Taxing times

WILL he or won't he? It is tempting to say that only Gordon Brown knows, but even he, it appears, has yet to make up his mind. Easier to answer is the question of whether the Conservatives are in a stronger position to fight a General Election, after a captivating week in Blackpool. The answer from the conference hall and bars is a clear 'yes', as was obvious from the roar that greeted David Cameron's dramatic 'Go ahead and call that election' challenge to Mr Brown.

There is no doubt the Tory faithful, who arrived at the seaside in near despair after weeks of disastrous opinion polls, left it believing that, at worst, they were back in the game.

And that is important. After all, it is the rank-and-file that knock on doors and stuff envelopes and all the evidence shows that swing seats can be won by effective local campaigning. Furthermore, the TV pictures of a youthful and confident Mr Cameron delivering a fluent speech - without notes - will remind many voters why they liked him just six months ago.

It was truly an astonishing achievement to deliver a 68-minute speech from memory, without stumbling once. Last time he tried the trick - two years ago - it was only for 20 minutes.

But, of course, the Tory leader could not fail to win over his own faithful with an audacious tax giveaway aimed foursquare at Middle England. The question is whether a package that looks shiny, exciting and new in the Blackpool sunshine will lose its sparkle on the autumn election trail.

To, answer that, I think we need to understand the motivation for Mr Cameron's decision to make tax the election battleground and there is only one explanation - sheer panic. Remember what the Tory leader repeated over and over at his last conference, just one year ago in Bournemouth - no "unfunded, upfront tax cuts" on my watch.

At the time, Mr Cameron was ramming home the message that he was bravely facing down his right-wingers and marching the Tories onto the centre ground. The focus was on the issues that settled the 2005 General Election - better schools and hospitals. Those issues barely featured in Blackpool. Instead, 12 months on, with an election looming, mouthwatering - and poorly-costed - tax cuts are being tossed around like confetti in the Blackpool breeze.

Of course, the Conservatives insist all the goodies - on inheritance tax, stamp duty and families - are prudently matched by fresh revenue-raising, but no one should be fooled. On every measure, the money will flow out of the coffers of a Tory treasury far faster than it will flow in. Take Monday's, cheered-to-the-rafters, pledge to spend £3.1bn freeing almost all the wealthy winners of the housing boom from paying any inheritance tax on the proceeds.

The proposal to raise tax from the non-domiciled uber-rich is very welcome and long overdue, but if it offered such easy pickings Mr Brown would have done it years ago. It is impossible to see how the Conservatives can recoup £3.1bn from the elusive non-doms - leaving Labour smelling blood and lining up those 'Tory spending cuts' posters.

Similarly, the Tories are determined to offer tax breaks to encourage marriage - including, it appears, a £1,000 a year tax cut for wives who give up work to bring up children. Yet, having pledged to fund his family tax cuts from new 'green' taxes, Mr Cameron spent the week ditching proposals on supermarket parking and aviation and was silent on 'gas-guzzling' cars.

Ditto the plan to boost tax credits for couples by raising £3bn from cracking down on the 2.7 million incapacity benefit (IB) claimants. These are the long-term jobless - many in the North-East - that Labour has spent a decade trying, and mostly failing, to get back into work. It simply cannot be done quickly.

Mr Cameron told the right-wing Press he would cut off benefits. He told The Northern Echo he would offer more intensive - and inevitably expensive - help to those on incapacity benefit, helping them find jobs.

Mr Brown must regret not reforming inheritance tax himself and allowing the Tories cleverly to steal a march on non-doms, but I don't think he will be panicking. Labour will be confident that, under the sustained scrutiny of an election campaign, the gaping black holes in the Conservative tax and spending plans will become obvious.

It is not yet widely recognised that almost all the inheritance tax gainers are in the Tory southern heartlands. They are probably already Tory voters. Similarly, expect to hear a lot about the fact that millionaires - yes, millionaires - will enjoy a whopping £280,000 bonus. It must be the most regressive tax cut in history.

What this week's blitz of policy pledges shows is that Mr Cameron, staring election defeat in the face, has gambled all on going back to basics - tax cuts and more tax cuts. Regardless of whether the sums add up - and they clearly do not - he is determined to put clear blue water between the main parties.

It may well be the case that the Conservatives, with time running out, made the correct calculation that back to basics was their best bet. And political journalists like me are delighted. If nothing else, the election, if it comes, will be an interesting one - because voters will now be offered a clear choice.

But, barring an unforeseen disaster, all the signs are that the nation has decided it prefers Gordon Brown to David Cameron. The Tory leader is paying the price for failing to set out a coherent alternative to Labour, believing he would easily win a personality battle with the dour Scot.

Yesterday, Mr Cameron left the stage to the sound of Desmond Dekker's 'You can get it if you really want' - containing the lyrics 'Rome was not built in a day, opposition will come your way'.

I still think that is a message for his own MPs - not the man in No 10.