Coffee House

The Daily Telegraph’s verdict: Osborne isn’t working.

9 February 2013

The Daily Telegraph is more supportive of the Conservative Party than any British newspaper, which is why its leader today – urging George Osborne to change course – is important. “The coalition’s economic policy is not working” it says, and goes on to urge a rupture with the failing policy. Its central recommendation is that corporation tax drops below Irish levels so Britain offers the lowest company tax in the European Union. Osborne could announce this on his 20 March budget. And he could spend 21 March listening to the sucking sound as companies started relocating to Britain.

“Overnight, this would make the UK the most attractive location in the EU in which to invest and do business, and it would be consistent with the steps the Coalition has already taken to make the country one of the best places in the world to start a new business. Such a significant reduction could be accompanied by the removal of exemptions, subsidies and special deals that businesses currently enjoy. Extra growth would compensate the Treasury for the up-front tax hit.

It also proposes the abolition – yes, abolition – of capital gains tax.

The Chancellor should also consider abolishing capital gains tax (CGT), currently levied at 28 per cent, which raises less than £5 billion a year but which requires a host of rules and regulations to prevent avoidance. This would infuriate the Left, but CGT reduces the incentive to invest at a time when it is badly needed. Entrepreneurship and risk-taking should be encouraged, not throttled.

This can be financed by the slimming down of government. The Telegraph leader cites a figure that you’d never read in the Guardian (or the Times) because it belies the idea of vicious (or courageous) cuts. In Osborne’s first 3 years as Chancellor, core government spending will fall by just 3 per cent. Like a child peeling a plaster off slowly, to minimise the pain, this just protracts the whole process. In 2015, after seven years banging on about the deficit, Osborne will have to admit that the deficit is not only still there but that it is the worst deficit in the Western world. Voters who had put the Tories in to fix this problem will be deeply unimpressed.

How to make faster progress? The government is interested in Canada right now, as we saw when Osborne brilliantly poached Mark Carney, the next Bank of England governor. But the lesson from Canada’s remarkable recovery is that there should be no sacred cows: departments should be cut equally. Osborne seems to have acquired a farmyard full of sacred cows. Foreign aid is ‘protected’, the NHS is ‘protected’ and so on Behind this lurks a dangerous intellectual error: the idea that money means progress. This is the very idea that was tested to destruction by the last Labour government.

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Doubling the NHS budget did not prevent the NHS Mid Staffs disaster: ‘Protecting’ the NHS does not mean making sure it’s more expensive than ever. The health service can be expected to do more, with less. It’s also worth noting that Telegraph is reluctantly proposing cuts that would alarm many of its readers. It suggests “removing benefits for better-off pensioners, such as free bus passes and the winter fuel allowance.

I can imagine Osborne reading this thinking ‘ah well, easy for you to say, I have to win an election’. But this is the point: right now, his caution is leading him to defeat as well as economic failure. The standard of living is being squeezed and voters notice. Osborne asked the 2011 Tory Conference to keep their “eyes on the prize – a British economy freed from its debts”. In fact, as the Telegraph says, Osborne’s plan is for the national debt to rise by an almighty 58 per cent. Soon, the Telegraph says,

…our social commitments, not least to pensions, will be unaffordable. It is simply handing over the responsibility to future taxpayers, which is not only unreasonable, but immoral. It is also profoundly un-Conservative.

Politicians tend to see newspaper support as tribal: that, if the Daily Telegraph is Conservative, it ought to support a Tory Chancellor. But the Telegraph, like The Spectator, vehemently attacked Gordon Brown’s plans for 2010-15 because of the debt he proposed. Brown’s critics, myself included, can hardly applaud Osborne for borrowing just as much.  As CitiGroup has pointed out, Osborne’s resolve has weakened with each budget and autumn statement. The majority of fiscal consolidation will now be carried out by whoever wins the 2015 election. This is not fiscal responsibility, but its negation. The City has noticed and it’s now likely that Britain will lose its AAA credit rating. A Chancellor, no matter how charming, can’t expect Conservatives to keep waving the pom poms while debt skyrockets and the recovery evaporates.

The Telegraph leader ends on a simple point: that next month’s Budget is Osborne’s last chance to make changes that will make difference in 2015. If he doesn’t do something radical, and change the autopilot from the current cliff-bound course, then he will be consigning himself, his party and his country to a pretty unattractive fate. The newspaper is not attacking Osborne, or calling for his departure. It is simply urging him to change course.

David Cameron has just demonstrated in Europe that boldness can work. The Telegraph’s leader shows there are plenty radical options on the table. Yes, taking them would be a gamble. But sticking to the existing policy, now demonstrably failing, would be the biggest gamble of all.


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Show comments
  • Daniel Maris

    And here’s some info on his Mum which I am sure will fill you all with confidence in his abilities:

    “His mother is Felicity Alexandra Loxton-Peacock, the daughter of artist Lady
    Clarisse Loxton Peacock.His mother was a Labour voter, an anti-Vietnam War marcher and worked for Amnesty International.”

    (Source: Wikipedia)

  • AlexMacDonald7

    I have been saying this for ages; there has got to be some supply-side reform! Corporation tax only harms the worker and the consumer anyway, The Conservative need to eat a dosage of Libertarian economics; yes please!

