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Tim, within the Tory vacuum your reputation is expanding. Well done. They are starting to take you very seriously indeed.

I love the pompous put-down from this berk that you were 'uncharacteristically heated'. Doesn't he realise that many of us want to kick his and his friends' ar*es rather than have a debate about their student union politicking?

My only criticism is that you are absurdly polite to these professional schoolboys. Other than that one quibble, well done.

It seems to me that, temporarily at least, the political argument outweighs the economic one. The 45p rate has the potential to become symbolic, it is asking the richest to pay more because of the fiscal position in which we find ourselves. Will it raise more money? Perhaps, perhaps not but it is an important symbol that all sections of society are sharing the pain of putting right Labour's mess.

Public sector pay will be squeezed and there will be spending cuts that will affect services. If the 'rich' are seen as escaping from this squeeze then it will be extremely divisive. However much we might claim that it is not yet implemented, it is in the Treasury's forecasts and we would have to find the money from somewhere.

We can put forward the powerful economic arguments for a lower top rate when the economic recovery begins: in the mean time the rich must share the pain while our other policies (such as scrapping NI increase and reducing corporation tax) will help wealth creators.

You're right, Tim. You only have to read Finkelstein's claptrap to know what we have always known: Cameron is runmning for office as Blue Labour and if elected will govern as Blue Labour.

If only you could get so impassioned about the poor and downtrodden instead of the richest 1.3% of the population who will be affected by this tax.

Quite right, Henry - no sense in being "absurdly polite"!

Put a sock in it.

It won't stop Labour attacking us as the party of the rich.

That's irrelevant. What you want to do is ensure they have little or no ammunition for their attacks. They can scream and rant all they like, but if their argument is simply "we're the party of the working class, ergo our criticisms are correct" they'll get nowhere. If, however, the Tories are seen to be cutting taxes for the rich that will give them something that can hurt the party.

Andrew Spencer is correct. This has become less about economics and more about political symbolism. The Tories won't win the election by ignoring the public's perception of policy, and it is neither the time nor the place to be lecturing them that their prejudices are "unfair" or counterproductive.

I agree with Henry.

Tim Montgomerie is one of the very best sort of Tories; honest, up front, reasonable, pragmatic and concerned for the future of our society. If the dominant Tory hierarchy were cast in Tim’s mould (or if IDS was still the Tory Leader) then voting Tory might be an option. Similarly if Frank Field was to become the leader of the Labour Party I might be tempted in that direction.

But the Top Tories are not like Tim and the Labour Party will never be led by Frank so it will be UKIP all the way!

Follow the Editors way and you lose the election. Simple as that. The Conservative Party will be portrayed as the rich mans party and it will work.
At this stage of the game its all about votes not winning arguments. Shame that the editor can`t see that and seems intent on splitting the party for his own reasons.

If you knew Tim resident leftie and knew what he'd done as a member of the Conservative Party you wouldn't say that.

Cameron has clearly had unprotected discourse with the Fink and caught SDP, a particularly unpleasant and potent PTD (politcally transmitted disease).

Exactly right Editor. Labour can still use the IHT issue to attack the Tories as the friends of the rich.

Tim's arguments weren't heated or angry. Finkelstein was wrong to say that.

But overall, why can't we be bold? Why can't we say, "45p is a mistake. Here's why. So that's our position"?

Are we the Conservative Party?

It seems the leadership is intent on following the "Bonaparte" route rather than the Thatcherite.

He started it Sally and by the way you don't have to rush to defend everyone with a name you find interesting.

Do you have anything of value you want to say about British politics?

Posted by: Fan of Monty | March 24, 2009 at 10:19

If you knew Tim resident leftie and knew what he'd done as a member of the Conservative Party you wouldn't say that.

I'm have no dout he is an admirable and compassionate person. For all I know he trawls the streets giving out soup to vagrants. I am talking about him in his persona as Editor of Conversative Home.

It amazes me that you as party members would devote so much energy towards the class interests of the unusually well off. I've never held much store by Marx's idea of false conciousness, but this really does make me wonder. I understand people being happy to pay decent levels of taxation to help raise the standards of living for the poor (I'm one of them), but I'm beyond understanding people who want to pay more tax to help those on very high incomes.

