I say in my political column this week that Cameron must “offer tax cuts before Brown does” – and seems I may not have to wait long before David Cameron repays my faith in him. Patrick Hennessy says in the Sunday Telegraph today that the Tories are planning an employment-orientated tax cut financed by spending cuts. As the FT said on Saturday that Darling could be mulling some £15bn of tax cuts, there was a danger that the Tories could be the only party in Britain not proposing to let people keep more of their money. Cameron was in danger of falling into the trap which ensnared John McCain.
McCain didn’t think for a moment that the tax-cutting agenda could ever be stolen from the conservatives. He was wrong. Obama put tax cuts at the front and centre of every speech he made, even if this wasn’t much reported in Britain. Look at www.obamataxcut.com to see the power of the message he was sending American voters. You enter your income, and see how much better-off you’d be under Obama than under McCain. Obama placed tax cuts at the start of his “infomercial,” he ran two-minute television adverts on tax cuts. He stole the issue from under the noses of the conservatives. Just like Bush did with education in 2000 and Clinton with welfare reform in 1992.
Brown pretty much built a career on stealing American ideas (tax credits, Sure Start centres, BoE “independence” etc) and you can bet he’d love nothing more than to nab the tax-cutting agenda from the Tories, especially if he thinks it would start a civil war. He’d dress up his tax credits as a tax cut (which was, to a large extent, Obama’s strategy). Brown would hope the Tories could not offer tax cuts, as they are unable to debate the issue rationally, still scarred by old internal battles. Yet it seems Cameron is not so much of a sitting duck.
One may cavil about the size of the tax cut (you can bet it will be tiny), but the message is the most important factor. Obama’s tax cuts were mainly disguised welfare, but he communicated his message more clearly . So no one listened to McCain’s objection. One of Obama’s proposed tax cuts was aimed at employers who take on new staff, a very recession-orientated policy that Cameron may well nick by proposing to cut NICs or some such. Tax cuts don’t have to be large to be effective – the IHT tax cut was £3bn, literally a rounding error in the Treasury – yet look at the effect this had last year.
Cameron’s greatest error at the moment will be to think Conservatives=Tax Cuts is a message so obvious it does not need to be said. That’s what McCain thought, and he paid the price.
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