Great news for taxpayers. The Conservatives have dropped their commitment to match Labour's spending plans. This is a good idea for a huge range of reasons but here are a few of the key ones:
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- Over the last ten years British taxpayers have been ripped off. We wrote about this in the report The Great British TaxPayer Rip-Off (PDF). The tax burden has increased by 51% in real terms but charges have increased and services been cut at the same time.
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- Huge amounts of taxpayers' money is wasted each year. The Bumper Book of Government Waste puts the total at £101 billion. European Central Bank research, cited in the Bumper Book, implies a total of £94 billion.
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- High deficits are being driven by massive increases in spending, running at around £30 billion a year for some time. This meant that we were borrowing huge amounts even before the crisis began. In that context, in order to reduce borrowing what really needs to happen is for the Government to reduce spending. In the report Gordon Brown's Economic Failure (PDF) we noted that the Government's real liabilities amount to a massive 129% of GDP.
- Government spending reduces economic growth. In the Gordon Brown's Economic Failure (PDF) report we set out how Brown's increased spending has already probably cost us around £12 billion in GDP per annum.