The argument goes that it won't raise much tax, and people will leave the country. That's a pragmatic argument, although I don't believe it. But there's the ideological one: if it did raise tax, and people didn't leave the country, would you be for it? I'd guess that the Editor would still be against it in principle. This I think is the firm dividing line between left and right.

I find it unbelievable that the Conservative Party could go along with the idea of a tax rise when they should know full well that it will harm the economy and bring zero net revenue .The message it sends to the electorate is that they are prepared to put political strategy before sound economic policies .

I'm sorry that there is disagreement between friends. As far as I'm aware Finkelstein and Tim agree far more than they disagree even on subjects where they are both wrong ie Iraq!
However my sympathies lie perhaps with Finkelstein. The 45p is a trap set by Brown/Darling. Cameron is right not to fall into it.
We didn't set this, Labour did, they've also damaged the public finances grievously. In order to repair that damage I simply don't see any tax reductions being viable in the early years of a new Conservative administration.


Your conduct in this debate has been beyond reproach. I did think when reviewing your original piece that you seemed quite exercised on the subject, but the more I thought about it, the more I agreed with you.

The criticism seems to be that you generated a debate when the Party hierarchy did not want one. This is somewhat ironic given the public mess that Ken Clarke and George Osborne have made in the last few days all by themselves. I don't consider myself to be a stupid person, but even I am beginning to wonder that the Conservative Party stands for economically.

Anyway, keep up the good work. This website is at the forefront of (all) UK political debate and a powerful force in stopping the Conservative Party from becoming both intellectually extinct and comment free.

You givbe we former Conservatives some hope that one day we might be able to return. Although, at the moment, that day seems a Hell of a long way off.

Why not just impose the 45p tax rate on the public sector ? Their salaries have been rising much faster than in the private sector and they have greater job security and generous pensions. Also they do nothing to generate wealth or get us out of the recession.

Why can't we say, "45p is a mistake. Here's why. So that's our position"?

Because anyone with an ounce of political common-sense would know the public would almost certainly reject the argument regardless of what it is and believe the "Tories are for rich people" accusations because it would fit with their current anger towards the upper classes. There is no "truth commission" to verify any arguments used against 45%, so it will come down to who they believe. They won't believe the people suggesting rich people shouldn't pay a bit more tax.

You can't expect the electorate to be rational when they're losing their jobs or having pay freezes/cuts. They couldn't care less whether it raises money or not, they simply would not accept the rich getting off a modest tax increase. As I said, it's about symbolism. Let the public see that the rich are not immune from tax increases and they will more readily accept temporary increases that will affect them.

Resident Leftie,
I am all in favour of the rich paying more tax but raising the top level of income tax will not work because, if you are rich, there are so many way’s of avoiding income tax (share options, pension contributions, being domiciled offshore etc.). Both the Labour and Tory parties know this so the 45% band is all about gesture politics. I find contemptible.
The UKIP concept of generous personal allowances (which would remove the poor from paying any tax) combined with a reasonable flat rate with no exceptions would be more sensible and probably, in the long run, yield more tax.
For myself, I favour an enhanced land and property tax since it is difficult to hide these assets. It might also deter Russian oligarchs and their ilk from buying up county estates and then leaving them to rot.

Why don't the Conservatives just rebutt labour with this everytime they go on about taxes, spending etc:

"Announce a General Election, give us access to ALL the books at the Treasury and THEN we will tell you our policy for the next parliament, until you do this, we maintain we cannot commit to any specific pledge."

Why don't the Conservatives just rebutt labour with this everytime they go on about taxes, spending etc:......

Because it will be painted as an excuse to cover for the fact they have no ideas.

"I spoke to Iain Martin at The Telegraph on Friday evening and we both predicted exactly what has happened. 80% of Tory members said we should oppose 45p or adopt a 'wait and see' policy. I was in the 'wait and see' camp. I thought George was too."

He IS! He has only said it could be difficult to avoid. He has NOT said YES to 45p, he has not said DEFINITELY, he did not say IMPOSSIBLE to avoid.

This whole hoohah is a mountain from a molehill and helps no-one.

Now we're into right-of-centre commentator peeing contests...


That's an excellent, excellent response.


