The Tories need to hammer home that tax cuts will stimulate growth

Beer Moth

What's the point of any moves toward economic prosperity, if this serves to keep in place the present rate of immigration so that the country is turned into a global cess-pit?

How long is that concern going to be ignored?

Alex

I believe the Tories should announce that the first £200 per week (£10,400 per year) of income should be exempt from income tax; that VAT should be raised to 20% and the point made that the rich will be paying it on their consumption - not the poor on their food - that it brings us into line with Europe.

That the part of NI which does not pay for benefits should be called: "Payroll tax" (or "income tax") so that everyone understands what it really is - as part of the transparency in government project.

The 50% marginal rate should be dealt with in government when the Treasury can release their study showing it will reduce income take

Deshsinif Si Ruobal

George Osborne should look back to what he was talking about 4 years ago - his central theme was to simplify the tax system and he even considered experimenting with the flat tax which the Estonians had so succesfully implemented - vastly increasing the tax take by creating an even 20% tax for everyone. This is the radical thinking that he needs to demonstrate today.

welease woger

I'm all in favour of taking the lowest paid out of paying income tax but how would it be paid for? Unless Osborne can give a credible answer he will be mullered on that one. It's easy for Cable to say that as he knows he won't be in a position to implement it.

How could it be paid for Fraser (genuine question)? I hope you don't just say growth because that's a cop out.

Nicj Leaton

There are real problems with this.

1. The government is borrowing at 5% to invest in spending to prevent a double dip.

2. The investment yielded 0.3% as a return last quarter.

Even a child understands that borrowing at 5% to get 0.3% return is bonkers.

If anyone thinks this is wrong, I'll offer a return of 0.3% on their pensions funds. I presume that Brown and Darling will take me up on the offer.

In order to get tax cuts, you need to reduce the deficit to zero or it goes tits up. That means 28% cuts in government spending. [The government lies by assuming that they own everything you earn and using a percentage of GDP]

Giving tax cuts is not going to solve the problem. Lets say you get 3% growth, which is big in historical terms, with borrowing at 5% its still screwed.

The only thing that matters is cutting government spending.

This can be done in two ways. Hacking and slashing. Hacking is the government getting out of whole areas of spending. From the small, Potato council, to large regional development agencies, they all need to go completely.

Secondly, there needs to be across the board cuts in pay. This actually helps with the hacking. First cut the pay on the services you intend to hack. Workers go on strike, so then you hack the service. Do that enough and when you cut the pay on core services, they will be a bit more reticent to strike.

Civil service pension liabilities are around the 1,100 to 1,200 billion mark. Offer civil servants an increase in pay now for opting out of the civil service pension. However, this is subject to a no strike agreement. That way the civil servants have to work out if they want to prevent fellow civil servants from getting their hands on the cash. They won't win the vote.

Efficiency savings are small. However there are some. For example, we could abolish car tax and put it on petrol. All the DVLC needs to do is then monitor car ownership and collate ownership. Tax collection is once a month from a few oil refiners.

The BBC could be flogged off.

However, there is a political problem. How do you avoid being seen as nasty Tories? The answer is to constantly remind people of where the cash is going. All past debts need to be published as a Doomsday book of Government debts. No state secrets such as the Civil Service pension liabilities. The government are refusing to publish, I suspect until after the election.

Secondly, a tax hypothecated to paying it off is needed. It should appear on all tax notifications and payslips and be cumulative. When people see tens of thousands of pounds going to pay past debts, there will be a real force for change. It needs a neat name, and labour tax is a good one because its a tax on your labour. Small l so it isn't confused with the Labour party, capital L.

Nick

seb

There is absolutely nothing that Osborne or anyone in the Conservative Party can announce before the campaign starts without Labour immediately stealing it and incorporating the idea into its own currently non-existent set of policies. Gove's education reforms were recently stolen in this fashion after an unusual delay given Labour's modus operandi.

[Amongst the many shocks that Labour will have to deal with closer to election time is the one that Darling will deliver to his next door neighbour. I think the Chancellor would be happy for Labour to be wiped out if this meant the end of Brown's career. Darling is finished and he knows it. Be it for reasons of revenge or simple patriotism, he's going to do something along the lines of a political belt bomb sooner or later to take out Kirkcaldy's Leading Autist. Watch this space.]

Tim Carpenter LPUK

Tax cuts per se do not stimulate sustainable growth if you do not cut spending but just increase debt.

It is a little better than keeping taxes, increasing State spending AND debt, I suppose.

Ideally you cut taxes in particular for the lowest earners (which will include more that a few SME owners!), reduce spending AND cut the deficit.

The fact is the interest payments alone are more than the Educational budget, so we need to reduce spending by more than [(£50+ billions) PLUS tax cuts] to begin to make headway, otherwise whatever you do will just end up with even bigger interest bills next year, even if we get away with the same interest rates, which is highly unlikely. We are currently borrowing money to pay the interest on exiting debts. Madness.

Spending IMHO has to come down by a 12 figure sum. Yes, over £100bln. Until you do that you can forget trying to reduce the deficit if you also want to make meaningful tax cuts at the same time.

