MICHAEL HOWARD made his first big mistake as Conservative leader last night. In his opening party political broadcast, he endorsed the idea of Tax Freedom Day as a Bank Holiday. This is a populist gimmick that undermines, rather than enhances, the Tories’ credibility as a serious alternative government.

It is almost as vacuous as the Big Conversation that Labour featured in its party political broadcast the night before.

Tax Freedom Day attempts to show how much of a country’s national income is taken in tax each year. That ratio is applied to the number of days in a year: in 2003, 147 out of 365. So, say the Tories, “we were working for the Government for the first 147 days of the year and for ourselves for the remaining 218 days”. Tax Freedom Day was May 27 this year, and the Adam Smith Institute estimates that it will fall on June 9 in 2005.

Supporters of Tax Freedom Day have half a point. Transparency about levels and rates of taxation is desirable. Governments of all parties have blown smoke in our eyes by disguising tax increases. Labour has been particularly guilty of such obfuscation since 1997 by proclaiming its adherence to its pledge about no increase in income tax or VAT, even while it has created or raised dozens of other taxes, which the Tories highlighted in their “stealth tax” campaign.

Yet Tax Freedom Day is also a deeply flawed concept. Mr Howard’s reference to “the day when you stop working for the taxman, and start working for yourself” is both revealing and misleading. It implies that no one benefits from the money they pay in taxes and, by implication, that this money is wasted (an implicit Tory theme). Do taxpayers get no benefit from the NHS or defence spending? Moreover, it is impossible to discuss tax without also considering public expenditure.

The political debate should be about the balance between the two. Focusing only on tax distorts the real choice.

Mr Howard and Oliver Letwin are right to give warning about the dangers of rising taxes, especially when they are hidden. But it is bogus to talk about holding down taxes, or even cutting them (where Mr Howard is cautious) unless you have first shown how you intend to reduce the size of the state. Most of the Tories’ recent promises — on abolishing tuition fees, raising pensions in line with earnings, and patient and parent “passports” or vouchers — involve substantial extra expenditure. Broadening the choice of public services does not save money in the short term.

The Tories have plenty of bright people thinking about these issues. Several, including David Willetts, Andrew Lansley and Greg Clark, the party’s policy director, spoke yesterday at a seminar organised by the European Ideas Network with Policy Exchange, two lively think-tanks.

Unfortunately, on this occasion, Mr Howard listened to Lord Saatchi, co-chairman of the Tory party, who championed a Private Member’s Bill in the Lords last July on Tax Freedom Day and wrote a slight book on the subject. Lord Saatchi has a big contribution to make on party organisation and marketing. But that does not make him a convincing policymaker. Tax Freedom Day is a policy-free soundbite. What the Tories need is serious thought, not empty slogans.

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