallel that with Brown's crazy spending plans to highlight just how irresponsible he is.

The line would be that the government's priority is to help people through the crisis in the most efficient way possible, and the best way to do this for the greatest number of people is to increase the money they have in their pockets through tax cuts.

This will all be funded by cutting non-essential programmes and simplifying the tax system.

Piece of cake...

[Old Hack]

Patsy, I don't deny that the BBC presents a challenge.

But Osborne isn't even trying. He's trying to get by on press releases and penny ante stuff that fails to tackle the fundamentals about how we put this right.

Perhaps if he had more to say the BBC may find itself obliged to take note?

[Rob C]

Contrary to many opinions expressed here, I CAN believe that efficiency savings would save significant amounts. My partner worked for 3 years in local (council run) CCTV and the experience totally astonished us: from a team of 7, 3 were a waste of space and 'carried' by the others. The 3 concerned are very union driven and aware of their 'rights' and this combined with weak management means they are all still there: 1 on long-term 'sick' (officially stress, but actually running his own business); another on part-time sick (also stress); and the third on permanent 'go-slow' pending retirement or golden handshake at our expense. I've since made the effort to speak to others in local government and it would seem that this is commonplace - those that can't survive or hold down a job in commerce, end up working for the establishment where there is little accountability, excellent union support and zero sense of corporate pride. There has recently been a standoff to the 11th hour regarding 2 of the same personnel above refusing to sign authorisation for enhanced CRB checks and although they eventually signed, the cost in effort, authority legal representation etc is scandalous. The comment we heard was that if they didn't, they would have been suspended on full pay for up-to 6 months, pending acceptable alternative employment or a pay-off. If the public realised the scale of waste, I think they'd be a council tax rebellion and I don't doubt that central government is far worse. What makes it that even more offensive is that part of our council tax goes into their protected pension pot, but the government first raided the private sector's pensions and then went on to be complicit in an economic meltdown that could well take away much of the remainder! Still, another 10 years of Labour and we'll ALL work for the state and no-one will need to worry - the only taxpayers left will be celebrities and MP's...

[RichardJ]

"By the way, Louise is a troll and I claim my £5.
50p since I posted, inflation, shitty."

Seconded, based on some of her previous postings.

[Louise]

@RichardJ - no I'm not a troll, ask John Redwood, Rob Wilson and Richard Benyon, they will actually say I won them their seats last time round.

I'm a conscientious objector at the moment, but I'd still like to see a Tory win.

[NigelC]

I work in the private sector delivering year on year efficiency savings for a major corporation.
It is not difficult if you set savings targets, provide the process and put the right managers in place.
With the bloated public sector we have today, first year savings of 10% should be easily achievable in revenue budgets.
Start with:
Identifying all non value added activity (from taxpayers veiwepoint) and eliminating it.
Eliminate non jobs (from taxpayers viewpoint)
Cut travel and expenses budgets but 25% (eliminate first class travel)
Cancel all meetings held in hotels and conference centres and use Government offices
Tackle procurement with strigent targets

It really isn't rocket science to get costs under control. The private sector have to do it!

[David Belchamber]

Rob C at 12.06:

"If the public realised the scale of waste, I think they'd be a council tax rebellion and I don't doubt that central government is far worse".

I imagine that many of us have similar stories of taxpayers' money being wasted in this way but who is going to stand up against it?

Does CCHQ take note of sensible suggestions that people make on this site? There are today a number of practical suggestions to fund part of any tax cuts that DC might wish to promise. In addition are the cancellation of the ID project, abolishing many consultancies (why do we have such a large civil service if consultants are brought in to do their work?) and also regional assemblies etc.

[Ruth Kelly's plaything]

Rob C | November 09, 2008 at 12:06 (inefficiency of local govt)- - - -

Absolutely right - but I think there is another malign influence that you do not mention. The managers responsible for these betrayals of trust are the very people we would depend on to carry through the reforms. Unfortunately they belong to the same unions and share the consensus public-sector view that efficiency is an alien, inhuman, Thatcherite notion.

There may be some good people there who truly believe in public service and are actually trying to minimise waste, but I suspect they are few and come under peer-pressure not to rock the boat.

Something radical is needed. A 25% cut in budgets with a 100% (of salary) bonus for managers who maintained service levels could do the trick, but it would reward those who have not cared up to now and penalise the good guys. How do we fix that?

