Cutting debate


Talk of tax-cuts has caused a ripple of debate among Conservatives. While Labour and Liberal Democrat MP's and supporters appear to have tied their flag firmly to leaders Brown and Clegg – despite such policies being anathema to many – there is much debate within the Conservative movement on whether Cameron is treading too lightly in his tax promises. The back-and-forth between Guido Fawkes and Danny Finkelstein has so far been the most public example of this.

In reaction to Liberal Democrat and Labour promises of tax-cuts, the Conservatives have so far only promised to scrap National Insurance for one year for employers who hire new workers unemployed for three months or more. Lower spending on unemployment benefits would pay for this. Prior to this Cameron promised to freeze council tax by cutting back on government advertising and consultancy fees; as well as take the family home out of Inheritance Tax and nine out of ten first-time buyers out of Stamp Duty by introducing a levy on non-domiciles. Tax-cuts? Yes, but only just.

With the battle lines between Finkelstein and Guido firmly drawn, it is worth considering whether there is any way of reconciling their arguments. Essentially they disagree over what they consider to be the public's perception. Finklestein is arguing that the Conservative Party shouldn't offer tax-cuts because the public wouldn't trust them (especially with public services), whereas Guido postulates that the public is ready for a tax-cutting agenda. But perhaps there is another way of looking at the issue?

In this debate, Finklestein and Guido take tax-cuts as the starting point in their arguments, whereas if one starts with government waste then Finkelstein's fears can be allayed and Guido's desires met. Even taking the black hole of the NHS out of the equation, government waste is truly profound. If the Conservatives were true to their philosophy they would build the argument for tax-cuts on the back of a significant scaling back in the size of government. As such, they would claim to be the party whose tax-cuts add up, as opposed to the party loading up debt with a tax on the future.

Which begs the question: does the Conservative Party actually believe in smaller government?