    • Daniel Maris

      Yes, do away with taxes! Return to a state of nature!! Hobbes and all that!!!

      Now stand for the Libertarian Party and see how many votes you get.

      • AlexMacDonald7

        Brilliant; thanks for your ‘valued’ contribution. Hobbes? The epicentre of coercion vs the stance of Libertarianism which fundamentally rejects coercion; well argued.

  • Tom Collins

    Promoted beyond his pay grade?

    Apply for JobSeekers allowance NOW!

  • Michael Thompson

    Thatcher’s free market began all this in the 80’s, and is the reason why this country is now a dumping ground for the filthy rich to play in, while the poor go to the wall.

  • TerryField

    If rigorous right-wing policies were applied, over time they would work – of the army of slob voters subsidised by Brown allowed for the time to see results.

  • John McEvoy

    Slimming down the government? What utter nonsense. The whole point of government is to feed relentlessly off the productive sector (50% of GDP is now non-productive, job wrecking, cash-dissolving ‘state activity’) so as to allow more and more State employees to draw big salaries for doing absolutely SFA followed by drawing large index-linked pensions for the rest of their naturals after early retirement.

  • patrick neil fillero

    Osborne is the weak link

    • 2trueblue

      Wrong, Brown/Balls/Blair ae the weakest link. They broke the chain.

  • jorjun

    Four words responsible for the lack of demand in the economy. The elephant in the room that British are trying studiously to ignore. The first bubble in history, never to pop. The striving to obtain somebody who can carry on the gold run in the bank of England. ‘Only home-owners vote’ : Rampant House Price Inflation.

  • Walter Ellis

    So the Telegraph has finally joined the Tea Party.

  • Daniel Maris

    Do you really think the Irish wouldn’t respond by shaving 1% off their Corporation Tax? They’d be mad not to. Our two economies are not comparable. The positive economic impact of one HQ locating in Ireland will be about 15 times the impact of the same HQ locating in the UK (because of the difference in the size of the economy and population). It is always going to be in their interests to shave another percentile off the corporation tax.

    Our future lies much more in innovation and cornering markets. The recent Highview development in energy storage is a classic example where we ought to be pouring in huge amounts of investment to get a global lead on that – so far we are only tinkering about with that, allowing other countries to catch up. The global market on energy storage is worth about $600 billion over the next ten years.

    Ireland cannot compete with the sorts of investment levels we can pour in.

    • HooksLaw

      You make a fair point. A race to the bottom of the tax league would be a bit daft. The other issue of course is how much do we need to spend as a nation. The drive to cut expenditure will have to be relentless for a generation.
      Cutting stupidly high rates may well result in a higher take in the end but cutting taxes to stimulate the economy will not impact on the government deficit except to make it worse.

      And there is relatively little ion the way of our tax structure – apart from basic income tax rates – that are a disincentive to growth and business. Interest rates are very low.
      I mention income tax since I believe that all rates are intrinsically too high and should be cut but the big problem the govt have inherited is the need for income given the massive deficit.

  • Carl Thomas

    Sorry but Canada’s dramatic recovery is a debt fueled construct with consumers, supplied with low interest rates, borrowing to preserve their standard of living.

    Record levels of debt and record asset prices. Sound familiar?

    A few thoughts to improve UK competitiveness are things like tackling costs of living by not debauching the currency then whining about imported inflation. These comments from Vodafone note the London cost of living, which the Treasury have implied they want to preserve by claiming the Mayor’s plans to build housing would distort the London market, makes it difficult for them to hire.

    Along with that some attempts to try and halt the trend of the past decades where all the benefits of growth are concentrated at the higher end of the income scale where they go into fueling unproductive asset prices rather than investment in businesses and purchase of goods and services. It’s all well and good saying that those at the higher end pay the most taxes but it’s ridiculous that the public purse is having to subsidise people working full time through working tax credits as they are not paid enough to support themselves.

    • Daniel Maris

      Carl, You can’t tackle the cost of living in London without tackling mass immigration. The Mayor is permitting the building of tens of thousands of property for oligarchs from Russia and China and other rich ne’erdowells from around the globe despite mass immigraiton creating huge housing need in the capital.

      Every Londoner is being squeezed. Their disposable income is being whittled away as pay is frozen or reduced in real terms.

      The answer is to concentrate on the REAL economy. That means jobs and homes for your citizens, not jobs and homes for incomers. That means long sustainability.

      That means innovation. That means more emphasis on manufacturing and agriculture.

  • Anthony Webb

    The trouble as I see it, is 1) The Liberal Democrats. And 2) The press as a whole aren’t offering enough political cover, even the right wing press seem confused.

    Basically, you are asking Osborne to step out into a live firing zone without much, if any cover fire what so ever. The press have to do their bit, but most still actually listen to the Labour line and promote Labour’s phraseology whenever they trot it out.

    The economics know how within the press corps, is truly shocking, ignorance seems to rule the roost, the Keynesian’s are far too powerful amongst the press.

    Osborne needs to step out, but provide some cover and attack those that restricts his instincts.

    • Daniel Maris

      It would be a lot simpler if Osborne just stopped f***ing up the economy.

