The Labour threat and two Tory ** faux pas **

The Conservative lead over Labour remains at 7 percentage points (Con 41%, Lab 34%, LD, 15%). Hat tip: Conservative Home. However, as I observed earlier today, Brown may be about to make two “excessive” policy risks by printing money and cutting taxes.  Actually, the tax cut would be welcome, but would alas dent the Tories’ opinion poll standing.

Because there is a Labour threat — Brown winning a majority or hanging Parliament in a ‘snap’ general election — which means more disastrous Brownian (dis)economics and the grim prospect of a second Brown term.

The Tories’ two looming strategic errors, therefore, are:-

(1) They fail to propose an income tax cut before Brown does.  The Conservatives have promised to elimiate lower rate tax on savings (interest on wealth) as opposed to reducing taxes on income tax (earned income) — not very egalitarian.  As a result, they would lose credibility further (as it is clear that Cameron will not replace his mate Osborne), and may even gift Brown an opinion poll lead — if he appears to be more in tune with the people.  Which Brownian (dis)economics can never be, though it might seem so at the time — after all, these good mortgage deals nowadays for the wine-bibbing “chattering classes” make them just luv Labour.

(2) They bring into the Shadow Cabinet the vilest proponent of europhilia, Ken Clarke.* Just because Labour has woken Mandelson from his coffin does not mean that the Conservatives should wheel in Clarke. This would inevitably create a UKIP bounce that would not only be disastrous for the Tories (and a boon for Labour) in the forthcoming European elections — but would spill over into the forthcoming general election.  Cameron is already weak on Europe (i.e. EPP-ED) and bringing back Clarke, a throwback from the Major régime, could split the Tories but would certainly drive Eurosceptic voters away from them in droves.

Therefore, the Conservatives need to propose to cut income tax as well as keeping Ken Clarke on the back benches where he belongs — to see off the Labour threat.  Otherwise, there will be a Tory leadership election within the next 18 months if they let Labour back in or gift them a hung parliament.

Tax credits and ‘pauperisation’

Labour won the 2005 general election because many voters stayed at home – apart from core Tory voters -and the welfare-dependent turned out in force.  This is the calculation that Labour is using in its forthcoming announcement on tax credits, which Melanie Phillips rightly describes as causing ‘pauperisation’:

If Brown’s fiscal stimulus turns out to be merely yet more tax credits, he should be jumped on from a great height since this will increase pauperisation and dependency. What is needed is tax cuts for those in work on modest incomes. The danger is that Brown will simply increase state spending and use the crisis to pursue his agenda of redistribution and control. But the Tories, having got it wrong until now, have proceeded to reverse themselves and got it wrong again. They went along with Brown’s reckless spending programmes in times of plenty solely as a piece of political positioning, because they were terrified of being called ‘heartless’ public service cutters and thought the only way to regain power was by hanging onto the coat-tails of the left. Yet those times of plenty were precisely when they should have been calling for ‘prudence’ and cutting spending to put reserves aside for a when times got hard. They did not – until now, when they have ditched Brown’s spending increases on the grounds that adding to the national debt is an act of recklessness – even though it is probably necessary for these present circumstances and only these present circumstances. Their current position therefore seems to be deflationary and likely to make the situation even worse.

I empathise with her when she says she has “not and never has been a Tory”.  She’s not the only one, and there are many like me too who think that, on balance, the UK is better off with a Conservative Government than a Labour one.  The “Judas kiss” that the UUP have given the Tories will no doubt come back to haunt Cameron – the UUP is as discredited and as defunct a party as there can possibly be.

But that the UK is better off with a Conservative Government has never been clearer than on the Tories’ Tax cuts to help hard-working families Vs Labour’s Tax credits to win Labour the next General Election. 

Hopefully, though Labour’s core welfare-dependent voters will vote for more of the same, other people in England and Wales will vote against Labour.  We shall see – looks like June 5th for the General Election.

One simple way to ease the pain – cut taxes

Mr Boom (Brown) and Mr Bust (Darling) have achieved the recession that their Labour economic policies were always going to deliver – as Merv ‘the Swerve’ and Mr Boom admitted in the last few days. Now, having created a bad situation for the country’s economic and financial position, can they perhaps ease the pain?

Alas, no. Their economic policies have very much been about government intervention – the bank bailouts, nationalisation, the ‘spend our way out of the recession’, and Keynesian (a swear word if ever there were one) spending on public works.

