Author Archives: Adam Corlett

Opinion: No taxation without explanation – tax summaries are welcome but flawed

budget breakdownStarting yesterday, and over the next month or so, ‘tax summaries’ will be delivered to 24 million taxpayers, detailing how much income tax and National Insurance they paid in 2013-14, and where that money went. You can see examples here.

As Nick Clegg said in 2012, this will deliver “greater transparency accountability in government … empowering citizens” with information on what they pay in, and how their taxes are spent. It sounds rather like the ‘Annual Tax Contract’ policy from the party’s manifesto in 1997 and 2001:

No taxation without explanation: Central Government should inform taxpayers of the ways in which their money is raised and spent, just as local councils now do.

You can draw your own conclusions from the pie chart on the right, but it looks like these annual tax summaries will be important.

Posted in Op-eds | Tagged | 25 Comments

Opinion: Nick Clegg’s fiscal target – splitting the difference

Calculating Taxes Up And DownStephen Tall writes that “in terms of policies, there wasn’t much that was new” in Nick Clegg’s Bloomberg speech. Giles Wilkes and others have suggested that, on the contrary, Nick’s fiscal targets are a welcome change from the excessive deficit reduction the Coalition has pencilled in for the next parliament.

These commentators think that Nick’s deficit target (below) is a continuation of Labour and current Coalition policy – to balance the budget excluding capital spending. My understanding, however, is that what Nick said …

photo by: kenteegardin
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Opinion: Of driverless cars and passengerless trains

"Driverless Car in Bonita Springs" by Chris Griffith

Driverless cars may not be quite as revolutionary as the 19th century spread of the railway, but there are huge benefits coming into view. The sooner we can deliver them, and the sooner policymakers can take them into account, the better – with mixed results for railways.

To be conservative, let’s imagine it’s 2044 – 30 years from now. We will look back at the idea of people customarily directing 1 tonne cars at speed as madness. Millions

Posted in Op-eds | Tagged and | 28 Comments

Opinion: Towards a sensible welfare system

Piles of money. Photo credit: czbalazs - http://www.sxc.hu/photo/1236662Where is the development of Lib Dem welfare policy? It’s hard to see any. Even the recent living standards policy paper (pdf) said “we do not believe that this paper is the appropriate place to determine a Liberal Democrat approach to welfare reform. this is an area that needs further debate within the Party.”

We all want a society in which technology, employment, education, high pay, low inequality, progressive taxation and cheap homes reduce the need for means-tested benefits, but this long-term …

Posted in Op-eds | Tagged and | 12 Comments

Opinion: Lib Dems only party to vote against khat drug ban

Julian Huppert, Lib Dem PPC for Cambridge“To ban, or not to ban, khat is the question”, tweeted Julian Huppert on Monday morning. Unfortunately, Labour MPs later in the day joined their Tory (and DUP) counterparts in a statutory instrument committee to vote in favour of a ban. The two Lib Dem MPs, Huppert and Greg Mulholland, were defeated 16-2 and the khat trade now looks set to be criminalised.

On The Guardian website, Julian writes:

a mild stimulant – roughly on a par with a strong cup of coffee. It is not considered particularly addictive, and there’s no clear evidence that it causes either physical or social harms. It is imported perfectly legally, and taxes are paid on it, to the tune of £12.8m each year.

When the Advisory Council on the Misuse of Drugs, the government’s expert advisors, were asked to consider khat, they said that it would be “inappropriate and disproportionate” to ban it. The cross-party home affairs select committee, on which I serve, produced a unanimous report opposing a ban. And yet the home secretary plans to do it anyway.

Posted in Op-eds | Tagged and | 35 Comments

Opinion: Lib Dems should get behind renaming of National Insurance

Tory MP Ben Gummer is today introducing a 10-minute rule bill “to make provision for National Insurance to be known as Earnings Tax”. It’s a very simple renaming proposal. But branding is important, not least in politics. The Chancellor is “said to be attracted to the idea”, so if Danny Alexander and Nick Clegg were to support it, the change could make it into the Budget.

It’s well known that National Insurance is an extra income tax in all but name. As far back as 1994, Lib Dem policy was “to abolish national insurance contributions and create an integrated tax …

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Opinion: Making allowances – 12 conclusions about the Personal Allowance policy

CentreForum today published ‘Making allowances’ – a paper all about the Lib Dems’ flagship policy of raising the income tax Personal Allowance. Here are some of my conclusions – some obvious, some more obscure – to help inform future tax cuts.

1) The costs are huge. The coalition’s Personal Allowance increases have cost £11bn, and the Lib Dems’ minimum wage tax target would cost at least the same again. With this combined total, we could (roughly) reduce VAT to 15%; scrap council tax or business rates; easily deliver quality universal childcare; or

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The Independent View: I know what next month’s living wage will be and it doesn’t relate to the cost of living

On 4 November we will learn the level of the new Living Wage, which many employers have volunteered to pay as a minimum. At present it is £7.45 an hour outside London. I’m betting that next month it will rise to £7.65.* How do I know? Well, the current calculation is remarkably simple, and it has nothing to do with the cost of living. What’s more, future increases risk making proposed living wage policies unaffordable or even damaging.

