Three Thousand Versts of Loneliness

Neil O’Brien argues in the Telegraph that the Conservatives should drop plans to cut inheritance tax. I can see his point. Although George Osborne’s proposal is to be funded by a tax on non-doms, it is inconsistent with the imperative of tackling Britain’s budget deficit. Quite simply, tax cuts are an aspiration for governments beyond the immediate future. In the short term priority must be given to combating the public debt and delivering public services as efficiently as possible, whilst striving to retain quality. Making inheritance tax an exception to an important rule has the capacity to confuse an issue where the Conservatives appear increasingly credible in comparison to Labour. The electorate is not naïve enough to swallow Gordon Brown’s claims that his government represents continued investment in public services, whilst the Tories offer cuts. It is fully appraised of the baleful state of the nation’s finances. But whilst voters understand that spending will be slashed...

There is no doubt that David Cameron has a difficult balancing act to perform in order to persuade the United Kingdom that his is the most efficacious economic policy for tackling the current crisis. On one hand he must maintain that Gordon Brown’s plan to expand exponentially the debt bubble which got Britain into the mess which it finds itself in is unsustainable. He is bound to contend that Britons must become a responsible nation of savers, rather than a populace addicted to debt. On the other hand he will argue that under his tenure the UK economy would begin to grow again, that Conservatives have policies which would free up credit for business and mitigate the worst excesses of correction which the market is likely to exact. It is a case which might appear to contradict itself, but it is also perhaps what the country needs to hear. If Cameron’s solution to our financial problems seem paradoxical, that is because it is a paradox in the financial system which he is seeking to ...

I previously recorded scepticism as to the efficacy of Labour’s 2.5% VAT cut, aimed at stimulating the ailing economy. Preliminary estimates indicate that in the run up to Christmas the government’s strategy proved an abject failure. Whilst shoppers are now responding to slashed sales’ prices, a tiny cut on most consumer goods proved neither here nor there. In response George Osborne is preparing to unveil the Conservatives’ proposed tax cuts. At first glance these alternatives appear to make considerably more sense than Labour’s £12 billion scheme. These cuts will be funded, promising to mitigate the crippling burden of debt which the current government is intent on inflicting on Britain’s tax payers. If Osborne becomes chancellor he will seek to cut National Insurance Contributions, which Labour has stealthily increased. Slashing NIC will benefit all earners as well as businesses, thus providing a real stimulus which finds its way directly into people’s pockets. Additional...

Conservative Home is canvassing Tory supporters as to their preferred strategy on 45p tax for high earners. The website quotes shadow treasury spokesman, Phillip Hammond, “Clearly if the government is going to announce a huge package of additional borrowing today there will have to be large tax rises after the election. Of course people on higher incomes will have to pay their share of that but don’t let anybody be deluded by the political spin into thinking that the black hole that Labour has created will be filled by a tax on a really quite small number of very higher earners, it won't. We are talking about a couple of billions of pounds, the hole is likely to be a hundred billon pounds big, its going to require tax rises across the board and I’m afraid it will be ordinary families and businesses that are hit not just the very rich.” If the statement seems somewhat ambiguous on the merits of the 45p rate, I’d imagine that the ambiguity is deliberate. Labour will not recoup a...