Tax credits have been an expensive disaster that ended up being a nightmare to administer while the poorest suffered . They should be replaced by a bigger basic personal allowance .

One possible idea could be a basic personal allowance of say £10,000 p/a for all taxpayers & a 10p band on the first £10,000 a year of taxable income . Taxable income of say £10,001 to £60,000 p/a would be taxed at 20% and incomes exceeding £60,001 at 30%.

The thing is if your income was say £20,000 a year or less you would only pay 10% income tax – £20,000 is not much these days is it ? A 40% tax rate on incomes exceeding £41,000 p/a is far too punitive – 30% on incomes over £60,001 sounds more economically competitive to me .

This plan would boost productivity growth and reduce avoidence leading to more revenue for HM Treasury , a stronger economy and an end to the poverty trap . How would I fund this ? Simple my sunsetting clause on QUANGO’s that could save £100 billion within five years ! If even the Lib Dems now favour cutting taxes & spending then such policies must be popular as that lot jump on every bandwagon going……

My question to David Milliband do you have the guts to move Labour rightward to win a fourth term in office by embracing the economic liberalism essential to a modern economic policy ?

Your analysis, of course (as ever) is right!

One other point though: in his desire to be pro Europe, how true is it that he is following the usual left wing line and gently rubbing out our relationship with the USA?
I imagine this is especially important vis a vis our wars in Iraq and Afghanistan, but also in procurement for military stuff too.
According to Christopher Booker, the worst thing Tony Blair did while PM was to join the European army and also the hopeless European arms provision where armaments do not get delivered and which cost about three times as much as the American ones (which actually work).
And then there is the problem of Iran which nobody over here seems to mention any more……

Reply: I think Miliband is trying to do the same straddle Blair did – be friends with the USA and be in hock to the EU takeover.

The challenge for the Conservatives is that a win in 2010 may be a one-off based on protest votes against Labour which will fade when you assume the responsibility of office. Conservatives currently do not present a coherent program of the change they wish to affect that might retain popular support through a decade or more in power. The party needs to imagine what it wants Britain and its role in the world to look like in 2020 and to view the 2010 manifesto as the first step in achieving a prosperous society that trades freely in a worldwide common market, improved democracy based on constitutional reform at home and a new (non-political) relationship with the Continent, strengthened links with the English-speaking world that deliver practical benefits such as the right to work in one another’s countries, and an efficient British state delivering quality services, such as an education system that equips Britons better than anyone else for the best jobs in the global marketplace. The challenges today are different from 1979 such that simply reapplying solutions to past problems may see a return of the ‘nasty party’ tag and one-term in office.