David Cameron recently announced that there is an 'economic, moral and practical' case for lower taxation. But why announce a change in taxation that will only come into effect in 2020 now? Those who think this might be because the tax cuts will be phased in, meaning we start to feel their effects in 2016, need to remember that the Conservatives are planning rapid deficit reduction, so it's unlikely that they'll get introduced until the end of the next Parliament. Now, what Cameron actually forgot to mention was that there is also an unashamedly opportunistic case for the introduction of lower taxation at the time of a general election.
The interesting point about this announcement is not that a pre-election tax giveaway has been announced, as all parties are guilty of doing this, but that it has been announced so far in advance of the next time we go to the polls.
Presumably the rationale for this has come from the recent criticism by newspapers of the Coalition Government's give-away of pensioner bonds. These couldn't be justified by the coalition's economic policy (i.e. the need for fiscal austerity), as they cost more in interest than gilts of the same maturity. What they could be justified as was as a reminder to the over 65s, who turn out in far greater numbers and tend (though not overwhelmingly) to vote Tory, of where their allegiances should lie.
By pre-announcing the tax cuts by a full five years, no-one will be able to criticise Cameron for opportunistic giveaways in 2020. Instead, we shall have years of drastic deficit cuts and (coincidentally???? - though this is a discussion for another time) reductions in the size of the state by 2019-2020, followed by a sudden upturn in our disposable income... just in time for voting season!
Now as I said, all parties are guilty of this. The IFS have shown that a net tax cut had been given in 1992 and 2001, by the Tories and Labour respectively. However, it should be noted that Labour, despite having the economic conditions to allow it, chose not to provide a giveaway in 2005, even though that was the election when Tony Blair began to face substantial criticism of the Iraq war, causing support for his party to drop by 5.5% relative to 2001.
So what conclusions can we draw from this?
That parties provide pre-election giveaways? Sure, obviously
That David Cameron's proposal marks the beginning of a new trend towards pre-emptive pre-election giveaways? Perhaps, it's certainly plausible this time round
That the Conservatives are more opportunistic than Labour? I have a sneaking suspicion about this one, though no-where near enough evidence to prove it so, for now, I'll say "probably not" through gritted teeth,
