Because he wasn’t clear in the first place?

Clearly tax cuts will not be our USP. The public debate seems to be crystallising around Brown favouring borrowing, Keynes and jobs, Cameron posing as more responsible and business-oriented. Clegg might get a few cheers for speaking up for ordinary taxpayers. On the other hand, he may just get pilloried for over-promising.

So do we just shrug shoulders, mutter “c’est la vie” and move on?

I have two problems with that. One, why is Clegg so confused? Is he just a natural muddler, or, does he have a political need to muddle? My fear is it’s the latter. When we hear the famous £20bn figure, Liberal Vision are meant to think “ah yes, big cuts in state spending, hurrah”. Whilst the likes of you and I are meant to hear “redirected spending on Lib Dem priorities, hurrah”. Of course the leader has a problem here, but, leadership is what he needs to show.

Secondly, if tax cuts are not our USP and Iraq is no longer our USP, then we are still in need of a USP, are we not? There is still a big gap in the market for the Green New Deal – borrowing to invest in jobs building a greener Britain. Why don’t we go for that?

I don’t think all the blame can be placed on the BBC, by any means.

Remember all the conflicting statements about how much of the £20bn would go into tax cuts.

And the recent statements by Clegg are, if anything, even more confusing. Tim Leunig interprets Clegg’s reply to Finkelstein as advocating tax cuts funded by borrowing.

But here’s a snippet from the BBC (apparently recorded yesterday afternoon) in which Clegg calls for “big tax cuts” but says explicitly that they shouldn’t be funded by borrowing:
http://news.bbc.co.uk/1/hi/uk_politics/7720337.stm

Clegg’s great strategy has been to make tax cuts the party’s “unique selling proposition”. But we’ve ended up in a situation where all the parties are talking about tax cuts, and the things that are unique about the Lib Dems’ proposals are that they are confusing and untargeted, and that we haven’t explained where all the money is coming from.

What chance does the general public stand?

They’d stand a better chance if the public service news organisation they all fund bothered to get our policy right. I have sent a correction. Let’s see if it changes.

Is Clegg really saying this? As I said, I can see there are comments that might be construed as hints of this, but none of them is really clear.

Surely the party’s message on tax is confusing enough without adding on a third possible set of income tax cuts, this time funded by borrowing.

Even some of the people taking an active interest here are pretty confused. The BBC is hopelessly muddled – its website says the Lib Dems “Have already pledged to cut spending by £20bn to help fund tax cuts for low and middle-income families by cutting basic rate from 20p to 16p” (http://news.bbc.co.uk/1/hi/uk_politics/7720598.stm). What chance does the general public stand?

In Danny-speak 1 and 2 are tax reforms, not tax cuts (although many individuals will experience tax cuts as a result), 4 is punk-tax-cuts, and only 3 are bona fide tax cuts. Like Danny I could easily find £20bn in wasteful or illiberal spending (and can do it in recurrent spending as well, not one-off capital projects), but like Danny I am sceptical that the party will be able to do it in opposition. It is, as he says, the sort of thing that is easier to do in office than in opposition, just as Labour found it easier to spend more in office than to argue the case in opposition. That is why, unlike Danny, I am not too worried about promising to cut an unspecified 3% of govt spending.

Where I do not agree with Nick is the need to have tax cuts paid for by borrowing. Recessions such as the one we are about to experience are very bad for some people, but do not affect – and can even be good for – many others. At the moment, if you have a secure job and a mortgage, you are likely to be better off than a year ago. I have a friend with a £250k mortgage whose monthly payments have fallen by £400 a month. I also have a friend who has lost his job. It is easy to give a tax cut to the friend who is £400pcm better off, but what is the point of that? In contrast it is hard to give it to the person who has lost his job.

Nor does the macro case stack up: the Bank of England have cut interest rates and that is likely to boost consumer spending by more than any plausible tax cut funded by borrowing. We called for BoE independence: perhaps we should let them get on with the job?

And of course we still have the problem that – while Clegg keeps talking as though these proposed tax cuts would be targeted at the low-paid – what is being proposed is (1) a 4p cut in the basic rate of income tax and (2) an aspiration towards further measures which are likely to be a combination of a cut in the basic rate and an increase in the allowance.

None of this is actually targeted towards the low-paid. In cash terms, higher earners would benefit more than lower earners.

Finkelstein just wants the state to do a lot less and charge a lot less tax. He thinks that’s simpler. He is right. It would also be quite disastrous, but that’s by the by. Finkelstein talks a fair amount of nonsense when he tries to be positive, but he has found it quite easy to do an effective demolition job on Clegg. See CCF’s link above.

The contrast with Barack Obama is dismaying. It occurs to me that James Graham was right – The worst aspect of this policy is, in many ways, the complete muddle we have made of its presentation. Clegg has tried to be specific and detailed, but at the same time, ambiguous and (I’ll choose the kind word here) flexible. It doesn’t work. Obama has enthused millions. We have not.

I can’t see where Clegg says anything about borrowing to fund tax cuts. In this article he still seems to be talking about funding tax cuts from what would be left over from the hypothetical £20 billion of spending cuts.

Though admittedly some of what he says – in this article and elsewhere – does seem to be advocating higher borrowing. Maybe the idea is that we would have to increase borrowing just to stay where we are. None of it is terribly clear.

Finkelstein’s response is here:
http://timesonline.typepad.com/comment/2008/11/my-reply-to-nic.html