Britannia Radio

Cameron here is at least beginning to address the crisis, though as  
reported here he doesn’t seem to have begun to understand the scale  
of the potential disaster staring the country in the face

Having said that, however, this a very shoddy piece of reporting as  
it is not reported in a coherent fashion.  For example the question  
of the 45% rate of tax - Was the decision not to scrap Labour’s plans  
actually mentioned specifically or merely implied?
-------------------------
I got the first report at midnight last night but didn’t send it then  
because I was unhappy with its contents and wanted to see what - if  
any - comments came up today.  Sure enough they did and I append them  
too.

The lack of courage is a recurrent theme and - as most readers know -  
it is a theme I fully endorse.

xxxxxxxxxxx cs
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TELEGRAPH            20.3.09
1. Tories will raise taxes for high earners
The Conservatives will go into the next election committed to raising  
the top level of tax to 45p for those earning more than £150,000.

By Andrew Porter and Rosa Prince

David Cameron signalled that the rich will have to pay "their fair  
share" to rescue the economy from the mounting crisis in the public  
finances.

And it was made clear that hundreds of thousands of top earners will  
face paying the new rate - which Labour will also introduce after the  
election if they hang onto power - if he enters Number 10.

In a speech intended to set out the Tory blueprint for economic  
recovery, Mr Cameron painted a grim picture of the likely situation  
he would face if elected Prime Minister.

He warned that the country was facing slumping into a depression,  
meaning that "tough decisions" will have to be made. Making sure the  
rich pay their way will be central to the recovery, he said.

His decision not to commit to keeping the highest rate of tax pegged  
at 40p will anger some traditional Conservatives. But it will also  
head off charges from Labour that Mr Cameron is only interested in  
the well off.

The top rate — currently paid by about 4 million people earning more  
than £39,825 a year — has been in place since it was introduced by  
Nigel Lawson, the Conservative chancellor, 21 years ago.

In a speech Mr Cameron said: "The richest in our society must bear a  
fair share of the burden."

And pinning the blame of much of what has happened to the economy on  
the those who have made vast sums from the boom of recent years, he  
added: "The poorest in our society should not pay an unfair price for  
mistakes made by some of the richest. Paying down our debt must not  
mean pushing down the poor."

The Tories seized on new official figures which showed show that the  
UK plunged further into the red last month, with borrowing for the 11  
months of the financial year now standing at £75.2 billion, the  
highest since records began in 1993.

Mr Cameron said that the scale of the problem meant that the  
Conservatives had been forced to abandon their plan to cut taxes by  
sharing the proceeds of economic growth.

He added: "I am a Conservative who believes in lower taxes. But in  
today's fiscal circumstances, the priority must go to debt reduction.  
Put simply, our overriding objective will need to change from sharing  
the proceeds of growth, to paying down our debt."

But Mr Cameron said that his brand of Conservatism would show "fiscal  
responsibility with a social conscience."

He explained that "temporary tax cuts", paid for by borrowing will  
not increase confidence in the economy.

Mr Cameron and George Osborne, the shadow chancellor, believe Labour  
was laying a trap for them by committing to the higher tax rate. It  
is why reversing it will not feature in a Conservative manifesto,  
according to senior party sources.

They believe that the 45p tax rate is now necessary if the Tories are  
to be able to fulfil their other pledges to reduce the public debt  
and continue to maintain frontline public services such as health and  
education.

One told the Telegraph: "We do not like it, but given the current  
finances we cannot pledge to avoid it."

In a recent interview with the Telegraph Mr Cameron said that those  
who wanted to keep the 40 per cent rate would have to show where "the  
billions" to pay for it would be found.

Under Labour's plans those earning more than £150,000 a year will  
fall into the new band from 2011. The new rate is expected to affect  
about 400,000 people and raise about £2billion a year.

Mr Cameron said: "We are not dealing with some average deficit, on a  
par with our peers. Just this morning, we saw the worst set of public  
finance figures in our peacetime history.
"According to some forecasters we are set to have the largest budget  
deficit of any G20 country this year. It could be more than 10 per  
cent of our GDP."

Instead of tax cuts, Mr Cameron promised a full-scale review of  
public spending to cut out waste and inefficiency, including slashing  
high salaries earned by "quango-crats" running public bodies.

The drive against debt would not, however, prevent a Conservative  
government from introducing measures to heal what the leader  
described as "broken Britain".

Paying off debt would be coupled with a focus on "socially  
responsible" spending measures, such as improving schools and  
hospitals, which would have economic benefits in the long run.

