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"CAMERON ON OFFENSIVE WITH CALL FOR TAX CUTS."

That’s the headline over an article in today’s Telegraph.  Its somewhat flimsy basis (although The Mail appears to have been spun the same way) is the welcome that Mr Cameron is expected to give to John Redwood’s impending policy group report on restoring Britain’s economic competitiveness.

RedwoodIn a recent entry on his must-read blog John Redwood identified some of the problems that have seen Britain fall from the 4th most globally competitive economy to number 13.  The graphic on the right is an abbreviated quotation from his post.

It is not clear if Mr Redwood will make specific recommendations for lower taxation but if he does there will be renewed pressure on George Osborne from small government conservatives to reverse the huge increase in taxation that has characterised the Gordon Brown years. 

The party leadership’s formulation of ‘sharing the proceeds of growth between lower taxation and more spending’ certainly leaves room for tax relief but Mr Osborne has ruled out making "up front" promises of lower taxation.  Late last year he poured cold water on Lord Forsyth’s excellent Tax Commission report.  Likely increases in green taxation may be announced, however, to pay for
some reductions in the taxation of families and business.  The leadership has spoken of shifting taxation from targeting good things to bad things.

Editor’s comment: "ConservativeHome has long been unhappy with the Tory leadership’s cautious approach to easing Britain’s crippling tax burden but we do not think that now is a good time for a major change of course.   Any big announcement on tax could be seen as a flip-flop and will increase voters’ suspicions that there is something opportunistic in Project Cameron.  The need for David Cameron to be authentic should guide everything he currently does.  Economic purists and tax simplifiers won’t admire me for recommending this but George Osborne should look to Canada’s Conservatives for inspiration.  Canada’s Conservatives have found that small but very targeted tax measures have much more electoral impact than larger but hard-to-understand tax reliefs.  A Conservative government needs to cut taxes in serious ways in order to address the competitiveness problems that John Redwood identifies but Osborne and Cameron have (unfortunately) boxed themselves into a corner that makes big up-front tax pledges electorally too difficult.  The main virtue of the Redwood report will be that Tories are discussing the economy again.  There has been no bigger mistake from Team Cameron than Oliver Letwin’s suggestion that the party was shifting from an econo-centric to a socio-centric worldview.  With disposable incomes now falling it was a terrible message to send.  Judging by the number of outside interests taken up by the shadow cabinet it appears that our frontbench remains econo-centric in their own private interests."

47 comments for: Now is not the time to announce big tax cuts

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