Why won't he tell us?
Despite better budgetary news Oliver Letwin continues to argue that there is an £11bn 'black hole' in the public finances which both Labour and the Liberal Democrats will have to raise taxes fill, but remarkably the Tories won't."Since the Institute for Fiscal Studies says Labour's black hole would be £11 billion, meaning a tax hike of £1,000 a year for a typical working couple, we challenge the Lib Dems to answer the same question we have repeatedly asked Mr Blair: which taxes would they raise?"
Let's say it again. The £11bn 'black hole' applies equally to the Conservatives' plans. Those plans were to reduce spending by £12bn in order to fund £8bn of deficit reduction and £4bn of tax cuts. To get to the deficit (£16bn) which they believe is prudent they will now need to find £23bn of spending cuts or tax increases: in other words taxes will have to rise by £11bn. If they accept a larger deficit then taxes will need to rise less, but there is no way in which they can marry their intentions to cut the deficit with a tax cut, while believing that Labour & the Lib Dems need to find £11bn.
The only conclusion (I have asked Howard & Letwin twice for an explanation, but none is forthcoming) is that Oliver Letwin now believes there is more chance of Vincent Cable being Chancellor of the Exchequer in 2005/2006 than himself.
posted by Matthew @ 2/28/2005 08:20:00 PM
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