The 45p tax rate, as well as being fair, was a very clever trap. If the Tories support it, the right of the Tory party goes off on one, if they oppose it, they are the party of the rich, if they won't commit, they are the "do nothing party". Pragmatically, I think the Editor is right - wait and see was the best policy. Short term popularity boosts are no friend of the opposition.

Osborne should just say:

"We are the party of reduced public expenditure and reduced taxation for all in principle, but thanks to Labour, public finances are dire, and we need to balance the books before we implement the tax cuts the country needs. This will mean reduced public expenditure, and it may even mean increased taxation in the short term. As soon as it's prudent, we'll start cutting tax. I will not be drawn on specific taxes until we've seen the books."

Posted by: David_at_Home | March 24, 2009 at 10:58
I am all in favour of the rich paying more tax but raising the top level of income tax will not work because, if you are rich, there are so many way’s of avoiding income tax (share options, pension contributions, being domiciled offshore etc.). Both the Labour and Tory parties know this so the 45% band is all about gesture politics. I find contemptible.

Tax levels in the EU are quite high, and the top decile does raise a decent amount of tax. The top one per cent (the Ashcrofts of this world) appear to avoid most of it. I'm glad you share the view that the rich should pay more tax, and I support the idea of a very high personal allowance, although I think this needs to be scraped back at the top end.

I'm in principle in favour of land value tax to fund a reduction in the rate of income tax, although I think there should be either a primary residence exception, or at least a hefty tax-free allowance. There may also be unforeseen consequences, so I am nervous about advocating such a step.

I disagree with you about a flat tax, of course, and I'd rather that offshore tax havens were dealt with and that individuals and companies paid tax in the jurisdiction in which they function. This would reduce taxation for the vast majority of us.

Spawn Ows is right. He has not committed himself to it. He was trying to reassure the public that one of his first actions would not be to help out the upper classes.

What some right-wing commentators appear to be doing is attacking as if he did back it because whilst they might like to pretend they want a wait-and-see approach, they're actually 100% against it and want to ensure it is scrapped.

By the way, could the next person to rail against 45% please say whether they would prefer to have the Tories say they'll revoke it/not bring it in even if that means losing the election?

Its as though thinking politically is a "sin". I would have thought we should commend David Cameron for having the wit to think in that fashion. That after all is exactly what Maggie did so succesfully - she rode the tide of public opinion in 79 - and after all, Cameron is doing just the same recognising that loathing of what rich bankers have done to our economy exceeds any disgust that the public rightly have for waste in the public sector.Now of course if we want to ignore how the guy down the pub thinks then fine - just don't come bleating when we lose the election for thats for sure what will happen if we are seen to go against that particular grain.

There are some very contradictory arguments coming out. On the one hand I read that the 45p increase won't raise any revenue because the rich will find ways round it. yet on the other hand I am told that it will be so punitive that these selfame people will flee the UK . Sorry - you can't have it both ways.

"Because it will be painted as an excuse to cover for the fact they have no ideas"

There is a difference between having ideas and making commitments. That is my point. Ken Clarke's use of the term 'aspiration' was a good one. Tories should have plenty of aspirations for the next parliament borne of good ideas, but no firm commitments or manifesto pledges without looking at the books. Its known as Due Dilligence (that thing the present government completely failed in doing with ANY of the bank bailouts)!

Are we so sure that promises of tax rises win election ?. If we follow this logic , , considering most people earn around 30k it could be politically advantageous to call for 60% tax over 80k , 65% over 100K and 75% over 150k . After all most of the population would not be affected by it and we can raise even more money . Whether that is economically sound it does not matter right ! We would only be doing for political advantage anyway .

you could sort this whole tax problem in one full swoop flat tax at around 20% of there everyone a lot simpler , fairer and better value for money.

Fantastic post by Toryblog.com.

People aren't in fact stupid. They know that jobs will only be created through wealth creation.

The Conservative Party's winning offer is: We'll help you create and retain wealth for your family while running public services efficiently and keeping our trousers up.

At the moment the party isn't telling people how they can make the most of and retain the benefits of their potential. It is also not saying how it will run public services more efficiently. If it is, pardon my ignorance and provide your evidence.

At 0 out of 2 it will have to expect debate. It needs a lot of help and I'm going to give it.

Are we so sure that promises of tax rises win election ?

