David Cameron is about to get to his feet and announce the beginning of what is expected to be three Tory tax cuts.
By reducing public spending growth to +1% in 2009/10 (excepting the four protected priorities of health, education, international development and defence) the Conservatives believe they can save £5bn compared to Labour's spending plans.
£4.2bn of this will be used to abolish the basic rate of tax on savings (£2.6bn) and to raise pensioners' personal allowance by £2,000 (£1.5bn).
The Tory Treasury team gives an example of how this would benefit older savers:
"A 70 year old couple who are retired and have total pension income of £14,000 a year each. They currently pay £902 in income tax each, or £1,804 in total. Their tax bill on their pensions would fall to just £502 each, or £1,004 in total, so they would be £400 a year better off each, or £800 better off in total. If they also currently get £1,000 a year each in interest from their savings account, they would pay £200 less each in tax on savings, or £400 in total. So in total they would be £1,200 better off."
The relief for savers fits into an emerging Tory narrative of rewarding people who do the right thing.
Up until today only the NHS and international development were identified as Tory spending priorities. They have now been joined by defence and schools - both of which are also prioritised by grassroots members.
it is not 'the right thing' to save at all.
the interest rates on saving are invariably lower than the interest rates on borrowing and so for the vast majority of people in the UK who are in debt through consumer debt, mortgages or financing should not be saving a penny but using any surplus cash they have to clear debt, as this will save them far more long-term.
is this just another policy designed to punish young people who are now paying the burden of what this stupid bunch of NIMBY baby boomers have spent in the last 11 years?
Posted by: anon | January 05, 2009 at 12:18
All very good stuff. How will this be paid for? We cannot, CANNOT let borrowing go any higher.
Posted by: Malcolm Dunn | January 05, 2009 at 12:21
Why is international development sacrosanct when much of the time the effect is to cushion oppressive regimes?
Posted by: jonnyboy | January 05, 2009 at 12:28
Read the second paragraph Malcolm :-)
Posted by: Tim Montgomerie | January 05, 2009 at 12:30
are the two examples the same?
Posted by: anon | January 05, 2009 at 12:33
Sorry anon. More haste, less speed and all that. I've deleted the second example.
Posted by: Tim Montgomerie | January 05, 2009 at 12:34
Frankly I would rather all savings be put into cutting borrowing.
Posted by: Felicity Mountjoy | January 05, 2009 at 12:35
But that still leaves borrowing at the absurd levels left by the government Tim.
Posted by: Malcolm Dunn | January 05, 2009 at 12:36
I'm with Malcolm and Felicity.
Our message should be no tax cuts until borrowing is under control.
Posted by: DCMX | January 05, 2009 at 12:41
jonnyboy: I made the case for an international development at the bottom of this post - http://conservativehome.blogs.com/torydiary/2009/01/tory-members-sa.html - on Saturday,
Tim
Posted by: Tim Montgomerie | January 05, 2009 at 12:46
Tax cuts should be focussed on increasing economic activity through investment. It would be far better to switch the VAT cut to capital allowances for business investment and to cutting employer NI payments.
Relief on savings is a good thing if it encourages more saving, which it should, as those savings are the capital the banks need to lend against. If it is only focussed on pensioners, it won't do this as they tend to spend more than the interest they earn anyway.
Posted by: C List and Proud | January 05, 2009 at 12:47
jonnyboy, agreed, 'International Development' is just welfare on an international scale that has the same effect as welfare in that it supports corruption and dependency. By the time the Conservatives get into office this international welfare bill is going to be close to £10 billion per year, 310 billion we can ill afford to throw at African despots.
Posted by: Iain | January 05, 2009 at 12:48
I can see why Cameron has gone for this but I think its a pretty light-weight measure when this announcement was built up as a major economic plan.
I dont think a few billion here or there is going to avoid the charge of being the 'do nothing' party.
Posted by: Johnny Fiston-Hewes | January 05, 2009 at 12:53
Some pensioners are suffering badly right now - this is the right thing to do.
Clearly we need to balance tax cuts and reducing debt but there is some urgency to help those who have saved prudently all their lives and now find themselves in difficulty.
Anon 12.18- Of course people should pay of debts with high rates of interest first but we need to re-establish the idea that saving is good for the long term or we will have another generation of pensioners reliant on the state. This is not sustainable demographically.
Posted by: NigelC | January 05, 2009 at 12:55
I'd like to slash "international development" dramatically (75% cut in budget or more).
