Does Mr Cameron support David Davis' tax approach... or not?

Earlier this morning a spokesman for Mr Cameron said:

"David Cameron has consistently argued that the proceeds of economic growth should be shared between tax cuts and investment in public services and that a dynamic economy needs competitive tax rates.  It is encouraging to see that David Davis has now confirmed he supports that approach and that there is a lot of common ground between them on this issue.''

And then, according to PA:

"Conservative leadership candidate David Cameron arrived at a meeting with Tory faithfuls today saying it was not "sensible'' to promise tax cuts so long before a general election.  Mr Cameron, in Tory safe-seat Bexhill-on-Sea, East Sussex, was referring to leadership rival David Davis's pledge today to cut taxes by £30 billion if he is elected as prime minister.

When asked about his views on Mr Davis's tax cut pledge, which he claimed would save the average family £1,200 a year, Mr Cameron said: "I do not think it is sensible to outline such proposals four years before an election.  We cannot know the exact state the economy will be in, and whether or not it will be growing or shrinking. I do not think that is the right approach. These suggestions were made last time and they didn't seem to have much success.''

Speaking briefly as he entered the meeting with Tory members and other members of the public, Mr Cameron said the country needed a "dynamic and competitive economy'' in which the proceeds of growth should be shared between "tax reduction and extra public investment''."

I take it 'not'.

Comments

[Oberon Houston]

I think he was saying that it was not wise to set out detailed spending plans four years in advance.

What he did say was that he supported the aspiration to lower taxes to encourage growth, what the numbers will actually materialise into simply cannot be stated at this stage. If anything it is David Davis that is on thin ice, as he has in effect made a commitment on the one side to public spending, and on the other to taxpayers that he does not know he can honour in 2010.

[Henry Cook]

DC supports the direction of DD's policy, but rightly questions the credibility of the detail. Simple!

[Henry Cook]

And those flip-flops are thoroughly unfair - there is no contradiction here at all.

[buxtehude]

No, the Editor is quite right: David Cameron is flip-flopping, he can't bear to be straight on any tricky issue. Just can't do it. Not strong enough. Won't help the country.

But it doesn't matter a jot: the media don't want to lose Cameron now that they've found him, and whatever he does will be viewed as fabulous. "Another brilliant vacillation! Genius! Moderniser!"

[Henry Cook]

Where is the flip-flop? Enlighten me.

[buxtehude]

Henry Cook, what does it mean to 'support the direction of a policy'? Is that supporting a policy or not? The difference between a policy and a 'direction' is that one is a commitment to action, the other is a PR posture. EVERYTHING Cameron will say over the next few weeks will attempt to appeal to both sides of any argument, so that all but the few - the few who care about really doing something for the country as opposed to playing the game of fantasy politics - will think he supports their own view.

[Jaz]

There's no flipflop here... He simply pointed out that DD is in no position to make promises regarding tax cuts 4 years into the future... Unless DD can foresee the future...In which case... i'm impressed!

[buxtehude]

Sorry, didn't see your last post before I replied to the earlier one. "Where is the flip-flop"?
1. David Cameron welcomes DD's position as a confirmation of his own - "encouraging".
2. David Cameron rejectcs DDs position as "not sensible".
Both in one day.
Now, can a logic be constructed that appears to make these non-contradictory? Of course. Is it convincing? Don't be silly. But it will do, it will keep most people happy.

[Oberon Houston]

Have I got this right...

DD "Public Spending 1% below growth"
DC "Public spending to share in growth"

Sorry, but those statements seem very similar, with DC being slightly less specific on the exact split, and the DD campaign team pulling £38bn out of the air.

[buxtehude]

Henry, all this shows that you guys don't believe in a low tax economy as a stimulus to growth. This is important, so let's once again be clear.
IF you believe that a low tax economy stimulates growth, then you can commit to a reducing high rates of tax such as we have now - because you believe that will make the economy stronger.
IF you believe that you have tax cuts only when you have surplus revenues, then of course you can't promise tax cuts until you have surplus revenues (which tends to be never).
You have to make up your mind whether tax cuts create wealth, or whether wealth comes from (say) government spending and therefore tax cuts are some kind of eventual reward for being over-taxed earlier on. Geddit?
Cameron clearly does NOT believe in the economy-stimulating effects of lower taxes, or he would want them now.

