Danny Finkelstein – one of politics’ nice guys – grabbed attention with his "punk tax cutters" soundbite but it hasn’t helped anyone understand the very different tax policies of the political parties (and of commentators and bloggers).

As we’ve written before, Danny sometimes appears as though he is stuck in the mid-1990s.  We imagine him going home and watching This Life DVDs and listening to Portishead.  The enormous thing that has changed since Danny was at William Hague’s side from 1997 to 2001 (and was burnt by previous promises to cut taxes) is a massive change in the public mood.  Voters have paid their taxes to the Blair-Brown machine and haven’t seen commensurate improvements to the public services.  They are ready for a refund. 

Voter readiness for relief is more urgent in recessionary times.  Tax relief now could help householders and businesses survive very difficult pressures.  ConHome believes that considerable tax reliefs could be funded by spending restraint.  Brown has presided over a massive increase in state spending.  Who believes that that money has been well spent?

Danny may think it unfair that the blogosphere has been agin him recently but he’s backed the three big errors that have characterised Tory economic policy:

  1. The belief that lower taxation produces no reliable dynamic benefits and every £1 of tax relief needs therefore to be "fully funded";
  2. That Conservatives should match Labour spending plans (with this decision has come a missed opportunity to lead public opinion about waste and over-ambition in the Labour state);
  3. Failure to use the economic crisis to wriggle free from (2).

None of this need be electorally consequential. ConHome believes that Labour is so broken that the Conservatives are still on course to win the next election. As economic gloom descends the Tory lead will grow again. Middle Britain’s allergic reaction to debt will finish off Mr Brown’s undeserved reputation for prudence. Our concerns aren’t electoral but about getting a really worthwhile Conservative economic policy.

The Tory agenda for social reform remains the best hope for reducing the demands on government and for producing a sustainably smaller state.  What we need is a more urgent agenda for restoring Britain’s economic competitiveness. That agenda must include a smaller state and lower, simpler taxes.

PS Danny blogs today that George Osborne gave ‘punk tax cutters’ what they wanted. No, he didn’t. Because of his commitment to match Labour on spending the Shadow Chancellor is having to come up with bureaucratic, self-funding mechanisms like yesterday’s recruitment subsidy.

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