Taxes, Spending, Conservatism

British Tory leader David Cameron gave a speech yesterday that outlined his approach to taxing and spending. Peter Hoskin reviews it here. It's McCain before he committed to the permanence of the Bush tax cuts:

After a decade of reckless spending under Labour, Britain needs good housekeeping from the Conservatives.  We need to start living within our means. Why?  Because in the decades ahead there will be pressure to spend more on the essentials - whether that’s care for the older generation, equipment for our armed forces, or more prisons and police to keep us safe. At the same time, we have reached the limits of acceptable taxation and borrowing.

With the rising cost of living, taxpayers can’t take any more pain indeed they want a government that can give them the prospect of relief. And our economy can’t take any more pain without losing jobs to lower tax competitors.

So how are we going to square the circle?

How are we going to spend more on the essentials without putting taxes up - and over time, creating the space for cutting tax, as we have promised to do?  Our overall method and aim are clear: we will share the proceeds of economic growth. Sharing the proceeds of economic growth is what living with our means, actually means. Not spending everything we have. Not borrowing to spend beyond our means. But ensuring that, over time, the economy grows faster than the state, so spending falls as a share of national income and we can reduce taxes and borrowing.

Those who criticise sharing the proceeds of growth have sometimes not appreciated that if a government actually did this, either taxes, or borrowing, or both would have to fall over an economic cycle.  I stress: have to fall.

And to reduce spending, he proposes welfare reform, pro-family policies, long-term waste reduction, and an overhaul of top-down public services. It matches Labour's spending plans but promises to make them more efficient and more accountable. Like Hoskin, I have my qualms. But it's a start toward restoring conservatism's brand as a careful custodian of public finances.