When it is a modest raise on an unpopular minority who can afford to pay during a time of economic crisis, it is certainly not a vote loser. However, the opposite position certainly is.

If we follow this logic....

....you would be ignoring the particular circumstances of this proposed tax rise.

The real evil of 45% is that the burden of it will fall disproportionately on successful small business owners and well-paid professionals who do not earn enough over £150K to warrant expensive tax avoidance advice. These people have got where they are through graft and excellence in what they do. We should not be confiscating half their income to keep the bureaucrats of e.g. the Milk Marketing Board (why does this still exist?) in the style to which they've become accustomed.

"Osborne should just say:

We are the party of reduced public expenditure and reduced taxation for all in principle, but thanks to Labour, public finances are dire, and we need to balance the books before we implement the tax cuts the country needs. This will mean reduced public expenditure, and it may even mean increased taxation in the short term. As soon as it's prudent, we'll start cutting tax. I will not be drawn on specific taxes until we've seen the books."

Not for the first time, I am in total agreement with resident leftie and I am delighted that it is possible for us to differ fundamentally on political ideology but agree entirely on certain issues.

I am also delighted that Tim is getting heated, because we need more passion and anger at what is happening at present. I think that the 45p issue is a trap and for the time being an irrelevance. It doesn't yet exist and the conservatives wouldn't willingly impose it. If Labour carries out it promise to do so, then that is for the future.

I hope that resident leftie might share my view that out of the ashes of our present economic mess there could rise a Phoenix in the shape of a new order, based on fairness.

I continue to press for a hike in the initial tax threshold up to the level of subsistence in order to remove millions from benefit and also for a radical simplification of the tax and benefits systems.

That might - or might not - involve a higher rate of tax for the really large earners; it would certainly involve those who earn their living in this country paying their proper amount of tax and not hiving it off to some tax haven.

Tim says, 'Taxes must only rise after we have exhausted possibilities for reducing spending.'

I feel I have to agree with Iain Dale on Newsnight last night. It may not be possible to stabilize the rate of increase in spending quickly enough. That doesn't mean we won't try. This isn't political, it is reality.
The crucial point is that, in the long term, a society at ease with itself will cost less money and therefore be less taxed, therefore more at ease and therefore even less costly etc etc
This is Cameron's primary radical idea. It sounds like common sense, but in poltics that in itself can be extremely radical.

you could sort this whole tax problem in one full swoop flat tax at around 20% of there everyone a lot simpler , fairer and better value for money.

Except that it would massively benefit higher earners and not benefit anyone at the bottom of the ladder who need help the most. If you removed the tax free allowance it would actually hurt them.

It would also lose the government lots of revenue, and before you start bleating about government waste you go find all those savings without cutting services. Only after all those billions have been saved can that money be put towards tax cuts.

Personally I think those who earn more can pay more. But the 40% threshold should be higher, say £50,000 a year. Increase the personal allowance and everyone stands to benefit, not least those who need help. That also encourages people to find work and not stay on benefits because the take-home pay from low-paid jobs increases.

Spot on Tim! The Conservative Party should never lose sight of the fact that it does best when it stands proud of its own beliefs.

Paul C

We should not be confiscating half their income

We're not. If you earn, let's say, £175,000, currently £60,000 is taken in tax - that's 34%. The 45% upper rate will only apply to income over £150,000. That extra £25,000 will only lead to more tax of £1,250. So that's still only 35% of pay taken in tax.

The sort of person who would be paying anywhere near 50% of income in tax would not be "honest joe successful professional/businessman who cannot afford tax advice".

We should not be confiscating half their income to keep the bureaucrats

Oh, yes, it's not like any public spending goes into providing medical care for those who cannot afford nice health insurance to go to BUPA hospitals or free school places for those who can't afford to send their children to private schools.

Like successful professionals and business owners....

"When it is a modest raise on an unpopular minority who can afford to pay during a time of economic crisis"

I wasn't aware everyone earning over 150K was unpopular.

Raj -don't understand your sums (and I got a C in Maths, albiet before grade inflation became positively Zimbabwean).

For 2009/2010, someone earning £175,000 will be taxed £60,626 together with £5,153.40 "National Insurance" (i.e. tax). That's 37.6% (£65,779.40). I'll take your word (see above) that 45% will add another percentage: we're then up to around 38.6%. Throw in cap gains, council tax, VAT, etc ad nauseum and it dosen't take long to get to 50%.

