Monday, May 19, 2008

Same Old Tories Propose Cuts in Service

Get ready for tax cuts and cuts in funding:

David Cameron today issued his clearest signal that a Conservative government would aim to cut taxes when he declared that Britain had reached the "limits of acceptable taxation" and revived landmark declarations by Margaret Thatcher.

In a major speech on the economy in Birmingham, the Tory leader pledged to "create the space for cutting tax" as he harked back to the early years of Thatcher's premiership.

Cameron, who started working for the Conservative party in the last two years of Thatcher's period in Downing Street, echoed two of her most famous statements when he said: "After a decade of reckless spending under Labour, Britain needs good housekeeping from the Conservatives. We need to start living within our means."

The first part of Cameron's remarks is drawn from one of Thatcher's defining statements in 1979, the year she was first elected as prime minister. "Any woman who understands the problems of running a home will be able to understand the problems of running a country," she told the Observer in May 1979, the month she moved into No 10.

Of course, the reality is that the tax burden isn't really that high when compared with other EU states. According to the latest report, total tax revenue as a percentage of GDP in the UK for 2005 was 37%. The average across the EU (and bear in mind that the accession countries have very law taxation - Romania's is only 28%) is actually 37.6%. In fact, if you were only to include the so-called 'EU-15', the average is actually 40.4% (all figures taken from hyper-linked report), meaning that the the UK's tax burden is actually 3.4% lower than the average. In other words, compared to other member nations, the tax burden in the UK is actually relatively low.

Perhaps it is unsurprising that during a period where people are being told that they will have less money in their pocket, the opposition are making claims about the tax burden. If people start to feel that they are facing financial pressure, they will be more susceptible to this kind of propaganda. And who can blame them? When money is tight and corners need to be cut, one begins to question the amount that is being paid out in taxation. The Tories will, of course, play the tax card heavily over the coming weeks and months, the truth is, as always, very different to what they portray.