The other measures are good, but should be paid for by savage cuts in the parts of the public sector which have not been ring-fenced (and international development which shouldn't be ring-fenced) and then instead of increasing government spending by *any* percent we could decrease it.
Sooner or later people will realise we are in a very, very serious situation. If we wish to have an economy left to do anything we need to take urgent far-ranging action right *now*. We are fast running out of time.
Posted by: Steve Tierney | January 05, 2009 at 12:59
Petition underway regarding Browns financial incompetence.
Pass this on by email if necessary
Make a statement now and shame Brown.
http://petitions.number10.gov.uk/Fianance/
Posted by: Petition against Brown | January 05, 2009 at 13:02
"I dont think a few billion here or there is going to avoid the charge of being the 'do nothing' party."
Johnny, I've said it before and I'll say it again; we can't do anything, we're in opposition. It's an idiotic charge to make, and I think it's crazy that some of us let it get to us. I'm not trying to be personal by the way, I just think it's nutty to even consider that criticism to be a valid one.
And yes, the amount isn't vast. However, when you add up the Tory proposals we are now looking - if my sums are right - at a tax cut larger than the £20 billion or whatever it was that caused us problems in 2005. The public are, I feel, more and more coming around to the idea of tax cuts being a good thing. I agree with those who think it's important to sort out the borrwing as well, but that'll be a slightly easier task in a more stimulated economy. And tax cuts are a way to build such a thing.
Posted by: David (One of many) | January 05, 2009 at 13:09
International Development. WTF?
Charity is NOT a good enough use for taxpayers money.
Posted by: Tommy | January 05, 2009 at 13:09
Terrorism and asylum seekers can both flow from failed states Tommy. There's a good case for saying international development is a self-interested policy choice.
Posted by: Tim Montgomerie | January 05, 2009 at 13:13
So, ""the Conservatives believe they can save £5bn compared to Labour's spending plans"". Out of an overall spending budget of £650bn, that's a 0.77% saving.
Pathetic.
Expensive private education has clearly not left Mr Cameron and his Shadow Chancellor at ease with numbers.
Posted by: John Coles | January 05, 2009 at 13:18
"Terrorism and asylum seekers can both flow from failed states Tommy. There's a good case for saying international development is a self-interested policy choice."
India has a space program. A BIG one.
Why should we continue to send them money when their own socialist/communist government values manned space flights over the lives of their starving people?
Posted by: Tommy | January 05, 2009 at 13:25
Well, now we know what's in Brown's Budget 2009 speech (even if Captain Darling has to mime the words on the day)...
Posted by: Teesbridge | January 05, 2009 at 13:32
All good, but we need more. If we cannot identify at least £20 billion savings compared to the staus quo, we lack sufficient ambition.
I am horrified by "Anon"'s economic illiteracy. If no one saves, where does the capital for investment come from? The trouble is that this government has made it less and less rewardinmg to save. The next Conservative government must put that right.
Posted by: Roger Helmer | January 05, 2009 at 13:37
"There's a good case for saying international development is a self-interested policy choice."
Well that sounds like just another version of DaneGeld, Blackmail or the Barnet formula.
You have got to realise that our Aid money corrupts the governance of recipient countries, with some African regimes budgets dependent on Aid, what we have managed to achieve is to disenfranchise the electorate from their rulers. After all one of the key motivators of accountability is tax, but when the gullible Muzngu is picking up the bill, who cares if their politicians are fleecing the system, because its just the Muzungu they are fleecing, and don't their politicians fleece us, Kenya’s politicians have awarded themselves salaries which are more generous than what our politicians pay themselves, in addition they have just decided that their wives should also receive a state salary and generous allowance, and the petrol allowance they have given themselves is more than the average Kenyan earns in a year, and guess who are the mugs paying for this largesse? We are with our stupid Aid budget!
Posted by: Iain | January 05, 2009 at 13:47
This will go down well and is a good move. As I read it we are helping all savers not just pensioners although they are suffering in particular because they needed savings to live on. This is a good move. As for cutting out more waste to pay for things, there may well be some that can be identified but efficinecy savings take time to work through and cutting costs can sometimes cost more in the short term. If specific areas that are non-essential are identified then all the better. I think it is good that we are clear on what we will ring fence especially education and health and the figures on spedning are clearer. This is heading in the right direction.
Posted by: Matt Wright | January 05, 2009 at 13:49
India has a space program. A BIG one.