Does anyone, apart from the straw man in your head, object to public funding of health and education? Thought not. A Conservative government could make savage, and I mean savage, cuts in the public payroll without affecting front-line services. Was it my mention of the Milk Marketing Board that set you off? I think we should be told.

Finklestein is wrong as usual. His answer to everything amounts to the same two things: don't be distinctive and follow the left. It's what you hear all the time from journalists but never from anyone who is any good at political action. His columns on anything to do with electoral politics are not worth reading. He is a clever policy wonk and a good debater and he should leave this sort of thing alone.

Danny Finkelstein has now replied to my reply to his open letter.

I think enough has been said but I do think one issue needs to be clarified.  Danny writes:

"You did not support a reduction in public spending so that there would be money where now there is no money. You supported it in order that there would be tax cuts. You repeatedly argued (including in radio debates with me) that the party should announce tax cuts early. You said they needed to make the argument now. That was why you wanted the lower spending plans."

That's not a fair characterisation of my views.  The primary purpose of what I advocated at the start of 2008 was spending control.  I didn't launch a campaign for tax cuts but for reducing the growth of spending.  At the time I wrote that reduced spending "could be used to reduce borrowing. It could be used for economy-boosting tax relief."

I can't remember advocating any specific tax cuts to be announced NOW - only that we should argue NOW for the general benefits of low taxation, including their supply side benefits.

"Voters may actually vote for some authentic truth telling!"

Quite right. I for one am sick and tired of politicians playing politics rather than doing leadership and good governance.

I have been warming to the Conservative Party in recent months. This has cooled me down a little. If there is much more of this, I and people like me might start taking the advice of Peter Hitchens that the only way to get a conservative government is to first get rid of the conservative party.

I do wonder, compared to government spending in Tax year 2007/2008 (the last full tax year before the downturn began) what reduction in net budget would be needed to balance the books over a period of 5 years?

Quite frankly if the next government wants re-election in 2014/15 they will need to get PSND to below 30% in my opinion and run a budget deficit of no more than 3%, we are talking total PSND of about £1 TRILLION by 2010. Split over a 5 year term that would require £500 BILLION in net debt reduction to get to around 30% PSND or £100 BILLION a year.

Have people realised that we wont get our Public Finances remotely CLOSE to normal for a good 10-15 years?

The present Labour government has earmarked £35 BILLION of efficiency savings, even sustaining that over 10 years doesnt bring our PSND below 40%!!!

We would need something akin to a forest fire slash and burn of Public Spending to get back to a normal responsible fiscal position within 2 parliaments!

Tim 1 Fink 0

45p and no more seems a sensible policy in line with public opinion and most of the West. In any case, with new international crackdowns on tax havens etc coming in the argument about the 'rich man's flight' is beginning to hold less water.

How much extra Tax for HMRC is potentially lost to Offshore tax Havens every year? Are we talking tens of billions or hundreds of billions?

I think the problem is clear.

The tory party have forgotten that government spending is not the only spending in the economy...

A 'tax cut' is a transfer of spending responsibility from the government to the public.

Instead of a 'one size fits all' central government spend, millions of individuals get to chose exactly how to spend that money for their own benefit, in their own unique circumstance.

Change the phrase not 'tax cut', but 'spending migration' or 'choice enabler' or 'freedom dividend' or 'responsibility transfer'...

I guess this makes it clear why the tories keep looking so much like labour - they are surrendering in advance on all the issues that took years to break blair.

I guess cameron will make a better labour leader than brown - but is that the best we can expect?

What I expected was: Cut taxes, makeing business creation quick, simple and cheap, sack as many civil servants as possible - let them form a whole new sector of wealth generators.

Well said Tim - you are entirely correct.

Knockout to Tim. If his opponent thinks agreeing yet again with Labour is going to show people why they should vote Conservative, that is bizarre.

Unfortunately, this kind of thing is what happens when you promote your back-room policy boys into the leadership. They have been trained to triangulate the other side, making them extremely fearful when the other side fails. I can't see them coming up with their own policies under the pressure they must now be facing.

