Friday, September 12, 2008

Lib Dem leaders must get their act together on taxation

Yesterday afternoon Danny Alexander had an article on Liberal Democrat Voice explaining the party's taxation policy.

He wrote:

"Liberal Democrats will end about £20bn of this wasteful government spending – this is the “spending review” process Vince Cable’s team has been leading. We don’t yet know the final outcome of this review – but I can guarantee it won’t involve trimming investment in frontline services.

"Much of the money we identify with this spending review will be reallocated to our own priorities for additional spending. The manifesto group, which I lead, is busy identifying those spending priorities, like the pupil premium to bring investment in the poorest children up to private school levels.

"But if there is money to spare, as Nick Clegg said this weekend, we will channel the vast bulk of it into going further with our tax cuts for low and middle income families. Sadly, some may have to go to filling up the black hole in the government finances that Labour’s economic mismanagement has created, but the vast majority of the 'spare' money will go straight back to ordinary people and families."

So "much of the money" saved will be reallocated to Liberal Democrat spending priorities. If there is money to spare after that, "the vast bulk of it" will be used to pay for tax cuts for low and middle income families, though some may have to be used to repair government finances.

How, then, to explain Nick Clegg's interview with ePolitix this morning?

There he says:
"If you ask a young family struggling to put food on the table, pay for the full tank of petrol, pay for their heating bill whether they want a bit of money back to see them through the looming recession or they want it to disappear into the coffers in Whitehall, I think it is obvious what the answer would be."
This seems to equate all public spending with making money "disappear into the coffers in Whitehall". Surely the young family will want to know what their taxes are being spent on before they judge whether or not they want their money back? Such a family, for instance, decide that taxation to fund improved local schools is a very good thing.

Clegg is also quoted as saying:
"Our tax proposal is very much on the side of the people, as opposed to simply giving more money to the centralised New Labour system, and I think that is exactly where our party should be and it is very much in line with our longstanding principles of fairness and also the belief that central government doesn't necessarily know best,"
But we are in favour of a decentralised system. Some cities and counties may choose to spend more on their schools than central government does at present. There is no guarantee that a decentralised system will mean lower taxes. The whole point of it is to give people the right to vary spending to meet local needs and priorities.

I am a great believer that government tries to do too much and is too intrusive, but there is no logical reason why someone like me should not support higher spending on the things the state should be doing and can do well. Of course, higher spending is not always the answer, but Clegg is too dismissive of it in this interview.

But the most important thing here is that Alexander and Clegg appear to be saying radically different things here. If we go into the next general election like this, we will be torn to shreds.

Incidentally, where is Vince Cable in all this? Shouldn't he be speaking for the party on taxation and spending?

1 comment:

dreamingspire said...

Vince is trying to get back on the dance floor, according this morning's report. Clegg worries me as he dances around.