Raising Taxes is Part of the LibDem Gene Pool

I ought to be welcoming the Liberal Democrats' conversion to low taxes. Well, I would if it were true. Ming Campbell and Vince Cable - the grumpy old men from the Muppets - are desperately trying to ditch the LibDems' reputation as the high tax party, but it will be very difficult to achieve that. If I thought they had transformed themselves into true, old-fashioned Liberals, who always believed in people's ability to spend their own money better than the government, then I'd think true progress had been made.

But taxcutting is like supporting a football team. You have to believe in it within your soul. It's part of your political being. Unfortunately for most Liberal Democrats raising taxes is part of their political gene makeup and most voters know that. They remember the 1p on income tax "for education". They remember the spending commitments that would have bankrupted the country. They remember the 50p income tax rate. So although the LibDems will want to concentrate on the headline of "2p off income tax" (are they suggesting 2p in the Pound off the education budget?) it's the other measures which ought to be examined in minute detail, as they will dramatically increase the tax burden on the middle classes - just the sort of people the LibDems need to keep hold of (and attract) if they are to repel the Cameroonian advances.

We're all supposed to be saving for our retirement, yet the LibDems are proposing effectively a new tax on savings, by abolishing the Capital Gains Tax taper relief allowances. They say this will hit the "seriously wealthy". No it won't, because they can afford tax accountants to get round it. It will hit middle England - the kind of people who own a few shares, or maybe a second home. This measure alone will raise £5 billion, they say. They're going to reduce tax relief on private pensions, raising a further £7 billion. Granth Thornton have calculated that this could cost some people £26,000 a year! Feel those pips squeak! Denis Healey will be nodding in approval.

In addition, they're going to hit us with £8 billion of green taxes. Ming Campbell is quoted in the Daily Telegraph saying: "I see no reason for any increase in the overall burden of taxation." Really? Well he could have fooled me.

And what of the Local Income Tax, which acording to briefings is not mentioned in Ming's speech. Is it still LibDem policy or not? Because again, for middle England, it would cost an average family an extra £2,000 a year.

It seems to me a great mistake for the LibDem leader to announce such definitive proposals three years out from an election. It merely gives Conservatives and Labour something to attack - and believe me, it's an opportunity that won't be missed. These proposals are so extreme that I don't think it's going too far to say that they are the most left wing tax proposals since Labour's 1983 "longest suicide note in history" manifesto. If the LibDems were purely going after Labour votes I could understand the strategy, but the fact remains that if the LibDems are to gain extra seats - and indeed retain the ones they already hold - it is Conservative voters they need. And there ain't many Tories who are going to swallow this tax manifesto, unless they want to emulate a Turkey voting for Christmas.

LibDems in their defence will try to say that it's all very well for Tories to criticise, but David Cameron won't commit himself to tax cuts. What they don't understand is the point I started with. Either you have an innate belief in low taxes or you don't. People know in their hearts that people on the right want to cut taxes and people on the left want to raise them. Conservatives do not need specific commitments yet. But we do need to make the case for lower taxes, an overall lower tax burden and explain why high taxes are threatening to ruin entrepreneurial spirit. Unwittingly, the LibDems have just presented us with an opportunity to do just that.