The die hard conservatives still do not get it, the next election CANNOT be truthfully won on a ticket of Tax Cuts, ANY tax cuts. Anyone running with a Tax Cut ticket is either lying to the public or failing them in an even worse way by not prioritising government debt.

The 2010-2014/15 parliament HAS TO BE 100% focused on bringing back economic growth (and thereby Jobs) and reducing government debt.

This would lay the ground work for a 2nd term with a Tax Cut ticket.

Anything else is MADNESS, give the electorate some credit, we/they are not so stupid as to believe the next 5 years cannot be traversed without significant belt tightening ACROSS the board.

Well said - I posted this contribution before though I feel it needs a 'replay' here:
I accept that expenditure cuts alone won't bring this massively profligate government's legacy to heel in the foreseeable future. Most of this 45p 'milarkey' is again all about presentation not substance! Firstly, let me remind you that income tax is not the only tax, we also have the so called NI - which is not insurance at all or paid into a segregated fund , but just another direct tax. So in absence we have a 50% direct tax already! But let me remind you all of several facts. Firstly, the so called richest 10% pay 53% of total income tax, and this obviously excludes the 'super rich' who can legally arrange their affairs to substantially reduce their tax burden to often below those in the 150/- to 500/- bracket. Secondly, ignoring the direct tax NI, the current average rate for someone on 150/- is 31.6% (c.47,400) compared to 14% for someone on 20/- (c.2,800). So the former is paying 17x more tax than the latter whilst only earning 7.5x more salary-wise. That looks pretty fair to me in terms of shouldering more, maybe if our beloved leader needs or wants the 'rich' to pay more he should be more honest about it. Frankly, if you need to increase taxes it should be on discretionary expenditure. Sadly, we did need to open this front, an unnecessary action or skirmish in military parlance! I won't even bother to demonstrate the fact that the yield versus potential damage means it will have absolutely no impact on reducing the huge government debt burden that this government is creating through it's stupid policies. Pure political symbolism, something of a trademark from the 'Roons' who have ben so behind the curve on all economic matters that it has been laughable.I perfectly understand about not showing your hand, but you need appreciate/recognise the problem and show resolve/the direction that you wish to go. But there you go, leadership by numbers 1,2, 3... Sound finance starts with living within your means, need I say more? The question should be in simple terms is it really necessary, if not cut it! We can not back down from the fact that the state has grown massively over the last 12 years and it is left to the Tory Party, as the only party possibly capable of rolling back the State to do so. Do they have the resolve? That question remains unanswered, the jury remains out.

I cannot for the life of me work out why you, Mr Montgomerie, give this Social Democrat any degree of standing by arguing with him, albeit in a most courteous manner.
The fact that he seems to have the collective ear of the Conservative leadership says a lot about the attitudes that prevail at CCHQ. But then, by their fruits shall ye know them, the picture of Mr Cameron on the Tube, lost in the Guardian, speaks volumes.
I've said it before about Mr Finkelstein and, because it was a little too trenchant, you deleted my observation. So here it is a little more diplomatically: Mr Finkelstein is a malign influence at the heart of the Conservative party.

Quotation from Finkelstein:

'You said they needed to make the argument (for lower taxes) now. That was why you wanted the lower spending plans.
This policy ... would have been an utter fiasco and left the Conservative Party in a complete mess.'

Can Finkelstein please explain why making an argument for lower taxes (not any concrete proposal, just the general principle) would be an utter fiasco ? By all means debate the tactics and the timing but I would hope that we could all agree on the principle, which should be a cornerstone of sound economic policy. Far more unequivocal support for the principle of lower taxes from our leadership would be very welcome at the present time. The party gets into a 'complete mess' not when it articulates its basic principles but when it abandons or backtracks on them.

It may have escaped people's notice, but the rich already pay more. It's called the 40% tax rate.

The introduction of a 45% tax rate is nothing more than a trap set by the Labour party to hide their politics of envy.

Far better to have a root and branch review of our tax system in order to simplify it and to take those on the minimum wage out of the tax system altogether.

Cut the cost of collection and the tax take rises.

For 2009/2010, someone earning £175,000 will be taxed £60,626 together with £5,153.40 "National Insurance"......Throw in cap gains, council tax, VAT, etc ad nauseum and it dosen't take long to get to 50%.