There is one way by which this gutless Government could ease the pain. It is quite simple. They should cut taxes.

But unfortunately that is beyond the leftwing ideologues who run the country. Their socialism has been revealed, as the only way they know how to respond to an economic downturn.

How much longer people in the UK have to suffer from Labour’s policies is anyone’s guess. Tax cuts are the only way to ease the pain, but this lot aren’t going to deliver those.

Will anyone?

£6.50 an hour is hardly ‘social justice’

Low-paid council workers are right to strike for better wages in the current economic context.  And yet there are many economic fallacies – in fact, outright lies – being bandied about by the treacherous, traitorous Labour Government.  These are the very people who have suffered most as a result of 11 years of Brownian economic policy: and yet many of them will have rejoiced at Blair’s 1997 election victory and will have faithfully voted Labour in every subsequent election.

Why do I support a strike by UNISON members?  Because improving the pay of the low paid in the economic climate caused by Brownian-Darlingian economic mismanagement, the ‘credit crisis’ and rising prices is morally right and socially just. 

Let’s clarify two facts to begin with.  First, 250,000 low-paid public sector workers on £6.50 an hour (of whom 75% are women, according to UNISON) have rejected a derisory 2.45% pay offer.  So it’s not just about low-paid workers (on around £13k a year for a 40-hour week) who need improved pay in order to be able to pay the bills, school uniforms, mortgage or rent etc, but it’s about equal pay for women.  These workers provide essential services such as:

social workers, housing benefit workers, rent collectors refuse workers, school meals staff, teaching assistants, cooks, cleaners, architects and surveyors.

These workers have been hammered by the 10p tax rate debacle and by other factors such as rising petrol and food prices.  They’re now seeking a 6%, or 50p an hour, increase in their pay.  Darling’s attitude is that, ‘we have introduced the minimum wage so there.’  However, it was never supposed to be a maximum wage. 

Second, the economic fallacy that increasing the wages of low-paid public sector workers would be inflationary.  This is an outright lie.  This is a small part of the workforce which is in the public sector – therefore, their wage increases do not increase prices of private sector goods and services. 

Yes, the money would have to come from somewhere – council tax or from Central Government – but it is simply not right to say that this scenario is similar to the 1970s winter of discontent.  There is no hyperinflation like then and food price rises are largely due to external factors as well as the actions of City speculators and the biofuel industry, as last night’s Dispatches reported.

So there will be a strike and hopefully the Government and the councils’ employer association will see sense on this matter.  And save these low-paid workers from financial ruin.  But let’s not forget that the Government has got these workers into this mess with its policies. 

UNISON should have broken its links with the Labour Party in the interests of its members – do low-paid union members really wish to see their money go into the coffers of the Government that has ruined them?  And the union should not bankroll Labour at the next election – all they’ll get is slapped in the face.

Amazing as may sound to many trade unionists, the interests of UNISON members would be better served by a Government that implements radical low-tax policies for low-paid workers (as advocated by Conservative Home’s Tim Montgomerie).  If public sector workers on £6.50 an hour could keep more of their own money, then there wouldn’t be any need for this strike. 

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.

Let’s not forget it was Davis who started the Tory recovery: time for a promotion

I was looking back over some old Wilted Rose blog posts to clarify my thinking a little bit and the penny dropped.

One thing that people just don’t remember about the events of last summer – the Brown bounce, the credit crunch, the social breakdown crisis – was that it was David Davis who started the Tory recovery in the opinion polls.

Davis brilliantly captured the public mood on the social breakdown and gun/knife crime issue, while Jacqui Smith and Gordon Brown hid away from the public glare. Davis has now captured the public mood on our freedom and liberty, although the press and media (and some prominent Tories) don’t realise it yet.

Brown came in as Prime Minister and it made me and many others despair. I noted that, “the Conservatives on 33% – David Cameron who alongside David Davis stood tall against crime and social breakdown at the weekend.”

So, although the credit crisis was also starting off, social breakdown and gun crime – so tragically highlighted by the brutal murder of an 11-year-old boy in Liverpool – with feral youths running wild on our streets. The social breakdown crisis was dealt with brilliantly by David Davis, so much so that the Conservatives starting seeing an improvement, particularly winning the ‘key demographic, the over 65s, as the Brown Bounce deflated.

