Cameron’s tactical dilemma
James Forsyth 6:04pm
One thing to watch tonight is David Cameron’s strategy for dealing with Nick
Clegg’s plan to take peoples’ first ten thousand pounds of income out of tax. This policy is clear and appealing and one that many Conservatives like. Indeed, Cameron himself called it
a ‘beautiful policy’ in the first debate. So it is imperative, that the Tories have a way to try and defuse it.
During the campaign, the Tories have used two different attacks on it. One is to criticise it from the left, to argue that the policy is not progressive as it does not help the lowest paid: you have to earn more than ten thousands pounds a year to get the full benefit of it. The other is what Cameron did in the first debate, attacking it as unrealistic given the size of the deficit.
In political terms, I’m not convinced by either of these approaches. The problem with the first one is that it sets Clegg up to say that the policy makes everyone who earns less than £104,000 better off. While the flaw with the second one is that it allows Clegg to say that the tax cut is fully funded: paid for by clamping down on tax avoidance, the mansion tax on properties worth more than two million, equalising capital gains rates with income tax and only allowing tax relief on pension contributions at the basic rate. These tax rises are either unrealistic or economically destructive. But in the current anti-banker political climate, they won’t put too many people off.
One approach Cameron could adopt is to talk about priorities. He can stress that his first aim is to stop the National Insurance increase—which the Lib Dems won’t—and that as a low tax Conservative, he’ll aim to reduce the tax burden over the course of the next four years. But stopping the increase in the job tax, which could cost tens of thousands of job, has to be any responsible government’s top priority.
PS: Just to show you how appealing the Clegg tax shift can sound, here’s how he described it in his Times interview:
"If you are going to ask the country to undertake the biggest exercise in fiscal contraction arguably since we paid off our wartime debt, then you’ve got to bring people along with you. It’s just not on to constantly tell people it’s pain, pain, pain without some fairness and gain on the other side.”
Giving people more control over their money is also a “great ideological distinction” with Labour. “Labour’s answer is constant tweaking of the benefits and tax credits system, an assumption of dependency. Ours is an assumption of independence. If we do get the most votes, we can really push hard to deliver that fair tax switch.”
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Michael
April 29th, 2010 6:12pm Report this commentCameron could attack it as the politics of old. On the one hand the Lib Demss will give with one hand and take with the other (rise in NI). Liken it to the 10p tax debacle a couple of years ago.
Tyranosaurus
April 29th, 2010 6:13pm Report this commentSurely Cameron's best response is to support it and say we will adopt it when we can afford it (incidently, the limit should be just over £12K p.a. - 52 weeks / 40hrs per week @ minimum wage to encourage people who are working at whatever salary they can get)
paulg
April 29th, 2010 6:22pm Report this commentOf course we would all like to do that, taking the poorest people out of the thax systembut its unrealistic at this time.
Its like all the rest of yous thinking that the most beautiful women in the world would sleep with you, its a fantasy: nice but unrealistic.
stephen
April 29th, 2010 6:26pm Report this commentA difficult call for Dave.
He has to think long term, a cosy deal with Clegg could mean PR and the Tories being out of power for a generation. Talking of which have just seen that the Gov of the BofE says this is an election no party should want to win as the cuts will be so deep the party winning could be out of power for generations.
Dave think the untinkable do a deal with Labour not Lib Dems, casualties of course staring with liabilties like Brown and Boy George and Darlings stays St Vince is stuffed. The rest of the cabinet is a bit like fantasy football Dave PM, Darling Chancellor and the Lib Dems and their PR duly screwed. Have about 3 years of misery then break the Con Lab pact Govt who knows Dave might even get re-elected then,
Snowman
April 29th, 2010 6:32pm Report this commentCameron should stick to what he said before, which doesn’t differ that much from your priority argument, or rather can be combined with it.
One suspects the £10,000 tax break was included in the confused party manifesto before the first debate, and hasn’t been properly tested. At least one of the sources to fund it, the equalisation of capital gains and income taxes, cannot please house owners. The clampdown on tax avoidance baffles, too. ISAs are a vehicle for tax avoidance, is he to abolish them?
Steven
April 29th, 2010 6:34pm Report this commentCameron should forgo the final TV debate and call a press conference instead. Seriously, brush it off as nothing more than a Political Idol competition.. At the Presser he can make a serious statement and then open up to questions from real people, not just journalists. Debate with real people, live on TV. He should stand there and reference the mess that the PIGS are now obviously in and talk honestly about how spending got way out of control as a result of BG's abolition of Boom & Bust. He should be honest that whoever wins will need to radically change spending and, if we're honest, taxes too. He should emphasize that it's important to stop the brain drain, stop immigration for political reasons and focus on rebuilding a private economic sector rather than a government sector. He can wrap it up in his 'Big Society" theme as we're all in it together, just like in war time. If he takes the gamble he may produce the 4% that he needs for an outright majority and then have a MANDATE to implement the radical changes required. If he fails and he is not elected outright he can go into the 'hung' parliament negotiations citing his honesty and leadership and commitment to fix the economic problems. If (as I assume Tory HQ fears) the electorate desert the tories simply for being honest, then he can stand back and watch the IMF come to the rescue later this year as GB will never cut spending and Clegg is a lightweight enjoying his 15 minutes. In this instance honesty really is the best policy. Winning an election where you have to immediately declare an emergency budget is a poisoned chalice (thanks GB) even if you intend on blaming GB after the fact. "Look we just got our hands on he books - it's worse than we thought... honest" will be a lame basis for enacting the harshest set of cuts in modern times.
Dave - Be bold. Be honest. Be radical. Throw off the cloak of caution and go for it. You have the opportunity to make political history and usher in a new era of open politics.
ollie
April 29th, 2010 6:56pm Report this commentYou know what, if Cameron had announced this policy, and not Clegg, the Tories would be looking forward to a landslide. He can't diffuse it - because it's an attractive policy, no matter how you cut it.
He has to take a hit on this - and nail Clegg on the debt and NI. He could also attack Cable's incredible flip-floppery. Nailed on Cameron win if he uses his brain tonight.
TGF UKIP
April 29th, 2010 6:57pm Report this commentNot suprisingly, James, what you can't bring yourself to say is that on tax and spend, Clegg often sound more like a Tory than Dave does. Not a very difficult, let's face it.
Verity
April 29th, 2010 7:32pm Report this commentSteven - "Stop immigration for political reasons...". Huh? I'd say 98% of immigration is for economic reasons ... third worlders looking for a better life at the British taxpayers' expense.
Dave should vow, which he will not, to cut immigration to the bone and deport people in Britain illegally and economic migrants.
He should also remove the vote from every incomere who has not been in Britain for five years and applied formally for British citizenship.
That's what he should do. In reality he will promise no such thing, and nor would he institute any such programme in the nightmareish event that he came into power.
Right On
April 29th, 2010 7:58pm Report this commentThink tonight is a foregone conclusion. It'll be a tie and Clegg will edge it on post debate polls. I'd pretty much guarantee it.
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