We're talking about an increase in income tax, which is why I calculated it on the basis of income tax. You can include NI if you want to, but all those other taxes are variable and rely on personal decisions - i.e. where you live, what sort of property you buy, what goods you buy, what you invest in, etc.

Does anyone, apart from the straw man in your head, object to public funding of health and education?

Then perhaps you can tell me how you will avoid any cuts to frontline services. I don't buy the milk marketing board nonsense because:

a) things like that do not cost anywhere near that much; and
b) people in public employment do actual jobs.

It's nice to believe that you could fire hundreds of thousands of civil servants without any repercussions, but the fact is that unless you close specific projects and services, whether they are front-line or not, cutting jobs just leads to more pressure on remaining staff. That leads to more good people leaving and going on long-term sick, leaving work uncompleted.

Some of you tory boy stock brokers need to get real. I am a natural Tory voter, I believe in private enterprise, small state, slashing the wasteful public sector (which we need urgently), but these debates on 45% and IHT for the wealthiest really turn me off. Most people in this country do not even earn £50k let alone £150k. Cameron could absolutely destroy Labour, crush them with a landslide, totally wipe them from existence, should he steal some Labour ground on fairness. Talk about tax breaks for the richest in the middle of a recession is completely the opposite and so dangerous is it, if it continues, it would seriously affect their chances of winning at election time. Tax breaks for the top 1%says to me, as a floating voter type, that the Tories aren't for me, I'm better off with the Lib Dems or UKIP, or anyone frankly. Seriously, wake up. Any hint that the Tories are for the richest (at least prior to the election) will see them lose a large section of middle ground voters. If they scrapped the IHT promise (or at loeast deferred it) and proposed a time limited top rate of 50%, they would walk they election obliterating Labour in the process.

* Raj - you can cut the pressure on those remaining by asking them to do less, focusing on the valuable activities only. The reason they are under pressure isn't the task at hand, it is the way they are asked to do it, the process they are forced to follow. Some common sense needs to prevail.

Matthew, I agree with what you say on tax, though I think 50% might be a bit high. Backing the rich will not win an election - it will lose it. Sorry, but the well-off will have to put up with a bit of general envy for a while. Or would they prefer to be in a situation which isn't enviable?

As for work load, if the ministers and councillors want to curtail their correspondence, projects et al they can. But they have to lead from example, rather than expect everyone else but not them to generate less work.

Tim - I disagree with your point about waiting to see the books. This is also political nonsense. It is plain to see that savings are possible. If you don't have the guts to spell them out before an election will you have the guts to deliver them?????

Besides which, if you got into power and saw that Labour had been lying about the finances then you could soon change tack at labour's expense. The idea that the opposition or even the general public are not allowed to know what their own government spending is wont make sense to most voters outside Westminster village.

Other than that I agree entirely.

There is no money.

But, Daniel needs to recognise that there will be less money if the next Government does not cut taxes and spending (for example, slashing Labour's client state, the welfare bill etc).

This is because of the simple economic fact that - if taxes are increased on the entrepreneurs, innovators, risk-takers, wealth creators, and job creators - they will be disincentivised form doing what they do best.

Therefore, increased taxes ultimately reduce tax take. And tax is then raised further in order to pay a larger welfare bill because the new jobs are not being created because those who could have created them have been 'taxed until the pips squeak'.

Isn't there a lesson here from the 1970s or from elsewhere in history?

Boris is showing the way on spending cuts.

The debate appears to have moved in an interesting direction. A number of distinct camps seem to be emerging:

1. The Political Capital Builders - see that spending cuts can no longer be a gentle erosion of spending, but instead are going to have to bite hard. They argue that it's political suicide to argue for strident spending cuts and at the same time strenuously ensure that those on £150k+ are mollycoddled and protected from any adverse impacts of the recession. If the rest of us are going to accept spending cuts, they ought to accept tax rises. Besides, it's the only way there's any chance of getting people to accept the cuts on the gargantuan scale needed.

2. The Finance Pessimists - those who look upon the current state of the public finances and fall into a deep despair. They view the current borrowing requirements, let alone if you relax the currently optimisitc projections, as necessitating tax rises. The debt accumulation is an horrendous economic risk (it's huge, it's growing fast, the rest of the world is borrowing at the same time, the risk of credit downgrading is too high), then spells real economic disaster if we lose control of it. All other considerations pale into insignificance next to balancing the books and getting a grip on the government borrowing requirement. Borrowing is in fact so large, that spending cuts cannot be enough - you simply won't be able to cut spending fast enough. Tax rises are necessary.

