FAQ on Cameron and taxes
So, why doesn't David Cameron believe in cutting taxes?
Actually, he does
But why's he saying he won't cut taxes then ?
Actually he's not. He says he won't promise uncosted upfront tax cuts. Those words are the key to understanding this. He won't promise tax cuts because he can't be sure of the state of the books and he knows that the public don't believe promises to cut taxes. (See below for the significance of "uncosted" and "upfront".)
Surely the polls show that the public would vote for a party that promised tax cuts?
So, why isn't William Hague or Michael Howard prime minister then? A much quoted ICM poll was used to suggest that people would be more likely to vote Conservative at the next election if they were promised tax cuts. The poll said no such thing. It said that they would be more likely to vote for the party if they believed they would cut taxes. What Hague and Howard found is you can say you'll cut taxes but that doesn't mean that voters believe you.
Meanwhile a put an exaggerated version of the choice facing the Tories at the moment (keep down taxes by cutting waste versus drastically reducing the role of the state) and Cameron's position got pretty overwhelming backing.
The story of all the polling is pretty clear - people do want tax cuts but they don't want cuts in services. They believe - in theory - that you can square the circle by cutting waste and bureaucracy BUT they do not believe anything that looks like a politician's easy promise.
That's why all the parties are beginning to sing similar tunes - Gordon Brown boasts about cutting waste and claims to cut tax rates, and the Lib Dems promise tax cuts and, you guessed it, to cut waste too. That's been the Tory message for the past two elections.
So, the Tories do want to cut taxes but don't want to tell us that now?
You're getting there. The Tories are still fighting to restore their economic credibility after the ERM debacle. They believe that by emphasising their commitment to economic stability and stressing the importance of mortgage rates rather than tax rates they can begin to restore that reputation and re-build trust. Having a fight with the right over being too cautious and centre-ist may help too.
If - and it's a big if - this strategy works then people might just believe any promises they do give later to cut taxes.
So, after all this, the Tories may end up promising to cut taxes at the next election?
Cameron is desperate to "stick to the plan" (as he put it yesterday). He does not want to repeat what Hague and Howard did by producing a plan for specific upfront tax cuts which Gordon Brown can take apart. He wants instead to copy Margaret Thatcher in her first election - promising tax reform, pledging to cut taxes if possible but acknowledging that - just as in her first government - taxes could rise overall if the economic situation demands.
Tax reform would allow corporate and personal tax cuts to be paid for by increases in green taxes. These would not be uncosted (the last of Cameron's important three words about tax).
So, the Right must be furious?
No. They know what Cameron's up to and they trust his instincts as a taxcutter. (Listen to John Redwood on the Today programme or Lord Blackwell of the Centre for Policy Studies on today's World at One.)
They think that he's being too cautious and that he should lead the argument in favour of the economic benefits and moral arguments for tax cuts. So, they'll keep up the pressure and the thinking about how it's done. The real argument will come some months or years down the line about what how specific their next manifesto should be.
Comments
The tories claim to be a new party with fresh policies and image yet all I'm hearing about is delegates wanting to cut taxes.Presumably this means crippling the health service and crime prevention.Seems like Cameron is out of sync with most of his party.Sounds like the same old stuff to me.I will need a lot of convicing before they get my vote.
But why isn't Cameron able to explain that as clearly as you Nick??
Nick
Thank you for posting my previous comment on What John can teach David, To be honest I did not expect you to. Due to the fact that you did combined with this blog entry being informative and fair, I take back all I said about your impartiality.
I wonder where the buiness people are Nick. For both the Conservatives and the Labour Party the same seems to be true. where are the economists and busines thinkers these days.
Are there no dry analysts about to give us some figures. Or is it that the New Labour mob have hidden the books and nobody can work anything out these days?
Or is it me. a cynical pair of eyes wondering where the next pipe dream is about to materialise. Or is Cameron the pipe dream? All these questions and no answers. Tax Cuts, hmm if that were only problem for David Cameron...
Maybe he could be the next Ken Barlow on Coronation Street if things go badly? After all he has the flannel, all he needs is the soap!
Re: Ed Clarke's quetion:
Because Cameron is a politician and they're congenitally incapable of telling the truth in case the public foinds out what they really think.
