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Thursday, March 24, 2005
Press summary: Thursday 24 March

In a wide-ranging article for The Times (p21) on the general election, Anatole Kaletsky argues: "Both polling and common sense suggest that tax cuts would not in themselves be much use in wooing voters today. What the Tories need is not tax cuts but an alternative vision on how to meet the great social challenges of the future - health, education and pensions."

Comment: Whilst Kaletsky is right to argue that low taxes should be part of a wider agenda of reforming public services, he is wrong to underestimate the desire for lower taxes. A TPA/YouGov poll published ahead of the Budget clearly shows that a tax cutting agenda would be popular, with 44% of voters wanting to see taxes and spending reduced after the next election and only 12% wanting to see them increase.

The second item of yesterday's Newsnight focused on the rise of the Flat Tax and the general competitiveness of East European countries. The report included a 'lively debate' between Tim Evans of the Centre for the New Europe and John Monks of the European Trade Union Confederation.

Comment: Over the past few months, the British media has woken up to the rise of Flat Tax across the world and even the BBC carried a positive report on it last night. Poland has recently adopted a Flat Tax and the socialist government in Spain is said to be considering the introduction of a Flat Tax. After the general election, there is a real possibility that the introduction of a British Flat Tax will become a big talking point.

Figures released by the ODPM yesterday show that council tax bills will rise by more than twice the rate of inflation this year and even bigger increases are predicted next year when homes are revalued (The Times, report p1, commentary by Tony Travers p29)

The Government yesterday tried to present Conservative councils as high spenders by moving to cap the budgets of nine authorities which have posted inflation-busting council tax rises. The increases range from 9% in Aylesbury, Buckinghamshire, to 100% in South Cambridgeshire and have prompted ministers to claim that the councils had posted high increases in the hope of being bailed out by a Conservative government. Sir Sandy Bruce-Lockhart, Chairman of the Local Government Association, said that the councils capped were "low-tax and low-spend" and that the LGA "totally opposed" the decision" (Guardian, report; Daily Telegraph, p8)

Writing in The Times (p21), Michael Howard defends the Conservatives against Labour's accusation that they want to "cut" government spending by GBP35billion. "If those are cuts then I'm a banana."

The Daily Mail (p8) reports that spending on advertising and PR by the Government is likely to exceed GBP300m for the second successive year, making Whitehall Britain's biggest advertiser.

The Daily Telegraph has a very good special supplement today on inheritance tax.