Those Tory 'tax cuts'

The Tories' vote-buying initiatives of today stink on three levels. Tax cuts and spending reductions ought to go hand in hand, that much at least they have understood, but ...

1. There is the wider point that interest rates should be of no concern to politicians - whether the market interest rate for savings is perceived to be low or high. This whole "'we have to do something for savers" propaganda is a tacit admission that the Bank of England's Montary Policy Committe (political appointees to the last man and woman) is not in the slightest bit independent. IMHO, politicians (and their stooges) shouldn't be setting interest rates or dictating to the banks how much they should lend and to whom any more than they should be setting exchange rates; deciding quotas and tarrifs or setting minimum or maximum wages or prices or interfering in the free markets any more than is absolutely necessary (i.e. intellectual property laws).

2. It is ruthless vote buying. They've pencilled in the 'cost' of the tax break at £4 billion. Fine. They know that there are statistically twice as many 'savers' as 'borrowers', let's say twenty million of the former, ten million of the latter and ten million who are neither/nor. A £200 average bung per 'saver' probably guarantees more votes than a £400 bung per 'borrower'. Besides the fact that the government taxes and spends far too much, the most sickening things about our tax system are the vast disparity in effective marginal rates - with 'savers' paying the lowest rates (which ought to rule out cutting that particular rate any further) - and the ludicrously low personal allowance. How about using that £4 billion to raise the personal allowance by £300, saving every taxpayer £100? It's just not spectacular enough to win many votes, is it?

3. But the very worst (and most terrifying) thing of all is that the Tories don't fight back when our Nulab government - as expected - starts wailing that:

The truth is the Conservatives are returning to the worst of Thatcherism in the early eighties with no support for jobs or the economy and cuts in public services as well. The Conservatives are repeating their mistakes of the past: if a timely fiscal stimulus of similar scale had been applied at the beginning of the 1990s recession, around 300,000 fewer jobs might not have been lost.

All the Tories would have to do is point out a few salient facts, such as, er, "£4 billion sounds like a lot, but in is fact considerably less than one per cent of total government spending", or perhaps "£4 billion is less than a quarter of the average annual increase in public spending over the last nine years" or even "While we accept that Labour have increased the number of teachers, nurses, doctors and policeman by about 300,000 since 1997, they have also swollen the public sector by a further 1.5 million non-jobs at an annual cost to the taxpayer of at least £50 billion".

But the Tories don't of course, I can only assume because they are in on the whole scam.