William Hague’s just been on Dermot Murnaghan’s Sky show. They shot the
breeze for a bit, gabbing about foreign affairs and the recent targeted assassinations on Taliban and al Qaeda leaders, then the conversation moved on to tax cuts as an economic stimulus. Hague
laughed off the suggestion, saying that the US is in its current crisis because for years it has concentrated on offering tax cuts rather than controlling its deficits. Britain will not make that
mistake, he said.
‘No deficit funded tax cuts’ was a line first pursued by David Cameron ten days ago in a speech to the Canadian parliament (although, as Fraser has noted, it has its roots in the 2005 leadership contest and Oliver Letwin’s opposition to
“unfunded tax cuts”). George Osborne reiterated the position in an interview with
the Telegraph yesterday and now Hague has made the same argument. I think it’s safe to say that there will be no major tax cuts at present.