I don't think that the cost is $1 billion or more. You might say that's a lot of money, but in the grand scheme of things it isn't. India's problem is more down to bureaucracy and as I once read "being a third-world country with first-world rights". Canning the space programme wouldn't make a difference. Though I would agree with previous criticism of payments to China because it offers so much money itself to other countries these days.
Aid can be supplied with strings attached, but not where we dictate a nation's entire budget - unless in the odd circumstance where aid mostly supports a country. There might be a case for redirecting aid to those states that really need it, but that doesn't mean total aid should be cut.
Posted by: Raj | January 05, 2009 at 13:53
Tim, I know that terrorism flows from failed states, but can't see how our DfID budget helps counter this.
If conservatives are against big-government welfare intervention at home, why should we have such faith in the welfare state, international-style?
Development functions could be taken over by the Foreign Office and Trade and Industry Departments, encouraging trade and economic development as a way out of poverty, with practical assistance rather than handouts. And if individuals don't like that, there are plenty of International Aid charities for them to donate to.
Posted by: Cleethorpes Rock | January 05, 2009 at 13:58
I will soon be an OAP but I think that the tax rules for OAPs should be the same for all.
So, raise the tax threshold to £10,000 for everyone with transferable tax allowances between man and wife.
Introduce a flat rate of tax for everyone above the threshold with no exceptions for the very rich (most of whom currently pay very little tax as Non Doms or by the use of pension pots, family trusts etc.)
Slash and burn state spending including non-scientific Qanqos, foreign aid, "green" regulations and subsidies to the EU.
Privatise education and introduce a voucher system and limit state subsidies to university education the science, engineering and medical subjects. Bring back apprenticeships and part time tertiary education.
Ditch the "green" agenda. Encourage employment by slashing employers' NI and doing away with PC anti-discrimination laws (it is not the business of the state who I employ or why).
Some hope of any of this from the Cameroons! So Vote for UKIP!
Posted by: David_at_Home | January 05, 2009 at 14:02
In my opinion as a party member, I welcome these proposals presented today by David Cameron. They show a caring nature, alongside compassion at a time when people, particularly the elderly need help direct from the state.
However it also shows a clear conservative approach to reigning in government spending by limiting government departmental spending to a 1% real increase, except in health, schools, defence and international development. They also present a clear paternal theme towards the electorate, that a Tory government should be presenting.
It must be accepted that their is going to be no quick fix to the government balance sheet, as we all know Labour Chancellors run out of money and have to borrow more but I think this is a step in the right direction to further announcements to be made on reviving the economy. Expect more over the next few weeks.
I would also like to make the comment that I do not agree with some of the posts found above, that International Developments budgets should be slashed, with one post calling for a minimum cut of 75%. I find this absolutely bizarre when we have direct responsibilty to those in need of basic aid, such as food, water and medicine. Whilst I agree we should not be handing money over to African despots as one post states, we should not stand by, when peolple are dieing globally of starvation and disease. Whilst I appreciate the UK is in a recession (well unofficially) poverty is relative to our situation. We still have food in our fridges and on our tables.
Posted by: Scott Carlton | January 05, 2009 at 14:09
Raj it doesn't matter what size of space program India has, the fact is it has one, and if its elected Government has decided it prefers to prioritise a space program over other programs who are we to say the electorate of India has got it wrong by electing this Government to office, and go and subsidise programs in India their Government has chosen no to. It should also be noted that India has a nuclear arms program, when we have just had to sell ours off to the Americans as we can no longer afford it, and the fact that India has its own Aid programs and gives Aid to other countries!
Posted by: Iain | January 05, 2009 at 14:11
Fraser Nelson has pointed out that this measure would ONLY be introduced if the Tories were in gov't by April.
http://www.spectator.co.uk/coffeehouse/3207391/camerons-planscrash-intobrowns-debt-mountain.thtml
This makes the Tories look dishonest
Posted by: Johnny Fiston-Hewes | January 05, 2009 at 14:23
Continuing a tradition is this area:
• In April 1991 composite rate of tax on savings was abolished. Children and other non-taxpayers could now register with banks and building societies to have their savings interest paid gross.
• In 1995, Tory Chancellor Kenneth Clarke’s third Budget extended the 20% lower tax rate to almost all savings income. Savers liable to pay tax at the basic rate of 25% did not have to pay any more tax on their savings interest.
Posted by: NigelC | January 05, 2009 at 14:25
Johnny Fiston-Hewes
The Conservatives can't implement any policies until they are elected!