      The UK press is probably the least Keynesian in the whole of Europe.

      Meanwhile in Greece – in case anyone hasn’t noticed – they have eliminated the deficit and are now actually reducing their mountain of debt.

      Osborne has managed to get the worst of both worlds: austerity and huge continuing increases in debt.

      • HooksLaw

        You need to be careful with Greece since things like pensions and defence come from a different state budget.

        Andl I read that Greece was missing its 2012 budget deficit target.
        Plus Greece regularly lies about its deficit and its economy. back in September it said its deficit for the year was 12.5 billion, against a target of 15, but it turns out it was 20 billion.

        The Greek economy is a basket case.

        • Daniel Maris

          OK, I am going to backpedal on that claim which I based on an NHK World news report – perhaps they had misinterpreted things as well. The surplus appears to apply to only the government expenditure accounts.

          The position appears to be as follows (still a very quick fiscal recovery all things considered):-

          “ATHENS, Greece (AP) — The Greek government said
          Monday its painful austerity drive is paying off, with the
          budget deficit reduced to the target of 6.6 percent of annual output in
          2012 from 9.4 percent a year earlier.

          A finance ministry statement said that, not
          counting the cost of servicing Greece’s debt mountain, the government posted a modest budget
          surplus of €434 million ($588 million) last year.”

    • HooksLaw

      ‘The economics know how within the press corps, is truly shocking,’ you could easily afford to miss out the word ‘economics’ there and your phrase would still stand.

      Otherwise true.

  • anxious

    the tory law – the poor law

    • Colonel Mustard

      The Labour party have worked harder and achieved more in kicking away the ladders of social mobility, ensuring the highest aspiration of the young is conformity and mediocrity, bankrupting the country at great expense but to no great improvement and making sure that the poor remain so. At the same time they have taken institutions like the NHS and effectively vandalised them.

      The Tories should take no lectures from advocates of the Destructive party about the poor.

      • telemachus

        You just cannot say the last government vandalised the NHS
        Before 1995 half the cardiac waiting list died before surgery and the hip waiting list was 5 years
        We are tired of the right not expressing gratitude

        • Colonel Mustard

          We are tired of the left not accepting responsibility, not apologising, but instead lying, dissembling, conniving, deceiving. We are tired of their double standards and hypocrisy – which you exemplify. I have been tired of it my whole lifetime.

          We are also tired of trolls like you who stalk and harass commentators with facile pro-Labour slogans in every thread.

          • telemachus

            In the end all right wing individuals resort to mud
            In 1930’s Germany they went further
            If we do not soon get back to a reasonable regime we may slide down that road
            They got rid of the Justice Secretary because he was too liberal

            • Wessex Man

              Um, the Nazis were a national socialist movement gone bad much like Labour.

              • telemachus

                The name belied the extreme nature

            • cyllan2


  • david aderton

    Thatcher used to say, “The country will thank us for it in the end”. The Thatchers and Lawsons are what this country needs right now. Thatcher used to say, “The country will thank us for it in the end”. The Thatchers and Lawsons are what this country needs right now.

    • HooksLaw

      Sadly for Lawson and your view of him, it was he, who was otherwise a good chancellor, who propagated the Lawson Boom which so bedevilled Thatcher’s successor.

      • MrVeryAngry

        Apparently against the Sainted Lady’s wishes?

    • telemachus

      That duo gave us the basis of the non caring society the effects of which linger on still

      • Wessex Man

        I suppose Blair cared about the poor at one stage many years ago and Brown didn’t really mean it when he called Gillian Duffy a bigot and Prescott didn’t really mean to become a Lord and the Pope is already planning to make Scargill a Saint.

        • telemachus

          I concede that Blair was a revisionist
          He was a necessary evil to allow Gordon to engineer a sufficient surplus to double the NHS budget and properly fund the schools crumbling when he took office

          • HooksLaw

            Brown did not deliver a surplus. Stop telling your lies again. once he stopped following Tory spending plans he ran deficits when he should have been paying off debt. Labour spent borrowed money.

            Brown was delusional.

            • jack mustard

              Actually, Brown delivered 4 years of surplus 1998-2001. From 2001-2008 he budgeted deficits at rates similar to those he inherited the Tories in 1997, and let’s not forget that George Osborne was promising to match Labour spending plans right up to 2008.

              • MrVeryAngry

                Brown did not ‘deliver a surplus’ at all. Gummints can’t deliveru surpluses, only wealth creating private business can do that. But, you are right about him spending us into penury. Osbrown is clueless..

              • doggywoggy


                Brown followed tory spending plans for two years whilst having three massive tax rising budgets in the first two years, stealing the pensions wealth of millions of future pensioners in the process and ruining Britain’s pensions industry, underselling our reserves of Gold and putting in place the regulatory framework which helped create the crash of 2008. and then then he delivered a temporary surplus in the years you name….

                Then he wasted those proceeds on 9 more disastrous wasteful and irresponsible years of over-borrow, over spend, over tax and inappropriate regulation. During which time the phone hacking and tabloids buying police evidence scandal was brewing under labour’s nose, they increased regulation in the food-chain yet stopped the meat inspections in 2001 and closed the meat inspection factories in 2006 which would have caught this horsemeat scandal much sooner, and they oversaw the NHS and the mid-staffs death by neglect tragedies (which now we learn could have been even worse in 5 other hospitals, in spite of doubling the NHS budget, they created an NHS which was a lethal death trap, through their own target setting overly bureaucratic, pen-pushing, box-ticking and care-be-damned culture).

