Saturday, July 19, 2008

Great Turning Points In History

Fiscal Götterdämmerung - but the fat lady hasn't quite sung yet

As we've noted more than once, back on the doorsteps in 2005 the proposition that tax was too high just didn't land. You couldn't give it away. In those dark days, the tax and spend consensus seemed all-powerful, especially once Dave had taken charge of the Tories. Low tax zealots like Tyler got so depressed we formed secret societies pledged to keep the flame alive. We gritted our teeth for a long hard slog, with nothing to offer but blood sweat and immolation.

But wow! Just three short years later, we've suddenly burst into the sunlight. That all-powerful consensus has crumbled at the first serious assault. The tax and spend game's up, and politicos of all colours are running for cover.

This week we've had the high tax Lib Dems promising tax cuts - tax cuts! - and this morning Chancellor Darling says:

"There are a lot of people in this country who feel they work hard, they make their contribution and they’re feeling squeezed. People will accept that they have got to pay for the schools for their children and for the hospitals in case they get ill, but they want to make sure the Government is fair about taxation. Every Chancellor has to be very conscious that there is a balance to be struck between how much you can spend and how much people will say, ‘OK if you’ ve got another pound to spend remember me as well’.”

Ah, well... hmm... OK, maybe the fat lady hasn't quite sung yet. "Fair about taxation" doesn't exactly sound like the clarion for lower taxes.

And just clock the way he thinks about whose money he's spending. Do taxpayers really say to him "if you’ ve got another pound to spend remember me as well"? If they do, they need some serious re-education. These aren't Darling's pounds to spend, they're OURS. Every single penny he spends, he's taken from us, the people who've earned it. He's the one who should be asking us for money, not the other way round.

Is that so hard to understand?

If so, repeat to yourself 500 times:


And where's Dave on this?

During the week he talked depressingly of the possible need to increase taxes when he gets in. He may be right. The dark forces of Gordo are going for fiscal Götterdämmerung between now and 2010, and the mess will be stomach churning. But what we'd really like to see is more flesh on the bones of George's longer-term fiscal rules: great that they'll be independently monitored, but "sharing the proceeds" remains vague in the extreme.

PS That Clegg pledge to cut taxes is contingent on finding £20bn of "efficiency savings" - ie it's to be funded painlessly so far as taxpayers are concerned. Sadly, in the real Yes Minister world, such "efficiency savings" never ever materialise. As regular readers will know, the massively hyped Gershon exercise turned into an expensive joke, which actually increased spending in some areas. The only sure way of making savings is to close down activities altogether (eg the useless Regional Development Agencies, or the equally useless British Council... there, I've just saved £3bn pa).

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