Both Liberal Reform and the Social Liberal Forum have commented on the measures contained in yesterday’s autumn (read winter) statement.
First up, Liberal Reform welcomed many of the measures – particularly the faster increase in the income tax personal allowance – but expressed concerns about the party’s approach to the negotiations on the statement:
Liberal Reform welcomes many of the individual measures outlined in the Autumn Statement. The faster-than-expected increase in the income tax personal allowance and the freeze in fuel duty are particularly welcome, and reflect the Liberal Democrat priority of reducing the tax burden on those on low and middle incomes.
We also welcome the increase in capital expenditure, paid for by shifting current spending. This moves resources to the area with the most positive effect on economic growth, and will begin to undo some of the damage caused by Labour’s swingeing cuts to capital investment in their last months in government.
Liberal Reform is also pleased that many benefits will rise in cash terms next year, although there will be a small real terms cut in a number of benefits. However, we would much rather have seen the welfare bill reduced by stopping the numerous unnecessary payments made to those on high incomes. At a time of austerity it is indefensible to be protecting benefits for the well-off while cutting those for the poorest.
Liberal Reform nonetheless has concerns over the strategy adopted by the Liberal Democrats in the run up to the Autumn Statement. We supported Nick Clegg’s call for wealth taxes to contribute at least equally to any additional deficit reduction relative to welfare cuts. But the party seems to have set out its stall before walking away and forgetting about it.
Any negotiator knows that to threaten an action only to not follow through with it drastically weakens one’s position. In the face of Tory intransigence in refusing to introduce higher taxation on wealth, the Liberal Democrats should have followed through with our promise not to support further savings from the welfare bill. What incentive is there in future negotiations for the Tories to heed our demands if we don’t stick to what appear to be very clear red lines?
And for the SLF, the group’s director, Prateek Buch, contributed the following remarks on the Guardian’s panel verdict:
George Osborne’s autumn statement and the accompanying OBR figures reveal three things clearly. First, the chancellor’s below-inflation rises in benefits penalise the very “strivers” he seeks to help – welfare spending remains high because people cannot support themselves through insecure, low-paying work. This is unpalatable, especially while the economy continues to stagnate – it goes against Nick Clegg and Danny Alexander’s promise not to balance the books on the backs of the poor.
Second, measures to tackle tax avoidance and ensure well-off pensioners contribute are welcome in their own right, but are not a fair trade-off for larger cuts to working-age benefits and services. Clegg rightly shook his head as Osborne refused to tax property – he should have done more than that to ensure the wealthiest bear a greater burden. Moving further towards the Liberal Democrat aim of raising the income tax threshold to £10,000 is welcome.
Third, while the extra capital spending and the requirement for Whitehall to bear its share of cuts are welcome, Osborne’s insistence on disproportionately hitting the poorest is matched by his continued shocking record on green growth. We have seen too little in this statement to create the green jobs of the future that will raise living standards – continuing this discredited approach is not good enough.
* Nick Thornsby is Thursday Editor of Liberal Democrat Voice and blogs here.