Leading article: Populist and eye-catching, but beset by vagueness
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Your support makes all the difference.Despite the calls from Blackpool for Gordon Brown to "bring it on", it is painfully obvious that the goal of the Tory leadership over the next few days of the Conservative conference will be to stave off an autumn general election. The opinion polls are simply too unfavourable for David Cameron and his advisers genuinely to desire a contest at this stage. And that is the rather desperate light in which yesterday's taxation proposals from the Shadow Chancellor, George Osborne, must be viewed.
There were some eye-catching proposals from Mr Osborne. His pledge to raise the inheritance tax threshold from £300,000 to £1m was red meat for tax-cutting Tory traditionalists. And it is also likely to be popular in marginal constituencies in the south, where booming house prices have pushed many middle class families into the liability bracket. His pledge to scrap stamp duty for first-time buyers on homes worth up to £250,000 is also likely to be strike a chord in areas where house prices have been breaking records and swathes of people are excluded from getting on to the property ladder.
These new promises are just about in keeping with the long-standing Conservative pledge that there will be no up-front, un-costed, tax cuts in the next Tory election manifesto. We are told that the cost of these cuts to the exchequer (£3.1bn from inheritance tax and £400m from stamp duty) will be paid for by a £25,000 fee charged to some 150,000 wealthy business people who register abroad for tax purposes, so called "non-domiciled" UK residents. This is clever politics from the Conservatives. It will be difficult for Mr Brown to criticise this tax raising measure as he has promised to "review" non-domicile tax status himself for some time. And the public's attitudes to tax-avoiding billionaires have changed of late thanks to the furore over the activities of private equity magnates and the uncertainty generated by the credit crisis. The threat from ultra-wealthy financiers that they will take their business elsewhere if tax loopholes are closed has lost some of its credibility in recent months.
But there is some disconcerting vagueness about the Conservative tax plans as they presently stand. Hints of tax cuts for families funded from savings in the welfare bill look dangerously like an un-costed pledge. The Conservatives rightly criticised Mr Brown for pulling this trick when he was Chancellor. Yet now they seem to be doing the exact same thing. This might get them out of a hole in the short term, but it could be damaging to the party's fiscal credibility when an election does come.
Even more worrying is the apparent marginalisation of the party's green tax proposals. The word being put about in Blackpool is that Mr Cameron has rejected some of the main environmental tax proposals contained in the recent "Quality of Life" policy review, including the sensible idea of charging VAT on domestic flights to discourage air travel where a low-carbon alternative is available.
There is a serious danger that Mr Cameron's actions on the environment will not live up to his rhetoric. To fail to follow through on his green pledges would be a major strategic misjudgement for Mr Cameron. It would also be to miss an opportunity. A poll published yesterday showed that a majority of voters, even Conservatives, favour the thrust of the tax proposals that emerged from the "Quality of Life" commission.
The flavour of yesterday's proposals is populist and also rather rushed. There was nothing, for instance, on business taxes or personal taxation. Yet, as the Conservatives conceded themselves yesterday, this is merely a starter, and the main course with regard to taxation is still to come. We must hope that the taste improves as the meal goes on.
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