Its not tax cuts stupid, its value for money

The Taxpayers Alliance, an up and coming right-wing pressure group, caused a minor flurry in Tory world at the weekend, with a poll suggesting that cuddly Cameron is wrong to rule out tax cuts under a possible Tory government.  A PDF presentation of the results is here, via ConHome.

The Taxpayers Alliance are a serious bunch.  They are American in style and outlook. They get advice from the Heritage Foundation and Americans for Tax Reform in DC – both groups being ultra-serious players, but most in the UK, especially on the left, don’t take them seriously yet.  The TPA campaign director is James Frayne – he probably did most of this polling – who ran the No Campaign against devolution in the north-east. 

The main message of the poll, according to the TPA, is that the Tories can win the election if they offer tax cuts and tough policies on immigrants – but that this isn’t the only answer.  They also argue that in fact it is as much about how you sell the policies, as the policies themselves.  They call for a clear right-wing populist agenda, sold in a media friendly, but grassroots led, way.  Interesting for us lefties, but not more than oppo research so far.

What really interests us in the poll comes out under two headlines:

First – people vs the politicians can be a winning strategy for the left, or for the right. 

The TPA work illustrates something that is widespread knowledge now – people don’t like politicians.  As the focus groups say: “They’ve been letting us down for years”.  But what the poll also shows is that people don’t simply blame the Labour government for the problems they see in Britain, it’s a plague on all their houses.  This gives Labour the chance to emerge from the ruins of current politics intact, because the reality is people don’t think the Tories would really do better. It is actually the system itself that is broken.  If Labour puts itself at the head of a constitutional reform movement, we can break down some of the dislike of politicians, and stunt the Tory reform attack.  The TPA pushes executive government (where ministers aren’t always MPs – as the Nordics have it) and directly elected mayors. Brown is doing some thinking ahead like this as well, and he is expected to come forward with ideas soon.  Johnson and Hain should do so too. 

Also of interest is that voters trust business even less, especially when it comes to public services.  One set of interesting quotes from TPA focus groups runs: “Services go down so profit can go up… Quick bit of cash for a few… The mess with the trains… All it actually did was create greed and profit for a few”. Privatisation – handing public services over to big businesses is seen as a failure.  So, for example, new models of community ownership can be a succesful vote winner, and an alternative to the tempting “get the politicians out of managing our hospitals” right-wing message.

The bottom line to the TPA’s promotion of anti-politician populism is that it can cut either way.  The Tories are politicians too, and populism traditionally has always worked better for the left when economic conditions have generated the sort power and wealth imbalances globalisation has brought us.

Second – its not paying tax that upsets people, it is waste and incompetence that angers voters. 

One message the TPA aren’t pushing from their poll is that people don’t mind paying tax in principle.  (To be fair to the TPA, this isn’t something they are hiding either).  One member of a focus group even says of paying tax “God knows what it would be like if they hadn’t put it [spending on the NHS] in”. What people seem to be saying is that they are happy to pay tax, as long as it isn’t wasted – and at the moment, they think it is being wasted.

The left has always, in this writer’s humble opinion, been too soft on public sector waste when in government.  For example, why is it that the right leads the way in hammering consultants fat cat pay? It’s no good us defending the indefensible – we have to be the ones putting ourselves on the side of ordinary people against bureaucrats.  This poll shows that if we do that, the public will trust us with their money, and worryingly, if we don’t do that, they will vote to give their money to someone else.

What is to be spun?

The disconnection between what we often do in Westminster and what people in the country want – often Labour core supporters – is something the left in Britain has to take seriously.  The populism of voters, and the willingness of voters to switch over certain key issues, and switch either leftwards or rightwards, is a opportunity as well as a threat.

In their press release, the TPA argue that, “The Conservative Party’s unwillingness to try to sell lower taxes has left an open goal for centre-left parties to steal popular messages.”  Stephen Byers has seen this too, hence his push for the scrapping of inheritance tax (although he picked the wrong target, as we suggested here).  But there is no reason why tax cuts have to cut the level of tax across the board.  It is possible to target cuts to deserving groups while continuing to find the money for investment from less deserving groups.

