Monday, 15 September 2008

A shot across the bows

When you dissect the speeches at Bournemouth today for and against the amendment on tax plans, you will see very little practical difference in members' views. We all agree that the least well-paid should be taken out of tax, and that the next lowest paid should pay 4p in the pound less tax (it was dishonest of some of the establishment speakers to imply that the people behind the amendment would go back on those commitments).

The dispute was, it seems to me, over the steer given to the Conservative end of the media that, in government, we would not only shift taxation from the poor to the very rich, but also find another £20bn savings in public services and hand those out as tax cuts as well.

We were damned both ways. If the amendment had been passed, we would have been damned in the media as tax-and-spenders. As it is, we will be damned as cutters of public services in favour of the rich. Neither, as an examination of the policy document and, hopefully, our manifesto when it comes, will show, is true.

Although the manifesto was clearly defeated, the many articulate arguments advanced in its favour must influence the drafters of the manifesto. We must not give the impression that further savings (for instance, from the cutting of the numbers of MPs and their pension entitlement, and all that flows from that) will all go to benefit tax-payers, when there are still great needs of not only the people who don't pay tax at the moment, but also many of those that we will have taken out of tax.

Many Liberal Democrat sitting MPs and challengers in the home counties need to get former Labour voters out of their armchairs when the election comes. These have already been disillusioned by New Labour which has shown itself merely to be a continuation of Thatcher & Major. They must be persuaded that it is worth switching to us because we really are different. Nudges and winks to the Daily Telegraph will be counter-productive.


Anonymous said...

The current administration is one of the highest Taxing, if not the highest Taxing governments we've had for a long time.

Tax cuts are achievable, we are wasting tax pounds left right and centre in this country.

Just looking at the Community Charge in Wales you can see that four out of the top five Councils for high Council Tax are labour.

Frank H Little said...

I have no difficulty with the idea of cutting unnecessary jobs, both in the civil service and in health administration. I have also long accepted that a cut in the number of MPs is a necessary complement (and benefit) of full devolution.

"Make it Happen" will take loads of lower-paid people out of direct taxation altogether. But it will also reduce everybody's income tax as 4p will be taken off the standard rate. The only "sufferers" will be those at the top end who make use of tax dodges which Vince Cable will put a stop to.

What we are talking about is the redistribution of further savings. Why should that all go back in the form of reduced direct taxation? The UK is one of the least directly taxed nations in the EU. Why not (while we are stuck with council tax) help all local councils with better rate support settlements? While Wales is still dependent on the Westminster exchequer, why not replace the Barnett formula with one that more fairly addresses Welsh problems?

Frank H Little said...

I should have included in the cost savings the inflated PR departments in Westminster, some agencies which are arms of the civil service in all but their accounts book entries, and the gold plate on MPs' pensions.