Posted by: NigelC | January 05, 2009 at 14:27
I think Scott Carlton is touting for a nomination on the "100 New Peers" thread.
Posted by: Cleethorpes Rock | January 05, 2009 at 14:27
"£4.2bn of this will be used to abolish the basic rate of tax on savings (£2.6bn) and to raise pensioners' personal allowance by £2,000 (£1.5bn)."
This announcement was warmly received and rightly attracted a round of appplause from the audience.
The speech and questions afterwards were delivered in a positive manner and DC presented himself as the "Man with a Plan" but reminded us, quite rightly that he had a plan - not a "miracle cure".
It is a shame that on another thread some of the posters have focussed on the environmental message which a few appear to dislike - as this though important was not the central plank of the speech. The fact is that the economy is logjammed and David Cameron was showing us how the Conservatives intend to get things moving again - despite the fact that Labour has caused unutterable damage which will take a long, long time to put right.
Posted by: Sally Roberts | January 05, 2009 at 14:29
O/T Slightly
Jacqboots Smith is at it again......
Another Jacqui Supporter is a Labour Party Pen Friend
Patricia Lailey, using her maiden name Hill, told how the politician sympathised during a recent bereavement.
But Mrs Lailey didn’t mention she had been a Labour councillor for four years, and had worked with the MP on local issues.
She lives in Redditch, Worcs — the marginal seat Ms Smith is fighting to keep at the next election.Mrs Lailey wrote in a national newspaper: “I recently lost my mum and Jacqui wrote a personal letter to me. She cares about us in Redditch.”
Hat tip to the Sun (and Guido Fawkes)
Posted by: Jacqboots Smith is at it again | January 05, 2009 at 14:50
Indias space program really is peanuts, it's a nonsense example. By that right maybe we should stop funding Isresl and Pakistan and their development aid because they research other things. Aid is more than "helping poor people" it's about getting and economic or political stake in future projects.
Posted by: Jaz | January 05, 2009 at 14:55
"If no one saves, where does the capital for investment come from? The trouble is that this government has made it less and less rewardinmg to save. The next Conservative government must put that right."
Precisely, Mr Helmer and I believe a good start has been made with the commitment to abolish the basic rate of tax on savings and to raise the pensioners' personal allowance by £2,000.
Posted by: Sally Roberts | January 05, 2009 at 14:58
"But Mrs Lailey didn’t mention she had been a Labour councillor for four years, and had worked with the MP on local issues."
Oh this is hysterical! Not only does "Jackboot Jacqui" dragoon her poor long-suffering hubby into line but now she's enlisting her friends too - no doubt she'll then move on to the assistants at her local Co-Op and the receptionist at her doctor's surgery!
Posted by: Sally Roberts | January 05, 2009 at 15:00
"I don't think that the cost is $1 billion or more."
You are confusing the space program and the budget of India's space agency. Most of what is considered India's space program is funded directly in grants eg sattelite rocket launches. The ISRO's budget is only for running the ISRO.
"Indias space program really is peanuts, it's a nonsense example."
Tell that India's many starving citizens. I really cannot understand how some people can be so crass.
"By that right maybe we should stop funding Isresl and Pakistan and their development aid because they research other things."
Absolutely! Why should our government pay for things that their own governments should be paying for when our government is in debt and their governments are spending money on things that they shouldn't be.
"Aid is more than "helping poor people" it's about getting and economic or political stake in future projects."
That makes no sense, please feel free to list the projects rather than give vague assertions.
Posted by: Tommy | January 05, 2009 at 15:41
Im not entirely sure how much money I would get from this (Im thinking in the regions of pennies). Its not exactly earth shattering as a policy but its a small step of reassurance for those with pensions or substantial savings.
Interesting to see ring fencing of departments. Labour will now claim that other departments will get even more crippling spending cuts.
Posted by: James Maskell | January 05, 2009 at 15:54
Spending cuts of £5Bn???
What are we thinking of in such a weak proposal.
We need to cut £20/30bn for a start and lets have a well prepared programme instead of all these little giveaway's which impress no one and give the impression it is all being done on the hoof
Posted by: Richard Calhoun | January 05, 2009 at 16:31
their governments are spending money on things that they shouldn't be
Who has the right to say which governments have the right to spend money on which things? If, for example, India shouldn't nuclear weapons as Iain suggested why should we be spending £20 billion or whatever it is on Trident's replacement?
