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Tuesday, April 12, 2005
 
Media summary - Tuesday 12 April

Extracts from today's Reform Media Summary:

The Conservatives published their election manifesto yesterday. Its front page reiterated the central themes of the Conservative campaign: "More police, cleaner hospitals, lower taxes, school discipline, controlled immigration and accountability." Key policies include: GBP4 billion of tax cuts, 5,000 more police officers a year, bringing back matrons to deliver clean hospital wards, giving head teachers the power to expel disruptive pupils, limits on immigration and a border police force, and setting a date for a referendum on the European constitution. Reaction:

  • Times (leader): A leader assesses the merits of the manifesto: "The Tories' themes are tax, immigration, crime, health and education. On the first, they are right to highlight an emerging demand for tax relief (especially for those with middle incomes) which will increase further if inflation starts to creep back into the international economic system."
  • FT (leader): A leader argues that the Conservative manifesto is "less than a programme for government" and it has continued the Party's "focus on the issues that market research shows to be worrying groups of voters - health-service squalor, unruly youth, crime and immigration". It states: "The overarching theme of the manifesto is that Britain is heading in the wrong direction. There is certainly a strong case to be made for this, with sharply rising government spending producing disappointing improvements in public services and taxes climbing without any sign of levelling off... . Unfortunately, there is little to make such a case in the manifesto. Instead it promises to continue with Labour election bribes, such as this year's one-off GBP200 council tax payment for pensioners. No detail is given of the GBP4 billion of tax cuts the Conservatives offer. When it comes to red tape, promises of a crackdown are offset by pledges of further regulation - on school meals, for example, and hospital performance. Rather than making a coherent case for a smaller state with less nannying, the Conservatives substitute their policy prejudices for Labour's."
  • The Telegraph leader said that the Conservatives need to spell out their tax proposals and declared that "the central battleground of this general election is tax and spend".
  • Simon Carr asks in the Independent: "The savings Mr Howard claims from the James report will take time to come through, why won't the Tories face the same black hole they say Labour will face?"

Spending plans: The Today programme interviewed members of each of the three main parties about their spending plans.

  • Labour (Ed Balls): The former Chief Economic Adviser to Gordon Brown argued that the Conservatives were planning to cut spending every year: "But they've also come along and made promises yesterday in their manifesto... . They're saying that in the first year of a Conservative government, they could also reduce borrowing by GBP8 billion and cut taxes by GBP4 billion and, on top of that, spend more money in certain areas... . The problem they've got is that it doesn't add up. It's not possible to cut taxes and spend more and borrow less all at the same time without a black hole... . Their long-term cuts plan... just doesn't get anywhere near being enough to pay for the extra commitments they've got."
  • Conservatives (Oliver Letwin): The Shadow Chancellor noted that the IFS said that the Conservatives would be able to reduce borrowing and cut taxes under their current plans. He said: "This election is about a massive question of choice for the British public. It's about whether you have a set of spending plans which Labour have set out which mean, and the Institute for Fiscal Studies says this, that there will be an increase in tax after the election, they estimate GBP11 billion, or whether you choose to have a government which tries to get better value for taxpayers' money, to spend more each year but at a slower rate than Labour would plan and which therefore can reduce borrowing, avoid tax rises, and cut taxes by a modest GBP4 billion in our first budget."
  • Liberal Democrats (Vince Cable): The Liberal Democrat Treasury Spokesman said that the Child Trust Fund "is not a terribly good use of government money" and that the Liberal Democrats would abolish it. He stated that those who had already received the "baby bond" would not have to pay the money back. He said that the money saved would be used to reduce class sizes. He argued that the Party was not proposing a general increase in taxation but was only raising tax in one area - a 50 per cent rate for income over GBP100,000. He also argued that the average family would be about GBP450 better off under the local income tax.

New NOP poll: An NOP poll has found that amongst people who are intending to vote, more than two to one favoured increased spending on services over tax cuts. John Curtice said that it "suggests that Britain's main opposition party may have seriously misread the nation's mood on tax" (Independent, p.4, p.24, p.25 [Curtice]).

Gordon Brown explicitly refuses to rule out tax rises. Gordon Brown said yesterday: "Nobody is going to make the error - and I hope not even the Conservative Party will make the error that politicians like John Major made in 1992 - of trying to anticipate every possible circumstance" (Times, p.26).

Conservatives dismiss GBP15 billion hidden spending claim. The Conservatives yesterday issued a detailed rebuttal to Labour's claims that the Conservatives had pledged an extra GBP15 billion of uncosted spending commitments. Shadow Chancellor Oliver Letwin said that the extra spending was fully costed within the Party's published spending plans. Mr Letwin also said that some of the policies identified by Labour cost less than Labour claimed, such as the extension of the right to buy. Labour claimed that extending the right to buy to housing association homes would cost GBP443 million although the Conservatives say that the policy would be revenue neutral. Carl Emerson of the Institute for Fiscal Studies said on the Today programme that if the Conservatives can find all the savings that the James Review says they can, then the Party's tax plans are affordable. He said, however, that the IFS had not looked at the James Review savings in detail.

The Times publishes a letter from Phillip Oppenheim, Exchequer Secretary to the Treasury in 1996-97. He writes: "Too much taxation reduces growth and the economy's ability to finance greater public spending. From 1979 to 1997, tax fell substantially as a proportion of GDP, helping the economy and productivity to grow faster than our main competitors (even manufacturing grew significantly), financing substantial rises in public spending. Since 1997, the tax take has gone up, productivity increases have fallen below those of comparable countries, our much-vaunted economic growth has been disproportionately dependent on the public sector and private consumption rather than productive investment." He concludes: "The choice is not lower tax or higher spending; it's tax too much and you will end up with less to spend. It's a shame the Conservatives are entering the election seeming not to understand this message themselves, let alone getting it over to voters" (Times, p.16).

New tax on new housing. The Guardian reports that a "roof tax" will be unveiled after the election in Milton Keynes. The scheme will require developers to pay the planning authority a tax of about GBP20,000 for each house to get permission for new development. The paper reports that a senior planner who has advised the Government said that a "roof tax" could soon be rolled out across the country (Guardian, p.10).

Waste: Ministerial special advisers cost the taxpayer a record GBP360,000 for foreign trips last year (Times, p.29).

This tax media summary was extracted from Reform's daily media summary, which can be subsribed to at www.reform.co.uk or by e-mailing katy.turner@reform.co.uk.

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