After the earlier stumbles courtesy of Messrs Newmark and Reckless the Conservative Party Conference has got into it’s stride with the speech from the Chancellor of the Exchequer George Osborne.
One message was that those who want lower tax are better off voting Conservative than Labour. This should be obvious – the philosophical difference is hardly novel. But it isn’t at all obvious to the voters.
YouGov carried out some recent polling for Red Box about what voters thought would happen after the next General Election. If Labour win 40 per cent of voters think taxes “paid by people like you” would be higher, 10 per cent think they would be lower. If the Conservatives win then 39 per cent think such taxes would be higher, seven per cent that they would be lower.
The voters can be forgiven for their pessimism. Since Nigel Lawson ceased to be Chancellor there have been tax hikes from his successors of both parties.
I don’t think that Mr Osborne has an ideological belief in low tax but he has had to come to terms with the practical difficulty that tax rises don’t work. We are now groaning under such high tax rates that further increases do not result in extra revenue. Therefore they are not a credible method of reducing the deficit. It was necessary to cut spending – welfare being specified – in order to balance the budget.
Mr Osborne said:
“The latest Treasury estimate is that eliminating the deficit requires a further £25 billion of permanent public expenditure savings or new taxes.
“And I tell you in all candour, that the option of taxing your way out of a deficit no longer exists, if it ever did.
“In a modern global economy where people can move their investment from one country to another at the touch of a button – and companies can relocate jobs overnight – the economics of high taxation are the economics of the past.
“And we choose the future.”
The language was borrowed from James Callaghan speech to the 1976 Labour Party Conference.
However the end of the speech owed more to the opening credits of the film Trainspotting:
“Now we seek a new mandate as the Party of jobs and security and a strong Prime Minister – against the party offering higher taxes, more debt and Ed Miliband.
“We are going to offer political resolve and economic competence.
“A confident future for Britain as the most prosperous country in the world.
“And we are going say to the British people:
“Choose David Cameron
“Choose the Conservatives
“Choose the future.”
There was a strong theme about the Conservative vision of free enterprise being outward looking and about progress – that is Labour’s return to Socialism that was the reactionary creed. Labour have regressed to being anti business.
Even before he started his speech Mr Osborne has already scored a success with his decision to scrap the pensions “death tax” – this news was splashed on most this morning’s newspapers front pages. The great thing about this tax cut is that it is happening now – rather than being a promise for after the election which the cynical element might have thus disregarded.
This was a confident performance. Increasingly we are getting a clear sense of direction from Mr Osborne. This represents a notable contrast with his lamentable Labour shadow Ed Balls.