“Let sunshine win the day” said David Cameron in 2006, urging Conservatives to become the party of optimism and to prepare for a government which would “trust ordinary people to make decisions about their own lives.” In 2010, outlining his idea of the Big Society just ahead of the general election, the Conservative leader described his vision as “unashamedly optimistic.” Envisaging a society in which people would use their initiative to achieve more with less government interference, he spoke of the brilliant entrepreneurs and social activists he'd met as proof that Britain could and should create such a forward looking and confident society.

Whilst the Big Society label has never succeeded in capturing the public imagination, the underlying concept was surely valid. This was an important attempt to signal a government that would — in contrast to Gordon Brown's regime — work with and for its people, rather merely seek to impose its will upon them.

Optimism about the human condition should not be dismissed as a politician's marketing tool — it is a vital ingredient in promoting a free society. Rather than assume that citizens need to be constantly directed and chastised by the state, consider how they can be enabled and encouraged. As David Cameron rightly pointed out, this is the best way to mend a broken economy as well as a broken society.

So what went wrong? What happened to that optimistic, encouraging outlook? And why do we now have a government that seems to believe we are all mean-spirited tax dodgers who don't pull their weight? This week, the hapless Treasury Minister David Gauke opened up a new front in the government's war on its citizens by describing householders who pay tradesmen in cash as “morally wrong.” His statement may have been off the cuff, but that doesn't make it any less offensive.

Millions of people in Britain paying small tradesmen and contractors for services of all kinds make payments in cash for entirely straightforward reasons: because the sums involved are trivial; because they are not in the habit of using a chequebook; because the contractor they are dealing with does not want the expense or inconvenience of operating electronic payments or a credit card account; perhaps because the recipient is unhappy to accept a cheque for fear it might bounce. These are not problems for big business, but for sole traders the ability to receive and to make payments in cash can be the difference between a viable business and giving up the struggle. And no, that's not because they operate in the black economy. Many sole traders do not earn enough in a year to reach the VAT threshold of £77,000. Does Mr Gauke really want a country in which we all assume that paying someone in cash carries the implication that they — and we — are all on the fiddle?

Perhaps he does. For the depressing truth is that this latest statement is of a piece with the Treasury's current jaundiced view of the British people, a view that coloured the 2012 omnishambles Budget.

This was the Budget which, until the Chancellor's later climbdown, labelled some of the most generous philanthropists as tax dodgers. It was also the Budget in which approval was given for a General Anti Avoidance Rule (GAAR), to give the government wide-ranging scope to decide whether, in arranging his or her affairs, it was an individual's intention to avoid tax. Combined with the Treasury's declared willingness to impose retrospective taxation dependent on “behaviour”, such a rule opens up the prospect of HMRC making arbitrary tax grabs from individuals and companies even though they have been acting within the law.

If, as Mr Gauke is now proposing, morality rather than legality is to be the test, it is very hard to see how the boundaries of taxation are to be set. Despite his legal training, Mr Gauke does not acknowledge the distinction between tax evasion — which is illegal — and tax avoidance, which is not. Tax avoidance includes, for example, putting money into a pension scheme or ISA; or a couple entering a marriage or civil partnership before one of them dies so as to ensure that the survivor can stay in the couple's shared home without having to pay inheritance tax.  Will the Treasury now examine every taxpayer's motives and decide whether such actions are “moral”? Perhaps Mr Gauke should in turn be asked whether he is confident that every item of government expenditure, using money levied from taxpayers, is “moral”?

In trying to decide how the Treasury has arrived at this sorry pass, it seems to me that pessimism is at the root of the problem, combined with a lack of faith in the principles which David Cameron once attempted so nobly to define. As we remain in economic stasis, the coalition appears impotent, unable or unwilling to adopt the radical measures necessary to restore growth or to shrink the still-bloated state. Instead of firing up the engines of wealth creation, it is scrabbling around down the back of the sofa trying to find some cash that a previous chancellor failed to grab. Whichever way you look at it, this is not a productive activity.

David Cameron seems to be finding the business of governing rather more difficult than he expected. The twin challenges of managing a coalition and dealing with an ongoing economic crisis are clearly getting him down. But his government badly needs to recover its faith in humanity if it is to overcome its problems. Slagging off the wealth creators — both large and small — will get us nowhere. Freeing up the optimistic, entrepreneurial spirit of Britain might, by contrast, put us on the road to recovery. It's time for the Prime Minister to recover a little of his old optimism — and  communicate it to the Chancellor and his team.

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