Environment Agency slams Tory tax cut maths

Michael Howard outlined proposals last week which, he claimed, could save £35 billion from the public purse, largely by cutting public spending and laying off around 180,000 public servants on top of the 70,000 already planned through Labour’s own reviews, making at least a quarter of a million in total.

He said he would use any savings from this addition to the unemployment statistics to fund small tax cuts such as reducing taxation on inherited wealth, and on removing the higher rate of stamp duty on more expensive housing.

In addition to these benefits for the more affluent sections of society, Mr Howard said he would also cut £47 million from the £116 million government grant for environmental protection.

The Environment Agency has queried this position, saying that, for starters, the entire government grant for environmental protection is only £90 million, not £116 million. A cut of £47 million, therefore, would leave the Agency unable to monitor and report on the state of the environment.

It has also challenged the savings claim on the grounds that most of the Agency’s environmental protection work is funded from charges to regulated industry, so would not save anything from the pubic purse at all.

The Agency has now written to Mr Howard asking for clarification over the proposals. It also points out that it has saved £118 million over the last three years and has further savings of £74 million committed for the next three years.

At the time of publishing, no answer had been given from the Conservative party.

The Conservative Party’s accountancy skills were also questioned by David Laws MP, the Liberal Democrat shadow chief secretary and a former banker. He says that his analysis of the Tory proposals shows that a Conservative government would have to increase taxes in order to fulfil campaign pledges to fund key public services.

By agreeing to stick to most of Labour’s spending levels for education, health and other key services Mr Laws says the Conservative party would have to actually increase taxes overall by 2009-10.

In an interview with The Guardian Mr Laws said tax would have to rise, as a share of national income, from 36.2% this year, to 38.4% by 2009-10 to meet spending pledges. He said his figures were backed by analysis from the Institute of Fiscal Studies.

By David Hopkins