And the polls climbed upwards, and all along David Davis has been a superb Shadow Home Secretary which has given the Tories consistently high ratings on law and order.

Dominic Grieve may be well entrenched in his new post as Shadow Home Secretary. But actually, once the by-election is over and Davis returns with a huge majority and vindication of his much-criticised move, Cameron should bring him back into the Shadow Cabinet.

And what’s more: he should promote this enormous talent. In line with a radical shift towards a lower-tax policy and an abandonment of the crazy ‘commitment’ to match Labour’s spending plans, Cameron should appoint Davis as the Shadow Chancellor.

Yes, fix the economy, but please fix society too

Last summer, moved by the murder of an innocent little kid, 11-year old Rhys Jones in Liverpool, I wrote that it was time for the Government to get a grip on teenage gun crime.  Matt Sinclair hits the nail on the head with his analysis of family breakdown and the rise of teenage pregnancy and illegitimacy.

You only have to read this post to see how completely out of touch with the lives of hard-working families some sections of the ‘third estate’ are (despite many of them working and presumably living in LONDON):

The second area of weakness I would highlight is the current Tory fondness for decrying Britain’s “broken society”.

I cannot bear this phrase – as I don’t believe the country as a whole is suffering from social breakdown, despite screaming headlines proclaiming the contrary – and I imagine many centre-ground voters share my displeasure.

It smacks of a carping Opposition-based approach, not of a party ready to govern what remains one of the greatest nations in the world. Please drop it, Dave.

How is society not broken when an 11-year-old can get shot on a nice middle-class estate in Liverpool, if a 16-year-old gets his throat slit by a thug wielding a glass tray from a bakery, and if an 18-year-old boy who was loved by all who knew him (and who had a bright acting career ahead of him) dies at the hands of a murderer outside a pub in a nice commuter suburb of London?  Yes, Sidcup.

Many centre ground voters are actually tearing their hair out in despair, because of what they see around them.  Try wandering round Lewisham or Lambeth at night, where even “good kids” have started carrying knifes to defend themselves against feral youths.  They are scared, so are their parents, so is most of society.

As always, there is a more credible viewpoint in Simon Heffer’s column, where he links youth crime to welfare dependency and the welfare state, and describes society as “destabilised”.  The lack of a father figure in the home in many cases does not help matters (and, after all, Labour MPs essentially abolished fatherhood last week in a notorious parliamentary vote).  Welfare is much adored by the left, as Heffer explains, because it, ‘gives them a clientele to control. All in all, it is a corrupt, corrupting, demoralising and poisonous concept.’  He goes further and says that:

Why is it that the criminal underclass can carry on as it does? It is because the state pays for it to do so. Why do children grow up feeling they have to kill each other at the slightest provocation? Because the state has removed the need for them to grow up in a coherent family unit, in which such feelings would seldom be fed. Why, when sociologists from Charles Murray onwards have linked single parenthood, social and economic failure and crime, does the state still sponsor so extensively single parenthood as a career option for young women? Because it assists the socialist state’s mission to control and expand a clientele.

A lack of responsibility, spending of £620 billion on welfare (in which Heffer admits even Labour MP Denis MacShane can see opportunities for reductions), youth crime spiralling out of control… 

John Redwood has, as always, brilliantly analysed the current state of taxation and spending and concluded that the Government is ‘dithering’ on the issue.  Where better to start than welfare?

Tax cuts would help enhance people’s quality of life and, yes, it is important (absolutely vital, in fact) to fix the economy.  But one of the ways that both the economy and society could be fixed together is by slashing the welfare bill, handing the savings back to tax-payers and encouraging the workshy recipients to go to work – not the folks who are unable to work due to disability or mental health problems.

it is time to sort out two of the greatest ills that afflict the UK today, social breakdown/teenage crime/welfare AND taxation, at the same time.  Not only can people keep more of the money they earn.  But also families can be supported to stay together.  And people can be encouraged to work, rather than be dependent upon welfare, making something positive of their lives.  And youth crime can be stamped out.

Labour makes the “Poverty Trap” worse: it hasn’t been the party of the working class for a long time

As someone whose father worked in a low-income job, I know what effect this has on the family finances.  But people who work in these jobs, when they could just as easily claim the dole or incapacity benefit, are the unsung heroes of the UK today.

Labour’s hatred of these people, who could potentially have been its staunchest supporters (and many of whom probably were in the past), is reprehensible.

