Sunday, 9 November 2008

Conservatives to offer 'funded' tax cuts??

. The Conservatives are all at sea on the economy (a sensation no doubt familiar to George Osborne); while the central problem with our message is that it isn't getting through the Conservatives is that they don't have a coherent one. Conservative Home reported last night that the Conservatives grass-roots, noticeably annoyed with Osborne, want the party to offer a tax cutting package;

"68% of members want lower taxes. 57% want tax cuts funded by tighter spending control (also to be used to reduce borrowing) and 11% are content for lower taxes to be financed by higher borrowing."

However, we can expect this to be backed by the traditional 'slash and burn' attacks on state provision. The last sentence of the article;

"A shift to the private sector is even more important now."

Would that be the same private sector that is now heavily dependant on state backed borrowing to keep it afloat?? Today, the Sunday Telegraph reports;

"A senior party source said the new "funded" Tory tax cut, which could be announced within days, would be aimed at staving off unemployment. It would be a "recession-alleviating measure" and would be paid for by cutting government spending elsewhere, he added."

All this following on from Osborne saying the 'cupboard was bare'. David Cameron, writing in the News of the World, reinforces Osborne's statement;

"So now the cupboard is bare and we’re worse off than any other major economy."

However, he leaves plenty of room for the Telegraph report to be borne out;

"Lower taxes are in my DNA — it’s one of the reasons I came into politics. I know it’s your money and I know you want some of it back. And I want to give it to you."

So, this presents us with a problem...we should be careful in making sure there is 'clear yellow water' between our tax cutting package and I have said numerous times before..a classic squeeze is looming.

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