                Labour over spent, over borrowed, over taxed and over and inappropriately regulated this country to where we are today.

                Many of these cock-ups and catastrophes are slowly being exposed by Cameron’s many enquiries and the result of those should prevent such things happening again, but to watch the BBC, and listen to lefties, whenever such scandal’s break, of the corruption and incompetence of what happened during Labour’s watch, you would be forgiven for thinking that Cameron caused it all. Much of which when he was an opposition, back-bench MP!

          • MrVeryAngry

            My, but you have a serious problem. Are you (a) deluded or (b) Daft or (c) deceitful?

          • 2trueblue

            Yep they both delivered the revolting north Staffs debacle…….

      • HooksLaw

        Cobblers. Utter lying bilge. If indeed what you say was true than it is you admitting 13 years of labour failure.

    • Augustus

      Osborne obviously lacks courage. Either that, or he simply hasn’t got the appetite for real reform. Britain needs a radical, determined programme to unleash the supply-side of the economy. Britain can’t remain a first-world, or even second-world, country unless it improves its productivity. Generating wealth is what’s needed, because as dire as Osborne’s inheritance was from 13 years of Labour
      profligacy, he’s still done far too little to improve the nation’s prospects.

      • HooksLaw

        Britain needs to get its non discretionary government spending under control. It is on target to lose 1.2 million public sector jobs. This is a massive change over.

        I am not sure there is any evidence for your supply side theory, beyond the more common sense view that lower income taxes are generally a good thing.

        Less regulation may be a good thing – but look at the banks look at horsemeat in our burgers. We live in a complicated world and i for one look at glib solutions with some scepticism.

        • MrVeryAngry

          The banks have been proto-nationalised since 2001 and specially privileged since I don’t know when. Regulation is the problem, it is not the solution.

        • doggywoggy

          Labour introduced MASSIVE regulations into the food chain from 1997-2010 and yet the horsemeat scandal has happened in spite of all that. They introduced a lot of regulation into banking and removed other regulations.

          The left vs right lot keep arguing about the amount of regulation without stopping ever to think of whether any of it is even APPROPRIATE.

          Labour are like a circus where to protect the audience from the lions, they put in 10 layers of cages. Then when the audience complain that they cannot see the lions for the cages, they go and open all the doors, then blame the tories when the lions get out at eat the audience.

          So far it looks like the tories have been continuing down that path, but have removed a couple of cages and put in some more doors.

          When all we needed was one cage with a very securely locked door which never opened to the audience.

          I want a party which does not consider the amount of regulation, but only the appropriateness of its actual purpose. One regulation that works is better than 10 regulations that don’t. Likewise 10 regulations that do are better than one that doesn’t.

          Let’s start looking at “does the regulation work?” not “is it enough regulation or not?”

      • TerryField

        He is comfortable. He is middle class. He is reasonable. He is not appropriate at present.

        • Daniel Maris

          Middle class? He’s the son of a Baronet. Aristocrat.

    • David Lindsay

      Well, it doesn’t.

      Better late than never from the Telegraph. The Worst Chancellor Ever simply has to go.

      • 2trueblue

        Ah well we could always go with Balls and have a total c… up.

      • doggywoggy

        Brown was worse. But tragically, not much worse.

    • Daniel Maris

      Yes, we’ll see how much the country thanks her when she pops her socks won’t we? What exactly has she left us? Nuclear power with a £67 billion waste price tag and a £1.5billion clean up per annum price tag. No coal industry. A bloated finance sector. Manufacturing in seemingly terminal decline. Further EU integration. And mass immigration as a structural prop of our economy.

      • 2trueblue

        Reality in your world must be great. Next you will be telling us that that in the 13yrs your chums were in power they provided for out future energy needs, looked after our youth employment, child poverty, built houses and improved our infrastructure, improved our hospitals (especially in the NE) all in all provided the frame work for a caring society where we all felt safe and could look forward to our future where those born and bred here felt secure that their standards were important.

  • MajorFrustration

    Sounds good but whats the point in two years Labour will be back in power

    • telemachus

      Then the five point plan from day one
      Plan for a flying start

      • Colonel Mustard

        A flying start as in pigs might.

        • telemachus

          I have a sense that the right are on the run
          The Tories have conceded tacitly the defeat, even the size of the defeat in 2015.

          • Colonel Mustard

            We’ll see, I have a sense that the worm is about to turn and that the bullying, revanchist, hegomonic left are not as clever as they think they are.

            • telemachus

              Do not have to be clever
              Just correct
              The public understand

              • Wessex Man

                For someone who worships it’s a Balls up and Stalin, I would hardly say you have a grasp of public opinion.

                • dalai guevara

                  as in HoL reform?
                  as in gay marriage?
                  as in the continuation of QE?
                  as in reducing tax for millionaires?
                  as in in/out of the EU?

                  Do explain to me how the Conservative backbench represent public opinion. I am all ears.