Not only has Labour ratcheted up the “Poverty Trap”, where people are better off on benefits than in work, by a variety of measures including the structure of its tax credits system.  But now, as BBC News reports, by abolishing the 10p income tax band, the Government:

penalises childless people in low-paid jobs. The Treasury Select Committee warned the ‘main losers’ could be deprived of as much as £232 a year. Chairman John McFall said they were an ‘unreasonable target’ for the tax simplification measure.

How many more people, whether white British or, in many cases, black and Asian, (and including a lot of women) are going to be forced into worse economic conditions and possibly out of work all together, by this discredited, despicable Government?

On a day on which, for many people, income tax falls from 22p to 20p in the pound – only to be cancelled out by the abolition of the 10p band – I would not even soil the phrase “tax cut” by using it to describe this dishonest policy by Brown and Darling.

What are needed are genuine cuts in taxation for people on low income – whether Single People, Couples without Children, or Families – to incentivise work and also to reward those who actually are working. 

Tax cuts for the rest of us could wait until later, but at least can we stop penalising the people who don’t have to work but do because of a “work ethic”, or because it makes them feel as if there is meaning to their lives, or for whatever motivation.

It is also time to stop the lie that Labour is a Party for the working-class.  It gave up that distinction a long time ago.

The TPA has won the argument, but can someone please tell Labour?

The TaxPayers’ Alliance (TPA), which was only formed in 2004 by Andrew Allum, Matthew Elliott and Florence Heath “to represent taxpayers and to fight for lower taxes”, has won the argument on taxes.  The old consensus, which formed some time in the 1990s, that taxes should not be cut but in fact should be raised in certain circumstances, has been well and truly broken by the TPA.

Whilst the TPA has won the argument on tax – for example, Labour scrambled to make a pale imitation of George Osborne’s brilliant inheritance tax proposals – elements of the Labour left are still influencing Government policies.

No doubt the business start-up rate will fall, and indeed there may be a rush to sell small firms, due to the despicable increase in Capital Gains Tax from 10% to 18%.  This was a sop to the Trades Unions, who promise to fund Labour’s election whenever that is, who have been aggravating about Private Equity bosses for years.  Whilst the CGT increase means that Private Equity Bosses still pay less than the 20% lower band tax paid by everyone else, this measure has inadvertently penalised many small business owners.  We all knew that Brown never meant what he said about entrepreneurship, and ‘enterprise for all’, and in fact all he has achieved is damaging the British economy and the main creators of new jobs – small firms.

It was reported that £1.4bn of taxes are being raised by Darling’s “mini budget”, for example by robbing pension funds (again) and many other tax-raising, entrepreneurship-harming, family-crushing measures.

More gallingly, today’s Telegraph reports that a Labour ‘opinion former’, an adviser to Brown, recommends replacing council tax with a new income tax:

“Take Council Tax away from the local authorities and make it a national property tax, easier to administer; easier to administer more fairly. Cap the property tax by reference to income, to solve the problem of the asset rich, income poor households. But don’t do any of this without serious investment in public sector skills to capture the benefit of change.”

Yes, Council Tax is unfair, but if Labour were to go down this road they would risk experiencing the same slump in popularity that the Tories achieved when they introduced the Community Charge.  Indeed, this could be Labour’s own poll tax.  Brown is so risk averse that it is unlikely he would go down this road, but one never knows.

The TPA has won the argument on taxation, so it is time that someone actually told Labour that this is the case.  Their tax-raising ‘mini-budget’, and the fact that the TPA is leading the debate on policy, has already contributed to a slump in the Government’s fall in the opinion polls. 

Such policy measures may have been popular with Labour’s ‘core vote’ when it governed in 1945-1950, 1964-1970 and 1974-1979, but (a) Labour lost the subsequent election, and (b) the Labour ‘core vote’ is not the old socialist, ‘soak-the-rich’ (i.e. soak-the-middle-classes) types of generations past.  Many people who have voted Labour since 1997 are exactly the sort of people who would be damaged by such a measure.

Think again, Gordon et al, the TPA has won the argument.  If you go down the road of a new property/income tax, you will be well and truly obliterated at the following election.  But actually that would quite suit the youngsters, such as David Miliband, who can’t wait to get the top job, but by then the top job will  be Leader of the Opposition in a Labour Party that will be out of power for a long time.