Monday, March 23, 2009

Much ado about nothing

No-one can accuse Ken Clarke of not making an impact. Today's Telegraph has Ken all over the front page, and on page 4, and in the editorial. The issue concerns commitments that shadow chancellor, George Osborne made about changes to Inheritance Tax rules. Its suggested that Ken may not have adhered rigidly to the right form of words when being interviewed on The Politics Show yesterday. Seems to me to be a huge fuss over nothing much at all.

Lets recap, beginning on Oct 1st 2007. George Osborne electrified the national political debate by promising that the next Conservative Government would increase the inheritance tax threshold to £1,000,000 - paying for it with a tax on non-domiciles. I approved of this, and so did a huge number of others. The announcement delivered two significant impacts. It is widely thought that it put the wind up Gordon Brown so much that he called off the General Election which he had led us all to believe was about to be called. The second impact was that the Chancellor, Alistair Darling sought to shoot the Conservative fox by introducing changes to inheritance tax rules of his own. These changes, which I also approved of (as far as they went) have been enacted - a good example of the Conservatives driving Labour policy!

And then we discovered that the Labour Government has so mismanaged our economy that the next Government will inherit a financial mess worse than anything previously seen in British history. An incoming Conservative Government will be obliged to fulfil its historic role of 'clearing up' after Labour. We do not yet know just how much of a disaster it is going to be. What we do know is that Government borrowing is greater than anything ever imagined in peacetime. The British people are beginning to realise that it may take years to restore our public finances to anything like a sound position. The context in which tax reductions can be considered, even when fully costed, has been transformed.

All that Ken Clarke seems to have said is that on assuming office, faced with such a horror situation, it would be unwise to regard increasing inheritance tax thresholds as the immediate priority. But it will remain a firm commitment in our manifesto for the first period of Conservative government. What really gets me is the sheer gall of Labour Ministers who describe Tory tax plans as being in a state of confusion. Talk about brass neck. They have no shame. Bearing in mind that its Labour Ministers that have comprehensively destroyed the British economy, its a bit damn rich to criticise opposition efforts to set out a strategy for reconstructing the edifice which they have reduced to ruins. Today's reports of Conservative divisions are pathetic spin - about the only activity that Labour remain good at.

9 comments:

Bonetired said...

All of this reminds me of Macmillan's famous attribution about "Events dear boy, events" ...

It would be lovely to have tax cutting exercise to bing us back to a low taxation economy but the first duty is to get the country on some form of economic firm ground - and that will involve the Conservativs making some decisions that will hurt.

Frank H Little said...

What's wrong with your party? You bring back Clarke to give some bottom to the shadow cabinet, but instead of putting him in charge of the treasury brief you give him a shadow-shadow job. Then you slap him down when he tries to bring some sense into the presentation of your policies.

dalesman said...

Seems to me that ken Clarke is the only one talking sense in the shadow cabinet.
The Tories are talking of having to save money but are going to push through the inheritance tax changes which will cost about £3 billion.
Someone needs to talk sense, so good on Ken.

Patriot said...

Stick to rugby Glyn you clearly know far more about that than economics. This is a global problem affecting everywhere. All countries including the capitalist altar the Tories worship at - the USA- are following exactly the same fiscal stimulus route as the Labour Government- most are investing more proportionately. Only your lot are planning to cut spending and reinforce the down turn. The 1980s all over again if the British public fall for it.

Glyn Davies said...

Bonetired - Spot on.

Frank - I don't agree with your take on this. Ken Clarke has been given a very significant role, and he is being 'used' as a spokesman a lot. Neither has he been slapped down. I'm not on the inside track, but it seems that the new meaning given to the word 'aspiration' in politics (not going to happen) gave the wrong impression about Conservative policy. There has not been any change from our 0ctober '07 promise to change Inheritance Tax rules, and levying a tax on non-doms to pay for it. There also seems a sensible pragmatic approach not to implement this manifesto promise until we have brought some order to our public finances.

Dalesman - I think the intention is that the cost of any change is bourne by non doms. I also suspect that the cost of the change has fallen a fair bit, as house prices and the value of investments have fallen.

Patriot - Lets wait until next week's G20 to see if every nation is as keen on loading impossible burdens on the next generation as you are. Thought I read that the CBI take the same view that I do on this.

Patriot said...

BBC news confirmed last night Glyn that UKs fiscal stimulus is smaller than USA, same size or smaller than all European countries and smaller than any developed country in year 2. Touche I think. You had better tell the spending cutting Etonians in the cabinet as it looks as though they have missed economics off the syllabus there........

DC guy said...

... well, great speech from Daniel Hannan, MEP.

http://www.youtube.com/watch?v=94lW6Y4tBXs

Glyn Davies said...

Patriot - Didn't you listen to Mervyn King yesterday? Its not the size of the fiscal stimulus that matters. Its the borrowing requirement of the Government. The collapse in tax revenues, and the increases in social security benefits, combined with increased public spending have made it very risky to spend even more. The next two years borrowing requirement has so alarmed the Governor that he felt obliged to intervene in such an unusual way.

DC Guy - I viewed it on Guido's blog. It was an amazing attack on the Prime Minister. Can't imaging such a forensic dismantling of Gordon Brown's record being allowed by Mr Speaker at Westminster.

Patriot said...

Sorry Glyn our borrowing requirement also smaller by some margin than other countries including those most admired by tories. The fact is if you guys cut spending you will deflate reducing tax revenues and increasing benefit payments. No other country in the developed world is proposing this. It is 19thcenturyeconomics and 1980s politics.