                • telemachus

                  I wonder who will be proved right in May 2015

  • Count Dooku

    I don’t agree with abolishing CGT. It is the only way that you can tax un-earned income. It is inefficient and has a whiff of double taxation about it, but it’s the best you can do.

    Corporation tax on the other hand should be scrapped. It is paid for by employees, customers and shareholders anyway and is DEFINITELY a double tax. Local business rates already cover the services that companies use and more!

    • telemachus

      Corporation tax could be abolished to promote a dividend bonanza and fuel a stock market boom

      • Count Dooku

        A leftist arguing for scrapping corporation tax? I never!

        • telemachus

          I R O N Y

          • Wessex Man

            Hells teeth you do irony?

            • Mycroft

              I expect they have one member of the Telemachus stable who specializes in that.

              • telemachus

                Do not decry reasonableness

                • Mycroft

                  That remark has a certain irony coming from someone that Mr Balls could provide a solution to Britain’s economic woes.

                • telemachus

                  Not only could he
                  But his five point plan is ready to go in June 2015
                  I’m looking forward to transformation from plodding gloom to the drive forward to prosperity again

                • Mycroft

                  I fear that is a matter of blind faith and it wouldn’t turn out any better than last time.

                • huktra

                  You forget the prolonged boom engineered by Gordon unil remanded by Lehman

              • MrVeryAngry

                They probably heard someone do it once, before the War.

    • MrVeryAngry

      Crap. CGT is ‘earned’ income.

    • Old E10ian

      ‘Local business rates already cover the services that companies use and more!’
      Excuse me, but I think that’s 180 deg out. You get nowt in return for business rates. CGT does at least take away money that’s been gained – sometimes without any meritorious action of your own, as you say.

  • telemachus

    “One last chance” it opines

    He has had all the chances he deserves and has given ut the triple dip

    There is a five point plan

    Repeating the bank bonus tax – and using “the money to build 25,000
    affordable homes and guarantee a job for 100,000 young people”

    Bringing forward long-term investment projects, such as schools, roads and
    transport, to create jobs

    Reversing January 2011’s “damaging” VAT rise now for a temporary period

    Immediate one-year cut in VAT to 5% on home improvements, repairs and

    One-year national insurance tax break “for every small firm which takes on
    extra workers, using the money left over from the government’s failed national
    insurance rebate for new businesses”

    • Nick Reid

      1) Bank bonus tax ? We already have a bank levy raising £2bn or so. Which is more than a bank bonus tax would raise (you might not have noticed that bank bonuses have fallen substantially).

      2) Temporary VAT cut ? Why would making an iPad £15 cheaper help the UK economy in any significant way ?

      3) I’d agree with you on VAT cut on home repairs and Nat Ins cut (tho need to make sure employers dont sack existing workers to replace with new workers).

    • kyalami

      In short, carry on the spendthrift policies which got us here in the first place. Staggeringly stupid.

      • telemachus

        Invest to reverse the triple dip engineered by Osborne choking off growth

        • kyalami

          “Invest” means there will be a return on your money. Yet, thanks to the spendthrift Balls and Brown, we spend as much on interest on this “investment” as we do on police and education together. On my personal investments I get a return – I don’t have to pay out each month. I recommend a beginner’s course on conomics before you comment again.

  • Fat Bloke on Tour


    The issue we are faced with is not primarily one of economics, it is one of systems engineering – the economy is currently over damped and will not reach / fulfill it’s long term capabilities under its current conditions.

    QE – pushing on string more like has failed just as it always would if it was used as a one club golfer.

    However the law of unintended consequences, or are they really.

    Turn NI into National Investment.
    Tell the Treasury to shut up over hypothecaton.
    Use the QE interest windfall to build build build.

    Lack of confidence and lack of demand is the issue.
    Sniffy has done nothing to generate either.

    • HooksLaw
      • Daniel Maris

        What makes you think those are UK citizens buying those cars? Russian oligarchs and Colombian drug dealers need to have their 4X4s when over here don’t they?

        • Wessex Man

          Well you need something like an armoured car given the state of our roads.

        • HooksLaw

          Come off it. Like your street is full of Oligarchs and drug dealers. the statistics give the lies to the fathead.

          • Daniel Maris

            Well I live in London where I suspect most of that increase in car purchases is coming from and I can assure you that tens of thousands of properties are currently being built for wealthy people from overseas and as they take up (occasional) residence, a large proportion of them will buy cars. It could well explain much if not all of the rise, particularly at the top end.

  • Right_On1

    “Money does not equal progress” – a notable point but unfortunately one of the many Labour myths of the last 20 years that this group of “Conservatives” have totally failed to challenge. Much like “austerity” that Osbourne has allowed to be “disproved” while not even trying to implement it.

    DT leader is the right direction, worth reading the comments after for the standard left wing talking points and nonsense.

    • HooksLaw

      Read the Telegraph comments? You must be joking. What have that bunch of useless idiot bigots and racists got to say ?

  • Nick Reid

    Critics of Osborne’s policies from both the Left and the Right fall into the trap of thinking that if only we did X,Y & Z then the economy would be substantially better. That there is some magic policies that will transform things. But what if the current set of policies are actually the best available under current circumstances. We are recovering from a debt driven consumption boom that crashed horribly and the process of consumers delevarging and UK plc rebalancing can’t be improved or speeded up by a VAT cut or more school building (Labour’s proposals) any more than cutting corporation tax or CGT.