[Confused Voter]

It's not very difficult.

In the morning, Cameron's people were accusing Davis of copying Cameron (FLIP). In the afternoon, Cameron said he disagreed with Davis (FLOP).

15-love to the Editor.

[Henry Cook]

In the morning - "there is a lot of common ground" - true - both want to share the proceeds of growth on more spending and less tax.

In the evening - highlighting where there isn't common ground - in that it is entirely irresponsible to produce exact figures based on questionable forecasts which will most likely change.

"1. David Cameron welcomes DD's position as a confirmation of his own - "encouraging".
2. David Cameron rejectcs DDs position as "not sensible".
Both in one day."

Number 1 - he finds the direction of policy encouraging.
Number 2 - he finds the attempt to put that direction into precise figures at this stage of the parliament "not sensible".

Direction agreed upon (share proceeds of growth, lower tax economy)
Policy not agreed upon (stupid to produce exact figures for the next 10 years when we don't know what will happen)

Hope that makes things clear!

[Editor]

At the end of this day we know more about David Davis on tax. We know for sure he's going to prioritise tax cuts. Yes it'll be a difficult sell but the next Tory leader has three plus years to show that our economy depends upon more competitive levels of taxation. You can agree or disagree with DD (most voters out there will disagree ahead of a publicity offensive) but we know what he believes on this issue.

That can't be said about DC. At the end of this day we're no closer to an understanding of what DC thinks on tax. This morning he appeared to welcome DD's positioning. This afternoon DD's positioning has become 'not sensible'. As the IFS economist said: "The Cameron statement [on sharing the proceeds of growth] doesn't really rule out very much. It encompasses a wide range of possibilities. On its own, it doesn't tell us very much at all. He could mean increasing public spending more quickly or less quickly... It's not clear they differentiate him from what David Davis said or the situation under Gordon Brown, where incomes after taxes are higher now in real terms than when he became chancellor despite the tax burden being higher." My guess is that DC doesn't have a clear view on tax yet. He's certainly found a formula that keeps his options open. Wide open.

Vote for DC (I might yet myself) but know that, at present, you/I haven't got a clue what kind of tax policy you're/I'm voting for.

Or on drugs policy...

Or on the future of party democracy...

Conclusion: DC appears a big risk to me. He could be brilliant. He could be...

[loyal_tory]

The problem isn't that Cameron's current position exlcudes a serious low tax economy agenda, it is that it includes it as a possibility--and also includes the possibility of not having a serious low tax economy agenda. All we know, is that it won't be both.

Saying this: "David Cameron has consistently argued that the proceeds of economic growth should be shared between tax cuts and investment in public services and that a dynamic economy needs competitive tax rates" and this "I do not think it is sensible to outline such proposals four years before an election." simply does not tell us what Cameron's approach would be to any of the different circumstances he mentions: fast growth, slow groth or no growth.

David Davis or the BBC would do the party and the country a big favour if he or Dimbleby simply asked David Cameron in the first televised debate the following questions:

1. What does he think the party should be saying in 2009 if the economy is growing slowly or not at all--cut taxes or not?

2. Does he agree with Danny Finklestein, who believes tax cuts are incompatible with public service reform in a first term? If so, which is more important to him?

3. What other countries have impressed him most in the systems they have evolved to deliver health and education?

4. How does he propose to reform the organization of the Conservative Party to make it more electable?

5. What policy areas outside of the key public services does he believe require more government spending, not a specific amount but in general?

[loyal_tory]

Surely it would be a sorry state of affairs if someone who wants to be leader of the Conservative Party and Prime Minister can't answer those very simple questions?

The electorate is going to want to know that he has answers. If we don't know what they are, how are we supposed to figure out whether he will be able to provide them?

[loyal_tory]

Let's face it, the next leader is going to get asked them anyway by the Labour Party on December 6th.

[loyal_tory]

And the media will ask because the viewing, listening and reading public want to know.

[The Political Thinker]

This is a clear indication that David Cameron is too risky. Not only is he inexperienced, but he is also unclear on many important issues – taxation and the economy being one of them.

