We reported on David Cameron’s big economy speech earlier and mentioned Cameron’s unwillingness to rule out tax rises. There is a real fear within Team Cameron that Brown will follow a scorched earth policy over the next two years and the Tories will inherit truly dreadful public finances. The IFS are already warning that tax rises may be necessary. We’ve just noticed Benedict Brogan’s blog…
BB’s conclusion: "The golden economic prospect Gordon Brown inherited in 1997 was built in large measure on the fearsome tax rises brought in under John Major to restore health to the Exchequer. Necessary, but politically terminal. Mr Brown is unlikely to return the favour, which is why Mr Cameron and Mr Osborne must be viewing the prospect of power with some trepidation."
Will we have ‘Tory tax rise’ stories in tomorrow’s Mail and other right-leaning newspapers?
Mark Wallace of the TaxPayers’ Alliance has just provided us with this quote (our emphasis):
“The Conservatives may think the Treasury will struggle to afford tax cuts but one thing is far more certain – the economy can’t afford tax rises. Seeking to plug holes in the public finances with tax rises will simply hobble the already wobbly economy further, harm confidence on the high street and put more people out of work and onto benefits, further worsening the financial situation. Sizeable savings can be made by getting rid of unnecessary quangos, freezing civil service expansion and radical public sector reforms. Tax cuts – or even rebates along the American model – would give the economy a shot in the arm.”
[What Cameron said on Today, when asked if tax rises might be necessary: "I hope that won’t be the case, because I think we do have more responsible spending plans. Government always has to do what is right to safeguard the public finances. The tragic thing now is that at this point in the economic cycle what the Government ought to be doing is cutting taxes and giving a fiscal stimulus to the economy. They can’t do that because the cupboard is bare and borrowing is so high."]