It's been a week since David Cameron topped the parliamentary ballot. It's been three weeks since the 'boy wonder' deservedly stole the frontrunner status from the uninspirational David Davis. Throughout this period Mr Davis - and his team - have demonstrated no real awareness of the seriousness of their predicament. The Davis operation has appeared unable to find a response to the Cameron phenomenon. Mr Davis has appeared to be sleepingwalking to a massive defeat. But finally there are signs of life.
Tomorrow Mr Davis will announce tax cut plans equivalent to £1,200 a year for the average family. This, Team Davis suggests, will be "achieved by reducing overall public spending to 40 per cent of national output – the level advocated by former Chancellor Kenneth Clarke at the party conference earlier this month". A Davis-led Tory government would introduce a 'growth rule' which would limit spending increases to below the trend rate of economic growth.
Mr Davis will say the following:
“The political sands are shifting. Gordon Brown’s high tax, high spending experiment is running into trouble. Every independent forecaster is predicting that his sums do not add up and that he will have to put up taxes again. It is also increasingly clear that spending without reform has wasted taxpayers’ money by failing to deliver sufficient improvements in public services.
“We will make the gravest mistake if we seek to ape the New Labour project at the moment when it is seen to have failed. People are yearning for an alternative to New Labour, not a repetition of it.
“The Conservative Party has a choice. We can either continue to accept the terms of the debate set by Tony Blair and Gordon Brown, with ever higher spending and taxes. Or we can set a distinctive Conservative agenda for the future.
“We can either join the ranks of centre right parties around the world, such as the Republicans in the United States and the Liberals in Australia, which have won by cutting taxes. Or we can remain frozen in the headlights of a centre left agenda, and continue to lose.”
Mr Davis will point out three killer facts:
- The UK’s tax burden is rising to a 25-year high
- Growth is at a 12 year low
- Britain has dropped to 118th place out of 180 in the world growth league since Labour came to power.
The riskiest path for Britain's public services is the path we are on.
It is a path to an uncompetitive, underperforming economy. Mr Cameron
talks about sharing "the proceeds of growth between tax reduction and
public service investment" but what will generate growth in his economic programme?
Oliver Letwin, a Cameron backer, is reported as being opposed to tax
cuts at elections. Is this the Cameron camp's position? "Such pledges
were a vote loser and there was 'no point' in making them," ThisIsMoney
reports Mr Letwin as saying.
Mr Davis' analysis is right.
George W Bush's tax relief package has been hugely successful - restarting the post 9/11 economy and boosting the whole world's economy. [The US budget deficit, by the way, reflects a failure to control spending].
Mr Davis can only hope to succeed by reframing the tax question. At present, the British people immediately connect tax policy to spending. Full stop. Mr Davis needs to show the British people that tax policy is also a powerful economic weapon.
Mr Davis will be helped in this intellectual battle if he is more careful with his rhetoric. The term 'tax cuts' should be banned for obvious reasons. Tax relief is a much better 'Don't think of an Elephant!' term - suggesting respite from an oppressive burden. By introducing the ideas of stealth taxation and fat government the Tories have already won some battles in the propaganda war with New Labour.
New language will help to tilt the terms of debate towards reduced taxation. Perhaps Conservatives should start their search for new language by rethinking presentation of their goal of ‘low taxation’. Does the ‘low taxation’ phrase do any rhetorical work? No. ‘Economically sustainable taxation’, ‘globally competitive taxation’ or ‘fair taxation’ do, however, send out educational messages.
The idea of targeted tax relief will also help conservatives to win the battle on tax. Rather than the idea of indiscriminate tax cuts for all, targeted tax relief can be crafted to become associated with good causes like family life, charitable giving or poverty reduction.
Mr Davis has not transformed this contest with this initiative. He'll need to do much more than make one (very good) tax policy announcement. He deserves to have helped his prospects, however, and he will have done the Conservative Party a great service if Mr Cameron has to clarify his own (rather ambiguous) position.
Paul Goodman MP's second Platform blog addresses DD's tax policy.
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