What Baroness Thatcher told me about tax cuts
Fraser Nelson 6:36pm
I have just been telephoned by the BBC about my “interview with Margaret Thatcher” where she laid into David Cameron. Em, not quite. It was a comment of hers I reported in my News of the World column in April and repeated on Coffee House yesterday. It was picked up on ConservativeHome and ran in the Evening Standard, and then the Press Association and now the Daily Mail online. My friends are now calling up to congratulate me on interviewing a woman who hasn’t spoken publicly for years.
The truth is far less glamorous. I met Baroness Thatcher after Lord Lamont’s excellent Keith Joseph lecture in April and asked her about the Cameroon slogan “stability before tax cuts.” She looked at me as if I had gone quite mad. “Oh no,” she said. “You can’t have stability if you don’t have tax cuts.” Did she mis-speak? Hardly. One of her former advisers, also present, forcibly developed her point later. Today’s high public spending (now higher as a percentage of GDP than Germany’s) requires dangerous borrowing and huge tax burden. This discourages work, dampens growth and encourages consumers to borrow, to fill the hole the taxman has blown in their take-home pay: a spendthrift government is a threat to economic stability. So “stability before tax cuts” is a non sequitur. As several Thatcher-era Tories will tell you, with much passion.
There is much patronising nonsense spoken about Baroness Thatcher, that she somehow a lost and lonely figure who doesn’t know who she’s visiting or what she’s saying. One man who knows her well is Liam Fox, who sat beside her at his hugely successful Atlantic Bridge/Rudy Giuliani dinner on Tuesday. “She was the best I’ve seen her for several years,” he told me afterwards. “Fully animated and with an opinion on all major issues of the day.” Good to see that, aged 81, The Lady is still not for turning.
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TGF UKIP
September 21st, 2007 7:37pm Report this commentIn the context of "today's high public spending,.... dangerous borrowing and huge tax burden" the line "you can't have stability if you don't have tax cuts" was precisely position of David Davis in the leadership election in 2005. The foolish Tory Party, though, manipulated by the London media (the Speccie in the vanguard) went for Dave and "we speak of anything but tax cuts) to Gordon's present joy and delight. That you should publish this Fraser does reinforce my belief that one at least of the Speccie's Cameron cheerleaders is having serious second thoughts on the wisdom of their promotion of Project Dave. All too late though, I'm afraid, and in the coming disaster of Gordon's electoral triumph you lot are going to be fingered as having played a lead part as one Dave's principal sponsors.
hogarth zombie
September 21st, 2007 8:17pm Report this commenthold on TGF UKIP - didn't the Spec led the charge against Dave's crazy grammar school policy? And Fraser is nobody's cheerleader. I wish it had been Davis, though.
Nick
September 21st, 2007 8:19pm Report this commentSurely if borrowing is a worry then tax cuts are not an option until spending cuts have been made. It would be the height of irresponsbility to bring in tax cuts when there is already a deficit. So surely the thatcherite line is you can't have stability witout spending cuts and then and only then tax cuts. So the Cameron line makes more sense to my mind, however neo liberal your economics.
Ed
September 21st, 2007 8:46pm Report this commentTGF UKIP and Hogarth Zombie: Fear not. Reliable sources suggest you'll both live to see a DD leadership. If I were you, I'd stick ten quid on the 11/2 at Paddy Power - that's if, of course, Gordo can resist calling an election on Monday.
jimmy
September 21st, 2007 8:47pm Report this commentBrilliant post, Fraser. There's a lazy consensus between the parties on our high-tax high-business-cost economy. Someone needs to remind the country that it makes no sense. As you say, the formulation the Tories are using just now is a plain non-sequitur. / If the economy's growing we can afford to pay for more public services. If and when it contracts again, we will have to scale them back again - or else we head for a crash. Although it sounds a bit daft, the phrase "UK plc" helps gain some clarity of thought here.
TGF UKIP
September 21st, 2007 10:04pm Report this commentOn reflection Hogarth Zombie I am being a tad hard on Fraser personally but the whole editorial line under the present and previous editorships has been wholehearted support for Dave (one of their own?) - the grammar schools debacle being the exception that proves the rule. And thanks Ed I am a sporting man and at 11/2 I'll be sticking not ten but at least twenty quid on DD. With foot and mouth spreading and about to bite Gordo in the arse he ain't going to risk it now though I'm sure he'd love to. Time for the Tories to show their ruthless side?
John Whitworth
September 22nd, 2007 8:50am Report this commentDon't tax cuts incrase revenue due to some presdigitatory economics known as the Laffer curve? Didn't Reagan manage it? And Nigel Lawson?
Simon
September 22nd, 2007 10:14am Report this commentinteresting the BBC were straight on the phone smelling trouble. I see the pro Brown Telegraph is making the most of it too
Tiberius
September 22nd, 2007 6:16pm Report this commentYou DD cheerleaders: what do you expect him to do that Cameron isn't that will stuff Brown? On tax cuts/stability; those who think the voters buy the above argument are mistaken. They buy the Labour mantra of Tory tax cuts equals sacked teachers and nurses.
Edwin
September 22nd, 2007 7:13pm Report this commentTGF is correct - and so is Thatcher. Cutting taxes enables higher spending (if that's what you really want) by producing higher tax ravenues. E European flat tax rates prove the point (here in Romania we are watching this in action after the imposition of a flat 16% tax rate across the board). However, Dave seems to have rejected tax cuts AND spending cuts - why don't we just vote Labour? Fraser and D'Ancona are guilty of apparently blindly backing (and, I would even suggest, advising) Cameron on these Centrist Blair type policies.
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