The Tories made no promises on tax increases yesterday, VAT excepted. This was not by choice. This was by necessity.
The reality is that as Theresa May also recognised yesterday markets are not the answer to all questions. And nor is individualism.
Add all this together and what she's saying, whether through gritted teeth or belief, is that the state has a role in our future and that the direction of travel along which all parties have been headed, where tax cuts and a smaller state have been the only possibility on the agenda, is now no longer on the political road map.
Labour signalled that with its manifesto that rejected neoliberalism. May's done it, wittingly or unwittingly with hers.
Of course not all will agree as yet. The Tory right will always be the Tory right, living in their own version of the nanny state forever, where nanny does indeed solve all problems and no questions are asked as to who pays her and why she might want the job in the first place.
There will be as much a problem for those on the right of Labour who have been in denial on the role of the state for far too long.
The LibDems Orange Book tendency will also be in shock. The nationalists and Greens rather less so, I suspect.
But take the May stance, coupled with the recognition that deficits will run until 2025 (at least), as being necessary measures of pragmatism and the Labour stance as being the overdue, necessary, revival of a Keynesian based approach to the economy within a UK political party and what is actually on offer at this election is a fundamental and unavoidable shift in the direction of UK politics.
It's fundamental because low tax and small state is off the agenda.
It's unavoidable because whoever wins will be moving towards higher tax and a realistic acceptance of a bigger, more interventionist state.
I welcome this. Much as I think markets have a role in the economy I know that they cannot meet all need. I know too that because of the belief that they can substantial pain has been imposed on many. And I also know that the opportunity that enlightened tax and government policies provide to help people fulfil their potential have been foregone.
It's less than two years since David Cameron mocked my book The Joy of Tax at Conservative Party conference. But that was then. Now it's time to use tax to build the future we need. And the main parties are agreeing.
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On the subject of corporate tax I see the EC is finally moving towards some sort of common corproate tax base – be interesting to see what comes out of Ecofin next week.
http://www.consilium.europa.eu/en/meetings/ecofin/2017/05/23/
There’s a blog coming on that…
Very interesting. May just might be grandstanding – a final hoax perhaps?
I’m not sure though that the main parties agree amongst themselves. Blue Labour PLP are going to struggle with this – look at the grief they have been giving Corbyn.
The Orange Book Lib-Dems – tough. Collateral damage.
But within the Tories? This could rip them apart if May’s words are more than words. We could end up with the angel of death (Osbourne) returning to the leadership this time so that he can get his wrecking ball out again.
I’d love to be a fly on the wall at Conservative HQ that’s for sure.
Osborne won’t be back he was in incompetent, inconsequential berk who lacked social skills, intellect and basic decency – talking about surpluses was just a bit of public school boy ‘japes’ that he enjoyed playing while in office ( which as martin Rowson points out was just a ‘gap year’) whilst taking the piss out of the poor and ill before buggering off to a job with another newspaper with which one would not stoop to insult ones haemorrhoids.
he is the ultimate empty vessel; hatful of hollow; man without qualities.
I do not know whether to believe the rhetoric but let’s assume I can. In this election there is no Hayekian offer on the table. Whoever you vote for – Keynes wins!
This is a seismic shift. It had to happen of course. The invisible handers completely failed to understand the complexity of the modern world.
Weird, isn’t it?
But you are right, it had to happen
Last time that happened was the banking crisis. Remember Brown “we’re all Keynesians now”. As soon as it subsided the Bundesbank & George Osborne said “actually. we’re all Kayekians now”.
Keynes was never fully ditched because we’ve always had the ‘automatic stabilisers’ and increase of deficits when aggregate demand dips too low as in 2012-13 when the Tories increased the deficit to give the economy a boost (while pretending they were heading for a surplus-!!!).
Probelm is the Tories always advance the Keynsianism the barest minimum so it doesn’t get in the way of the wealth siphoning of the financial sector and the misallocation of credit by banks -so their ‘friends’ still do well at a cost to society. For example:
May talked about the ‘broken Housing market’ but she frames this as if it were an ‘act of nature’ and nothing to do with human volition. She never bothered to explain the real causes because that would blow the gaff on the whole rentier system, which she is clearly not going to do.
Likewise, the greasy sharp-suited Fallon recently talked about how the energy cartel shouldn’t have worked out like that, there ‘should have’ been more competition. Again, the same framing of these events as if we just a natural occurrence and now critique of the underlying forces and Government’s responsibility to steer things.
They then propose price caps having, a few years earlier, condemned Labour for suggesting this and called them Marxist and in the case of one M.P (Jesseye Norman) referred to it as ‘Stalinist.’
This is clearly fiddling around with the edges of things and deliberately trying to ease things a little while keeping the substantive issues untouched. The Tories can carry on with this way of dealing with things for years promising rigid inequality, debt slavery with slight easements here and there.
Sorry, I meant, of course “Hayek-ians”. I think Kayekians is just another word for canoeists
🙂
I still have reservations about this. I see no ‘road to Damascus’ epiphany about taxation amongst the Tories.
Aren’t we being premature here?
It is what the Tories do after the election that is important.
They have just got away with delivering a broadly un-costed manifesto. In broad daylight.
If they do tax it will be regressive and no doubt aimed at ordinary folk.
I remain sceptical about this – deeply so – and for good reason.
I noted Martin Wolf had an article on the same theme as mine
‘a broadly un-costed manifesto’
PSR you are forgetting that the obligation to have a ‘costed’ manifesto only applies to the Left! The Tories have to keep the myth of unaffordability going in order to convince the electorate that Corbyn would ‘bankrupt’ the economy despite the non-bankruptability of a sovereign money issuer.
Of course, the whole costings nonsense is a ritualistic charade. If the capacity and resources are are their it is affordable.
RE `uncosted` budgets
http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2017/05/the-fully-costed-fallacy.html
(not defending Tories on this-I`d eat glass first-just an interesting point)
Well, OK Richard fair enough.
But it’s not just about taxation though is it?
It is who is going to be taxed and how much. This remains to be seen.
Also, I do not hear the Tories wishing to roll back policies that have resulted in money being taken out of the economy – benefit cuts, the 1% reduction rent income for social landlords that makes it harder to build; the benefit cap which is set to reduce the accommodation portion of benefit over the coming years. The NHS?
I do not buy your premise. I’m going to need criminal justice levels of proof before I do.
And my stance is no reflection by the way on your judgement. It’s just that we are talking about the Tories here….THE TORIES!
I hear you!
Sorry. You are right to be hopeful. And during times like these, that it is strength.