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The Tories should take a tax lesson from Ireland

Allister Heath

Tuesday, 3rd June 2008

David Cameron must prove to voters that Conservative economic policy will be more than just Brownomics with a posh accent, says Allister Heath. The Irish have shown him the way

For ten frustrating years, the City turned a blind eye to Gordon Brown’s tax hikes, public spending bonanza and general resocialisation of the British economy. The business establishment, anaesthetised by booming bonuses and cheap money, was in no mood to take seriously those of us warning of the dangers ahead. But now that the good times are over, and with a desperate Labour Party openly baying for toffs and non-doms, our top financiers are panicking – and with good reason.

Joe Public will have to wait another two years before giving Labour the kicking it so deserves in a general election; meanwhile, Britain plc is already voting with its feet, with top firms such as Shire Pharmaceutical and United Business Media leading an unprecedented exodus.

So far, so good for the Tories, once again the City’s favourite party; but daily headlines announcing that yet another corporate giant is considering upping sticks (Prudential being the latest) will soon become just as much of a headache for David Cameron as it is now for Brown.

The reason: for all their recent shift in rhetoric, the Tories remains wedded to the Brownite big-government consensus responsible for Britain’s collapsing competitiveness and the current flight of talent and capital. Now that Cameron looks set for power, he needs to show how his policies will first halt and then reverse this disastrous development: how a Tory government will be about more than just Brownomics with a posh accent.

As one senior City source told me last week, private banks and tax lawyers have spent the past few months warning overseas clients that the Tories are unlikely to make any material difference to their affairs; after all, it was they who started off the destructive attacks on the non-doms. Cameron needs to send a clear signal that he now accepts the need for a fresh, modern approach to economic management – and that will have to include a clear break with Brown’s crippling orgy of tax and spend.

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