After John Redwood’s excellent report on the economy, we move on to John Gummer’s “Quality of Life” report. It threatens to undo all Redwood’s good work and tax reductions, by adding new “green” taxes. Let’s leave aside the growing doubts on the alarmist climate scenario. Even if you buy the CO2/climate story, a few green taxes will have a trivial effect on global CO2 emissions, while doing significant economic damage. As a recent letter-writer to the press put it: the Tories must decide whether they’re low-tax free market economists, or high-tax socio-environmental meddlers.
George Osborne recently said on the Today programme that he “is not a supply-sider”. Well if he paid a moment’s attention to the evidence from a dozen countries, he would be, and he ought to be. And it is no good David Cameron insisting that “We will put economic stability ahead of tax cuts”. In the medium term, low taxes are a pre-condition for stability, not an alternative to it. High taxes will undermine stability. If you’re in a runaway train, you don’t achieve stability by doing nothing. You need to take urgent action.
Of course it would be wise to reduce government spending as we reduce taxes. Two suggestions. Recent reports suggest that the cost of quangoes in the UK is an extraordinary £130 billion a year. Finding £20 billion savings there should be a doddle.
Then there’s welfare. David Cameron says that family breakdown is the cause of our broken society, and he’s partly right. But welfare dependency is as big a problem, or bigger. Leaving aside those genuinely unable to work, it’s better for both the individual and society that the individual should work. Welfare is there to tide people over temporary illness or misfortune, and to help them back into work. It is not there to fund and maintain a permanent, work-shy, feral underclass, many of whom plague the streets carrying knives or guns. We should do as the US has done, and put a lifetime limit of say five years on welfare eligibility. When that’s gone, you’ll have to rely on family or charity. Yes of course, there would be a few hard cases. But the great majority would get back to work, and find a better life, a decent income, and some self-respect.