Switching to a flat tax regime without loopholes and axing public spending is the only way to save the UK

Thursday 3 January 2013

IN his otherwise excellent critique of the ideas of the Conservative "modernisers", Andrew McKie fails to make the vital link ("Spending and borrowing will be the Tories' undoing", The Herald, December 31).

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The Tories are spending and borrowing too much precisely because the modernisation project requires them to concede ideological hegemony to the high spend/big state zeitgeist so sedulously conjured by Tony Blair and Gordon Brown, and so naively believed by great swathes of the electorate, especially in Scotland.

But the Brown model has utterly collapsed "under the weight of its internal contradictions'', as the old Marxists would say. As Labour's Liam Byrne so crisply put it as he left office: there is no money left. Now that Tory over spending and borrowing have shown that Ed Balls's Plan B would have had no discernible effect on the economy, Labour has no economic policy at all. That's why it has gone completely silent since the Autumn Statement.If the Tories could but grasp this, they would see the opportunity to present a viable alternative. We have to move to a flat tax regime with no deductions or allowance loopholes above a generous level of personal allowance which would keep the working poor out of income tax altogether. This is so because, under the current tax system, there is no big untapped source of revenue that will not result in the rich moving themselves and their assets out of the country. The paltry sum raised by Gordon Brown's 50% income tax rate is evidence of that. Moreover, no peace-time British government has won an election with taxes taking in excess of 40% of Gross Domestic Product, and we are past that critical threshold now.Consequently, and in addition, the axe has to be taken to public spending: foreign aid, renewable energy subsidies, working-age welfare, EU subsidies, the NHS and education bureaucracies.I should like to believe that David Cameron, George Osborne and the other modernisers have the strength to grasp the nettle, and do what has to be done to save the country from the knacker's yard. Sadly, however, not enough voters recognise the gravity of our situation to support austerity. So probably we shall have to ready ourselves for a Labour Government to take us into the abyss instead.Richard Mowbray, 14 Ancaster Drive, Glasgow.You state (Herald Obituary, December 31) that William Rees-Mogg, writing in the Sunday Times, "called for Alec Douglas Home to resign as Prime Minister, which he did shortly afterwards". More likely it was the result of the 1964 General Election, which Harold Wilson won by a margin of four seats, that caused Sir Alec to depart Downing Street. Even if we accept that the Rees-Mogg article, which your obituarist describes as "one of the most influential pieces of post-war British political journalism", played some part in Home's decision to resign as Tory leader (although, as you acknowledge, Home himself always denied this) it was surely more his failure to win the support of senior colleagues such as Iain Macleod and Enoch Powell that ended his brief leadership career. Russell Galbraith,73 Norwood Park, Bearsden.

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Switching to a flat tax regime without loopholes and axing public spending is the only way to save the UK

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