Tories and the Turning Point

Anatole Kaletsky has written an important column this morning which you shouldn't miss. His final paragraph sums up his argument neatly:

The upshot is that the burden of proof in British politics is shifting. That taxes and public spending must rise for ever can no longer be taken for granted. Political parties who want lower tax – and by implication smaller government – no longer seem out of tune with the times. And this ideological shift means the beginning of the end for Labour government.

I think he is right.

Meanwhile over on his blog Nick Robinson suggests that:

This is curiously a moment of maximum danger for Tory modernisers

And I think he is right too.

The inheritance tax cut promise is given almost all the credit for the shift in Tory fortunes.  There is a danger that Conservatives could jump to the wrong conclusions and think that this proves the call for "red meat" announcements on tax was right all along. That's why I think Nick is correct.

In fact the story of the Tory revival is more complicated.

First, the polls do not prove that inheritance tax was the only reason for the shift. The shift started happening before the Cameron speech but inheritance tax was only one of the things going on. The display of unity, the quality of the speeches and Cameron's television performances were all, I would argue, important parts of the boost. The Tory Party looked electable, or at least a great deal more electable. Inheritance tax played a big role, but not alone.

Second, the balanced tax message of George Osborne is what made the inheritance tax message work. He announced that he wants a low tax economy but netted off the inheritance tax against another kind of tax, not, as in previous elections, a notional spending cut. This made it far more credible and seen as a coup. The Treasury attempt to undermine it, failed. The modernisers have learned the lesson of previous failed attempts to win on tax.

Third, inheritance tax was very well chosen. People see it as a charge rather than a routine tax and they object to the double taxation. The normal problem with tax promises is that people don't believe them, they think the tax cuts will be cancelled out by a matching tax increase. Cutting inheritance tax is different. They think the specific tax is unfair and so they are willing to see another tax go up to pay for it. Especially if the other tax doesn't fall on them!

So it would be wrong to abandon the modernising approach to policy because of the success over inheritance tax.

However.

Anatole Kaletsky's critical point is that the debate has now changed. Alistair Darling has made a terrible error.

As I explained in an earlier Times column, the advantage the Government has on tax and spend is anchoring. Pundits start with their figures and view Tory figures as the change. Not any more. Darling has surrendered a very large part of their anchoring advantage. This will make advancing a tax cutting agenda much easier.

Comments

[David]

Unfortunately Daniel, your comments come too late. A man of whom I must regretfully say is one of the most influential in the Tory party, Tim Montgomerie, has already made a comment regarding Boris Johnson's campaign that, as it lacks a vision, he should commit to cutting council tax. Montgomerie and his coterie are the greatest barrier to the return of the Tories.

[David Moss]

Anatole Kaletsky says this is the beginning of the end for New Labour. Support for this view comes from an unlikely corner -- the leader in today's Guardian [1], 'Things fall apart':

"... the expected has fallen apart and plans will have to be changed ..."

Like Mr Kaletsky, the Guardian think this will involve a "long march towards a general election in 2009 or perhaps even 2010" and that:

"This march will require open minds and nimble feet, as well as great confidence in the destination."

Open minds? Nimble feet? Great confidence? Who can they be thinking of?

They obviously have a wickeder sense of humour on the Guardian than they are usually credited with.

One serious point. The irrevocable collapse in our sub-Prime Minister's credibility [2] suggests that we cannot wait until 2009 for a general election and that we will not have to [3].

----------
1. http://www.guardian.co.uk/commentisfree/story/0,,2188242,00.html

2. "Sub-Prime Minister" is pinched from the conservativehome website.

3. Please see Brother Big's comment on the Guardian leader.

[David Moss]

Question. Who wrote:

1. This was more than a horrible humiliation for the prime minister [referring to events this week].

2. In 1994 Tony Blair and Gordon Brown purged socialism when they forged the New Labour project ... This week Brown and Darling all but killed off social democracy too.

3. There is a stunned disorientation among Labour MPs, alarmed by both Brown's vision void and his sudden incompetence. Talk to ministers and wise old heads of Commons select committees, and they are reeling with shock. The backbenches sat through Darling's politics-free performance on Tuesday like the Animal Farm beasts gazing through the farmer's window in the final scene.

4. How has Gordon Brown managed in such a short time to shipwreck himself and his party?

5. ... when Cameron threw "phoney" at him in Prime Minister's Questions, it stuck like napalm ... He has lost his character just when he needs trust to strengthen his arm for the coming European treaty row. His party is suddenly gripped by doubt that the big brain has a strategy. Looking back on his content-light conference speech, it asks what he has been thinking this past impatient decade.

Was it:

(a) Daniel Finkelstein

(b) Jeff Randall

(c) Matthew d'Ancona

(d) Simon Heffer

Answer: http://tinyurl.com/2grwqa