It took a while, but I spotted Labour’s April Fool trick: an attack document
on the Tory economic agenda. It looks real at first, but when you go through it the con becomes transparent.
APRIL FOOL ONE: “The Conservative Party wants to face two ways at this election, promising extra tax cuts and spending commitments while at the same time claiming they would reduce the deficit further and faster than Labour’s plan to halve it in four years.”
Labour pretends to be unaware of the basic economic concept that if you have a lower tax rate, business grows faster – generating more revenues. There is such a thing as a self-financing tax cut, which is why the top rate of tax has fallen around the world over the years. And even a tax cut which leaves a net loss the Exchequer is balanced out under the Tory NI tax cut (if the Fink will allow the term
APRIL FOOL TWO: ”The Tories have also now conceded they won’t commit to reverse the Government’s position on 50p rate of tax and pension relief reform.”
REALITY: Hammond has said he’d have this tax for two years, and then abolish it. So they will reverse it. Keeping this revenue-destroying tax for even that length of time is, of course, foolish.
APRIL FOOL THREE: Totting up all the Tory pledges to three decimal points, and announcing with a straight face that it doesn’t add up.
It’s a con. Economics does not allow for this degree of certainty – economists only use a decimal point to show they have a sense of humour. Claiming there is £22.272 billion black hole uses precisely the same tactics that Blair used in the Iraq dossier: ascribing certainty where none exists. Taking stabs in the dark, putting them all together, and trying to sex something up. Even if Labour’s sums were credible (they’re not) one cannot predict tax revenue like that. Ken Clarke was a brilliant Chancellor because he took this broadbrush approach. Brown’s genius was in fooling Tories into debating economics in this ridiculous micro-management way.
I could go on, but I’ll make a final point. It is rather rich for a Labour government running a £165bn black hole each year– ie, unfunded spending commitments in 2010-11 – to get worked up about what it claims is a £22bn hole in the Tory pledges. Labour lost their right to talk about fiscal responsibility about nine years ago – the last time they balanced a budget. Something tells me Brown won’t fool the voters this time.
P.S. Stephanie Flanders finds some more April Fools in the document here.