[Peter]

I have nearly a grand a month stolen from me each month. Unless a tory tax cut puts at least £300 back in my monthly wage, I will know they are still fiddling round the edges and I will not vote for them. Income tax is the really stinger and it is offensive.

[Janet]

Has the idea of flat rate tax been discounted?

[Pete C]

From the Libertarian Party Manifesto:

According to government statistics, Income Tax raised £143bln in 2006/07, which accounted for approximately one quarter of the total government spending of £534bln (public sector current expenditure plus net investment). However, consider this: in 2001/02, the equivalent government spending was £378bln. Were we to return to those recent levels of public spending, we would have more than enough income from other sources to immediately abolish Income Tax.

How about some competition, Dave?

[DavidNcl]

What Peter said!

I used to be a party member. Some of the modern party make me feel ashamed I ever was.

Let's shut down big bits of the state (like the BBC and regulatory quangos) and let the people keep their hard earned cash.

Throw Osborn and iDave under the bus. They're not tories; they're commies.

[Malcolm Dunn]

To deliver reductions in tax we need to deliver reductions in spending otherwise we're no better than Labour (or Bush) and our terrible deficit will get even worse.
Some classic posts on this thread.Some body called Louise reckons she won John Redwood's ,Rob Wilson's and Richard Benyon's seats for them!What an ego!
And David Ncl, Cameron and Osborne are commies! Unbelievable! Glad you're not a member anymore old chap.

[Old Codger]

I was amazed that the good folk of the conservative party elected a Tone clone (heir to Blair) just when the general public were beginning to see through him. We must remember that Gordon is losing, but by a lot less than even a few weeks ago, and that Dave is not winning. That is a fact, no matter how the figures are spun, and will not change unless the Torys start producing real policies to extract us from the current mess. It appears to me that neither Dave nor George have a clue.

[Opinicus]

@RobC and NigelC

The issue is not that there is no fat to cut, which is obvious to everyone but that there is no political will to cut it and no viable prospect of it being cut. When you write posts about the current Shadow Treasury team it is vital always to use the subjunctive and despair.

@Janet

In so far as it was ever seriously considered, Yes.

[MarkE]

Tax cuts funded from reductions in "waste" implies the same level of services can and should be provided, but there are many services that are wasteful in themselves. Someone needs to be shouting from the rooftops that there are a million or more jobs that can be cut, which would mean the withdrawal of a service, but that such a withdrawal is a good thing; there is no one who needs a five a day, real nappy, bike-it, or diversity officer (with the possible exception of Gordon Brown, who's hold on office depends on his payroll vote). When will the Conservatives recognise this and promise real cuts in expenditure?

[resident leftie]

Obama?
Tax cuts for the poor and middle classes funded by a tax increase on £100K+ earners? Getting rid of off-shore tax havens so the government can get our share? I'm all for it. I look forward to similar proposals from Cameron.

Kevin Rudd:
KEVIN Rudd's $6 billion ambition of abolishing the top tax rate is on hold, with the Government blaming the global financial crisis.
As promises to pursue federal-state reform through bonus payments to the states face the budget razor, hopes of further income tax reform have also dissolved for now.

Mr Rudd's stated goal was to have three, not four, tax rates by 2013-14 - 15 per cent, 30 per cent and 40 per cent - but both sides of politics said at the last election that further reform depended on the state of the budget.

Finance Minister Lindsay Tanner confirmed today that the so-called “aspirational” tax cuts were now on the backburner.

Stephen Harper? He's running a budget deficit to finance tax cuts.

John Key? Taxes financed by borrowing and cuts in services.

Which of these models are you suggesting the Tories follow?

[pp]

As janet says - what about flat rate tax?

I think it is the only sensible way to go -- the massive savings in admin alone would provided a boost to most companies (probably not payroll companies, or inland revenue staff).

It would also remove the 'lie' of NI etc.

The only possible objection would be the aparant boost it would give to top earners when introduced.

However this problem could be avoided -- by legislating that the switch over must be 'take home pay neutral'.

Companies could be requried to recalculate everyones salary preserving their existing take home pay figure.

A little bit of effort up front, but worth it for a massive improvement in the taxation infrastructure.

[...?]

Osbourne... has done nothing, save hang around, WTF Tim...?