Alex

Tax cuts may well stimulate the economy in the long run, but they cut Government income in the short run.

Which means early cuts in services and government spending, just the thing the majority of economists and the IMF thinks is wrong-headed, and the British people do not want.

Holly ......

Beer Moth,
If you ignore the wall to wall John Terry saga,the news bods are going big on the hung parliament story and the'body'Cameron has set up just in case.
So at the outset MILLIONS are going to be tuned in to the football,just to see if they shake hands!Sad!Maybe they'll start crying & hugging & apologising on the pitch?
God give me a break!
Then we have Lynn Foulds Woods telling people in the marginals to give us a kicking,because some Lord has donated to the party,yet totally missing out that the other 80% was raised by local activists.
Then I come on here & your going on about immigration!
When the media is going on about the economy
& donors.(and footballers)
No wonder people are confused!
Immigration,I presume,will be included in
the conference at some point.
Papers talk about one subject,the TV news talks about another subject,so when the party bods come out and talk about what they intended to talk about,which is often something completely different!it all gets bloody confusing!
Now as I type it's the dip in the polls.
I live in Yorkshire,with three NO GO AREAS in the area & Labour ARE NOT getting back in around here any time soon.The MAJORITY I speak to(we still talk to strangers on the bus up here),the Conservatives are going to stomp it!
This was a Conservative led council & the Lib Dems,Greens & Labour had a 'love-in',
pooled their votes together and nicked our council.
Then when it all went belly up,the Lib Dems legged it as far away from Labour as they could.So the Lib Dems are history around here as well,god they got even less than the Green party!It took THREE parties joining forces to oust the Conservatives!
Ignore the polls,I don't know where they are doing them,but around here people do not
believe them. AT ALL!,They get raging mad over them!
Labour are hated and I mean HATED!around here,the Lib Dems are snidey little shoots,& can not be trusted & the Greens Maybe second this time around.
The BNP have a few odd bods support,UKIP are
too much of a one policy ticket around here,which they play up on,due to the no go areas.Which we do not like.
We also think about immigration.It is a MAJOR concern,but not the only one.

paulg

A reduction in corporation tax will not stimulate consumer demand to say it will is economic illiteracy. It may over the long term stimulate investment but that is something else all together and, for a full explanation of the difference I suggest the conservative treasury team sign up for an A level economics course.
Unless George Osborne, stands up and announces the reduction in corporation tax along with measures to stimulate consumer demand this election will be lost this weekend.
I can’t believe it!

lawrence greek

Fraser

Last paragraph - that's two things to consider not three? Unless I misunderstood.

Taking the lowest paid out of tax would be the single best thing they could announce during the election campaign. It is an absolutely nailed on vote winner. It's fair, sensible and would stimulate growth. It would also leave Labour in the wilderness for generations to come. All my doubts about Cameron would be blown away in one go if he were to announce this.

Paul B

Osbourne certainly should announce that he is increaing the threshold to £10400 or above. This would put real money in peoples pockets and lead to growth. It would also make work attractive. He should further announce that it will be his intention to move towards a flat rate income tax rate of no more than 20pc for all (preferably lower) with no allowances apart from the threshold.

He should go for beggar thy neighbour corporate tax policies that will bring companies and investment surging back into the country and put two fingers up to EU if they were to raise objections. In this global economy the answer is local. Local policies. To have harmonised tax policies across many nations is the socialists dream, but not one for free trade, freedom loving Conservatives

stephen

Osborne may have saved the 2007 conference with a tax cut but it is now an electoral albatross! Puting the IHT threshold up to £1m just plays into Labour's hands saying the Tories are only a party for the rich. I dread Osborne being "Election Coordinator" He is politically naive and arrogant just remember when he met the Russian Millionaire with Mandy on the Russian's yacht. The Tory party has polictical adults like Hague and Clarke why does not Dave use them instead!

mitch

How about abolishing Gordons idiotic tax credit scheme, of begging for your own money back and losing 30% to admin?.
Change peoples tax codes to suit, make it revenue neutral and sack the admin staff as efficiency savings.set a limit on benefits at say £40k total family income then you get nothing tax cuts would moderate the impact of this.

John Law

Alex
February 27th, 2010 12:05pm

"Tax cuts may well stimulate the economy in the long run, but they cut Government income in the short run.

Which means early cuts in services and government spending, just the thing the majority of economists and the IMF thinks is wrong-headed, and the British people do not want."

I see you are now the spokesperson for the British people.

I think the last time this was surveyed, people were in favour of well targeted spending cuts.

The reality is that both cuts (real hard cuts in some areas to be spent on things that generate value) and tax cuts to make enterprise and hard work more worthwhile.

Sorry to disagree with the IMF, but where were they when this disaster was brewing

John Law

Holly ......
February 27th, 2010 12:56pm

Holly re the polls, take a look at the political betting web site.

Yes the Con lead has narrowed, but the level of manipulation of the data is pretty large (see Ugov figures). So raw data more like 42 / 26 / 18, becomes a five point Con lead.

My own guess is that you are nearer the mark and that Labour, tops, will get 28% of a 60 percent turnout and an even smaller percentage of a larger turn out. I guess 20 to 40 seat Con majority most likely.