    Regarding your specific proposals. UK corporation tax is already one of the lowest in Europe. And as we know from Amazon et al most of these multinational companies that can be based anywhere manage to avoid paying full corporation tax anyway. Is reducing corp tax even further really going to make any significant change in the number of companies based in the UK (we already host the most international HQs in Europe).

    Capital Gains Tax. The reason it is set at 28% is because the Treasury models stated that this was the peak of the Laffer Curve in generating max income without causing people to avoid it or work less hard. It’s difficult to argue that anyone is being put off being entrepreneurial because of its current rate. More likely it is planning issues (the biggest bugbear of small business owners I know) or lack of qualified staff that stops them expanding. Quite frankly selling your business for £100m and pay 28% tax or 20% really isn’t an issue.

    • Right_On1

      Not sure that UK Corporation tax could be considered one of the lowest in Europe. From memory it’s about 30th, and that’s only because of recent reductions.

      • telemachus

        The DT are trying to emulate the Irish
        The UK is above that
        Let’s have a realistic plan for growth a la Balls

        • Right_On1

          Your plan does indeed sound like a lot of balls.

          • telemachus

            However it sounds it will get us out of Osborne’s triple dip

        • Colonel Mustard

          The last “realistic” plan ended up with “the money is all gone”.

          • telemachus

            Liam’s Joke
            For it read we have invested all left after the Lehman steel to promote growth
            Please George do not waste our investment.
            Sadly he did not listen

            • kyalami

              “invested” = p!ssed away

              • telemachus

                See above
                West Coast mainline, new hospitals, new schools and on

        • Old E10ian

          ‘Let’s have a realistic plan for growth a la Balls’
          If I claimed my allowable business expenses twice, a la Balls, I’d be sent to jail. Is this what you have in mind?

      • Nick Reid

        UK corporate tax rates are below those in Germany, France, Spain, Italy, Switzerland, Holland etc. Yes many of the eastern European and Balkan countries have lower rates but the likes of Microsoft or Pfizer or Citigroup are unlikely to be setting up their European HQ and posting their multi-million dollar a year executives and host of MBA graduates to Riga or Sofia.

    • Count Dooku

      The issue with Corp tax is that the people who pay it are extremely mobile. It’s no good having one of the lowest rates in Europe at 40%, when the guy who has the lowest charges 5% (this is for illustrative purposes, I’m aware the rates are incorrect).

      Also, Ireland is a very similar country to us socially and civically. The only thing we used to have was the size of our market, but now we are in the EU, that doesn’t matter. The whole continent is one market.

      • Nick Reid

        Not that mobile. Goldman Sachs employs over 5,000 peoople in its Fleet St office. Are they really going to move all these people (who own houses in London, have kids at school in London, friends in London) to Dublin or Stockholm because of a saving in corporation tax ?

        Not to mention all the business links GS has with London based lawyers, accountants, IT people etc.

        Now if the UK had an egregiously high corporation tax rate (with no sign of it being temporary) then gradually businesses would leave and new ones would stop coming. But at the margin a few percentage points on corp tax makes little odds.

        The 45p top rate of income tax is a greater disincentive to business formation in the UK. As that is higher than in our peer nations (like Germany), if not egregiously so.

        • Count Dooku

          My whole point is that 10% when compared to Ireland is not marginal at all. We either match them or we go lower. No point in coming second in the athritic race.

          And Goldman’s effective corp rate is ridiculously low as it routes a lot of its business through its Irish and Lux subsidiaries. US banks do have big branches in London due to fantastic staff in the City, but they definitely don’t pay full corporation tax here.

          • Nick Reid

            Which was one of my points. There’s no point in reducing corp tax rates as an incentive to attract global firms as they don’t pay full corp tax rate anyway.

            Reducing corp tax rates will make no difference in attracting business to the UK. It will just reduce the Treasury’s coffers a little which will have to be made up with higher income or excise taxes.

        • telemachus

          Just a bit tired of folks thinking up spurious economic excuses to try to reduce taxes for the super rich.
          You are just about to receive a 5% pay rise and you want another

          • jimmy mac

            40% is more than enough for wealth creators and always has been. Even Labour accepted it before they began to politicise things.

            • telemachus

              Not in these times of economic squeeze
              All have to contribute
              Not just the poor

      • Old E10ian

        The major fixed ‘tax’ which businesses based here cannot avoid, is Business Rate. You pay it in advance of any profit that your premises may earn you, with no direct return. The loss of cash flow may even be the deciding factor in whether you make any profit.To my mind this is also the killing flaw of Land Valuation Tax, which some cite as a panacea. Capital Gains Tax at least takes away money that you know you already have.
        Since Business rates go direct to central government for redistribution, councils have no direct payback in nurturing their local businesses; instead they try to raise money with punitive parking regimes that make local high streets die.
        Equally, employer’s NI is a direct deterrent to creating employment. We could actually afford higher income and CG Tax if these two fixed overheads were reduced.

