Wednesday, October 24, 2007

Is Simon Heffer right?

Normally, of course, the answer to this would be no. But in asking, as he does today, whether the Tories would best be served by focusing on cuts on public spending and the resultant capacity for cuts in taxation, he is merely vocalising what a lot of Conservatives, both lapsed and current are also thinking.
The idea is as follows: the Conservatives recovered their popularity as a reuslt of promising an increased threshold for Inheritance Tax. This means that the time is finally right for the old debate on tax and spend to be reversed. The Tories should thus identify large areas of public spending that should be cut, and make plans for cuts in personal and business taxes on that basis.
The traditional counter is that the Labour Party would jump up and down, talking about 'black holes' and claiming that every school and hospital in Britain would close, and every nurse would be reduced to prostitution. Which, of course, would be the Labour response.
At a certain level this has been the Tory dilemma since 1997. Calls for cuts in taxation have been met with the 'so how many doctors are you planning to kill?' response. Its inherent ludicrousness as a response (£6bn is a rounding error in modern British finances, not a black hole) has not, until now, dulled its effectiveness. What Heffer is arguing is that now the tables have switched, now the weight of public opprobrium is on levels of taxation, not levels of spending.
But Heffer has been saying this for years now, and he's been wrong at every election during that time. Why should he be right this time? My personal feeling is that, while the reduction in overall public spending should be a strategy for the Tories, it should not be a tactic. Introducing benefit reform a la Wisconsin or Australia should be done to reduce welfare dependency and increase employment levels, not to cut the spending levels. NHS reform should be done to improve service, not solely to keep bills lower. Conservative ideas for social reform should have the effect of cutting spending as it is - and focusing on this should allow the Tories both to talk about general reduction in taxation, and not to be accused of slashing services.
As for tax cuts, the true lesson of the conference is that any tax cuts need to be both eye-catching and specific. Therefore, such specific tax cuts should be clearly identified and separate from a general ambition to cut taxes. The public don't believe parties that say they want to cut taxes, so specific examples must be given., The Labour Party currently seems in such ideological retreat that all the Tories must be certain to do is cost the proposals thoroughly, and make sure they pass the first smell test. So, Heffer is mostly right. Changing times, or stopped clock?

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1 Comments:

Anonymous Peter Horne said...

There is enormous capacity for tax cuts..£167 billion pa on quangos, a 60% increase in spending on education in real terms in 10 years with no discernible increase in standards..there is a real thirst in England now for a rolling back of the state.

You may be interested in this
http://inversions-and-deceptions.blogspot.com/2007/09/
advice-for-next-conservative-leader.html

7:34 pm  

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