The Tories and Tax Cuts

They’ve started. Before they’ve even hit power, there is a real sense that the Tories are backing away from any tax cuts they may have pledged or even hinted at. In fact, they may be going the other way and be starting to think about tax increases. Ken Clarke’s comments about inheritance tax aren’t an aberration for that party, they are a pretty clear statement of intent. In fact, it wouldn’t surprise me if Clarke was floating a test balloon for the party. If his comments were ignored, then the Tories might quite happily have dropped their Inheritance Tax plans. When the predictable outrage hit, the Tory leadership did what it was always going to do; blamed it on the loose cannon in Ken Clarke.

Of course the Tories have a way of justifying their lack of tax cuts and their potential tax increases. It is all about being responsible, see? They can’t cut taxes unless they can afford to do it. And given the current economic situation, they simply won’t be able to afford it. It isn’t their fault; they’ll just be playing the hand that fate (in the guise of Gordon Brown) has dealt them.

There is something they can do, of course. They could reduce spending. They could cut taxes after they cut some of the things money is being wasted on. After all, Brown has spent money like a drunken sailor in a whorehouse. There should be no shortage of potential targets for spending cuts.

But the Tories are scared of pledging spending cuts. In fact, they are more than scared. They are absolutely terrified of talking about cuts in spending. They see such rhetoric as one of the reasons for their crushing defeats in both 1997 and 2001; and those defeats traumatised them. They are determined to sit in the middle ground, determined to use the Blairite consensus and the rhetoric of Gordon Brown to appear non-threatening and responsible.

Yet is it really responsible to not be aggressively cutting spending at the moment? Surely a Tory government should, as a matter of priority, be slashing government budgets and returning the money saved to the taxpayer? Actually, isn’t it a moral imperative as well as the responsible thing to do? Isn’t it right to return some of the money the government has effectively stolen from the people to waste on needless and pointless projects?

Also, from an economic perspective, it might help if the people were allowed to spend a little bit more of their own money. Confidence needs to be restored before people are willing to start spending again. One way to restore that confidence is to say to the people that they aren’t going to face further tax rises, and actually the opposite is going to happen. How powerful would it be to say to the great British public that if they vote Tory in 2010, they will have x percent more of their income to spend than they do right now?

Of course, the Tories will tell you that it isn’t that simple. And one of the problems faced by the Tories isn’t so much that people are opposed to spending cuts, but rather that they don’t understand why such cuts are so vital. And one of the reasons for that is the fact that the Tories haven’t made the case for spending cuts. Again, their pathological desire to not be seen as a tax cutting and spending cutting party means that the many people won’t understand that there is another way.

Much has been made of Danial Hannan's impassioned speech criticising Gordon Brown – which is good, because he is making a valid point. But his party needs to listen not just to the jibes at old Gordo, but also the underlying policy message. In short, the Tory party needs to get a fucking grip on itself. This is not the time for consensus. It is not the time for procrastination, for moderation and for meekness. The country needs a radical change, but unless the Tories change themselves and their ideas then quite simply their coming administration will be more of the same.