Friday, October 28, 2005

Davis Tax Cuts

At last- some real beef. £38 billion pa tax cuts- £1200 for each family- by the end of the next Parliament.

As we've posted previously, his plan is based on adopting Reform's Growth Rule, ensuring that public spending does not rise faster than the trend rate of growth in the economy. He says:

“We need to move from a spending agenda to a growth agenda, where government is focused on achieving value for taxpayers’ money and public spending discipline ensures that there is room to lower the tax burden.

My approach doesn’t involve cuts. We are talking about how fast to grow spending. On the contrary, those who argue for a faster rate of spending growth have to address the question of where the resources will come from.

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.”

And for those who say voters are still prepared to pay those yet higher taxes to get those services, that's not what recent polls are telling us.

And too early to "write the manifesto"? The lesson from the last Election is that voters didn't actually believe we would cut taxes- to win next time we have to get the message over clearly right now.

Britain is crying out for an alternative, not a half-hearted repro.
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