This newslog is nothing more than a David Cameron love in, and would ask readers to compare and contrast it to those posted during the Lib Dems and Labour conferences, especialy since this morning Mr Osboure Shadow C of E said he could well raise taxes.
Ed Clarke wrote "But why isn't Cameron able to explain that as clearly as you Nick??"
Because no matter how clearly Cameron explains it he gets a 10 second slot on the news - and there is not a lot you can do with that.
He is going down the right track and people are fed up with Labour and Blair. I even came across a blog called "Socialism stinks". The fact that things like that are getting more common tells you that Brown (or whoever) is going to do badly at the next election, so it is important for Cameron to get the message right.
Funny... I don't remember such a positive slant from Nick Robinson on the Labour leader or its conference.
A fascinating piece of revisionist writing. The Tories have banged on about waste for years but their ideas have always been wildly optimistic so if outlandish claims are a good basis for electoral success the Tories are the party.
As for the apparent unity in the Tory party over tax cuts, that's not what the rest of the media is saying...
The problem Cameron has got, and one shared by Teresa May during a conference speech, is the membership of the Conservative party are living in a fantasy land where the vision of eternal tax cuts and power reign, and they dislike the implication they’re greedy and selfish. These same people who believe they’re wonderful (who doesn’t) and preach freedom, just can’t get it into their heads that consigning swaths of Britain to poverty wages and servitude is incompatible.
I took care to read through Cameron’s mini-manifesto in its entirety, and buried beneath the new age mantra were the same old policies. Must admit, it was a slick job and not easy to pull off. Credit to Cameron for playing both sides against the middle so well. He tells a good story, and there’s something in there for everyone, but the hard reality of change has to be tackled at some point. Either way, Cameron is quite correct to calm his charges down in the short-term.
I’m not convinced the Conservatives will win the next election. Indeed, it would be a disaster for the country and their party. It takes time for people to change in a meaningful way, and even longer for a group of people to change, and three years is the absolute minimum assuming things go according to plan. They rarely do. So, I think, Cameron is hoping for the best but, if he is wise, preparing for the worst. He won’t win but his party may emerge blinking into the light.
I think Sarah Montague asked a very pertinent question of shadow chancellor George Osborne on 'Today' this morning. He said (I'm probably paraphrasing) that reducing taxes was the "direction of travel", but he simply wouldn't be drawn on whether the ultimate destination was just a slight reduction in taxes as a proportion of GDP or a more radical shrinking of the size of the state.
So, fair enough that Tories want to take us towards lower taxes, but don't we have a right to just a clue about distance as well as direction?
Well done Nick for clarifying that. Unfortunately most in your esteemed profession either lack the ability to present the truth has ably explained by George Osborne this morning on Today or are reporting misinformation for party political purposes.
It is impossible to promise tax cuts when you are three years from power, goodness knows what Labour has in store for the economy.
Well this sounds reasonable tome. If Mr Cameron lays his plans on the table then Mr Brown will just pinch them all. Thats what labour have done in the last few elections (which is why we seem to have 2 tory parties now).
Having been fleeced and bled dry in the last 10 years I think I will vote for whichever party offers the least financial pain.
A very interesting blog entry, Nick. I have always thought that the Tories generally favour tax cuts but it is true that the economic situation is not always right to cut taxes. Like many, I vote with my wallet but I do think that economic stability is more important. It has taken me a while to be convinced by David Cameron (I'm a true blue) but I am more and more impressed every day. This conference has almost convinced me that I will be voting Tory at the next election.
spot on nick, best analysis i've seen on the tax cut so far... maybe see if you can get on tv to explain it.
This tax cutting/not tax cutting issue is a little out-moded I feel. It seems we always have the left arguing in favour of higher taxes and the right arguing in favour of lower taxes. The logical conclusion of these two positions is an ideal of either 100% tax or 0% tax, neither of which would serve anyone's interests.
Surely the debate would be better served by deciding what each party feels the state should provide, costing it, and then working out how much tax that equates to? The notion that you wage an idealogical battle around what level of tax is equitable and then pick up the pieces in the personal freedom vs. public services trade-off, is I feel redundant.
