By Tim Montgomerie
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Fraser Nelson is delighted at the prospect of the abolition of the "sadistic" 50p tax rate. But also at The Spectator, Alex Massie, warns that it will be a "PR disaster" if Osborne announces a tax cut for the top 1% while freezing public sector pay etc etc. Both are reacting to today's sensational Guardian claim that George Osborne will, after all, get rid of Gordon Brown's latter days tax hike.
- Everyone I speak to thinks the Lib Dems have leaked this. Some say the Lib Dems have leaked it to steal the Chancellor's thunder. Some to highlight the concessions that Lib Dems are seeking in return. Some because the Lib Dems are fighting for 50p to be cut to 45p rather than 40p. All Tories agree that the Lib Dems are becoming shameless leakers. "The Lib Dems are ceasing to be trustworthy partners," said one MP close to the Chancellor, "the business of government depends upon some basic levels of confidentiality". Another said "we could cover the budget deficit and get rid of 50p easily if we taxed the Lib Dems every time they leaked stuff". If the Lib Dems are behaving like this before year two is even up how will they be behaving in years three and four?
- 50p should be abolished and it's better to abolish it now, some time before an election than wait until closer to polling day. I don't like the idea of a timetable for its abolition – it keeps the issue alive and potentially makes it an election issue. 50p should only be abolished, however, as part of a (i) shock-and-awe, (ii) fully-funded and (iii) pro-striver tax cut package of the kind I outlined on Monday. This package should include some property taxes because it's more economically sensible and ethical to levy tax on people who've benefited from the property boom than people who are trying to earn and invent today. I'm delighted that Tory MP Guy Opperman has joined Mark Reckless and Nick Boles in recognising the need to shift the burden of tax from income to land. Without a shock-and-awe package there's a real danger that the newspapers will be headlining the 50p issue and that will reinforce the Labour charge that the Tories are indeed the party of the rich.
- Finally the Right needs to talk about other economic policy instruments than tax. The tax level is an important contributor to economic growth but science teaching, airport capacity, employment law, the cost of energy, lifting trade barriers and cities policies etc etc also really matter. It's vital we pursue a balanced and holistic growth agenda as a party.