Jon Moulton calls for sharper cuts now to avoid pain later

Jon Moulton, board member and author of CPS report ‘Pain Aversion’ says public spending must be cut harder and sharper to avoid pain later.

“An important Tory donor has withdrawn his financial support from the party after disagreeing with the Government’s charity tax and George Osborne’s economic strategy.

Jon Moulton, the venture capitalist, said that he remained a Conservative at heart but warned the decision to cap tax breaks on large charitable donations had left him feeling “very uncomfortable”.

In an interview with The Times, Mr Moulton said that the Chancellor’s plan to secure economic growth by plugging Britain’s budget deficit over five years was “always optimistic”.

He called for greater austerity now as the only way to avoid “even more catastrophic pain later”.

He said a failure to make further cuts created the “grave danger of a brief recovery”. He said: “I am not saying I am no longer a [Tory] supporter. If you asked me what my political persuasion is, it would be Conservative — I have not become a socialist. But I am not a financial donor to the party at the moment.” His comments reflect growing unrest among Tory donors, MPs and members over the compromises imposed on the party by having to govern within a coalition.

Mr Moulton called for a swift about-turn over the decision to include charitable gifts in the Budget’s cap on tax breaks. Under the plans, tax relief would be capped at £50,000 or a quarter of a donor’s income, whichever is higher.”

To read the full article, visit The Times website (paywall).

To read Mr. Moulton’s CPS pamphlet ‘Pain Aversion’, click here.

Date Added: Thursday 31st May 2012