Mr Cameron went on: "We are not going to behave like flint faced  
turbo-charged accountants, slashing spending without regard to the  
social consequences.
"We are going to behave like progressive Conservatives, pursuing our  
aims of a fairer society, an opportunity society, a safer society and  
a greener society in all that we do.
"But we will pursue these progressive aims through Conservative means  
- including proper control of public spending."

Yvette Cooper, Chief Secretary to the Treasury, said that  
Conservative policies such as plans to cut inheritance tax showed  
that Mr Cameron was insincere in his commitment to equality.

She said: "How can David Cameron talk about fairness when he is still  
committed to a tax cut for millionaire's estates?
==============
2. The public finances: Treasury needs some radical Tory thinking   
(First Leader)
[This deals clearly with Cameron’s personal failings though not  
specifically with his speech above -cs]

The public finances are in an even more parlous state than had been  
feared. Figures released yesterday by the Treasury showed that  
cumulative borrowing by the end of February was £75 billion, three  
times higher than last year and far in excess of forecasts. With the  
recession deepening, unemployment growing and tax revenues falling,  
the IMF predicts that UK borrowing will soar to £150 billion in the  
next fiscal year, higher in relative terms than that of any other  
developed economy. Against such a deeply worrying background, the  
Government continues to talk up the prospect of a fiscal stimulus to  
the economy, though without any clear idea of where the money would  
come from other than printing it. Next month's Budget will need to be  
far more realistic and honest than the last, which projected a modest  
rise in borrowing.

Another spending splurge would cause untold damage. The profligacy of  
the Treasury during the boom years has meant there is no longer any  
room for manoeuvre. Given the amount of taxpayers' money committed to  
the bail-out of the financial system, we are in danger of becoming  
inured to a few billion here or there; but these are desperately bad  
figures – and arresting this spiralling decline should be an over- 
riding priority. At least David Cameron, the Conservative leader,  
understands this, though whether he has the right prescription is  
still unclear. In a speech yesterday, he correctly identified the  
problem: these are the worst public finance figures in our peacetime  
history; the deficit is larger than when the IMF had to come to the  
country's rescue in 1976.

Mr Cameron also stated a truth that the Government not only wishes to  
avoid but actually uses as a stick with which to beat the Tories –  
that the state of the nation's accounts cannot simply be put to one  
side and dealt with later. A strategy for rectifying this dreadful  
state of affairs must be put in place now, but it must not involve,  
as the Tories seem to believe it should, an acceptance of the 45p top  
tax rate planned by the Government. Mr Cameron, fearful of  
antagonising public-sector workers, is reluctant to talk about  
cutting back on state programmes; but causing offence will be  
unavoidable, because it is inevitable that the Tories will have to  
challenge the post-war consensus on how those programmes are paid for.

The party has radical proposals for public-sector reform that will  
reduce the size of the state, which seems immune to the economic  
crisis. Mr Cameron needs to construct a coherent and straightforward  
case for the state to spend less, borrow less, tax less and do less  
by getting out of areas where it is neither needed nor wanted. His  
speech was welcome; but he needs to be bolder still.
============================
TELEGRAPH Blogs - Janet Daly  19.3.09
Is David Cameron's message out of sync with voters' concerns?

In the Spectator this week, David Cameron makes a stab at delivering  
what he clearly hopes is a new, clear Conservative message.   
Unfortunately, it isn't very new or terribly clear. It is basically  
the "post-bureaucratic age" theme revived, this time with a tone of  
urgency and anger.

Well, the urgency and the anger would be perfectly appropriate, God  
knows, for the terrible economic crisis we face but oddly there is  
very little reference in Mr Cameron's piece to that crisis and little  
apparent recognition that the circumstances in which we now find  
ourselves (and thus the terms of political debate) are quite  
different from those of a year ago.

He begins by saying that he has received a great deal of misguided  
advice to the effect that he and his party should just lie low if  
they want to win the next election: "Sit back, keep quiet...let the  
Government unravel". But, he says, he repudiates that advice,  
choosing instead to outline a vigorous alternative plan. This is an  
admirable decision but I do hope that Mr Cameron is aware that until  
about twenty minutes ago, the insistence on sitting back and keeping  
quiet was coming from his own camp and was directed at critics like  
me who were arguing that cowardice was no way to impress the electorate.

He then goes on to outline (or rather reiterate) the ideas of self- 
determination and responsibility which his party has been selling for  
some time, and which would be, under normal circumstances (and if  
explained in more concrete terms) perfectly plausible as a basis for  
a campaign. Unfortunately, the circumstances are not normal.

