TaxPersonal TaxView from the House

View from the House

Even watered down promises, as have now appeared in the Conservative Party's pre-manifesto document, Believing in Britain, have a nasty habit of coming back to haunt politicians.

William Hague had already publicly abandoned the frankly ludicrous pledge to reduce taxes irrespective of the state of the economy.

But, even within this context, there still remains a vague undertaking to cut taxes and at the same time to raise public spending in key areas of the economy. The Conservatives are, on this issue, landing themselves in a mirror version of the kind of dilemma facing Labour before the 1997 election.

As Gordon Brown spoke of his ambition to lower the starting rate of tax to 15p or even 10p, saying he had no plans to impose penal tax rates on the wealthy.

But, accurately pre-empting groans from dyed-in-the-wool socialists (there are still some about) at this proposal, Brown was forced to say: ‘Our prudence and responsibility is not an abandonment of socialism it is the very essence of it.

‘This is not a choice between morality and economics, between principles and realism, between prosperity and social justice, between head and heart. I don’t want this party to stop dreaming dreams, to water down our idealism or discard our vision.’

Fine words, but not very convincing to those who realised that Brown was embarking on a crude vote-winning strategy.

Labour’s former deputy leader Roy (now Lord) Hattersley, said at the time Labour would have won the 1992 election had the party ‘promised’ increased taxes to improve public services.

Don’t you believe it. When people are asked whether they would be prepared to pay higher taxes, have better hospitals and schools, they invariably say ‘yes’. But when they get into the privacy of the polling booth they vote the other way. A cynical view, maybe, but a voter’s natural instinct is to keep as much as possible of his hard-earned cash in his own pocket.

The problem faced by Hague – and in the past by Brown – is he cannot tell the electorate that voters are more altruistic in public than the polling station. They would be confronted with howls of injured anguish and, more to the point, many lost votes.

And that would never do …

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