I think complaining that countries like India "spend money on things I don't like" is silly when there is no such prohibited list. I might as well say that I think we should back India's space programme because it will add a potential counter-weight to the Chinese.
Posted by: Raj | January 05, 2009 at 16:33
We need to cut £20/30bn for a start
From where, Richard? Don't mention ID cards - there's already a pledge to bin them. And don't prattle on generally about quangos et al. They spend money on certain things, they don't just funnel the money into private bank accounts.
Please list the projects with respective funding that adds up to £20 billion.
these little giveaway's which impress no one
Obviously you're not a basic-rate taxpayer or a pensioner (who could do with the extra money) then. Sorry but we have no reason to pander to the better-off.
Posted by: Raj | January 05, 2009 at 16:37
Posted by: Raj | January 05, 2009 at 16:37
Raj
I would like to see a carefully planned response to the grave financial situation this country finds itself in. Drip feeding intentions does not do us any good in such a serious situation.
We need to take on the Welfare State, the waste is criminal.
We need to introduce a flat tax ensuring those under £15000 a year are taken out of tax
Alongside a Flat tax we need to start to dismantle the Benefits system, it is evil.
I could go on but I think you will have taken my point, we need a radical response to the failed policies of the last 10 years, and to the failure of 60 years of the Welfare State
Posted by: Richard Calhoun | January 05, 2009 at 16:45
Richard
We need to take on the Welfare State, the waste is criminal
How much is wasted and how can the waste be reduced without hurting people who need help?
We need to introduce a flat tax ensuring those under £15000 a year are taken out of tax
How much would that cost? Where is that money going to come from?
Alongside a Flat tax we need to start to dismantle the Benefits system, it is evil
So what happens if someone loses their job through no fault of their own and there is no work in their area? What if a stay-at-home mum is left by her partner (who disappears) and has no one to care for her young children? There are plenty of people who need State support and you are crazy to imply otherwise.
I could go on
Go on? You didn't even start to answer my post. I said very clearly that I wanted a list of the specific projects you would cut and how much they each cost. All you have done is say that you'd get rid of "waste" in the welfare system and dismantle the benefits system. So basically if someone falls down on their luck it's too bad and they sink or swim.
Posted by: Raj | January 05, 2009 at 17:00
Sally, don't you think a substantial tax cut and a huge simplification of the tax system should head the way of those who actually pay for this rapidly growing number of OAPs?
Posted by: anon | January 05, 2009 at 17:02
I don't disagree, anon and I think we will see tax cuts when the time is right for us to have them. Now it would seem is not yet the time.
Posted by: Sally Roberts | January 05, 2009 at 17:14
"I think Scott Carlton is touting for a nomination on the "100 New Peers" thread".
Cleethorpes Rock I can say I am not touting for a nomination for the 100 new peers thread lol.
To give some background to my earlier post, I have sent David Camerons team over recent weeks a number of emails being quite vocal, attacking the party's position on the debate taking place on the future of the economy and raising my concerns that Labours attack on the party, (that being the 'party of do nothing') was starting to resonate with the electorate and that this, was being reflected in the opinion polls, in that people would prefer the team of Brown/Darling to handle the economic crisis over Cameron/Osbourne.
I felt todays announement picked up on my concerns, I am not saying that I am purely the catalyst for todays announcements but it is quite refreshing to know that we have party leader and senior shadow cabinet members that are prepared to listen.
Posted by: Scott Carlton | January 05, 2009 at 17:18
"Who has the right to say which governments have the right to spend money on which things? If, for example, India shouldn't nuclear weapons as Iain suggested why should we be spending £20 billion or whatever it is on Trident's replacement? "
Raj the difference being that we don't take Aid, and that was my point. India has elected its own Government, as such the Indian electorate has chosen their priorities. They have the money to direct to social programs if they so chose, they didn't, they preferred to have the money spent on a space program and a nuclear arms program, when a Government has funds to do that it should be excluded from any consideration as a possible recipient of our Aid money.
Posted by: Iain | January 05, 2009 at 17:28
Substantial tax cuts are a nice thought yes but I for one am under no illusion that the next years will not be painful on us all. I appreciate that Cameron is trying to make it least painful on some of the most vulnerable in our society ie the elderly who will be hurting the worst. I am sad that these ideas can't be implemented NOW when they need the extra money to get by every month.
It is a drop in the bucket yes, but what do you expect? Do some of you not realise we are in deep trouble and every day this goes on and every penny more we borrow we get deeper into it? This will be no easy or quick task to dig out of, even the cutting back of programs etc is going to take time and alot of thought and rethinking.