The claim that if you provide people with access to the right  
information and give them power over their own lives, they will  
behave responsibly seems, on the face of it, to have been rather  
dented by the great debt bubble. I personally believe that people do  
behave better and more responsibly if they are not infantilised by a  
paternalistic, over-powerful state.

But at the moment, the country seems alarmingly full of people who  
demonstrably did not make the right, responsible economic choices:  
who mortgaged themselves to absurd levels and took unethical risks  
with their own and other people's money. As a result, a great many  
voters want (or think they want) not more freedom but more  
protection. They want to be rescued and helped by government, not  
left on their own. This is, as we all know, an extremely dangerous  
notion and it is one which Mr Cameron should be specifically, and  
painstakingly, countering.

He must face head-on the Left wing view that, as he puts it, "people  
will do the wrong thing unless they are told what to do by  
government", and explain why personal freedom can still be the answer  
rather than being the problem.
==========================
DAILY MAIL Comment    20.3.09
David Cameron's first step
    By DAILY MAIL COMMENT

Another grim day for the public finances saw borrowing set to soar by  
£100billion this year, with an incredible £200billion increase  
possible next year.

Whoever wins the election will inherit the worst debt crisis in our  
history.

For too long both parties have been in denial about the truly  
horrific scale of the problem, but yesterday a speech by David  
Cameron gave the first indication that the Conservatives are  
beginning to grasp the public spending nettle.  [It’s hard work  
hammering it into their thick skulls! -cs]

Mr Cameron ditched his aspiration to 'share the proceeds of growth',  
pledging instead to focus on 'paying down our debt'.

He said that in the public sector, we must 'get more for less' and  
vowed to cut back on ridiculous tax credits that give state handouts  
to the well-off.

He also attacked the wildly inflated salaries of quangocrats, as it  
emerged that spending on quangos has gone up by £4billion in the last  
year alone. [Today we learn that the head of Ofcom is paid £417,000 a  
year.  WHY does he get more than twice a prime-ministerial salary? -cs]

Yesterday's speech was a significant step - but only a first step. A  
far fuller picture of Tory ideas is required, and it's not yet clear  
they have the courage to make the cuts that are necessary if the  
economy is ever to recover.
==========================
THE TIMES                     20.3.09
David Cameron considers the painful options
    Peter Riddell: Political Briefing

The crucial test for any aspiring prime minister is whether he  
addresses the acute fiscal crisis now, before the election. This is  
not about precise policies that cannot be decided. What matters is  
admitting the seriousness of the problem and the painful options.  
David Cameron’s speech was along the right lines, not least on a day  
when the dire trend of public borrowing was underlined. But his big  
omissions were also revealing.

Mr Cameron steered away from a slash-and-burn attitude to the public  
sector, or to tax cuts at all costs. Sharing the proceeds of growth  
between higher spending, tax cuts and debt reduction has been  
replaced by the priority of debt reduction to aid recovery. Public  
service reform will continue, though he accepts that this will not  
produce expenditure savings in the short term. [It ought to.  Take  
quangos for example. -cs]

On public spending, he talks of getting “more for less”, a suggestion  
similar to the repeated theme of Sir Gus O’Donnell, the Cabinet  
Secretary, in his speeches to civil servants. Mr Cameron stresses  
that “we’re not going to rest our whole strategy for living within  
our means on a simplistic list of efficiency savings”. There will be  
“serious pay restraint” for those “who work behind the front line in  
public administration”.

Yet the fiscal adjustment will involve far tougher decisions. Mr  
Cameron said that his Shadow Cabinet was looking “at every single  
extension of the State” to see whether it is justified.

But where? Apart from hinting at cutting tax credits for middle-  
income earners, the Tory leader said nothing about which state  
activities can be cut back or would go. The big issue is which core  
services should remain taxpayer- funded — such as schools and the NHS  
— and how far direct payments should be extended to, for instance,  
the elderly, childcare and tuition fees. The Conservatives need to  
address these issues before the election.

The other big omission is on the tax side. Not only will there be no  
room for many years for cuts in the tax burden, as distinct from  
shifts from one tax to another, but taxes are also going to have to  
rise in the next Parliament in order to cut debt. This is not least  
because of the enormous hole that has opened up as a result of a  
probably lasting shortfall in tax receipts from the City and  
financial services.

If the Tories now recognise the severity of the crisis, the  
Government is still in public denial. Ministers are unwilling to  
acknowledge that fiscal policy was unsustainable before the  
recession, and, in future, they refer only to spending restraint. But  
it is going to be much nastier than that. This is not about  
apologies, but about being honest with voters.