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Hague Ditches "Tax Guarantee", Promises Specific Tax Cut Proposals

Robert Lee, Tax-news.com, London

31 August 2000

William Hague yesterday ditched his much-vaunted "tax guarantee", announced in October 1999 as the centrepiece of his "Common Sense Revolution" policy programme. One of five policy guarantees, it was a pledge by the Conservative Party to reduce taxation as a share of national income. Earlier this year, the "tax guarantee" was watered down after Shadow Chancellor Michael Portillo persuaded Mr Hague that spending on key public services during a recession could suffer as a result of such a tax cut committment. Now the guarantee has been buried six foot under once and for all and will not appear in the Tories' mini manifesto to be published next week.

In its place comes a woolly, non-committal "Believing in Britain" draft policy programme, which is expected to promise that in "all normal circumstances" the Tories would cut tax.

In an interview with The Times, Mr Hague stated that the Tories are to contest the forthcoming election with specific proposals to reduce tax and he defended the killing off of the "tax guarantee" as insurance against exceptional circumstances.

Mr Hague, however, seems passionate about his new draft manifesto and has promised half a dozen big policy announcements in the document, with more to come before the Tory party conference in the autumn. Mr Hague has faced fierce criticism of late and the Tories a slide in the polls, but he dismisses August as being the "silly season", saying 'I do not feel we have lost ground. I think we are in a very good position because of the progress we made earlier in the year.....I do not accept that we are in a weaker position. I have never taken that much notice of opinion polls. They go up, they go down. They are often wildly inaccurate. We have never opened the champagne at this office when we have gone up. We have never got down in the dumps when we have gone down.'

The ditching of the "tax guarantee" is unlikely to send Mr Hague's party soaring up the polls, that is for sure. However, he claims he is simply diluting it to provide a get-out clause in the event of a recession. He has said that the remaining four guarantees which make up the Common Sense Revolution - on health, schools, the pound and denying benefit to people who can work but will not - will remain.

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