David Cameron's economic priorities

After yesterday's remarks on security issues - in Leeds - David Cameron focused on the economy today during visits to Cambridge and Hertfordshire.  This is the second of his statements on the 'five big challenges facing Britain'.  Mr Cameron emphasised three economic priorities:

(1) A less regulated economy.  Acknowledging that he's not the first Conservative politician to make this promise, Mr Cameron said: “I’m not going to make simplistic promises about cutting red tape. Politicians have been saying that for years.  The truth is that we will never succeed in cutting back regulation unless we change our society’s attitude to risk. We need to treat adults as adults and change our risk-averse, compensation culture. That means a major culture change in this country, a change that I want to lead."  Oliver Letwin, an early supporter of DC, gave a big speech ('Nothing Ventured, Nothing Gained') on risk some time ago and his approach might be inspiring Mr Cameron now.

(2) Competitive tax rates and first-class public infrastructure.  In a classic example of triangulation Mr Cameron positions himself between "Labour’s extreme approach, which is to take all the proceeds of economic growth and spend it themselves" and a more ambitious tax cuts policy (perhaps of the kind we expect to hear from David Davis tomorrow).  Mr Cameron's middle way is "to share the proceeds of growth between tax reduction and public service investment".  "Education and transport are," he says, "vital components of a long-term economic policy. How will we compete in the world unless we have a well-educated workforce and the best graduates?  And how will our economy work properly if we don’t solve our transport problems which make it such a hassle for people and goods to move around?  We need to invest in these areas while keeping down the burdens on the state. That’s why we have to take tough decisions like supporting tuition fees for higher education and charging for new roads."  This is Mr Cameron's co-payment idea.  He concludes on tax: "It’s just irresponsible to pretend that we can get good public services on the cheap, or that short-term tax cuts are all we need to do to build a competitive economy."

(3) The third priority is pensions.  DC: "If we don’t sort out our pensions crisis, our economy will be crippled by the additional burdens that will fall on the taxpayers of the future.  Labour are ducking this challenge, and we must not. I will launch a thorough-going review of pensions policy, based on long-term considerations rather than short-term electoral advantage. This will involve making tough decisions. We need to be sure that a Conservative Government after the next election is equipped to provide Britain with a state pension system and a framework for private pensions which, together, restore the incentive to save, eliminate unfairness for women, and give everyone a decent income in retirement."

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Comments

[James Hellyer]

Point (1) ignores the fact that most regulations now come from the European Union. Saying "take responsibility for your actions" will not stem that tide.

Point (2) is virtually meaningless. Essentially he's saying he would do what New Labour does - after all, they use "his" big idea of co-payment already. In case people hadn't realised, it's little more than a stealth tax.

Point (3) says and does nothing (at an uspecified future point an unspecified good decision will be made)

Can Cameron tell us who in the party has advocated making decisions on pensions based on short term games? Or is this another implied false dichotomy (*he* wouldn't do that implying that someone else would).

[Editor]

James, on the EU, DC says: "We need to resist damaging new regulations - whether home-grown or from the EU - and take back powers from the EU over employment and social regulation."

[James Hellyer]

"We need to resist damaging new regulations - whether home-grown or from the EU - and take back powers from the EU over employment and social regulation."

That's either naive idealism or disingenuity!

How exactly does Mister Cameron propose to take back these powers? Does he really think that France and Germany will acquiesce? Or that if he acted unilaterally the Luxembourg Court wouldn't immediately rule against him?

[Tom Ainsworth]

Sharing the proceeds of growth between tax reduction and public service investment (point 2) is hardly 'saying he would do what New Labour does'. I haven't noticed many New Labour tax reductions recently!

[James Hellyer]

"Sharing the proceeds of growth between tax reduction and public service investment (point 2) is hardly 'saying he would do what New Labour does'."

Read the detail that follows. It's exactly what New Labour does - make people pay for things that were funded by tax (e.g. university places), but collect the taxes anyway. They also pour money into education and transport. Where are the differences? They tick all his boxes.

Having a soundbite that involves the word "cuts" does not signal the intention or ability to deliver them.

[James Hellyer]

And there was the New abour income tax cut in 2001 - 1% off the base rate.

[wasp]

That tax cut was entirely cosmetic because Brown immediately put up National Insurance to raise more than he had lost by cutting taxes.

[James Hellyer]

You miss the point, Cameron's commitment to tax cuts seems as cosmetic. Nothing above (from the words "Education and transport are...") would seem out of place coming from the mouth of a New Labour politician.

