Sky New business editor Michael Wilson

After that terrible week for the economy – and who knows what the real figures are - your comments sum up the frustration which the Tories hope a substantial majority of Britain’s voters are feeling.

Question is, how do David Cameron and George Osborne take the advantage? I spoke to Osborne last week and, of course, asked him when he’d address the tax issue. He, as usual, said that it was ‘ammunition for use later’.

But you can see that the Conservatives are moving towards tax cutting proposals, as David Cameron said today ‘after a decade of reckless spending under Labour, Britain needs good housekeeping from the Conservatives. We need to start living within our means.’ Now, who does that remind you of? If you need a clue, think Grantham and ‘housekeeping’.

While Cameron teased tax cuts, saying that Britain had ‘reached the limits of acceptable taxation and borrowing, the Tories face two big problems.

First, Labour would be mad to call an election until the 2010 time limit, when it’s conceivable that our present economic woes may be over. At which time, Gordon Brown would claim that he was the right man to have been trusted with the economy through difficult times.

But the other problem is more alarming. When Labour came into power in 1997 the ship of state was still roughly heading to the right of the political sealanes.

By early 2000, Britain was beginning to veer towards the big government, big taxing, big public spending state that would be familiar to those whose working lives fell in the sixties and seventies.

By 2007, government figures revealed that one in three households across Britain is now dependent on the state for at least half its income.

Incredibly, there also grew a sort of mental immunity to rising taxes. Unless I missed them, where were the howls of protest at the stealth taxes, the rise in national insurance contributions that somehow wasn’t announced in the Budget speech, and where was the protest at the non-indexation of income tax bands... not one since 1997?

Do some people really believe that more public spending automatically means better public services? Presumably they did, and presumably they still do.

I don’t wish to be political, either side, but I would make the observation that the Conservatives have a way to go before they can change this deep-rooted acceptance of big, expensive government. 

Britain is still, in terms of spend and borrowing, another Sweden. But the Swedes can afford it.

Comments

[a-masson 28 May 2008 09:05:18]

why would anyone want to take on the hidden debt that the prime minister never admits are going to be on future generations when he is long out of being in a position of any responsibility

ajm aberdeen

[D. Atkinson 21 May 2008 15:42:38]

Nu labour and now Gordon Brown all thought that if they had enough cash they could produce heaven on earth. All those disadvantaged people could have everything they wanted. Unfortunately if you encourage idiots to stay at home and have kids, you end up with more idiots to look after, but Hitler's exploits made that line of thinking unpopular. In reality as the old saying goes - the road to hell is paved with good intentions. A simple correctly used welfare system is an advantage to all, but today it is out of control. Inside Brown's Brain >> "Just tax them a little bit more and we could build more schools, a bit more and we could save the planet and after that , a bit more for ....." . "Meanwhile we will expand the public sector, this will kill 2 birds with one stone 1. We will get a few million of the uneployment register and 2. we will buy ourselves some more labour voters." This works well until the economy can't provide enough money to pay for all the wage rise demands and index linked pensions. The public sector monster which labour has created is poised to bite the hand that feeds it . In another 15 years we could be voting for labour again as we will have forgotten all about today.

[Carol Kent 20 May 2008 00:23:09]

Surely a quick way of saving would be to get rid of the unelected Regional Assemblies, tax credits - raise the allowance instead. Can't see Baby Bonds being much use either unless money is added and if you can afford that you will probably save anyway. Only help young people to stay at school if they have the intent and ability to go on to further education. Changing the welfare state will be hard but it has to be done sometime, we simply can't afford to supportan underclass who will not work or want and just produce more who have no idea of working for a living. Go back to what it was meant for, to help the sick, the old and the unemployed who have previously contributed, Just think how much we could help them if we were not keeping all these others. As things stand only the rich ot those on benefits can afford to stay home with their children, undermining family life. The other thing that needs sorting is the vast difference between government employee pension conditions and the ruination of the private sector pensions and the doubling of council tax to help pay for the former, it simply can't go on. Civil servants and other local/national government are no longer poorly paid and no one in the private sector could afford to buy salary/index linked pensions.
That would be a start.

[Rich, Warwickshire 19 May 2008 20:08:45]

I suspect the reason why higher taxes escaped public revolt, is that since 1997 we've had a decade of rising houseprices.

Every homeowner, if they'd wished, effectively had a 2nd income based on equity release.

It's all changing now of course!

[Elizabeth Davies Cape Town 19 May 2008 17:01:38]

There is no rush to give the Labour party all the new ideas, Cameron is waiting for the general election, and the Conservative manifesto. Everytime the Conservatives introduce interesting tax policies the Brownies jump on it and claim it for their own, keep your friends close and your enemies closer they say, and keep your own council.

[Michael Cornwall 19 May 2008 16:21:49]

I do not really understand the implications of what Cameron says. From where I stand I see a situation , where people, everyday people,are unsure of their lives,unsure of how things are going to pan out. I think it would be helpful if Cameron was quite specific in all of his proposals. To continue with my update I just had a good chat with my bank manager who told me he could park in a carpark in a busy holiday resort, usually he has to go to the top car park but there were 30 spaces available,I believe this is the same as what you in the city call counting cranes. I think the holidays will be last minute , apparantly the camp sights are doing okay which, means people buying down,in every way,I have today had a near record day of sales but it is all buy downs and then there is the uncertaity of tomorrow. I still think we need good leadership. What is the plan then.

[Tony, Berkshire 19 May 2008 15:05:23]

Shares seem to be doing very well on a daily dose of bad news. We of course have complete faith that both political parties are ensuring the market is not being manipulated and that the FSA have the teeth and tools, to look after our interests. Do you have a feeling that all that taxation is going to be required to bail out those who are essential to maintain confidence in financial markets (again!)? Who ever can sort that lot out will get my vote.

[Khalid 19 May 2008 14:55:52]

Sir
I think Robert has cut the mustard thus far as the essence of prudent policies, however, is it not the aim of those is power to provide value for money?
Tax cuts are welcomed by all, yet any tax raising policy once initiated is very unlikely to be reversed so long as money is being made.
By way of further example, the congesiton caused by the low emiision paper based forms do not in the slightest assist local climate becuuse it will takes the developing world nearly half a decade to catch up, whilst the atmosphere continually gets poluted at our expense.
Suffice to say, having endured ten years of over zealous tax doctrines, the [Only Way Is Up- Yazz]

[Robert, Scotland 19 May 2008 14:14:54]

It is not the acceptance by the people of big expensive Government which is the Conservative's biggest obstacle to over-come. It is "dependency Britain" which is the challenge. This is not re-stricted to those on the more obvious benefits like; Pension credits, child credits, incapacity allowance, Disability allowance (care & mobility), attendance allowance,etc.
It stretches to the perks given to Civil Servants, continued early re-tirement when the rest of us are facing up to indefinite working lives. Taxpayer funded final salary schemes that are now all but gone for those working in the private sector.
None of the people benefiting from the above can reasonably be expected to vote out this "Santa Claus" Government. Even although the continued existence of these unfunded perks leads us further and further into an unsustainable level of Government debt. Do turkeys vote for Christmas?
It is not the Conservatives we need to save the Country, the Samaritans would be a better shout.