Magazine article The Spectator

McCain's Failure Is a Warning to Cameron: Offer Tax Cuts before Brown Does

Magazine article The Spectator

McCain's Failure Is a Warning to Cameron: Offer Tax Cuts before Brown Does

Article excerpt

There was something almost comic about Gordon Brown and David Cameron's rush to associate themselves with Barack Obama's victory, each offering their own quite different interpretation.

The Prime Minister declared that people are looking to government to help them during the economic downturn. The Conservative leader, with no less confidence, asserted that people are obviously hungry for change.

But neither British party leader will have felt comfortable with the slogan which the Democrats were pushing in every swing state until the last possible minute: 'Obama-Biden for tax cuts'.

The Conservative leadership persuaded itself some time ago that elections are not won with such a message. The view, held in some Cameroon quarters with almost religious fervour, is that the British thrice rejected tax cuts and should not be offered them again. When George Osborne's political capital was greater, he would speak about 'educating the party' on the issue of tax cuts.

Yet at the last Tory conference, I met some delegates only half-joking about an 'educating the Osborne' session, in which they would teach the shadow chancellor how to fight a spendthrift government with a taxcutting message.

Mr Obama has just given a rather spectacular lesson in how to do it. While John McCain seemed a little squeamish about his offer of tax cuts (which would, after all, increase the deficit) Mr Obama was utterly unapologetic. It became one of his core pledges to America, placed at the heart of every major speech and rally address -- and it had a galvanising effect. When asked which of the candidates was the 'real' taxcutter, polls showed that Mr Obama beat Mr McCain three to one -- even though the Republican plan was, in fact, the betterformulated and further-reaching of the two.

Obama thus stole a key issue from his rivals, as George W. Bush once did with education, and Bill Clinton with welfare reform.

All this is freighted with meaning for the Conservatives. Mr Cameron argues that the Tories need not talk much about tax, immigration or crime as they will always be trusted more on these issues. This is precisely what Mr McCain thought about tax cuts. In his determination to come across as a different beast to the rest of his unpopular incumbent party, he left key flanks undefended.

His attempts to sell his (more genuine) tax cut message came across as insincere, whereas Mr Obama has for two years been calling for the burden to be lifted on 95 per cent of American families.

Mr Brown can certainly claim some ownership of the Democrats' victory, in that many of his accounting tricks have been deployed in the forging of the Obama tax cut policy -- chiefly his repackaging of welfare payments as 'negative tax'. This allowed the Democrats to claim that their tax cuts would be directed at low-earners such as Joe the Plumber, a character introduced to the campaign by Mr McCain. 'Joe's cool, ' Mr Obama said. 'I got no problem with Joe. All I want to do is cut Joe's taxes. But Senator McCain isn't working for Joe the Plumber. He's working for Joe the Hedge Fund Manager.' It is easy to imagine the Prime Minister salivating at this line of attack and making a variant of it his own in due course.

So in Britain we can expect tax credits to be given a new label, and the British public to be promised 'tax cuts' -- which would amount to the Prime Minister's old trick of having the low-paid fill in forms for the return of the money already taken from them in tax. …

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