A FEW YEARS back, I used to have a problem eating my dinner while watching
ER. How’s that for a gripping first sentence? The thing is that my old
ER dinner problem makes me think about Tory tax policy. This is not just because almost everything makes me think about Tory tax policy.
Obviously there’s a lot of fascinating detail, but I’ll cut it down to the essentials. By the time I had arrived home from work, recovered from the commute, put the food on and waited for the grill timer to go ping, the time was usually ten past nine.
Which was generally fine, except for this — on Wednesdays I wanted to watch the hospital drama on television. And ER started at 9pm. So I faced a weekly dilemma. Should I start watching a programme of which I had missed ten minutes? Or should I wait until it finished to start watching the video, which would mean sitting up gawping on the couch until 11 at night.
And then the problem was solved. My brother-in-law recommended Tivo, a hard disk that attaches to your television and makes recordings easier to organise. Once I’d bought it, I found that it could pause live television. In addition, unlike with a video, I could watch at 9.10pm while the rest of the programme was recording. I said goodbye to those eating-dinner-while-watching-ER blues.
There’s more. I have become devoted to Tivo, one of the best consumer products I’ve ever purchased. Yet it wasn’t long before Tivo was withdrawn from the UK market. Hardly anyone else, it turns out, bought it.
Tivo had spent a lot of money on advertising, telling people that they could pause live TV. But who understood what that meant? Who believed you could really do it? Who knew that they wanted it, especially for a few hundred pounds?
So Tivo turned out to be a product that no Brit wanted to buy, but no one who had bought it would ever want to be without. Sky Plus came along, offering the same service but sold more subtly and as part of a package.
The fall of Tivo demonstrates a simple point. There is a big difference between features that are technically possible and valued by those that have them and features that people are willing to buy. I want you to keep this in mind as we discuss Tory tax policy.
Recently, the Taxpayers Alliance, an independent (and necessary) campaign for lower taxes, commissioned polling on tax policy and began circulating the results among Tory MPs.
Some of the answers were unintentionally amusing. Voters were, for instance, provided with the following statement: “The Conservative Party says that lowering taxes would create damaging instability for the economy.” More Conservatives, trying to be loyal, agreed with this statement than disagreed with it, even though it is patently absurd and not remotely party policy. (Party policy is that in certain circumstances it may be necessary to eschew tax cuts temporarily while other policies are put in place to stabilise the economy. Hopefully 0 per cent of Tories disagree with this.)
You might have thought that this comic result would make Conservatives cautious about interpreting the rest of the findings. Sadly, my conversations with Tories over the past few days strongly suggests that it didn’t.
Unsurprisingly, the Taxpayers Alliance discovered that voters would, yes please, like to pay less tax. But they also discovered something more striking. When asked “Do you agree or disagree that if Britain reformed public services and cut waste it could lower taxes without having to cut spending on vital services?” many more agreed than did not.
The agreement by voters of all parties to a central right-wing proposition has produced a flurry of excitement. The papers have been full of talk about a tax revolt against the leadership and its refusal to offer up tax cuts. John Redwood promises a completely new pamphlet and says: “We need to send a fierce signal that we are the low-tax party.”
Let’s leave aside for a second that being fierce has not proved a fantastic vote winner for the Tories for most of the past 20 years. Let’s look instead carefully at what the poll finding is telling us. It says that voters believe you can preserve spending and cut tax at the same time. The problem is (as focus group work for the Taxpayers Alliance shows) that they don’t believe any politicians will actually do it. They think that politicians won’t cut taxes or waste.
This leaves the only interesting question — how do the Conservatives persuade voters that they are wrong, that this time Tories can be trusted? And this, not the desirability of tax cuts, is what the grassroots and the leadership are really arguing about.
The fierce signallers believe that the way to change voters minds is to start making the case earlier in the Parliament and devote more time to the case for low taxes. The quiet men should turn up the volume. This relies on the frankly ridiculous assertion that Tories have not been doing precisely this for years.
The alternative is to accept that tax cuts are a strangely tricky sell, a bit like selling a product that pauses live television. I believe both the central arguments for lower tax are correct. Reform is quite possible and allows you to cut taxes without damaging services, and tax cuts will stimulate much, if not all, of the extra growth required to pay for them. But I am not surprised that voters are sceptical.
Tories have to win office and then prove their point; prove, if they can, that the scepticism is unjustified. They should play down the tax issue but cut taxes in office. Then if they are right, if the tax-cutting theory proves correct, the Government will provide an unbeatable combination — faster growth, lower taxes, better services. Voters will feel about the Government as I feel about Tivo. They won’t want to be without it.
Tax cutting can be simultaneously a good thing to do and a stupid thing to promise. Winning policies and election winning policies are not always the same thing. What’s so hard to understand about that?
