Magazine article The Spectator

Abandoning the Pledge to Cut Taxes Will Make a Tax-Cut Policy More Plausible

Magazine article The Spectator

Abandoning the Pledge to Cut Taxes Will Make a Tax-Cut Policy More Plausible

Article excerpt

Though Mr Hague is in favour of hunting with hounds, he is also prepared to shoot the occasional fox. He did so on Tuesday, to the dismay of the Labour party, which had been looking forward to a prolonged pursuit of the tax fox.

To understand why the Tories found themselves locked into a rigid commitment to cut tax irrespective of economic circumstances, it is necessary to recall the political circumstances in which the pledge was given. In those days - already hard to remember - the Tories were incapable of attracting the media's attention, or at least its favourable attention. No one seemed interested in what Mr Hague had to say. In retrospect, it is remarkable that he remained so calm when apparently under sentence of terminal neglect. But it is hardly surprising that his party did launch one insufficiently thought-out gimmick. Thus the tax pledge, which immediately ran into problems. Almost every serious commentator pointed out the flaws, and so did Michael Portillo.

Since his defeat in 1997, Mr Portillo has undergone an interesting political evolution. This process has been misinterpreted, even by some of his own supporters. There are those who allege that he lost his nerve as well as his seat, while others assume that the whole exercise was just a ploy to secure his status as leader-in-waiting. Neither is true. From the outset, Mr Portillo was determined to use the enforced leisure of seatlessness and opposition to do some new thinking. His basic beliefs have not altered, but he is in search of fresh language in which to articulate them: Thatcherism for a new century.

There has been one by-product. Mr Portillo was always more thoughtful than his earlier public image suggested; he was also more intellectually fastidious. Now, he is even more so: virtually incapable of defending a policy in which he does not believe. A shameless shadow chancellor - Iain Macleod, for instance - might have made the tax pledge work. Michael Portillo could not do so.

But he was not alone in his doubts. On Tuesday, there was a sense of relief in Tory circles, as well as the odd chuckle over the party's unwonted tactical cunning in making the announcement on the day of the St Paul's service for Queen Elizabeth. Most Tory MPs are relieved that a potential electoral liability has been excised.

There is a further advantage. By scrapping the pledge, the Tories have not only regained tactical flexibility. Paradoxically, they have also made their tax-cutting strategy more plausible. To say that we intend to cut taxes, but only in a responsible manner, lends weight to a policy which would otherwise have invited endless hypothetical questions from every interviewer. No wonder Labour spokesmen sounded vexed.

Tuesday's decision will also make it easier for the Tories to assail Gordon Brown's public-spending review. It seems curious that a Chancellor with such largesse at his disposal should be unable to stop his critics' mouths with gold, but such is Mr Brown's predicament and he has only himself to blame. In political terms, this government's public-- spending record falls into two phases: the millions and the billions. The first won plaudits; the second has bombed.

Early in the Parliament, the government's ability to extract maximum political advantage from minuscule spending decisions reduced the Tories to incredulous despair. They had spent 18 years handing out huge sums, but the more they spent, the louder the complaints about the cuts. Then Labour came to power, with ministers trumpeting an extra 10 million here for education or an extra 15 million there for health, and the media relayed all that as if no previous government had ever spent anything on education or health. …

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