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Monday, 10th March 2008

Hammond puts his foot in it

Fraser Nelson 5:09pm

Philip Hammond, Shadow Chief Secretary to the Treasury, has just finished a pre-Budget lobby briefing, which I suspect will end in some troublesome headlines for him tomorrow for two reasons. 

First, non doms. Hammond asks us to believe that the Tory non-dom tax would scare away fewer millionaires than Labour’s policy. But the Tory figures claim they’d sting non-doms for £2.8bn, four times what Labour hope to sting the non doms for (Labour will only tax those who have been here for seven years). Hammond says the non-doms prefer certainty. Presumably for newly-arrived non doms that means the certainty of getting stung for £25k under the Tories versus the certainty of not getting stung until 2015 under Labour.

Next, tax. Hammond sat next to a huge chart showing up government debt is over 40% of GDP when one factors in Northern Rock (which he says it should). It begged an obvious problem. If the Tories want to rectify this, they can forget about any tax cuts. Especially as they are also pledged to outspend Labour on public services. So isn’t it the case, Hammond was asked, that a Tory government could well finish an economic cycle without lowering any tax at all as it would have so much debt to repay? Hammond would not give a firm answer. Bingo. So in addition to the Tory pledge for no up-front tax cuts, there is also no promise to cut taxes in office either. Hammond says the Tories are, instinctively, a tax-cutting party. A promise which I suspect few voters would bank on.

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Comments

David Lindsay

March 10th, 2008 5:17pm

The Tories are supposed to be patriots with social consciences, and Labour are supposed to be social democrats with a strong streak of working-class patriotism. So why does it have to be a Lib Dem who wants to abolish non-domicile tax status, or at least come as close as anyone dare to saying so? There are many annoying things about the Lib Dems, but one of the very worst is that so many of them are individually interesting and industrious politicians, hammers of parliamentary corruption, or secretive and sloppy family courts, or the Legislative and Regulatory Reform Act. One of the best of those is Vince Cable. The Lib Dems are still a poisonous and preposterous lot collectively. But at least they don't purport to stand for anything specific, unlike Labour or the Tories, which pretnd to have principles but don't. We need entirely new parties. So let's get on with it.

Peter Hirsch

March 10th, 2008 5:23pm

Labour has gone bad and the Tories have gone mad.
When will the Tories ever see that a successful Opposition needs to shred bad policies expose the bad results of those policies, attack inept government and keep their powder (their own policies) dry and secret. It is unwise to make promises in Opposition - instead just attack the broken policies of government.
At present we have a failed Government - and a failed Opposition. And we know what the electors think of both: not worth turning out to vote for either.
Cameron's excellent speech at Conference has been followed by a vacuum. Yes, the Tories are mad.

David

March 10th, 2008 5:25pm

"If the Tories want to rectify this, they can forget about any tax cuts" But I thought you agreed that the economy and goverment debt was in poor shape. Surely you'd therefore agree with this?

Mike

March 10th, 2008 5:32pm

The opposition is too frightened of Labours "baseline" of high tax, high spend to say the emperor has no clothes. He's naked. As has been noted in these pages G Brown cannot have failed to have noticed that his economic policies have not worked. It's high time the opposition pointed this out and shredded his record. I find the current tax n' spend dutch auction deeply depressing for a small-government, pro-business, pro-entrepreneurship conservatives like me

cityboozer

March 10th, 2008 5:44pm

Fraser, Fraser. It "begs" no question, merely "raises" one.

Simon Maynard

March 10th, 2008 5:45pm

This sounds like a rather disappointing performance from Hammond. Not so much because of what he said but because of the stumbling manner in which he said it. The Conservatives face severe difficulties regarding tax cuts both because of the state of the economy and public misgivings about their motivations. However, whilst those of us that are merely observers or commentators can afford to indulge in the 'rabbit vs Hare' debate, the Conservative leadership must, in spite of their private doubts, be seen to present a clear vision for the economy. Whether this vision includes tax cuts or not is almost a secondary issue.

cityboozer

March 10th, 2008 5:47pm

"Hammond says the Tories are, instinctively, a tax-cutting party. A promise which I suspect few voters would bank on." And Labour is instinctively a tax-raising party, which will take what it wants to spend on buying votes and call it social justice. Few Labour voters would have banked on it still being the case in 1997 and perhaps even 2001 but we have seen tat it remains true and further that it remains ineffective.

Faceless Bureaucrat

March 10th, 2008 6:00pm

Oh dear, are the Conservatives showing signs of coming down with Lib Dem-itis?...

TGF UKIP

March 10th, 2008 6:34pm

The Tories thoroughly deserve all the the trouble and Labour merriment this will cause. Don't blame Hammond, he obviously had a difficult, if not impossible, hand dealt him by Dave and Boy George. Just another episode which reveals just what a hollow sham of a "Conservative" Party this is. Labour to spend £617 bn = £36,000 per household this year and Dave and Boy George not only say that nowt can be saved for tax cuts, they want to spend even more. How can any self-respecting small "c" conservative contemplate for one second actually voting for this gang of social democrat tax and spend bingers?

Cuttsie

March 10th, 2008 7:31pm

Read the Reform report 'a Lost Decade', out yesterday. Either taxes need to increase to prevent a complete disaster, which will anyway wreck the economy subsequently, or cut taxes and spending and get back towards an entrepreneur economy. Then get employees in the public sector into the same world as the rest of us. If we don't do this, its all over anyway. Northern Rock £100 billion, PFI £100 billion, public sector pension funding £700 billion. How are Dave and George going to tackle this?

THX1138

March 10th, 2008 10:36pm

Hammond is useless and he even looks a bit like "Hugh Abbot". I saw his "cojones" get a right good chewing from Mrs Balls on Newsnight and it takes something to make her look good. The Tories need to sort out the treasury team pronto I think Boy George needs a good budget or Dave should have a little chat, we all know he is only in the job because they are mates. Alistair Darling is such boring pompous politician the best attack is competence & humour look what a good job Hague is doing with those tactics against the older Miliband. The Tories should get Ken Clarke back to soften Darling up he doesn't have to do the job if they win but he would be a far more effective shadow than Osbourne and lets face far more fun.

Fergus Pickering

March 10th, 2008 11:10pm

Hammond says that the country owes a huge amount of money which it needs to pay back. And you say that it doesn't? Or you say that he shouldn't say it?Or what exactly is that you say?

SackHammond

March 11th, 2008 8:04am

Hammond is a poor presenter and now is exposed for weak intellectual thinking. Get rid.

steve

March 11th, 2008 8:25am

Can anybody tell me what would happen to UK tax take, if the non-domicile exemption (i.e no tax due on overseas income, not imported to the UK) was granted to everyone?

Dave B

March 11th, 2008 9:16am

"a Tory government could well finish an economic cycle without lowering any tax at all as it would have so much debt to repay? Hammond would not give a firm answer. Bingo. So in addition to the Tory"

Government debt is just deferred taxes, so before Conservatives can reduce taxes, they first have to pay off Labour's borrowing.

I don't see what's wrong with this. 'First stop digging' is always good policy, surely?

Sir Buffy de Vere

March 11th, 2008 11:38am

Why was Hammond giving the briefing and not Osborne? Bit McAvityesque.

EyeSee

March 11th, 2008 1:28pm

I'm waiting for Cameron, standing perhaps on a party conference stage to turn around and see a huge 'Conservative' banner. Then to say 'bloody hell' and rush off the stage as he realises he is in the wrong party. Let's try to make it easy; you run a parliament to represent the people and make the country function. That's it. Do as little as possible, extremely well. Westminster Village -it's not about you.

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