    • HooksLaw

      I agree.
      There is a notion that the government must ‘do’ something.
      interest rates are at 0.5%.
      Corporation tax has been cut
      Hundreds of thousands of public sector jobs have been cut
      The NHS is going through savings which will total 20 billion a year (pause and think about that Mr Nelson – savings which will total 20 billion a year – before you spout about nothing been done. Go and cut your magazine budget by 17%)
      Unemployment is falling
      Employment is increasing
      Car sales are rising as is investment in the car industry.

      Wake up and consider Mr Nelson that whatever growth we had previously was thanks to a debt fuelled artificial boom that was exacerbated in the last 18 months of this governments life in a desperate attempt to cling to power. The economy is hopelessly unbalanced and far far weaker than probably anyone thought.

      Cut corporation tax more by all means – but do not be fooled into thinking this is a panacea. The UK economy is buggered and will take time to recover, a recovery which is severely hindered by the failures in the Eurozone.
      it is a failure that is also hindered because of the state of our banks which as every day passes are more and more exposed as a bunch of criminal barrow boys.

      Its time you spent more time exposing these cheats and self serving liars who are as much responsible for ruining Britain as the labour Party with whom they connived in a mutually beneficial symbiotic relationship.

      • Nick Reid

        Very good points. I’ve asked Fraser Nelson in the past why he, as a the manager of a small/medium sized business, is so very keen on supply side reforms. For a country like the Uk that already has low supply side barriers to business.

        Is being able to fire people more easily, or prevent them having a lunch hour or banning maternity leave or lower corporate tax rates going to make the Spectator a more profitable or successful magazine ? I very much doubt it.

        Clearly the UK has a demand problem. There are fewer people around who can afford £3.50 for a Speccy. That’s because real household income has fallen as (imported) inflation has reduced people’s spending power and low interest rates has reduced savings income.

        These are the real issues facing the UK economy.

        • HooksLaw

          The spectator would be more profitable if it offered something people wanted to buy.
          Clearly from the general tenor of comments on here what the Spectator badly needs is an improvement in education standards more than anything else.

          PS Mr Reid
          The Spectator costs as much as a pint of beer and i know where I would sooner spend my money.
          The Spectator needs to look at what it offers and who to, not at corporation tax and flexi-leave. As it stands it does not inspire me – although it should.

        • Daniel Maris

          No,the structural issues are more fundamental. For the Spectator the real danger is people coming on this site and reading the articles for free and refusing to pay a subscription, and going off to somewhere they can read for free, if the Spectator try and put the content off limits.

          That’s one big issue – the way the internet is destroying retail businesses and associated employment.

          Generally another huge structural problem is that globalised free trade makes us – a country with laws, a welfare system and no peasantry – compete with a country wihout laws, no welfare system to speak of and a labour reserve of 400 million underemployed peasants.

          Another biggie, is that we have structural mass immigration caused by a number of factors including previous mass immigration, membership of the EU, destruction of trade union power, and the dominance of the finance sector.

      • jack mustard

        Alternatively, one could point out: the economy is shrinking; the benefits bill is rising; national debt is increasing; child poverty is increasing; and there is a crisis of underemployment. Like you, I don’t want this government to do anything – it’s actions serve to make things worse.

        • HooksLaw

          If the economy is shrinking why is unemployment falling and employment rising?
          Where is the magic wand you are so eager to wave?

          • jack mustard

            The economy shrank 0.3% in the last quarter- you really need to follow the news rather than propaganda from Tory HQ. Most of those new jobs you boast about ar p/t, low-paid, taxpayer subsidised – that is why then benefit bill is increasing while unemployment falls.

            As for the magic wand – it clearly isn’t in George Osborne’s possession. He is more Slytherin than Gryffindor.

            • Daniel Maris

              It shrank even further on a per capita GDP basis, probably another 0.1% or so, thanks to mass immigration (something Speccie commentators hardly ever mention, even though the ONS has pointed up the effect). In terms of disposable income, after paying for tax, energy, housing and transport, I would be surprised if anyone but a small minority in this country among people at work has seen any real increase over the last 10 years, whatever might have happened to the national GDP.

          • Daniel Maris

            Unemployment down? Because as we are gradually discovering there is a statistical fiddle going on. People are being encouraged to register as self employed is one example. And also, because there is a change in the job market. Many people are now working part time into old age – job blockers preventing younger people get a start. Others are working part time in preference to going on benefits, given all the administrative hassle that now involves, even though they want to be FTE.

            The is no magic wand, but there is a real baton that the government should wield, as in focussing on the REAL economy: per capita GDP, disposable income for UK citizens (not just anyone who happens to turn up here for work), jobs and homes, how big are new build properties…the real things that really matter to our citizens.

            • Old E10ian

              ‘People are being encouraged to register as self employed is one example..’
              You speak as though that’s wrong: as I’ve said to several of my formerly salaried friends, facing a future as freelances, there may not be many Jobs, but there’s lots of Work needing doing.
              Those who offer work, rather than demand jobs, may find more real, rather than paper, security.

              • Daniel Maris

                But it explains (in part) why the economy is not doing well but unemployment has been falling. Also, there is an element of figure-fiddling – as I understand, people are being encouraged to register as self-employed because they can claim a grant that way, probably roughly equivalent to a job seekers allowance, but v. useful for keeping the unemployment figures down.