Academics at Loughborough University do calculate the wage needed to fund, after tax and benefits, what members of the public consider a basic …

Posted in Op-eds and The Independent View | Tagged and | 4 Comments

Opinion: Where is the Liberal Democrat influence over drugs policy?

qatYesterday we learnt that the Home Secretary has decided to ban the drug ‘khat’, against the recommendation of the Advisory Council on the Misuse of Drugs (ACMD). The Lib Dems were reportedly against this move, and the decision lay with Theresa May. This and other decisions suggest that drugs minister Jeremy Browne has been given a script but no power.

The disappointing decision to make khat a Class C drug follows the view of the ACMD in January that it should remain legal (having said the same thing …

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Opinion: Are current state pension arrangements fair?

Two stories jumped out at me this week as being deeply connected. Stephen Tall praised Ed Balls for not ignoring the huge chunk of welfare spending that goes to pensioners. Then, a new website from Public Health England reminded us of the country’s large health inequalities. These inequalities should give us extra cause to question the fairness of current spending on pensioners.

As Stephen wrote “Spending on the state pension will increase by nearly 20% in real terms between 2010–11 and 2017–18.” The challenge of an ageing population was present even before the financial crisis. It’s now …

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Opinion: Who’s been hit hardest by the coalition’s cuts?

The budget on March 20th is likely to concentrate on growth, on avoiding an ‘omnishambles’, and on fighting the notion that Osborne has taken the country from triple A to triple dip. But it’s also the time to take stock of who’s bearing the brunt of (attempted) deficit reduction. This graph shows the combined effect of all the coalition’s tax and welfare changes, as modelled by the Institute for Fiscal Studies. It doesn’t look good.

Impact of modelled tax and benefit reforms since Jan 2010, by income decile group (Copyright of the IFS*)

The blue …

Posted in Op-eds | Tagged and | 15 Comments

CentreForum: Three tax changes to help rebalance the economy

Tax ConsiderationsVince Cable this month launched our new publication on helping small and medium sized businesses access stock market finance. Here, I’d like to concentrate on three tax changes that could address the broader challenge of ‘rebalancing the economy’ away from an over-reliance on debt and unproductive investment.

I’m all for a highly progressive tax system that doesn’t privilege ‘capital income’, but that doesn’t mean the current system works in a fair or sensible way, as these three bizarre distortions show.

Corporation tax

As George Osborne said in opposition:

Our corporate sector’s

Posted in Op-eds | Tagged | 36 Comments

Opinion: Does the Prime Minister really care about free speech?

The Prime Minister is concerned that Leveson’s “essential” legislative underpinning for press self-regulation would cross a line. “We should be wary of any legislation that has the potential to infringe free speech and a free press”, he stated, saying that we should be proud of our “great tradition” of freedom of speech. But the UK has many laws that restrict citizens’ free expression and which we should be deeply ashamed of. Will the PM be campaigning to end these?

There’s ‘Section 5’, under which – for example – a 16 year old was summoned to court for holding a placard saying, “Scientology is not a religion. It is a dangerous cult.” Thankfully, after pressure from MPs and the Reform Section 5 campaign, the Home Office consulted on the law and – separately – the Lords will tomorrow vote on amending it. Reformists (including the Deputy Prime Minister) can presumably count on the PM’s support!

Posted in Op-eds | Tagged and | 5 Comments

Opinion: It’s time to reform child benefit

Child benefit and child tax credits represent the second biggest area of welfare spending, after pensioners. Public spending should be invested disproportionately in ensuring that all children fulfil their potential and develop the skills needed for tomorrow’s jobs, and that we intervene early to prevent, rather than react to, problems. However, this does not mean that current child-related expenditure is spent as well as it could be. Here are two considerations ahead of the Autumn Statement.

Firstly, any real-terms reduction in spending on child-related cash transfers should go alongside increased investment in early years support and childcare, especially for poorer families.

By …

Posted in News | Tagged | 9 Comments

CentreForum’s proposals for the Chancellor’s Autumn Statement

Ahead of December 5th’s Autumn Statement, we have suggested £17 billion of revenue-raising measures for the coalition parties to consider. Our proposals offer ways to narrow the deficit with as little pain as possible, and further measures to unlock growth.

These include what might be called “wealth taxes” – those on property, inheritance, and financial assets. One of our key themes is that substantial revenue can be raised simply by ending wealth and income tax breaks. Spending cuts should therefore include cuts to ‘tax expenditures’. Many of the measures below would make the tax system simpler, fairer and more efficient …

Posted in Op-eds | 6 Comments

Opinion: Taking minimum wage work out of tax would deliver the Living Wage

With greater ambition, the Liberal Democrats’ policy of increasing the personal allowance would equalise the Living Wage and the minimum wage, without risking jobs.

