In the ongoing battle between Conservative supporters who want Cameron to take a small government low tax approach, and those who would prefer he sticks close to Labour policies, the former are finally starting to win out. Cameron has announced that if elected he would scrap taxes on basic rate taxpayers' savings and would increase the level of non-taxable income for pensioners by £2,000 a year. The tax cuts will be fully funded by lower public spending.
Cameron is now committed to cut public spending by ₤5 billion. It will no longer be anathema within Conservative circles to hear opinions on the shrinking of the state. Ideally we would see promises of more than a ₤5 billion, though it is a start. In response to Cameron Labour has warned that transport, research and universities would be at risk from Conservative cuts. As these are areas best out of government hands, we can only hope that Labour's warnings come to fruition.
Scrapping taxes on basic rate taxpayers' savings is not so much a move that incentivises saving, but one that goes some way towards not disincentivising it. This will offer a practical and potentially popular alternative to Labour profligacy and waste; failure underwritten by debt ridden public finances. The reality has fallen desperately short of the rhetoric; the mindless mantras Brown has been repeating for the last few months make Tony Blair’s spin look like profound intellectualism.
Of course, Cameron has mantras of his own. To talk of attacking “excessive materialism" makes him sound more like the Archbishop of Canterbury than is really comfortable. However, given the choice, Cameron’s paternalism should perhaps be tolerated. We may have to give him our soul, but at least he will steal less of our money than the chap currently in charge.
