Last week in an interview shadow Chancellor George Osborne revealed how
the Prime Minister had barely spoken to him since they fell out three years ago over a Parliamentary vote, when Mr Osborne refused to cover for the then-Chancellor by pairing with him.
That’s intended to reflect badly on Gordon Brown, no doubt, but I don’t see why. If I regularly had to deal with Osborne in a professional capacity then I too would be looking for any flimsy excuse to wriggle out of my responsibilities. There is something I find instinctively dislikeable about the man, and you should remember my bias when you read this post. However, I tried to listen to his conference speech yesterday with an open mind. I’m not sure I succeeded.
Last year you’ll recall Osborne’s pledge to raise the threshold on inheritance tax brought the house down, prompted a surge in popularity for the Tories, and made Brown abandon any plans he had of holding a general election. The question now was whether Osborne could repeat the feat this year.
The headline grabber this time around was a proposed freeze in council tax; this was unfortunate, from a Tory point of view, as the “Labour has done it again” comment reflecting on the current economic crisis seemed to me to be a far more effective bit of political rhetoric and a fine narrative to run with. Instead, for those who could be bothered to get past the “credit crunch” news headlines to read about the Conservative party’s conference the main point they will have taken away is that the Tories have come up with a convoluted dog’s dinner of a proposal that is not really a council tax freeze at all. How it will play out in the country only time will tell, but I really have my doubts about the policy. Anything that is apparently paid for by those damned elusive “efficiency savings”, located as they are somewhere between the holy grail and the golden fleece, has to be questioned. The savings that have been mentioned include cutting advertising, regional agencies and management consultants; but I’d be amazed if advertising spending amounts to all that much, cutting regional agencies while increasing central government funding to councils seems a retrograde, centralising step, and while you would be hard pressed to find anyone with a lower opinion of management consultants in general as I have, the idea that we can just sweep them all away at a stroke to cut costs seems absurdly naïve. All this, by the way, while on the other hand Osborne announced setting up the independent “Office for Budget Responsibility” to monitor government’s fiscal policy and shadow Health spokesman Andrew Lansley trailed the creation of “Healthwatch” to act as “a national consumer voice” for the NHS. I assume neither of these bodies will be charities staffed by volunteers.
The reason for such an odd plan – to freeze council tax rather than to simply cut taxes – is because of the gloomy economic situation we are in, and to hammer home the fact that the Conservatives are serious politicians, hampered by Labour’s legacy of profligacy, and are not merely reckless tax cutters. “We will make sure that this mess never happens again,” assured Osborne, making a promise he must know he cannot keep, or perhaps mindful that he can always claim that a completely different mess happened to occur on his watch. But for the here and now “the cupboard is bare,” he lamented; there is simply no money for any “up-front tax giveaways”. While he managed to lower his voice from his usual shrill whine in a stab at gravitas, he admitted he could not promise to similarly lower taxes, and indeed elsewhere he has said that he may even have to raise them.
But just a minute; I thought the Tories had pledge to cut taxes, or at least to cut a tax; for cast you mind back a year and that is effectively what the promise to raise the threshold on inheritance tax to £1m amounts to. Opinion polls still regularly attest that this is a hugely popular move, thought I’ve never quite been able to figure out why; but as the Tories ladle on the dire news that they cannot promise tax cuts overall, the fact that they can promise one for the richest 6% of estates seems all the more inequitable. The more the Tories lower their voices and talk of lean times for all the more that pledge on inheritance tax seems to stick out like a sore thumb. So how come the support? How have they got away with such a freebie for a rich minority? Where is the sense of righteous moral outrage?
The promise to raise the threshold on inheritance tax has rightly been seen as a turning point in Conservative fortunes that has helped to propel them towards government. But if this is the only tax cut that George Osborne can promise while admitting that taxes overall may have to rise, then rather than being a popular vote winner that pitches him into 11 Downing Street this policy should really have 94% of us reaching for the pitchforks, the torches, the tar and the feathers.