I am quite bored of hearing the claim of the Conservatives being the "do nothing party". I am quite sure they had plenty of ideas, but then they had hopes of taking over a country that was not down on it's knees in debt in a terrible recession that is only set to get worse.
I appreciate the use of the word "victims" in the speech as that is what many people in this country feel like due to Labour's mismanagement of our tax money, our civil rights and our futures.
Posted by: meli | January 05, 2009 at 17:30
" The speech and questions afterwards were delivered in a positive manner "
Sally the bit of the speech I heard on the radio sounded clumsy and disjointed. Not sure who is writing his speeches but he needs to get someone else. We got an intro that tried to put as many 'changes' in a sentence as he could get in, that sort of meandered over a whole range of topics, called for an election , then launched into the tax policy.
It seemed to me it would have been better if he had just concentrated on the issue of debt, pointed out the dangers facing us, demanded that Gordon Brown gets a electoral mandate for what he intends to do that's going impact on generations to come, or give the electorate the opportunity for a change, then liked the topic of debt in what the Conservatives want to do to support savers.
Posted by: Iain | January 05, 2009 at 17:44
"Sally the bit of the speech I heard on the radio sounded clumsy and disjointed. Not sure who is writing his speeches but he needs to get someone else."
Well one of the people who works on his speeches is our very own Sam, formerly of here so you'll have to get on to him if you don't like them :-(
Anyway, Iain, perhaps you should have been there instead of relying on soundbites! All you need do to get yourself invited to future similar events is email [email protected]
Posted by: Sally Roberts | January 05, 2009 at 17:48
As someone planning to save more regularly, this is welcome news indeed and makes me want a Conservative government in office all the more.
Posted by: Votedave | January 05, 2009 at 18:04
Posted by: Raj | January 05, 2009 at 17:00
I think that my proposals would offer enormous savings on our public expenditure without going into the detail.
You are on the other hand are simply stating that all the benefits and other enormous costs thrown out by the Welfare system are ours by right.
Well they are not, and when you are bust you cut back dramatically on spending to balance the books, not carry on regardless.
Radical change is going to come about whether you like it or not, I would prefer the Tories to grasp the nettle and ' lead ' this country out of this huge financial mess we find ourselves in,
Posted by: Richard Calhoun | January 05, 2009 at 18:14
I am broadly supportive of the tax cut on savings but I think denying any tax saving at all to higher rate tax payers with savings is both unfair and self-defeating.
Unfair - because many of those in work with savings, and, more particularly, with the ability to choose to save more, are higher rate taxpayers and as much victims of what has happened economically as any other saver. We are the good guys too because we tried to use the "fat" years to build our savings for self-sufficiency for the future rather than spend it all. I can understand that you might want to restrict the benefit to basic rate but to say that we continue to pay 40%, or perhaps in 2011, 45% on our interest income when basic rate tax payers pay nil% is starting to look like victimisation.
More to the point - it's not much of an incentive to save for those who are more likely actually to have the money to do so, is it? Is this a populist stunt or a genuine attempt to boost the savings ratio? Nor does it make it nice and simple so interest income is just paid gross and doesn't have to go on the tax return. Cameron's measure, with tricky calculations for those on the margin between basic and higher rate tax, has all the potential to create positively Brownian levels of petty complication.
I am also sceptical about the green investment index, or is it a separate Stock Exchange? (A speech writer who doesn't understand the difference between an index and a market has mangled this one, but Cameron is an economist who has worked in ivestor relations - he should know better.) I suppose one should read the fuller document that has apparently been published but at first blush this seems ill-formed as an idea, although I agree with the broader green thrust of his speech. If there are worthwhile green investments available, and people want to invest in traded securities in them, both of which I am sure there are, there's a perfectly good market on which such investment can, and indeed are, traded on and encouraging the FTSE company to subdivide its "FTSE for Good" index is hardly the stuff of statesmanship. I fear there may be more PR here than substance, but maybe there are details that make this something more? As ever, I am willing to be convinced because there is often more substance to Cameron than first meets the eye.
Posted by: Londoner | January 05, 2009 at 18:50
There is no tax on savings per se, the tax is levied upon the interest generated by savings, should the interest rate zeroise (as predicted by some finance "experts") Dave's plan is shown up for what it is - a scam, of the electioneering type.
