Tax cuts are essential for combating social breakdown

Fraser Nelson, writing in the most recent issue of The Spectator, observed that the Tories are seeking to focus on social policy, rather than the economy. The thinking behind this is that Labour’s opinion poll ratings are already sliding as its record for economic competence has been lost.

However, it would utterly foolish of an incoming Government not to tackle the economic problems that underlie much of the country’s social breakdown.

Tax cuts for lower-income workers, and abandoning the absurd commitment to sticking to Labour’s spending plans, are advocated by Tim Montgomerie in an excellent article in today’s Telegraph. Tim demonstrates again why he should be an MP, if not in 2010 then at least in 2014/15, and a future Cabinet Minister. His proposals should become Conservative policy.

Many public sector low-income workers (e.g. £13k a year), as trade unionist Mark Serowtka rightly pointed out last night on Newsnight, are suffering from rising prices and the impact of Bank of England interest rate policy on their mortgages, and are understandably demanding wage increases – possibly indicating a number of strikes. 

The danger is that high-tax statists could dictate the policy and preclude tax cuts in favour of increased public spending (and, therefore, by implication lower economic growth, real income and living standards), leading to a failure to get out of the economic morass that Brownian policy has created). There’s no point Osborne (or whoever the next Conservative Shadow Chancellor is) becoming another Alistair Darling.

For some of the more stupid Tories, ruling out tax cuts is similar to Blair’s Clause 4 moment on public ownership. However, the key difference is that Labour was wrong supporting public ownership and renationalisation; tax cuts are morally right.

Tax cuts would not only ease the burden on low-income workers, but it would incentivise British people (whatever their ethnic group) who are currently living on benefits to start working.

Creating a new culture of work in areas of ‘worklessness’ or high unemployment can only help to reverse social breakdown. Economic policy, and taxation policy in particular, are inextricably linked with social policy.

Tax cuts could be the incentivising ‘carrot’, that would be more effective than a ‘stick’ approach to forcing people into work.