[Jack Stone]

The above comments show why the party have been out of power for so long. This obsession by Europe and tax cuts are not shared by the public at large which as been evident by the last three general election results.
Its clear that David Cameron wants to reduce the tax burden but its clear that he as also realised that you can`t do that until you convince the public you will not sacrifise our public services for tax cuts and you will not get another Conservative government until you do just that.

[Cllr Iain Lindley]

For god's sake James, change the record. I've stopped reading this blog because your tireless rebuttals have become utterly tedious.

[john Skinner]

Agreed Iain. Hellyer's boring me rigid. He should run his own blog and the we could all ignore it.

[James Hellyer]

I'm sorry, I forgot that opinions could only be expressed that's sentiments and timing were agreed with Iain and John...

Do grow up.

[Rick]

"ut was entirely cosmetic because Brown immediately put up National Insurance to raise more than he had lost by cutting taxes."

It was certainly not "immediately" but some time later.....it was stupid to cut the tax rate anyway

[Rick]

Politicians are fantasists. Tax cuts were possible in the past because of North Sea Oil revenues - then the cinsumer boom gave Britain the second biggest trade deficit globally after the USA.

Since we now import gas for our power stations and oil exports are falling off, the increased trade deficit is hardly conducive to tax cuts, higher imports, higher house prices. It starts getting ludicrous. The Dutch Disease was to inflate living standards on the back of the Groningen gas field only to fall to earth in later years.............such is Britain's fate.

[James Turner]

This is my first post to this blog, which has been one of the things that has really inspired me to involved in Conservative politics again. I should start by making a couple of general observations before I make my main point.
If I had a vote in the contest, I would vote for DC. I share the concerns expressed by some about his experience and his apparent love of soundbites, but on the whole this contest has made me realise that DD, while an effective frontbench performer, simply isn't a potential prime minister. Do we really believe that people who used to vote Conservative, but were persuaded not to by Blair, Ashdown and Kennedy, will vote for us again because of DD? This contest was his chance to put those doubts to rest and he has failed. Labour activists I know are genuinely astonished by his standing within the party, as frankly, are numerous Conservative activists I've spoken to.
My other reservation about DC is this talk of 'blood on the carpet' and the fascist tendency within the modernisers. I don't like it (I was a keen supporter of Portillo but thought the conduct of the Portillistas was despicable). On the other hand I look at the Cornerstoners and feel a deep sadness, in the same way I hear old-style socialists and feel sorry for them - these are people who really haven't seen how wrong their views are. But the answer is to address their arguments not shout at them and hope you can drive them away.

General rant over. My specific point to James Hellyer on this is that I take issue slightly with him on the flow of regulations from the EU. I'm a regulatory lawyer. He is correct on the *number* of regulations, but wrong on their effect.

The UK is a terrible goldplater, by which I mean that we add to and overcomplicate the regulations that come from the EU. The Major administration was heading this way, but as with most things the last 8 years have seen this trend absolutely explode. We spend masses of time and taxpayers' money 'implementing' EU rules, normally in a manner far more onerous than necessary. If we look at other EU countries, my (admittedly limited understanding) is that many (especially in the south and east) simply declare that their law already complies unless that is manifestly untrue, or they enact it verbatim. An Italian lawyer told me that to his knowledge Italy had goldplated less than 0.3% of the applicable EU legislation. I don't know exactly, but would expect the equivalent figure here to be comfortably in excess of 80%. This is something we can and must control.

By the same token, and please don't take this as an attack, but could you tell us James what LF and DD have to say on this subject?

[Blue2win]

I must agree that ploughing through James Hellfire’s posts is very tedious and I have stayed away for a few days in the hope he has run out of his obsessive 'defence' of his outdated and failed form of Conservatism. By the posts on this Leadership blog, I am not alone.

Please, JH, look at the last ten years and ask yourself why all your hardline policies have not delivered a Tory PM, indeed not even delivered as many Tory MPs as Michael Foot had Labour MPs.

Hardly a most astounding decade of success for us, is it. We need new thinking and a new approach while keeping our basic principles.

And ask yourself, what sensible and successful politician would commit himself to detailed policies at this stage of the campaign for the next election? Well, lots of Tory failures have and you still would.

You clearly want purity over power. Without power we can do nothing to help the country. To gain power we cannot be too rigid and too purist let alone too extreme. Politics always has been the art of the possible real world of technicolour complexity. You seem to believe it to be the black and white desert of the purist.

[James Hellyer]

"He is correct on the *number* of regulations, but wrong on their effect"

How can I wrong on their effects when I didn't mention the effects, but rather their source? Don't see where you're getting that from.

