Ed Miliband’s speech on tax the other day sparked bemusement amongst Liberal Democrats. For years, Labour have passed off the Liberal Democrats as the sellout Spawn of Satan and here they were embracing Vince Cable’s Mansion Tax and trying to make out that they knew how to make the tax system fairer.
Amongst those bemused Liberal Democrats is Chief Secretary to the Treasury Danny Alexander, the man who has given 23 million people a tax cut by raising the threshold at which they start to pay tax. For the tax year beginning in April, this will amount to £600 being cut from every basic rate taxpayer’s bill.
Danny has asserted the Liberal Democrat claim over the fair tax ground in today’s Guardian. First he reminded us all what life was like when Labour were in power:
When the two Eds were in government, there was no mansion tax, just scorn poured on the Lib Dems for suggesting it. Worse, there were loopholes galore in stamp duty, so the very wealthy avoided paying even that. Hedge fund managers paid a lower rate of tax than their cleaners. The top tax rate for 155 of the 156 months they were in office was 40p, not 50p or even 45p, as it will be from April. In fact, Lib Dems – in coalition with the Conservatives – have made sure that the wealthiest will pay more tax in every year of this government than they ever did when Labour governed on their own.
The hypocrisy of Labour’s position is most apparent on the issue of the 10p rate. Miliband and Balls knew when they supported its abolition that it would mean a tax rise for more than 10 million low-income workers. Balls was a Treasury minister at the time, Miliband a senior member of the government. To blame Gordon Brown for it, as they did this week, rather than offering a simple apology, just shows how little they understand why Labour lacks any economic credibility.
Danny signalled again that the Liberal Democrat aim beyond this Parliament is to raise the tax threshold beyond the minimum wage:
We will continue this in government until the first £10,000 you earn is tax free. I’d like us to go further after the election – with the goal that you don’t pay income tax until you earn more than the minimum wage. That is the sign of a fair tax party.
In government, Labour increased tax on low income households; in government the Lib Dems have led the largest programme of tax cuts for working people for a generation. If it’s fairer taxes you want, the Liberal Democrats are the real thing and Labour a pale imitation.
Oh, I almost forgot – he used that phrase again:
And now it is the Lib Dem idea of fairness that is shaping a better tax system for the future. It is why only the Lib Dems can deliver a stronger economy and a fairer society.
It’s the sort of robust, confident language you have every right to use if you have implemented the most prominent pledge on the front of your manifesto. You can read Danny’s whole article here. You can also sign up to support the Liberal Democrats’ campaign for fairer tax here.
* Caron Lindsay is Co-Editor of Liberal Democrat Voice and blogs at Caron's Musings