I also disagree that it’s “not sensible” to promise large tax cuts now. In fact, I even believe that David Davis’ tax cuts are too timid – but certainly a lot better than what we offered in 2001 and 2005.

We need to lower taxes for both people and businesses. It’s not just “Oh, I like the idea of lower taxes, but we’ll have to see” – we must promise to lower taxes, even if it means slashing public spending and cutting back Government to the bones.

[Selsdon Man]

Tax and spending projections must take account of the following

- the pension time bomb
- rising PPP costs and Network Rail debt
- rising welfare costs if the economy goes into recession

It is understandable that DC is cautious. The costs could be huge. Cutting bureaucracy, waste (including local government)and quangos could make a major contribution.

Any tax`cuts must stimulate economic growth and increased receipts. DD must spell out which taxes he will cut and the increased revenue as a result.

Only then will he overcome public sceptism (as shown in recent polls) that we can actually deliver tax cuts. That is a key issue that DD must address.

[Selsdon Man]

We also need to know what DD would do if the economy is in recession and tax revenues are declining?

DC must spell out his approach to tax and spending too. He does not need to commit to numbers - let us have principles and priorities.

[AnotherNick]

Hooray David Davis is going to slash a load off my tax bill...... and that'll get him elected just like Michael Howard slashing a load off my tax bill did.... d'oh.

Come on Davis change the record why don't you. Tory promises tax cut, quickly dressed up as Tory cuts in public services, quickly becomes four defeats in a row.

I'll admit now i've not read the detail before writing this, I've just heard the headline - to some this will make me niave, but in reality it is what the electorate would do.

Cameron may be a bit vague on the details, but Davis is doing the old Tory trick of I'm losing lets throw in a tax cut. It looks like another scheme to make the rich richer. While I'm very doubtful about flat tax, the one very appealing point to those with a social conscience (a significant number of which floated to New labour / Lib Dems) is that it would raise the threshold, so that very explictly the less well off get the saving - that is the only kind of major tax cut that is electorally sound for the Conservatives at the moment.

[Confused Voter]

So far we have three policy areas where nobody has a clear idea what Cameron actually believes (tax; drugs; party organisation).

What happens if this list keeps getting longer?

[Cllr Iain Lindley]

I welcome a lot of what Davis said today, but the simple truth is that to put a figure on tax cuts before you've even been elected leader is simply handing the ball to the opposition. Next we'll be hearing that £38 million is an "aspiration".

The time for figures like this is the budget (or perhaps pre-budget statement) before the next General Election. We don't know how much of a mess Labour are going to make before that time - we might well be faced with a situation where we are in recession and there will be no tax cuts under the growth rule then!

Plucking a figure out of the air is exactly what we've been accused from in the past, and it is every bit as airy-fairy as anything anyone else has proposed.

[buxtehude]

"Direction agreed upon (share proceeds of growth, lower tax economy)"
Henry Cook, please do make an effort, because I'm sure your heart is in the right place. No, that is not an agreement. Sharing the proceeds of growth with a tax cut is very very different from having a tax cut to get growth. Please tell me you understand that.
It's perfectly ok to think that lower tax cuts do not stimulate economic growth. I think it's wrong, but it's a definsible position. But it's NOT ok to confuse these two very different things. Aspiring to one day cut taxes is not the same thing as planning to cut taxes to stimulate growth.

I don't know how many times this simple thing needs to be repeated. The question I now want to ask is:

1) Do the Cameronians not understand this very simple distinction?

or

2) Are they pretending not to understand?

And which is worse?

[loyal_tory]

There is also public service reform, surely the key to showing voters Tories have the answers. David Cameron says the Tories have been too focused on structures at the expense of results. But he has left it ambiguous if he is making a policy or a presentational point.

If Tony Blair, Prime Minister for eight years and Labour Party leader for eleven, can say (while in a minority in his own cabinet and opposed on this issue by Labour Party activists) that the most successful examples of giving more power to parents to raise school standards are Florida and Sweden (in his introduction to the Schools White Paper), why can't a candidate seeking to lead a party that believes in empowering parents at least point to "school choice" schemes abroad that he believes have been a success?

Even New Labour now recognizes that unless you inject more choice into the structures you will never deliver better results.