Brian Monteith: Tory tax-cuts will win voters

Scottish Conservatives leader Ruth Davidson. Picture: John Devlin

FORTY-FIVE years ago yesterday, the first episode of Monty Python’s Flying Circus was broadcast – it was time for something completely different. Scottish democracy needs something different now, and ironically it is the Scottish Conservatives that could provide it.

A week is a long time in politics, and there are another 82 of them before the next Holyrood elections, so there will be a great deal we cannot yet foresee. One thing I predict confidently is that the Scottish Tories will go into that campaign with their most attractive manifesto yet – all because they have at long last embraced cutting taxes in Scotland.

Ruth Davidson’s announcement that she is establishing a Low-tax Commission, to report back to her by January next year, shows a degree of intent that is highly encouraging. What is clear is that rather than wait until May 2016, the Scottish Conservatives believe that being identified as a low-tax party intent on reducing the burden of the state on ordinary people will be an advantage during next year’s general elections.

Tory rivals, supporters and agnostics should all welcome this development for it achieves three things that will set our democracy alight. Firstly, those from our left wing political consensus and our McChattering classes will finally be able to test to destruction at the polls their theory that Scots favour higher taxes in return for greater public spending. I think the collectivists are in for an embarrassing surprise.

Secondly, Conservative members and sympathisers will enjoy much-improved morale that comes from their party of choice advocating policies that they instinctively believe in and wish to see being offered to the Scottish electorate. High morale is a prerequisite for running an effective campaign.

Many conservative supporters have stayed at home during Holyrood elections, believing it was a pretend parliament of no consequence. Now they will have a positive reason to turn out and vote – like they usually do at Westminster elections. Such a change in behaviour could be worth at least five points to Ruth Davidson’s Conservative group, taking them into an unprecedented level of support in the low twenties. Low tax policies could also prove appealing to the aspirational sections of Labour and SNP voters, especially if, as seems likely, both parties veer to the left with even higher tax policies.

For the undecided and unengaged, the good news would be that at long last there could be a strong ideological choice between our political parties. It is clear from the swing from Labour to SNP in 2011 and the subsequent revelation from YouGov post-referendum polling that demonstrated nearly one-in-three SNP supporters voted No in 2014, that the Scottish electorate realised it could vote for Alex Salmond and then vote against independence if required – and it did. The constitutional issue thus discounted, supporting Labour or the SNP has essentially been a mutual trade-off, with the Scottish Conservatives under Annabel Goldie unwilling to present a significant challenge to this consensus.

When I advocated over two years ago that the Scottish Conservatives establish a Tax Commission it was in the knowledge that the new Scotland Act that derived from the Calman Report would allow tax cutting of income tax to return to Scotland next year.

The further tax-varying powers that will undoubtedly come in the wake of last month’s referendum will provide Scottish Conservatives with the tools to change Scotland’s political discourse so that competing bids to spend more taxpayers’ money will be balanced by them offering lower taxes.

There will be cries of anguish and howls of rage from those that believe in a growing public sector – such as Labour, the SNP and public service unions – as well as the lazy consensus that appears to inhabit the BBC editorial staff and media commentators of the dirigiste school. We saw it last week when David Cameron announced tax cuts at both ends of the income tax spectrum by proposing a rise in the tax-free allowance and the starting threshold for the top rate. His plan would take many of the low paid out of tax altogether and relieve many mid-scale earners (such as a quarter of teachers, a third of police officers and ten per cent of nurses) from the highest rate. Hardly the filthy rich.

As is usual, opponents line up to say how much it will cost, quickly moving on to then demand what state spending will be cut by to fund the reduction. The tax cuts are then dismissed as uncosted and unrealistic without any acknowledgement that all earnings belong to individuals – not the government.

Never is any consideration given to the well-documented effect that reducing taxes can have – that of increasing a government’s revenues as more people are attracted into work or become more productive. So we were told Cameron’s tax cuts would cost £7 billion because that is the expected yield based upon the current levels of tax.

And yet we know that when previous politicians, from Calvin Coolidge to JF Kennedy to Ronald Reagan and Margaret Thatcher, cut income taxes the net receipts climbed. The reverse can also be true, for we also now know that when George Osborne increased capital gains tax the revenues plummeted. The argument is simple enough: reforming taxes to make them lower and simpler can be of benefit to the public sector rather than a trade-off against it.

This is the message that Ruth Davidson’s Scottish Conservatives need to develop, together with some ideas that can be debated and fine-tuned into a realistic policy platform. There are no shortage of Scots or Scottish think tanks that she could ask to join the commission or contribute by giving evidence. She should be speaking to Eben Wilson of Taxpayers Scotland and Geoff Mawdsley of Reform Scotland, while she and Michael Forsyth should bury their recent differences as he has much first-hand experience of chairing such a commission for David Cameron.

Lord Forsyth came up with a range of attractive proposals only for them to be quietly locked away in a drawer as George Osborne and David Cameron felt it better to eschew the Tory tax-cutting image to appear modernised, like New Labour. Now David Cameron is using tax cuts as a way to attract back Conservatives who had lost heart. Ruth Davidson should learn from this.