Posted by: Patrick Harris | January 05, 2009 at 19:15
This is all just tinkering. We face a huge crisis and I am afraid Cameron comes up with a package that just doesn`t go far enough.
Those who believe you will be able to cut public spending by huge amounts without affecting front line services are deluding themselves.
You need to do what Barek Obama is going to do in America and have a huge stimulas package of public works that will help create and save jobs and stimulate the economy.
Cameron with this package as not just opened himself up to a Brown charge of do nothing again he as also open up another line of attack now about Tory spending cuts.
It will all end in tears and another Conservative defeat. It seems the party have learned nothing from there time in opposition and have just reverted back to Thatcherism.
Posted by: Jack Stone | January 05, 2009 at 19:17
Posted by: Jack Stone | January 05, 2009 at 19:17
A lot in what you say Jack, but I'm afraid we haven't got the money or the clout to do what Obama is proposing in the US
What we have got is obscene levels of public spending fuelling a client state which gets ever more threatening.
The only answer is to cut back on the Welfare State, there is huge waste and hand some of the money back to low earners by taking them out of tax
Posted by: Richard Calhoun | January 05, 2009 at 19:37
I'm a full 20% behind abolishing basic savings tax. Can't say better than that. But I'm a saver. Not yet retired but getting close. Every extra pound will help my retirement savings last longer without recourse to the State. Why should my savings be taxed twice anyway?
Should Cameron spend this money on cutting business taxes instead? He has a plan to guarantee business loans - far more targeted and prudent than just handing back cash.
Should he cut income tax instead. In time, after a recovery. But now a general, and inevitably small, tax cut would simply go to reducing employed persons' debts or increasing savings. Good things in themselves but not a real government responsibility.
Savers, saving for or mostly in retirement, don't have much sunny uplands of future recovery income to look forward to. 20% of our population are over 60 years of age.
Posted by: Jeremy | January 05, 2009 at 19:38
Well done Cameron.
A policy which is both good for individuals and the country and will also be popular as it is seen to be fair.
Now we need similar ideas to help small business and the reduction of red tape.
Continue to put 'clear blue water' between Conservatives supporting wealth creation, saving and living within your means (both as an individual and a country) against Labour's tax, borrow, spend and consume way to disaster.
Posted by: Another Richard | January 05, 2009 at 19:46
"This is all just tinkering. We face a huge crisis and I am afraid Cameron comes up with a package that just doesn`t go far enough.
Those who believe you will be able to cut public spending by huge amounts without affecting front line services are deluding themselves.
You need to do what Barek (sic) Obama is going to do in America and have a huge stimulas (sic) package of public works that will help create and save jobs and stimulate the economy.
Cameron with this package as not just opened himself up to a Brown charge of do nothing again he as also open up another line of attack now about Tory spending cuts.
It will all end in tears and another Conservative defeat. It seems the party have learned nothing from there time in opposition and have just reverted back to Thatcherism."
Thatcherism was a success economically and electorally. It is a fact that a lot of public money is wasted and this needs to be reduced.
If you, Draper-Stone the Labour troll, think that the Conservatives are really "doing nothing" then what can any opposition "do"? Brown should, if he believes that, resign and we will see Conservative ACTION.
"Barek" (Barrack) Obama has announced some significant tax cuts - tell me what happened to him in November's election.
Finally, this is called "Conservative Home" and you are not a Conservative. Your course of action would be obvious were you not so slow on the uptake:
GO.
Posted by: Super Blue | January 05, 2009 at 22:41
Financially the proposal is not massive, but the principal it represents is massive.
Well done dave and team.
Tax cuts will not (directly) make anyone rich - but the principle of respecting peoples property rights, and freeing them to keep and use their own money as they see fit will make a massive difference.
The labour trolls who say it won't make much difference should feel free to list the other areas where they think taxes should be cut (and list the spending cuts they would support alongside).
Posted by: pp | January 05, 2009 at 23:09
I think this is a sensible policy.
I would like to see a 1% National Insurance cut across the board as this is a tax on jobs.
This would reward those in work and those who employ people.
Posted by: A Cllr | January 05, 2009 at 23:12
Excellent.
The announcement of Tory plans for tax cuts for savers/pensioners etc is all over the London Evening Standard newsboards and front page.
The whole speech is worth reading. Perhaps plenty of good potential soundbites.
“The longer they're in, the worse it gets.”
“Move on from a grim future under Labour”
“Labour decade of debt”
Of course we could have “Labour isn’t working” again (both in terms of unemployment and their ‘measures’ to deal with the recession.)
