Tories unveil plans to cut taxes by £4bn

The Conservative Party has undertaken to introduce tax cuts of £4bn in its first Budget, should it win the General Election.

Shadow chancellor Oliver Letwin committed his party making the cuts a month after the election.

Yesterday, the party announced that review led by business troubleshooter David James had identified possible savings of £35bn from "wasteful" public spending, which it would redirect towards frontline services, reducing borrowing or cutting taxes.

The cuts would involve the abolition of 168 public bodies including the Small Business Service, and the loss of 235,000 ci

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Comments

Questions for John Jenkins: Are you suggesting …

dstickl | | Permalink

… in your post, that – in issuing House of Lords Written Answer HL5868 dated 23 Oct 2002 – Parliament was lied to by “New” Labour?

If YES, then what is your precise evidence, in fine detail, please?

If NO, then what alternative explanation and/or figure are you – as a distinguished qualified accountant used to working with concepts and figures - proposing?

Evidence for the "very small" £300m figure

dstickl | | Permalink

As today's FT Editorial comments 'Yesterday's Tory tax package surprised in just one respect: the paucity of tax cuts on offer', it is clear that the suggested £300m tax cut through the scrapping of Employers' NICs on Employees over SPA is "very small".

The evidence from "New" Labour for the £300m pa figure is as follows:

House of Lords Written Answers 23 Oct 2002:
National Insurance Contributions

Lord Butler of Brockwell asked Her Majesty's Government:
What is the yield from employers' national insurance contributions in respect of employees over state pension age.[HL5868]

Lord McIntosh of Haringey: The Government Actuary's Department estimates that employers' national insurance contributions relating to employees over state pension age amount to around £300 million a year.

Figures

AnonymousUser | | Permalink

And there's me thinking that Tony Benn was the master at making up figures as he went along (no offence Tony-I've watched you too many times on question time).
If the Tories REALLY want to win the next election on TAX then they should read the last 3 months worth of Accounting Webb and Tax Zone.
Apart from Tony Blair where are the other politicians who are prepared to put their heads on the chopping block????????????

If Tories were also to cut Employer NICs for their employees ...

dstickl | | Permalink

... aged over State Pension Age (SPA), then IMHO the Tories would be likely to get the votes of a lot of responsible people aged over SPA, who wish to work.

This is because their position has been made worse by “New” Labour’s very recent proposals that a “default” retirement age of 65 would be lawful, because the current proposals could induce employers to dismiss ALL staff at 65.

This is because staff would be likely to be protected by unfair dismissal and age discrimination laws if employed after their 65th birthday. Hence the perverse result!

And this is despite Adair Turner’s recent pensions report making it clear that working beyond current retirement age would be necessary to defuse the pensions time bomb.

As a State Pension is IMHO a deferred wage, then Employer National Insurance Contributions (NICs) are a very proper contribution to this deferred wage.

Clearly these Employer NICs should “obviously” cease once the employee has reached SP Age.

The cost of removing these Employer NICs for their Employees aged over State Pension Age has been asessed as only £300m per year.

But this would also allow further tax cuts under the Tories, as the economy expands, and also people aged over SPA remain active and healthier as a result.

Fetch me the flannel and the soap

Anonymous | | Permalink

If the Cons are going to put 235,000 civil servants out of work - most of whom will be the halt and the lame and those who can't even hack it as civil servants let alone hard working employees who have suffered the vagiaries of the job market for years - where are they going to get the money from to pay them the dole if they give £4billion away in tax cuts?

Answer: Some tax money [& benefits savings] could come from ...

dstickl | | Permalink

... the consequences of scrapping Employer NICs on their Employees over SPA, of course!

But the Tories actually HAVE to do that first!

Question: As "New" Labour appear to have diminished opportunity for responsible people over SPA, is the Tory Party going to "abstain" from this "open goal"?

Answer to Don Stickland

AnonymousUser | | Permalink

It isn't the £300M that worries me (that is another matter) it is the £35BILLION. If this figure really is true and "new labour" are really wasting this sort of money then surely GB should say to DJ "hey thanks for bringing this to our attention we will put it right before the next election". Or have the Tories just identified money that they can move around a little.
Since Mr Major and Mr Lawson sent the small businesses of this country down the river I would look thrice at any figures they banded about.