The Case for Lower Taxes

Over at ConservativeHome Tim Montgomerie is analysing the Built to Last document and will be writing something on each of the eight principles during the course of the day. I'm only going to repeat what he says on the first - tax. Largely because I agree with him!

The first 'Built to Last' principle focuses on the economy:"1. A successful Britain must be able to compete with the world. We will put economic stability and fiscal responsibility first. They must come before tax cuts. Over time, we will share the proceeds of growth between public services and lower taxes - instead of letting government spend an ever-increasing share of national income." This is the only principle I really take exception to (I'll be more positive for the rest of the day). George Osborne was in Ireland last week to celebrate that country's economic success. But the key lesson of Ireland is that they didn't achieve economic stability and then cut taxes. They cut taxes and that got them to economic stability. Taxes created the growth that avoids the instability and factionalism of a zero-sum economy. David Cameron and George Osborne have been 100% right to say that tax must not be the Conservatives' only economic weapon (and John Redwood has made some interesting noises on what this wider competitiveness agenda might involve) but I hate to think that the 'stability versus tax relief' false choice might be enshrined in our party's constitution. I'm also with the Taxpayers' Alliance on the popularity of tax cuts. This was on the TA blog yesterday: "We believe that the reason the Party has failed to make an effective case for lower taxes because they have pushed the wrong messages and we think that the Party should have made an adapted case in terms of how lower taxes can help ordinary people in their everyday lives (as the Daily Express has recently done in their campaign against inheritance tax)." Conservatives should be using the whole parliament to make the case for economy-boosting tax relief - as David Davis proposed in the highlight of his leadership bid. That isn't going to happen but let's not box ourselves into the Labour way of thinking about tax. I think we should be thinking about adding a sentence on the ingredients for a growing economy... so that we have "proceeds" to share.

One of the things which most gladdened my heart yesterday was David Cameron's clear statement that he wanted the government to get out of our lives. One way, and some would say it's the best way, is to tax us less and let us spend our own money. After all, isn't that the ultimate way to 'trust' people?