Tories need to pile into them now with very simple, strong, patriotic and positive messages.

Badger will then hopefully apply the final bullet to Browns head with an honest budget.

Irene

John Law:

I agree.

YouGov in particular are very misleading with their weighting, in fact their Sun tracker has not moved all week, I think they may be contacting the same people!

TGF UKIP

WEll at least your final para was sensible, Fraser, what went before just demonstrated how clueless your mates are when it comes to devising poulist measures to win an election. Just like 2005, in fact, when their idea of a tax cut was some complicated pension mechanism which meant nothing to anybody.

Likewise here, to Joe Voter all a business tax cut boils down to is "them" giving "them", their mates, a tax cut. And as for Osborne being able to sell that or anything else, makes me realize again just how remote Richmond on Thames and The Vilage is from the rest of the country.

Time you faced up to it, matey, Dave is being rightly punished for his arrogance and nepotism in choosing to have as his two principals his two best mates and it's a toss up which is worst the extra planetary wheeze-a -week Mekon or sleazy, snidey Boy George.

Resign yourself, Mr 5% is on his way to becoming Mr 2%.

Verity

Alex writes: "I believe the Tories should announce that the first £200 per week (£10,400 per year) of income should be exempt from income tax; that VAT should be raised to 20% and the point made that the rich will be paying it on their consumption - not the poor on their food -

that it brings us into line with Europe.

Oh, goody!

Verity

Wot TGF UKIP said.

Beer Moth

Holly...

"Immigration, I presume, will be included in the conference at some point."

You presume as you see fit, but don't hold your breath for any accuracy or truthfulness.

In the absence so far, of any sign from any of the mainstream parties, that they have a clue about, or an interest in, the dire course we are on; and in the dogged reluctance of the media to tell things anything like they are, then I'll stick to my own knitting pattern, tah.

Alex

John Law 2:32pm

"I think the last time this was surveyed, people were in favour of well targeted spending cuts."

Maybe they are, but that doesn't mean they agree with Georgey boy. The closing of the opinion polls tell you that they do not want whatever it is (and who really knows?) what the Tories want.

"The reality is that both cuts (real hard cuts in some areas to be spent on things that generate value) and tax cuts to make enterprise and hard work more worthwhile"

The arguement is in the timing. George wants it now, nobody else in the whole wide world agrees. Apart from Dave and Fraser and you and few Tories.

Marcher Baron

Don't whack up VAT (it's an EU tax after all), but add a 5% purchase tax to luxury items and call it the Brown Tax.

Holly ......

Beer Moth,
If you believe the Conservative party will continue to allow unfetted immigration and porous borders.
If any of you believe the Conservative party
will wreck the economy.
If any of you believe the Conservative party
will be bad for this country.
If any of you believe the Conservative party
will allow the EU to walk all over us.
Nothing anyone will tell you will make any difference.
Even when they do,you move the goal posts.

Alan Douglas

welease woger asks how not taxing the lowest paid would be paid for.

I don't know exact figures, but the cost of collecting from the lowest paid must be very close to the "take". It will be paid for by reduced manpower needs, almost entirely.

And if there is still a cost not recovered, that will be taken care of by increased willingness of the lowest paid to work harder, because they will get the benefit from their work, not the benefits office in reduced payouts.

Alan Douglas

2trueblue

The Tories should keep their powder dry until the date of the election has been announced. Liebore have the media totally on side and are very short of real ideas. The real sroty has to be on delivery. It is something that Liebore are incapable of producing and must be hammered home.

The less the Tories can reveal despite pressure as Liebore will just steal it for their own empty policy folder.

Aremay

Put simply, no. Without the Bush tax cuts, the US deficit shrinks dramatically. They weren't paid for, and I highly doubt that these will be paid for.

There is no room to cut tax this year, next year, or for several years after that. Spending cuts - big ones, on hospitals and schools - are going to have to come through. The Tories have to stop pretending that closing quangos and cutting the number of MPs alone will do it. Promising to protect the NHS, which consumes the second largest share of the budget, shows a shocking lack of spine.

As for the reports of YouGov 'fiddling' their polls, it's called statistical analysis - you have to weight and screen your raw data to take account of past voting, likelihood to vote again and all the rest of it. Like the 'climategate' e-mails, all so much hot air from people who know so little, it's dangerous.

Beer Moth

Holly...

What goalposts? What movement?

It's simple: if the Tories are the solid bet that you describe, then why are they not stating in clear terms, how they propose to put right the mess?

If I were a Labour supporter, then in view of the fact that this government are so reviled and spent, I would be quite pleased to see that there is a 'reserve' party which, although it isn't actually called 'Labour', will carry the project on with maybe a few light concessions. I would be happy to vote Tory as an interim.

The argument I've heard is that the Tories are saving their best till closer in to the fray, so that Labour cannot counter punch with stolen ideas.

The ideas I want the Tories to have, would not be those which Labour could associate with; they would do that old fashioned thing of setting the Tories aside from the Labour wrecking ball.

Ideas which it seems, the Tories have similarly disavowed.