Watching George Osborne and Alistair Darling on Marr this morning, one couldn’t help but be struck by how Labour is defining the Tories on tax. Darling kept stressing that it tells you everything you need to know about the Tories that the main tax cut they are offering at this time is to inheritance tax.
Now, this, obviously, isn’t quite fair. As Osborne said, the Tories wouldn’t actually deal with inheritance tax until the public finances have been stabilised. But it is a problem for the Tories that the only tax pledge of theirs that has had cut through is the inheritance tax one. The Tories need to talk far more about their plans to freeze council tax and talk more openly about their plans to cut corporation tax to make British business competitive again. This would make their tax package appear balanced.
On the banks, the Tories have an opportunity to outflank Labour. Osborne is right to say that the banks wouldn’t be able to write their losses off against tax, an idea his office have been exploring for a while
. But it is also worth him getting ahead of Labour in constructing a tax that would make banks pay insurance for the possibility of the state having to bail them out again.