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First in an occasional series on European politics.
In Europe, the political spectrum often seems inverted. Many nominally left-of-center political leaders are leading free-market reform efforts, while their colleagues on the putative right support socialist policies. The U.K., France, Germany, the Netherlands, and Italy all offer clear examples of a wide gap between the political affiliation of national leaders and the policies they pursue in office.
Cameron has gone as far as to accuse his own party of excessive “rigidity.”
The United Kingdom has seen more than its fair share of political role reversals. In 1997 and 1998, Prime Minister Tony Blair led his Labour colleagues to cut the corporate tax rate from 33% to 30%. During his tenure, the British government also cut the long term capital gains tax from 40% to 10%, reduced the national sales tax and the income tax, and expanded a child tax credit for lower- and middle income families. Blair’s government also created a new R&D tax credit scheme for small and medium sized companies, and in a bid to make entrepreneurial activity more tax-friendly, created a Management Incentive Scheme to provide significant tax cuts for the leaders of small, high-risk ventures.
Yet Blair’s philosophy is not that of Thatcher. Even as he recognizes the limits of state intervention, his heart is on the left. “The only society that works today,” Blair once said, “is also one founded on mutual respect, on a recognition that we have a responsibility collectively and individually, to help each other on the basis of each other’s equal worth.”
Blair’s policies, under the “Third Way” label, became well-known throughout the world. What is less well-known is that many British conservatives have had great trouble in finding a way to combat Blair’s political philosophy. He flummoxed them through triangulation, much as Clinton did to the American right after 1994. Today, the new leader of the British Conservative Party, David Cameron, does not disagree with Blair on the most important issues—rather, he disagrees with Margaret Thatcher, his predecessor as leader of the Conservative Party.
Cameron has gone as far as to accuse his own party of excessive “rigidity,” and as the BBC put it, “delivered a pretty stinging rebuke to those in his party… who have led demands for a tax-cutting agenda.”
The man who now leads the British right has called for a new array of “green taxes,” says that conservatives should accept that the creation of British government healthcare through the National Health Service (NHS) was “one of the greatest achievements of the 20th century,” and, perhaps most surprisingly, is in active opposition to spending cuts of the National Health Service suggested by the current Labour Chancellor!
In theory, Conservatives are in favor of smaller government. But Cameron, whose son has a rare condition combining epilepsy and cerebral palsy, has promised to campaign against spending cuts at the NHS, adding: “When your family relies on the NHS all of the time—day after day, night after night—you know how precious it is.”
Look for the Conservative Party and the Labour Party to battle each other in the years ahead for being the “greenest.”
It could be argued, of course, that the care to Cameron’s son could be provided more efficiently through private healthcare companies instead of through government healthcare, and that dependence on government services, all the time, day and night, is not a good thing: the fact that the leader of the Conservative Party, of all people, does not want to admit this should be worrisome for free-marketers.
Cameron speaks with disdain of the past policies of the Conservative Party. Perhaps forgetting that low taxes can help people pay their mortgage more easily, he said at the Party Congress: “While people wanted, more than anything, stability and low mortgage rates, the first thing we talked about was tax cuts.”
What’s Cameron’s dream? As he said at the Congress, it’s “social responsibility.” For those unfamiliar with European political discourse: the term “social responsibility” is a lofty-sounding but ultimately empty concept that European socialists have used for years to make fiscal conservatives feel guilty about fiscal austerity and tax cuts. It is extraordinary that this, of all things, is the core value set forth by the leader of the “Conservative” Party.
Recently, a letter from Labour Environment Secretary David Milliband to Chancellor of the Exchequer (Finance Secretary) Gordon Brown leaked out. It was replete with plans for substantial new “green” taxes that amounted to billions. One would expect the Conservatives to be opposed to these proposals because Conservatives are supposed to be generally skeptical of new taxes, and the relationship between “green” taxes and actual reduction of environmental damage is often unclear.
Instead, rather than criticizing the proposals, Tory environment spokesman Peter Ainsworth attacked the Blair government for not implementing them earlier: “Tony Blair’s Government has sat on its hands for ten years. Tackling the enormous challenge of climate change would have been much easier if they hadn’t left it so late.”
Look for the Conservative Party and the Labour Party to battle each other in the years ahead for being the “greenest,” not by pleading for more individual responsibility, but by pleading for the most punitive green taxes possible. In his letter to Gordon Brown, as the BBC has reported, David Milliband “calls for measures to combat “car use and ownership”, and a “substantial increase” in the road tax. He also calls for “a new pay-per-mile pollution tax … families with big cars could end up paying more than £1,000 a year in additional tax.”
In a bid to outdo Labour on green issues, Conservative Party leader David Cameron has already said he supports the “Richmond [borough] council’s plans to charge the drivers of the most polluting vehicles higher parking fees,” has said he would be willing to tax air travel, and has expressed a desire to “rebalance” the tax system to tax pollution instead of income. Most interestingly, he has “also said he would put a wind turbine and solar panels on top of Number 10 Downing Street if he became prime minister.”
No wonder, then, that one third of British voters polled, as the Guardian reports, “thought [of Conservative leader] Mr. Cameron … as the most likely green leader, with 24% favouring Mr. Blair and 19% favouring Mr. Brown.”
Which British party is the party of small government? Which party is “greenest”? And which party is most committed to tax cuts? The fact that these questions are up for debate is the biggest story in British politics.
Jurgen Reinhoudt is a research assistant at the American Enterprise Institute.
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