It now seems that Labour and the Tories are willing to follow the Lib Dem lead on tax cuts for low- and middle-income earners. Yesterday’s papers had news that Brown & Darling are preparing a range of cuts for possible inclusion in the forthcoming pre-Budget report. And today’s Telegraph reveals that Cameron & Co. are now lining up a preemptive tax cut of their own.
There are strong moral, fiscal and political arguments in favour of targeted tax cuts, so – on paper, at least – it’s A Good Thing that all three main parties have hit on the same position. But dividing lines remain, and they should ensure that this situation reduces into a tax war rather than a new consensus. Chief among them is the way in which the tax cuts will be funded. Word is that Brown will fund his measures through extra borrowing – whereas the Tories and the Lib Dems would take the more sensible route of paying for them by cutting back on government waste.
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