I hate to say it, but the Lib Dems proposals to cut personal tax and shift them across to environmental taxation – while being uncosted and ill-thought through – were interesting thinking all the same.  And would it not be wise for a serious Labour MP to float the idea of aggressively cutting tax on people with the lowest incomes, while making up that money with a Land Value Tax on business (a tax recently backed by the IPPR?  These are just thoughts, but it is obvious there is room here for us to pounce while the Tories focus on changing their policy on wind-farms.

Groups like the TPA are springing up in response to the failure of the Tory party to promote aggressive policies for the populist right.  They may take some wrong conclusions from their poll, but they are force to be reckoned with and shouldn’t be dismissed as loons or as a Tory front group.  With an electorate as stroppy as they are now, it will need careful thinking on the left to ensure that voters come to us, rather than the populist right.

Other interesting results from the poll:

– 46% of voters don’t identify with any party at all

– over 20% over voters “knows somebody whose job has been affected by jobs moving abroad”.

– voters think that poverty, bad edcucation and poor rehabilitation are bigger causes of crime than immigration

– The Tories are the biggest party amongst over 65s only

– Voters who don’t identify with a party prefer Brown over Cameron


6 Responses to Its not tax cuts stupid, its value for money

  1. Henry G says:

    This is a fascinating article – great food for thought for the left in the party.

    Of course the Diane Abbots of this world still call for more money (without strings) into public services. As someone who works with the public sector in regeneration, I see considerable waste every day and ludicrous publicly funded projects that are poorly thought out, badly managed and divert resources away from the public good. The tragedy for this Government is that there already has been huge investment in many public services, but so little trickles down to public benefit. I’d rather see tax cuts for the least well off than many of the ‘initiatives’ I come across.

    I think the point about people not minding tax as long as there is not excessive waste is a very, very important one. It’s not just right-wingers that shudder when you read some of the publicly funded posts advertised in Guardian Society. Unless we continue to reform public services to be more personalised and efficient, many services will be vulnerable to a taxpayers backlash. The left must frame the debate around this, otherwise we’ll get skinned at the polls.

  2. Neil Harding says:

    This article is absolutely spot on to point out that the left need to regain the initiative with environmental taxes and cutting consultants fat cat pay. I will add though that the private sector also waste a lot of money. Look at private healthcare in the US, spending twice what we do for a much poorer service. The NHS is actually efficient in comparison with that.

  3. Matthew says:

    I think that is a fair point, although it comes out in the answers people gave in the poll on privatisation – that private companies cut corners for example. Although most it is unpleasant right-wing stuff, I would recommend reading the whole PDF from the TPA, it has some real nuggets in there.

  4. Ian G says:

    I would imagine very few of us would hold our employers up as models of efficiency, there’s ALWAYS waste, and the private sector is not above making daft decisions. I think I remember hearing that management costs in BUPA were higher than in the NHS. Of course people take it personally when it’s the public sector, as it’s our money being wasted.

    Did anyone see the very woolly article from Zac Goldsmith in Guardian? It contains nothing but the vague idea that environmental taxes are good, but it has got this gem:

    ‘George Osborne, the shadow chancellor, speaking in Japan today, will describe environmental pollution as a market failure. “It is a classic case of what economists call an externality”‘

    So the question is, now Gideon has grasped ‘A’ level economics, when will we get some real policies?

  5. Henry G says:

    But with more people working in the public services now than ever, is there not the chance that more people can think of examples of grotesque waste.

    And when they hear that their local hospital is laying off trained nurses, or that the council is pushing up council tax well in excess of the increase in their earnings, they are not happy.

    One can argue that there has been a substantial increase in nursing health care staff since 97 even allowing for recent redundancies, but the Brownite narrative that emerged after the Wanless Report that ‘a little more tax will improve public services’ falls apart. The findings in this report backs up such a concern.

  6. Neil Harding says:

    Ian G. It is just as much our money, whether waste is in the public or private sectors. We all pay for private sector waste as well, through prices at the checkout. It may be more hidden and less easy to quantify but it is still there.

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