                • Old E10ian

                  I don’t dispute the scope for jiggery-pokery (I’m not short of cynicism), but there’s nothing wrong in principle with helping people into self-employment by erasing poverty traps. I don’t know how it works nowadays, but in Thatcher’s time there was an overt scheme to pay the JSA equivalent for a year if you registered as self-employed. Obviously, it involves risk, but my point is that having rights to holiday pay and sick leave mean nothing if your employer is Blockbuster or HMV. As Macarthur put it, ‘Security is a myth: there is only opportunity.’

                  No party talks about self-employment in a positive and concerted way. Unions hate it, of course, for a mixture of good and very bad reasons. I’ve never forgotten the way a clock struck thirteen in my mind when I heard Michael Foot say many years ago that self-employment was a ‘scourge’ he wished to see abolished. As a fairly unquestioning Labour supporter who wished to start my own business one day I was forced to ask whether they really wanted people to escape poverty if it meant them escaping regimentation

          • anyfool

            The economy gives the appearance of shrinking because the previous Labour years GDP and growth were massively overstated.
            The present government is swimming against a current of utter bilge spouted by the Media and others.
            The economy at the moment is probably growing otherwise the workforce would have began to shrink by now.
            The ONS and almost all public sector divisions are staffed by mediocrities who cannot be trusted to do a reasonable job.

      • Daniel Maris

        There’s plenty the UK government could do:

        1. Get out of the EU.

        2. Stop mass immigration.

        3. Invest in innovation.

        Would be three ways for a start.

      • FrenchNewsonlin

        “banks … criminal barrow boys”. Indeed and until “these cheats and self serving liars” face criminal charges they will carry on as before. RBS talks about begging FredShred to return his ill gotten gains. Fat chance. RBS under the Shred had US operations. Send him to the US, they’d have more compunction in throwing the criminal book at him. There’s plenty of ammunition and, as you quite rightly say, more surfaces daily. Meanwhile the time is coming to repudiate all the ‘odious’ debt and reset the economy.

      • Barbara Stevens

        If we are ‘buggered’ like you suggest, why are we spending 12 billion in foriegn aid, we were told we had a ‘moral duty’, what tosh is that to tell a nation struggling to survive. We now see the elderly care proposals, which could be afforded if the aid budget was stopped. We owe these countries nothing, and to be told we do is a lie. Since when as the UK become a worlds benefactor? These people are supposed to be educated, in top schools, or was that a con too?

    • Colonel Mustard

      You’ve outwitted and confused the tele-troll now. He’s all up and down this page trying to tag his slogan to the top comment. The thread looks like a rose garden.

      • telemachus

        If you look that is not a reasonable strategy
        The only confusion here is the confused mind of any who would believe that the DT Leader is a serious proposition

        • HooksLaw

          Ah well now there you strike a chord – we really need an article on the decline of what was once a great newspaper.

    • Doppel1800

      “More likely it is planning issues”: the biggest single problem is employment law not planning, nor is there a shortage of qualified staff.

    • andagain

      More likely it is planning issues (the biggest bugbear of small business
      owners I know) or lack of qualified staff that stops them expanding.

      I remember how enthusiastic the Telegraph was about planning reform last year. If they change their minds I might believe them when they say it is necessary to cut taxes on Tory donors and spending on Labour voters.

    • MrVeryAngry

      28% CGT is theft. Why should my work be taxed twice?

  • Jimble

    The idea that Osborne is charming is as silly as plan A.

  • Fat Bloke on Tour


    If you had any sense of shame you would currently in a period of quiet self reflection wondering why you ever thought the dog boiling of the ConDemNation would work.

    Sniffy has got it wrong.
    You have got it wrong.
    Dave the Rave’s media glee club have got it wrong.

    All you have to do is watch the film – Ace in the Hole – and it will all become clear.

    Cutting taxes to steal bread out of the mouths of Europe’s poor is not the answer it is just the problem writ large as the same failed policies are tried over and over again. It is madness to think that this time will be any different.

    The building blocks for a recovery were in place in 2010.
    Sniffy has managed to lose half of them.
    It will be harder but it can be done.

    • Rhoda Klapp

      If you run your economy for poor people, at the end you won’t have an economy and you will have more poor people than ever.

      Fraser has finally caught up with what some have been saying down here for a couple of years.

      Except that there was no victory in the EU budget saga, and won’t be until a budget goes through. Watch the pea under the thimble, those people are real operators, they will stuff Cameron, who is just a victim of delusion.

      • HooksLaw

        An EU budget has been set. Live with it.

        • Rhoda Klapp

          When it happens. Or more accurately when it can be shown to have really happened. If it sticks for seven years. Just be ready to look at the one-year record of this one as an indication.

        • FrenchNewsonlin

          May have been ‘set’ but the EU parliament is talking of voting it down.

    • Colonel Mustard

      “Cutting (British) taxes to steal bread out of the mouths of Europe’s poor” tells us everything we need to know about you. That our economy is to be judged on its effectiveness in providing charity to foreigners, even when bankrupted. If you want failed policies not just tried but imposed over and over again then you need only look to the Labour party. 10p tax and “the money is all gone”.

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