Also some good stuff on the need for a prosperous but responsible economy:
(With a market economy)our vision of a good future is of a less materialistic country, more concerned with people and our relationships; a contributor society not a consumer society. Our economy will be more green, more local, more family-friendly, less arrogant about what central government can do for us and more optimistic about what we can all do for ourselves if we all work together individuals, communities, businesses - in a spirit of social responsibility.
Posted by: Philip | January 05, 2009 at 23:14
p.s. Seeing ossie on newsnight -- did paxman really use a gestapo style spotlight on him? Or was there a power cut, and only one big torch to film by??
Mind you - great performance, great message.
- one point... Brown (the PM) makes all the government treasury announcements (the tax badger is just a glove puppet)accordingly his shadow (cameron) makes many of the opposition ones... Ossie could add this to his arsenal of responses. His responses were a very solid defence, but could have been an attack...
Posted by: pp | January 05, 2009 at 23:21
If you, Draper-Stone the Labour troll, think...
Many months ago I corresponded with Jack Stone by private e-mail. For this Jack Stone to be a troll there would have to be new impersonation or a very elaborate and well established false identity. I don’t believe that any political blogger would be daft enough to copy-cat Facebook's fake President of Guyana.
I would work on the basis that Jack Stone’s opinions are real, albeit odd (in my opinion).
Posted by: Mark Fulford | January 06, 2009 at 00:06
Oh, and P.S. Super Blue, you clearly know neither Fulford's First Law of Blogging nor that it's only the editor who gets to say "GO".
Posted by: Mark Fulford | January 06, 2009 at 00:14
Oh, and P.S. Super Blue, you clearly know neither Fulford's First Law of Blogging nor that it's only the editor who gets to say "GO".
Posted by: Mark Fulford | January 06, 2009 at 00:16
After reading through numerous posts on various threads at this site, it seems to me that DC is about the only tory to have modernised.
Talk of slashing the international development budget, the welfare state failing over 60 years...seems the same old tory party to me.
Posted by: floating voter | January 06, 2009 at 04:11
I am obviously not the only person who thinks that Draper-Stone is a troll; indeed someone used the name "Jack Stone is a Labour troll" for their posts.
After all, everything he says is so counter-intuitive and illogical; he just spouts Labour policy.
There was a similar problem in a British history forum I moderate with a girl who used a ridiculous name, disagreed with everyone else, never read historians because she understood better than them how people thought five hundred years ago. Eventually, she became a figure of fun and went away. I would say "trolled off" but I was unfamiliar with the term then.
Posted by: Super Blue | January 06, 2009 at 09:27
Yesterday's speech by DC was important because it shows that we are now moving into the realm of common sense in economic policy. It was perhaps not bold enough but it was dangerous enough for Labour for the good Yvette Cooper to take to the airwaves with screeches about "tory cuts"; indeed she started to specify exactly what was going to be cut: "apprenticeships etc".
It was pathetic and George Osborne, to his credit on C4 News, asked the interviewer "not to parrot Labour lies", as no cuts were mentioned and he was able to point out quite clearly that all budgets would increase - but by less than Labour was proposing, hence the ability to make tax cuts out of budgeted expenditure.
Posted by: David Belchamber | January 06, 2009 at 10:24
An announcement today illustrating the huge waste in public spending:
'England Golf awarded £12.8 million Sport England grant'
This was announced by the English Golf Union today - what possible reason in a sane financially responsible World can giving taxpayers monies of this sort be justified??
Posted by: Richard Calhoun | January 06, 2009 at 11:32
It seems to me that talk of tax cuts for pensioners is all very well, if they pay tax.
Apparently over 60% of pensioners with modest savings are non tax payers, therefore it is irrelevant. It is the interest rate that effects such people, not tax.
A typical example would be a couple who receive the basic state pension, with no private pension, but have under £100,000 of joint savings, which was producing approx £6,000 to £7,000 a year, now find that this has dropped to £700.00 per year!
Hopefully many will have moved to bonds or something similar but many will have not.
Sadly talk of Tax cuts for such people is a joke.
Posted by: John Selby | January 07, 2009 at 12:01
Well we had already pretty much promised this due to previous comments so it's hardly a ground-breaking announcement. Personally I think there should be far more priority on debt reduction and so we should be cutting far more than £5 billion of the budget.
Posted by: Joseph S. | April 19, 2009 at 21:18