Never mind the economics. Any voter who has ever expressed an opinion over a pint of beer knew without question that the pain inflicted on the electorate by Messrs Lamont and Clarke in successive budgets would be soothed by the elixir of tax cuts in a pre-election bonanza. The magic figure of 20 per cent for basic rate income tax was much bandied about in pubs and dinner parties throughout the land.
Unhappily for taxpayers (and the Tory backbenchers who have been clamouring for tax cuts in the wake of the party's trouncing in the Scottish local elections), early relief from the fiscal yoke is far from certain. In spite of the Prime Minister's optimism on the recent Panorama interview, the message this week has been don't hold your breath.
Most economists predict that the Chancellor will have about £6bn available for tax cuts before the next general election. But that will not buy the Conservatives a 20 per cent basic rate of income tax. "The Government might have to face the electorate with a 23 per cent basic rate, but with the promise of a 20 per cent rate to come,'' Kleinwort Benson notes.
Gavyn Davies, the Independent columnist and one of the Chancellor's "seven wise men'', said this week that the Treasury could afford only a 20p basic rate by 1998 by freezing public services for three years or raising revenue elsewhere. However, if Kenneth Clarke were to abandon his commitment to a balanced budget he could create as much as £17bn for tax cuts. More than enough to achieve the 20p goal.
Roger Bootle, chief economist at HSBC Greenwell, is predicting tax cuts of £2bn in the November Budget and £4bn the year after. But he agrees it is a delicate balancing act. "Interest rates up, yes, but not too much. Taxes down, yes, but not too much."