This is precisely the sort of tax cut that the Conservatives should be proposing. Removing tax on savings for basic rate tax payers will encourage people to save more, and reward those who do so.
David Cameron is definitively right when he says that
We need to make a really big change: from an economy built on debt to an economy built on saving. From a country and government that has lived beyond its means to one that lives within its means.
Because we do. This recession has been caused by over-spending andpeople who live way beyond what they can possibly afford to in the real world. Life on the never-never was always going to collapse at some point when it all caught up with you. This is one way of helping it not happen again.
Also, this £4.1 billion is also effectively funded. Yes, it may be by the ever-so-vague “efficiency savings”, but there is a real proposal there - that only planned spending increases on health, education, defence and international development would go ahead under a Conservative government, with all other departments having their increase in spending reduced from about 4% above inflation to just 1%. Which, handily, amounts to about £5 billion.
This isn’t a tax cut that would, or could, get us out of this recession. It undoubtedly is tinkering aound the edges - after all, £4 billion or so is peanuts on a national basis, however much is sounds in itself. But it is the sort of thing that helps those who help themselves, and is restricted to the lower-paid workers so cannot be attacked as a “tax break for the rich” as the ‘rich’ can’t benefit from it.
