Sunday, 22 March 2009

So it's forty-five pence, are we all agreed?

I thought I might title this 'How do you solve a problem like George?' But that would be demeaning and possibly misdirected.

Osborne's latest statement – that a 45p top tax rate may be unavoidable – is particularly extraordinary since the tax rise that's "going to be difficult to avoid" is not planned by Labour until 2011.

Is Osborne saying it may be unavoidable then? Or that it may be unavoidable in a first budget after Conservatives win the general election?

Either way, the message is the same – the plan is all but agreed to introduce a 45% rate.

Why would George announce this and now?

It's generally prudent to avoid committing to round figures this far from an election. And it's also impossible to predict the state of our public finances more than a year from now. (Assuming Gordon drags out our pain to the bitter end.)

The impact of his message on grass-roots Tories has been like waving a red flag at the party Conference. Could there be an alternative agenda to George's pre-emptive tax strike?

'Decontaminating' the party has been going on for some years. In fact, one thought the need to constantly impress that Tories have a social agenda as much as a business one was over.

Is Osborne trying to influence the wider electorate now by suggesting the Tories' first response to the budget crisis will be to tax the rich?

Or, has he concluded the public finances next June will be so dire that a small rise in top rate tax will be the least of the un-Conservative tax-raising measures he'll need to take? In which case, he may judge it better to have his ideological battle with the party faithful now than immediately before the election.

Whatever Osborne's reasoning, it must surely be the case that this unpalatable announcement has the sanction of the party leader.

Osborne may be the messenger but the message comes from Cameron.

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