How can the Tories cut taxes?
The Conservatives have promised in the coming weeks to explain how they will go about cutting taxes. Nevertheless I wonder whether they can promise or even suggest tax cuts without making a mockery of this part of Michael Howard's speech.Britain cannot continue indefinitely to spend more than she is earning without higher taxes or higher interest rates - either of which will harm our economic prospects.
If we are to secure our future prosperity, government must once again start to live within its means.
If we assume by 'Britain' Howard means the British government, rather than Britain, then this seems an explicit commitment to reduce the budget deficit to zero. According to the OECD (second link down) in 2006 (the first year Howard will have a chance to influence things) the budget defict will be 3.2% of GDP. This is around £35bn.
Thus even before the Conservatives can consider tax cuts they need to cut spending by £35bn. It's going to be tricky.
posted by Matthew @ 1/04/2005 01:17:00 PM
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