Are the terms of debate changing?

October 16, 2007 10:42 AM

Philip Stephens has an interesting piece in the Financial Times on whether the terms of political debate are changing in favour of lower taxes:

"The politics of the 1980s were defined by a view that tax cuts were good and public spending wasteful. The public realm was neglected in favour of individual aspiration. New Labour finally changed that argument. For the past decade, spending has been seen as virtuous, tax cuts selfish. Tony Blair's genius was to cast economic competence and social justice as natural handmaidens.

The vital insight was that, even in the 1980s, voters instinctively favoured high spending on public health and education. But they did not believe Labour would spend their money wisely. Instead they would likely pay higher taxes without improvement in public services. Only by overturning such scepticism could Mr Blair win.

"The Conservatives' problem since been a mirror image of Labour's earlier travails. Voters have at once doubted their ability to deliver tax cuts and feared that the price would be neglect of vital services.

"The big political question now is whether there has been a shift in the terms of trade. Has the country begun to decide that much of the money poured into public services since 1997 has indeed been wasted? And is it coming round to the idea that Mr Cameron could reduce taxes without neglecting schools and hospitals?

"In truth, neither side knows the answer. Hence Mr Cameron's cautious insistence that he will match Labour spending plans. Mr Brown's response is to say that the Tory sums do not add up. He may be right. But debates about the arithmetic will not be enough if the government loses the argument that taxpayers' money is being well spent."

Dragonsbackground
It does indeed seem clear that the terms of debate are changing. The increase in capital gainst tax  announced in the Pre-Budget Report last week has encountered well-founded opposition from those who will see an 80 per cent increase in the tax rate they pay for business assets held for over two years. But the sheer ferocity of the response from business groups and many others, including the BBC Dragon's Den programme, is something we have not seen for a number of years.


On the day that Labour were elected in 1997, the then head of the CBI, Adair Turner, appeared on the BBC and said that the business community would be happy to pay higher taxes. How times have changed for the better!

Philip Stephens has an interesting piece in the Financial Times on whether the terms of political debate are changing in favour of lower taxes:

"The politics of the 1980s were defined by a view that tax cuts were good and public spending wasteful. The public realm was neglected in favour of individual aspiration. New Labour finally changed that argument. For the past decade, spending has been seen as virtuous, tax cuts selfish. Tony Blair's genius was to cast economic competence and social justice as natural handmaidens.

The vital insight was that, even in the 1980s, voters instinctively favoured high spending on public health and education. But they did not believe Labour would spend their money wisely. Instead they would likely pay higher taxes without improvement in public services. Only by overturning such scepticism could Mr Blair win.

"The Conservatives' problem since been a mirror image of Labour's earlier travails. Voters have at once doubted their ability to deliver tax cuts and feared that the price would be neglect of vital services.

"The big political question now is whether there has been a shift in the terms of trade. Has the country begun to decide that much of the money poured into public services since 1997 has indeed been wasted? And is it coming round to the idea that Mr Cameron could reduce taxes without neglecting schools and hospitals?

"In truth, neither side knows the answer. Hence Mr Cameron's cautious insistence that he will match Labour spending plans. Mr Brown's response is to say that the Tory sums do not add up. He may be right. But debates about the arithmetic will not be enough if the government loses the argument that taxpayers' money is being well spent."

Dragonsbackground
It does indeed seem clear that the terms of debate are changing. The increase in capital gainst tax  announced in the Pre-Budget Report last week has encountered well-founded opposition from those who will see an 80 per cent increase in the tax rate they pay for business assets held for over two years. But the sheer ferocity of the response from business groups and many others, including the BBC Dragon's Den programme, is something we have not seen for a number of years.


On the day that Labour were elected in 1997, the then head of the CBI, Adair Turner, appeared on the BBC and said that the business community would be happy to pay higher taxes. How times have changed for the better!

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