Anyway, I know that the UK has a habit of overenthusiastically implementing EU regulations, but that's rather becide the point. The statement of Cameron's that I was addressing was proposing to repatriate powers from the EU, not to alter the extent we administer said regulations, but rather to remove ourselves from their scope entirely.

I would make clear that not gold-plating regulations does not mean that stop implementing them. The flow of regualtions would still be coming, and this is something Cameron has not addressed in any meaningful way.

As for DD or LF's views, DD's Chatham House speech indcated he wanted to fight to repatriate powers on a case by case basis (as opposed to Cameron's take back all of power "type" a approach - something I don't thin is workable). LF wanted to create new alliances with centre right parties and governments to try and allow a vehicle for change and dergualtion within the parliament and commission.

[James Hellyer]

Oh look, Blue2Win has joined in the parade of lies.

"Please, JH, look at the last ten years and ask yourself why all your hardline policies have not delivered a Tory PM"

This would be the Party that hasn't done anything I suggested, instead removing its tax lowering profile at the last election and pledging to outspend Labour? How right wing.

"And ask yourself, what sensible and successful politician would commit himself to detailed policies at this stage of the campaign for the next election?"

Put this lie away. Nobody is asking for detailed policies, simply ones that are coherent and where the most basic questions can be answered. Soundbites are not enough from a politician with no history of policy substantial policy positions beyond the authorship of an election manifesto from which he has consistently distanced himself.

"You clearly want purity over power."

Oh look, the favoured line of the unprincipled and rudderless: anyone who disagrees with you must want purity rather than power. Obviously it's beyond your comprehension that people may have different ideas about how to gain power, and actually want us to be elected on a programme we'd be happy to implement.

"You seem to believe it to be the black and white desert of the purist."

You seem to want a monochrome world where only people who agree with your views are allowed an opinion. Modernisers against free speech - there's a surprise.

[Yet another Anon]

Surely it's time the Conservative Party realised that it is time to leave the EU, the European Court of Human Rights and the European Court of Justice, deregulate the labour market, scrap the Minimum Wage, cut public spending and so be able to cut taxes, restore Capital Punishment and fight for the union on the side of the UUP\DUP against Sein Fein/IRA.

[Henry Fitzpatrick]

I know, I know - and to think there was a time when the bad old, fusty old, even in office some of the time Tory Party *believed* in a few of those things! Thank Secularism we're long past that sort of silliness. Now that David Cameron has emerged, to make sure that we'll never believe in any that antique nonsense again, power surely beckons. But PLEASE let us never again be led by an election-losing, right-wing extremist like John Major, William Hague or Michael Howard. Their extremist manifestos rightly cost us the support of the British people. Them and James. James is obviously to blame too. I hope Cameron drives him out of the Tory party. And replaces him with a women. Who isn't a Tory, and doesn't like them.

[James Maskell]

Ywet another Anon, was that a serious point? 2 points, one, scrapping the National Minimum Wage...they get rid of that, Im probably gonna get a pay cut! secondly, the Conservative Party is technically speaking called the "Conservative and Unionist Party". It already does by name support the Unionists...

[Adrian Owens]

Good grief

How this blog is deteriorating with second rate abuse of James Hellyer. I don't agree with many of his points, but keep on James. At least you are trying to discuss issues.

[loyal_tory]

This is all very interesting but what we want to know is this: Does Cameron believe cutting taxes is necessary to create the economic growth which pays for higher living standards, a better quality of life, and more spending on public services?

Or does he intend simply to share the "benefits of growth" between tax cuts and public services without first boosting the economy by cutting taxes.

If it is the former, he deserves a shot. If it is the latter, he really doesn't. Sharing the kind of "growth" we are getting under the current administration is not going to pay for significant tax cuts, investment in public services, or much of anything else.

I don't think it is unreasonable for Conservative members to know the answer before they cast their vote. It is a philosophical rather than a detailed policy question. Perhaps The Sun can squeeze it out of him before our ballot papers arrive in the post...

[Editor]

Loyal Tory asks exactly the right question. We need tax cuts in order to have any 'fruits of growth' to share.

[James Hellyer]

But that brings you back to the point about funding the initial cut. Growth is not guaranteed, but the need to meet current spending commitments is a certainty. That's why I can't see how a cut can be pledged without either a) cutting spending or b) having run a surplus, because option c) (borrowing) runs risks if growth is not immediately achieved.

What I would like to see is either of the candidates will make any moral case for tax cuts. What claim does the state have on an ever growing part of our earnings? Is it right for us to be heading back to the pocket money society?