3. The "Wait-and-See"-ers - those who wish to wait and see in the hope that something will turn up, and save us. They regard tax rises as a wholly unnecessary commitment, and that the correct course of action is to wait and see. They therefore are more relaxed about the public finances that the Finance Pessimists - believing that things may not be that bad. However, they don't rule out tax rises in principle, and accept that they may turn out to be necessary.

4. The Ideologues - those who will not countenance the Conservative party raising taxes under any circumstances whatsoever. The state of the public finances are an irrelevance, if you want to balance the books cut spending. If that doesn't work cut spending more.

It sounds like David Cameron may in the first camp. I'm in the second camp (where you might also find Danny Finkelstein and Ken Clarke). The editor is I think in the third camp.

The debate in large part isn't really about whether the party should raise taxes on principle or not. Rather, it is about what we believe about the state of the public finances, and what scale of action is required to return them to a semblance of health.

My point is that when this 45% tax band comes in on incomes exceeding £150,000 p/a the wealthy will just declare as much of their income as their accountants can manage as capital gains rather than as income. This means that the rich will be paying 18p tax on a great deal of their income rather than 45p ( that is 60% less than Brown & Darling envisaged). Those wealthy types will be paying tax at 2p in the £ less than most basic rate taxpayers - sounds unfair & regressive to me.

Why not just cut the 45% & 40% tax rates to 35% on incomes exceeding £250,000 p/a and raise the thresholds for basic personal allowance claw-back and pensioner tax allowance claw back to £250,000 p/a ? Capital Gains Tax could be ended with capital gains taxed as income for the first five years to boost long-term investment and then be tax free after then.

That would be fairer as relatively high tax levels would be reserved for those who could afford it while the resulting productivity boost and fall in tax evasion could boost HM Treasury's coffers. It would fairer to say that for five years at least that the rich would be paying 35% rather than 18% and you could boost the incentives for long-term investment.

Adam in London - a good assessment. I would put myself in camp 1.

Adam, good stuff. Camp 1/2 myself. Though any talk about specific rates misses the point - the Conservatives aren't in government yet, they haven't done enough to guarantee an outright win, Brown's 'bounce' showed that everything is still in the balance. Cameron should be doing everything he can politically to win over the electorate, and sorry if it offends people, but hang the Tory idealogues, we need to get rid of Labour more urgently than any minor tax tweak.

Camp 4 for me please.

I can find you billions of wasted cash in military and database spending without even trying. Then there's the quangos, RDAs and Business Link to go for after a quick glance. Next comes remuneration policy in the public sector, then a rebuilt welfare state based on membership of mutual societies.

Raising tax now doesn't make sense, it is just achingly trendy and right-on.

It's time for a little creative destruction.

If that makes me Camp 4 too, then so be it, but I'll happily light the necessary match under the welfare state to get us started.

That's the thing ToryBlog - every camp thinks there is going to need to be severe spending cuts.

1. Thinks the cuts will be so large they'll be unpalatable without a tax rise.

2. Thinks the cuts will be so large you can't achieve them fast enough to avoid a tax rise.

3. Thinks the cuts might be very large, but might be achievable.

4. Thinks the cuts will be large, but quite achievable and without adverse political consequence.

Adam, you've the potential to be quite dangerous. Congratulations!

My definition of what I am 4 is this:

Thinks the cuts will be very large but quite achievable because the spending being cut is grossly corrupt and positively damaging. Any pain will be softened by regaining control of the principles of sound government and providing tax cuts to 'hard-working families' who currently are in despair about their ruined personal finances.

I fear for this country because no-one in a position of potential power is making the argument for stopping the corruption, of unfunded public sector pension commitments just as an example, and putting money and freedom back in the people's pockets.

Democracy therefore isn't looking healthy enough to get us through the next 10 years in a sensible fashion imho. Who is giving the people an alternative to Brown?

The British people are not bred to be slaves to the state and political class. They will fight, I can promise you that Adam, and they will certainly win.

"Real tories will choose stability over tax cuts"

How would he know what a real Tory would do??

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