Congrats to Cameron for coming somewhere close to driving the debate in this, more reasonable format.
From where I'm sitting, it seems that the health service and crime prevention have been pretty well crippled already!
If we got rid of some of the bureaucracy and redirected funds to the sharp end things could improve.
It is not true that the tories don`t have there policies/plans worked out they just won`t tell us what they are?but they don`t have to we know.So how do we know? we know that Cameron has said he is "right of centre" and wants to lead a "right of centre party",what he doesn`t tell you is how FAR right of centre?.He thinks that Thatcher is on the left of the Tory party that is how far right he is.Don`t take my word for it ask Ming Campbell if you don`t believe me?for once Campbell has got something right (sorry for the pun).So yes he does plan massive tax cuts it is the nature of the beast.
David Cameron is turning fence-sitting into an artform but it will not wash when everyone knows that voting Tory means voting for a party that values tax cuts over and above state provided services. That is what being Tory means - giving control to the private sector. Cameron can say no cuts until he is blue in the face but Oliver Letwin the other Etonian (together with Osborne and Cameron himnelf), who is the real brains behind the group is CLEARLY in favour of tax cuts as he has been in the past two elections. Plus Leigh and Redwood and Tebbit and the Tory think tanks and just about every other Tory that anyone can name.
The trouble is that, as thing stand today with a relatively good economy, is that this is not going to get them into government - indeed it is a vote loser in the cities where the Tories are so weak. But can a leopard really just change its spots by hiding in the dark?
Cameron is counting on people being tired of a Labour government by the time of the election and something going wrong with the economy between now and then. Then, provided the Tories haven't already hurt themselves with tax cut promises and the Lib Dems threat can be contained, he is in with a fighting chance. The fewer concrete policies he has the better.
Is this cynical or just running scared of the Labour machine which appropriates good ideas wherever they come from?
Meanwhile he has got to sort out his Law and Order position pretty smartly - he can't afford to be on the wrong side of the terrorism /ID card debate - and I doubt whether John Reid is going to shoot himself int he foot like Blunkett and Clarke.
It seems to me that again you are prepared to give the Tories the benefit of the doubt, Nick, in a way you do not give either the government or the Lib Dems.
Slowly politicians of all types are beginning to recognise that it isn't so much the level of tax(within reason) but whether society gets real value for money. Frankly neither the previous Tory administration, where admittedly tax was lower, nor the current Labour one score highly on efficiency and value.
Just how many billions has this administration wasted on cancelled IT projects, especially a certain Mr Brown at the treasury? When you add to this the years of lost efficiency which would have accrued had the projects been delivered properly and you start to see the real cost of this administrations mis-management.
You then apply this to virtually every capital and social infrastructure project ( NHS, transport , military etc) and try to find one of any substantial size which has been delivered on budget, on time and to the original quality standards, I've tried and I can't find one. Either they can't plan properly or can't deliver - perhaps its both but its cost the British ( well mostly English given the Barnet formula and our generosity to Wales too) taxpayer very dearly indeed for precious little in improved services.
And don't kid yourself the previous Tories were much better. They just tried to do less and therefore had less opportunity for central government waste.
It's no wonder then that no politician wants to commit themselves to very much. Few if any of them have any real experience of really running anything beyond a PR campaign. How many of them have had to design, manage and deliver say a £100 million budget project, be it in R&D, Civil Engineering , developing a new car etc. Anything real with real marketplace competition and proper accountability. Virtually none of them and yet once in power they presume themselves qualified and experienced enough to spend multibillions of our money chasing their fantasies.
Well bitter experience has taught the electorate not to believe them or trust their judgement on anything more complex than running a wastepaper basket, which is what most of their project planning looks like they have been doing.
Many people have been saying that cloud-kookoo promises are unwise, and that with 3 years to go, promises on such issues as tax cuts would be out of place. I think we are missing the point, so please bear with me while I attempt to repeg this debate where it should lie.
While it might be true that one should not make promises one can't keep, this does not preclude one saying what one would do in a situation. What the conservatives could very well do is to let us know what they would do, what policies they would enact, right now, if they were hypothetically to be given the decision over what policies are enacted right now.