It was announced yesterday that the national ‘Living Wage’ for 2013/14 will be £7.45. This compares to the National Minimum Wage of £6.19. Boris Johnson has urged more companies to adopt the Living Wage, and Labour are even considering giving tax incentives for firms to pay the Living Wage.

Few would argue with the benefits of higher pay for employees, or with other Living Wage benefits such as lower staff turnover. But evidently most employers …

Posted in Op-eds | Tagged and | 15 Comments

Calling them granny taxes doesn’t mean they’re unfair

The phasing out of the additional personal allowance was decried as a ‘granny tax’ but that move did not go far enough. A new CentreForum report looks at two unjustified and deeply regressive age-related tax breaks: the tax-free lump sum and the exemption from National Insurance.

There are many lonely, vulnerable and poor pensioners who need support. But it’s insulting to suggest that everyone over 60 or 65 can be lumped into the category of frail granny (to say nothing of grandpas!). There is a huge range of incomes amongst pensioners. At the very top, the average annual pension …

Posted in News and Op-eds | Tagged , and | 20 Comments

Opinion: Is this the start of Plan A+?

It looks like the coming months will see new initiatives to boost the economy, following the second quarter contraction (now revised up slightly to -0.5%) and a record trade deficit.

As The Spectator reports,

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Opinion: Ritual slaughter – One law for all

Ritual slaughter has had a reasonably low profile in the UK, despite vigorous debate abroad, in the European parliament, and now in the Commons. David Cameron, Nick Clegg and Sarah Ludford MEP (FT) have expressed some level of support for the practice, but I must disagree.

The law requires that animals be stunned before slaughter, for their welfare, but there is an exemption for Muslim and Jewish food production.

Posted in Op-eds | Tagged and | 27 Comments

Opinion: The lottery winner who would be King or Queen

Hereditary monarchy has no place in a “fair, free and open society” but royalists and republicans seem to be talking different languages. To bridge the divide we need to choose our head of state by lottery. I agree with William Summers who recently wrote herethat he “cannot support a system of monarchy whereby power is inherited and all but one family is excluded from being head of state.” This is on top of questions of transparency, corruption and political influence, or of historical connotation. But republicans have failed to make the case for any alternative. Arguments from principle

Posted in Op-eds | Tagged | 15 Comments

Opinion: This graph of income tax rates might surprise you

If this graph seems confusing, it’s because it accurately describes taxation of income in the UK. What alternative can Lib Dems offer? I think there are four key problems and solutions.

  • Firstly, while the personal allowance is rising (to £9,205 next year), the National Insurance thresholds lag behind. As I’ve written previously, raising these is more progressive and, so, equalising the thresholds and the allowance must be the priority before going beyond £10,000.

  • Then there’s the withdrawal of the

Posted in Op-eds | Tagged | 28 Comments

Opinion: If Cameron won’t attend Rio+20 then Clegg should

The Rio ‘Earth’ Summit in 1992 was the “world’s biggest ever political gathering” with 108 heads of state or government. Its successes and failures on the environment and development continue to shape those debates.

In June, Rio de Janeiro will host the UN Conference on Sustainable Development, a.k.a. Rio+20. A very early draft document suggests it will cover a wide range of topics, including access to food, water and energy; marine litter and pollution; eliminating “market distorting and environmentally harmful subsidies including those on fossil fuels, agriculture and fisheries” (I’ll believe it when I see …

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Opinion: “The first £10,000 you earn tax-free”? Not unless we act on National Insurance

At Conference, Danny Alexander repeated his view that the personal allowance for income tax should be raised beyond £10,000, saying:

In the next Parliament, I want us to go further; our aspiration should be that someone working full time on the minimum wage should pay no income tax at all. An income tax threshold of £12,500 – think what that would do to work incentives, think what it would mean for basic fairness. Let’s put that on the front page of our next manifesto.

The idea certainly seems popular within the party. But remarkably absent from these discussions is any mention of National Insurance. The very first point in our 2010 manifesto was “the first £10,000 you earn tax-free” but, while it later clarified it meant income tax (IT), it’s hard to see why the parallel income tax that is National Insurance (NI) should be treated any differently.

Posted in Op-eds | Tagged , and | 24 Comments

Opinion: Why we need an impact assessment of drugs policy

Yesterday, Labour MP and former minister, Bob Ainsworth came out strongly against drugs prohibition. He proposed an “Impact Assessment of the Misuse of Drugs Act”, an “independent, evidence-based review, exploring all policy options” which was welcomed by Lib Dem MP Tom Brake. This is precisely one of the things that the Liberal Democrats for Drug Policy Reform (LDDPR) are calling for and I’d therefore like to give an overview of why an impact assessment is needed and is something that all can support.



1. One has never been done despite strong reasons for concern
Back in 1971, there were no ‘impact …

Posted in Op-eds | Tagged , , and | 13 Comments
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