Monday, November 10, 2008

Nick the Punk vs The Fink

Nick Clegg was invited to write a piece for Danny Finkelstein's superblog Comment Central this morning making the case for immediate tax cuts. He writes:

We would cut the basic rate of income tax by 4p (that's an extra 1000 quid per year for someone on 30k) by ending the tax relief on pensions for top earners, upping green taxation and charging capital gains as income. Straightforward, costed and workable.

But I want to go further. More fair tax cuts for people who really need help. Where’s the money to pay for it? How about redirecting spending from the NHS computer systems that never see the light of day; surveillance databases that make us the most spied upon nation in the world; and pointless ID cards that won’t help catch criminals? By the time we’re fighting a general election we will have identified £20bn of mis-spent money. No vague gestures at ‘red tape’ – we’ll let people know exactly what current spending we’re redirecting.

This is the sounds clear enough, but the doubts remain. At the Lib Dem Conference in September the agreed line seemed to be that the £20bn would be used on our own spending priorities, and it was only the surplus after that had been done that would be available to fund tax cuts.

And Chris Huhne always says the savings from scrapping ID cards will be used to pay for more police on the streets. Here is a press release from less than a fortnight ago saying just that. Clearly there is still some work to do here.

You can also so read Finkelstein's reply on Comment Central:
Proper tax cutting means overall tax cuts that come from changing the organisation and scope of the state. It requires proper reform and takes time. Punk tax cutting is borrowing to cut taxes or announcing unconvincing tax cuts based on dubious "savings" just to be able to say you are cutting specific taxes by a given amount immediately.


Anonymous said...

And the 4p cut gives a pensioner on £7000 a year an extra £40! Does this compensate for the abolition of the 10% rate? Gordon Brown got nothing for his base rate cut and stuffed for abolishing the 10% rate. A lesson?

Andy said...

Hugh: Lib Dem Policy since "Fairer, Simpler, Greener" has included raising the threshold at which tax starts to £7185. That was how we intended to eliminate the 10% rate, whereas Gordon Brown did it by charging that band at 20%. That means that the pensioner you are talking about it, by my reckoning, is taken out of tax completely.

A lesson? How about reading our policy before wading in?

Anonymous said...

And according to news sites this week Nick Clegg said cut 4p of the basic tax rate to give someone on £30,000 a year 1000 quid. No mention of increasing the personal allowance!

Do you feel that people only vote after they have read our policy documents. I am commenting on what the public hear us saying, not our policy. You assume too much if you think I do not know what "policy before conference" says. My problem is with the message arriving with the public. Obama got it right, we have not, yet.