Well you might think that other parties might steal their ideas. Certainly, they might. Wouldn't that be the greatest test and the greatest proof? The ultimate test of policy is putting it into practice. If Labour were to enact some policies put forward hypothetically by the Tories, and those policies proved to be good, wouldn't the country be in a better position? Isn't a country with better policies being enacted better off than it was previously?
Why should they not want to let their policies be known? Well, there is always the possibility that Labour could take credit for these policies that they did not come up with. But if that were to happen, Labour would only dig their own grave, because thereafter any bad policies they enacted would look so much worse in comparison.
If Labour were to take the credit for such policies, it might inhibit the Tories getting into power, but why was that ever important? Let's face it, if the policies of a party are being enacted, there is no reason for them to be in power. The only reason to get into power is because they aren't being enacted currently. Being in power is a means, not an end. Our politicians have lost touch with the ends of politics, they want to get into power whereas getting policies enacted should be their only goal.
And right now, the Conservatives are refusing to speak of policy. They are in reverse gear politically. Political debates should be about policy, not future policy but current policy. Politics without policy is a lie and a sham. We are in danger of being scammed by these power-grabbers.
So why is policy such a no-no currently? Because politicians have started to believe their own propaganda. They feed off each other like parasites. Tony Blair has been extremely successful and, expectedly, others are now taking after him.
I want to see policy return as the ends of politics. This modern trend of appearance-politics and power-grabbing is a sham; the politicians have lost touch and we need to reeducate them.
I am appalled by this glaring and unashamed bias! Is it your job to act as PR spokesperson for the Tories? Surely the function of the conference is to get Tory policies (such as they are) across to the public, while and the role of a good commentator (especially on a publicly-funded medium) is to fearlessly question politicians and to thoroughly examine those policies!
Yes, the requirement for utter objectivity in any political commentator is both unattainable and uninteresting, of course, but the best broadcast journalists are those who remain fiercely sceptical of all sides, and so pierce through the endlessly spun sound-bites that we all find ourselves assaulted with.
I’m afraid this post is too simplistically ‘on message’ to count as anything even distantly approaching a worthwhile analysis.
Anthony Jaynes is absolutely right. It is fascinating also to hear the difference with the today programme. I strongly resent being forced to pay a licence fee to what has become an anti-government lobbying group. Even worse is the way the ´óÏó´«Ã½ seems incapable of the straight reporting of anything. They have become third rate but thankfully it is possible to find some straight news sources on the Internet.
After Nick Robinson's "explanation" we still only know what a Cameron government would *not* do.
It's amazing that a party can rise up the polls and still tell not tell us:
1: In Europe or out ?
2: smaller state or larger ?
3: Immigration - more, less or the same ?
4: more or less privatisation.
If Robinson wants to do an FAQ why doesn't he list what the tory party *will( do. Noone expects dotted i's and crossed t's - but the tory party is currently vacuous.
Of course, unless fortunes improve for the current government, Cameron could be elected while saying very little of substance.
Is that what UK politics has become ?
The ERM Debacle.
Just for the record let me remind you that entry into the ERM was the policy of all 3 political parties at the time. The Conservatives were landed with the blame by all the ´óÏó´«Ã½ reporters as a favour to their beloved socialist party and they regularly bring the subject up to attack the Conservatives again and again.
Hi Nick,
I am glad to see you clarifying the issue rather than jumping on the badwaggon of misinformation.
Thank you
Hi Nick
Was it just a slip of the tongue this morning on the Today Programme?
I hear we will know who the new primeminister is to be "Within SIX MONTHS".
Looking at my calender, and counting back (say) six weeks for an election to take place, that means Tony Blair will resign no later than Mid February?
Really - Is there some little tit-bit of info you have not until now been telling us?
Saying they won't promise "upfront, uncosted tax cuts" actually means very little.
It allows David Cameron to promise any "uncosted tax cuts" that he wants when the election comes, because by that time it won't be "up-front" any more.
And it allows him to promise "up-front" tax cuts any time he wants, as long as he finds a way to claim that they are "funded". That could be done, for example, by identifying some highly optimistic forecasts of efficiency savings, exactly as they did at the last election.
So what has changed ? And when is someone going to press Cameron further when he glibly throws in the "upfront, uncosted" phrase into his answers ?
