Tories and the debate Labour wants to have

Tim Montgomerie is worried that the Tories intend to match Labour's spending plans over the period of the comprehensive spending review. And he is certainly right to raise the issue, given the new debate now taking place on the size of the state and taxes.

But I think it's worth going through the argument carefully.

First, the position on matching the CSR was taken for this spending period. Now that the election has been delayed, and may not take place until 2010, only part of the settlement will cover an incoming Tory government. The next election will almost certainly be fought on different figures.

Second, the political argument for matching their spending commitments is the one I made in an earlier Times and referred to yesterday - anchoring. The debate starts with Labour figures and the Tory figures are then seen as risky. In power the dynamic is reversed. Alastair Darling surrendered some of this advantage over inheritance tax. But Conservatives should be very cautious over just how much the situation has changed.

Third, accepting that anchoring exists does not mean failing to make the argument for lower taxes, and it does not mean failing to reduce taxes in power. The whole point is that the last two Tory campaigns engaged in the argument on tax and spend and lost. The approach of setting out randomly selected cuts in spending (or slowdowns in certain areas) didn't succeed. The next campaign needs to be different. The inheritance tax shows that shifting from unpopular to more popular taxes can succeed spectacularly where the old approach failed.

Fourth, the old approach of announcing a lower spending settlement was not just bad politics, it was bad policy, too. Tories do not, out of office, really know where to make precise savings and reform so the areas selected were sometimes eccentric and the amounts claimed questionable. The timescale was also questionable. An incoming Conservative Government might take at least a year to save money, and two or three years to achieve significant change. It is silly to get into a political tangle about Labour's CSR when that isn't even going to be the figure a Tory government would be changing.

Finally, there is a critical difference between the smaller state and lower taxes. Some moves to a smaller state - educational choice - will, certainly in the short to medium term, cost money even if they reduce spending in the long term. The whole freedom and small government agenda should not be boiled down to a debate on reductions in spending during the period of a single Labour spending round.

Are there still Conservatives who don't realise that this is the debate Gordon Brown is dying to have?

Comments

[Mountjoy]

I agree with your conclusions, Daniel, but Gordon Brown is desperately trying to manoeuvre the Conservatives into spending cuts. Osborne has been clever about how he is funding the IHT and stamp duty cuts, and he has outmanoeuvred Labour. Let's see what panic move Labour make next, as Osborne does not have to outline any other tax policies for a long time (assuming we are talking about 2009 or 2010 for a general election)!

[Maggie Snook, Wool]

Tories,Do tread carefully- be watchful and guard your tongues.
Take heed of wise elder voices!!
This is now a waiting game.
Young Labour cubs have got too cocky, be sure the Tory bright young things do not follow suite.
Here we sit in the far ends of our counties , waiting and whispering and wondering, what next?