Murdoch_rupertYesterday Rupert Murdoch gave a rare interview and encouraged David Cameron to shrink the government’s burden on "over-taxed" Britain.  The media mogul also said this of the new Tory leader:

"I’ve had a couple of very charming meetings with him he’s very bright. He’s put together a more impressive front bench than was there before, but it seems to be all about image.  I would really like to know a little bit more about what his vision is for the future of this country and his people.  You know, some facts and some real policies rather than just a lot of almost throw away positions they take to change their image – so much so that if you believe everything he says there’s not going to be an alternative between him and a New Labour government certainly."

CashMr Cameron uses an interview with this morning’s FT to move away from support for a lower tax burden, however.  He told the FT that: "When it comes to the economy, I am absolutely clear that stability and responsibility come first, second and third as our priorities – and that they come before the commitment to cut taxes."  George Osborne will give a speech later today in which he will unpack this emphasis on stability.  He is expected to emphasise tax simplification rather than tax reduction.

This cautious approach to tax relief will dismay supply-side conservatives.  Their arguments for tax relief are threefold:

  • Britain must compete in the global economy but Gordon Brown’s taxes are endangering business’ ability to do so.  Last week’s The Business revealed that UK tax levels are about to exceed those in Germany for the first time in a generation.
  • Many of Labour’s stealth taxes have fallen most heavily on the poor.
  • William Hague and Michael Howard waited until the final months of the last two parliamentary cycles to start selling their modest tax relief packages to voters.  David Davis used his leadership bid to say that tax relief was essential for growth-driven revenue growth and the challenging political case for lower taxation needed to be made for a whole parliament.

ADDED AT 2PM: Download osborne_speech.pdf