Another similar game with words, just like the "upfront, uncosted" trick, is "sharing the proceeds of growth".
The implication of this phrase is that ALL the proceeds of growth are currently taken by public spending increases - which of course, they are not. If the economy grows and people get higher incomes, that income is already "shared" between the part that is taken in tax and used for public spending, and the part that is not taken.
So what does this phrase actually mean - if anything at all ? When they used it at the last election, it was code for "give lower-than-inflation increases in public spending, to allow us to pay for our tax cuts".
Nick,
I was listening to the debate on airlines yesterday. I don't understand the idea behind taxing airline fuel. Here's my problem:
It is generally accepted that short haul flights are worse than long haul flights in terms of global warming, not least because there are a good deal more short haul destinations. I presume this is why the debate was focused on low cost carriers. With the range of a modern airliner, would it not be a simple matter to refuel the aircraft at a location which is not charging any fuel tax and thus avoid buying fuel in the UK?
Assuming my premise is true, surely a UK airline fuel tax would be largely pointless.. Frankly if you are developing policies to tackle global warming I fail to see the value of those policies if they are purely local. I think the clue is in the title, "GLOBAL warming".
Perhaps, if you have a moment, you could ask Mr Cameron or one of his buddies how a fuel surcharge for airlines will work - bearing in mind the huge gaping hole I have pointed out?
He won't "promise upfront uncosted" tax-cuts?
He dosn't catch you out Nick, but surely a more fundemental element to Cameron's strategy is to bamboozle the public with phrases that mean nothing to them, and put a general 'jist' of pleasing noises ontop of that confusion. It's always been my position that, particularly in British politics, changes of government mean quite little; each party has to react to the needs of the country, and the civil service exercises their own influence ontop of that. You as well as point that out by saying how each party is essentially saying the same thing.
He's using tax as an implement with which to beat the voters, and get himself a nice new house in London.
The reason that David Cameron won't promise tax cuts is quite simple. If he does so he will be confronted by Mr Paxman, Mr Naughtie et al demanding to know what services he will cut in order to achieve his aims. The Tories have been caught on this (by broadcasters more than the press)in all the campaigns since 1997, much to the delight of Labour.
Attempts to plead the very well known intellectual case for lower taxes on both economic (higher growth, less fiddling) and freedom (its our money) grounds were submerged by good old media confrontation, reflecting, I suppose, the zeitgeist.
With the enormous tax increases of the past six years not bringing utopia in the NHS or anywhere else, the zeitgeist is changing again: tax cuts will come back onto the respectable agenda - i.e the desire will come from below.
Mr Cameron intends to be in power when that happens. Knowing a thing or two about handling the media, as Mr Paxman can attest, he isn't going to get caught the same way again.
This is just complete biased rubbish from a supposedly impartial journalist who is in fact in love with the Cameroons.
The laziness of your incorrect assertion that Thatcher promised to cut taxes if possible is inexusable. This is an untruth that the Tory leadership has made use of and which it is the job of journalists to expose. Mrs Thatcher specifically promised cuts in income tax in the 1979 general election. David Cameron is refusing to do the same. Spot the difference now?
And if you believe tax cutters in the party believe Cameron is one of them, you are simply not doing your job properly. Lord Forsyth is not of that opinion and neither is anyone else not fearful of losing a position on the front bench or on one of the policy committees a la John Redwood.
i d just like to thank nick robinson for doing a really good job as politcal eitor by explaining some of the detail of the tory tax debate in an intelligent and informative way and making good use of his blog. nice one!
You must have missed this story:
Dave wants to cut income tax. But only if you're a soldier.
66 tax rises under Gordon Browns chancellorship. This was stated in the house on a few occassions by David Cameron. How many of these taxes will he repeal?. Not many I think
Why is it that David Cameron never seems to have a fixed policy attitude on anything? He always seems to shift ground in order to receive the greater public opinion poll.
My parents recently closed a very successful business because they were sick to death of paying everything they worked so hard for to this government.
Now my dad works in the Gulf and doesn’t pay a penny in tax to the UK and my mum is claiming jobseekers allowance.
I would say that Browns tax and spend policy has backfired in my parents case and I do wonder how many others have made the same choice as they did?