Are genuine tax cuts coming our way?

Today's Financial Times reports that the Shadow Chancellor George Osborne signalled yesterday that the Conservative Party will be going into the election on a multi-billion pound platform of tax cuts.

So a major politicial party is finally recognising the hardship that ever-increasing taxes is causing to so many families and pensioners across the country, and more importantly, is actually going to go into an election promising to do something about it.

Well, not quite. As the Financial Times reports, George Osborne also made clear yesterday that any proposed tax cuts will be a) matched by tax rises elsewhere, or b) merely aspirations rather than firm commitments. So we're back to where we started - no promises of overall tax cuts in the manifesto, but a hope that the overall tax burden will be lower at the end of the first economic cycle of a Tory government, provided that the proceeds of growth will be shared in the right way.

Well, again, perhaps not quite. The Financial Times article states:

"George Osborne gave his strongest endorsement yet of a £21bn package of
tax cuts recommended by the Tories' tax reform commission, including a
reduction in corporation tax and the axing of stamp duty. "I want much
of what they say to form the basis of a programme for government" [he said]."

Despite the new wave of enthusiasm among politicians of all parties for new green taxes, it would be hard for George Osborne to find an extra £21 billion from green taxes, particularly given their justified unpopularity with ordinary people. Gordon Brown has of course already implemented parts of the Tax Reform Commission report, so if George Osborne implemented all the rest of it, the overall cut would be less than £21 billion. Still it would be a sizeable package and might therefore imply a long-overdue reduction in the overall tax burden.

So you never know - perhaps the Conservative Party is slowly coming round to a sensible position. We will watch future developments with interest.

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