“To be fair to the Tories, at their last party conference in Manchester George Osborne finally spelt out that a future Conservative government will be cutting public spending. But even the £23 billion over the next five years that Osborne announced amounts to little more than a rounding error in Britain’s public finances. Even in the face of the greatest economic crisis that Britain has experienced in decades, Tory policy remains timid and unimaginative. If the Tories can’t offer anything better than managing Britain’s decline, then what’s the point of a change in government?”
£23 billion of savings will hardly be noticed and the Tories will have to go further. But, as James noted in this politics column, the Tories have a radical plan to foster growth through tax and spending cuts over the next parliament. The plan is inspired by Laffer-style supply-side thinking: low taxes will improve Britain’s competitiveness in the global market, encourage job creation and yield substantially higher receipts. The proof of this radical alteration to Britain’s tax system will be in future receipts and future growth, not public announcements 8 months before the election.