Like most people I spoke to after Spring Conference I was very impressed by Nick’s speech. I absolutely, 100%, agreed with everything – well almost everything – he said! I even whole heartedly agreed with his promise that if we had money to spare we would give it back to those most in need of tax cuts. Where he lost me a little was over the notion that we could realistically be in a position to maintain public services in the current fiscal climate and be swimming in an excess that gave us such scope for tax cuts. Even Cameron (God bless ‘im) has acknowledged that the party of tax cuts can’t promise any such thing in the next parliament.
Having sat on FPC for a couple of years now, I know only too well the plaintiff cry when new spending is proposed (for example in investing in youth services which is my particular interest) that there is no money available. Nick has promised to find £2.5 billion for the pupil premium, even before we can realistically look at tax cuts. And then there are the other issues we, as liberals must surely see as priorities. The scandal of mixed sex wards, particularly horrendous when it comes to mental health units, the overcrowded prisons and the lack of investment in tackling the drug addiction and poor literacy that leads to the revolving door for most offenders, poor housing, child poverty… need I go on?
I do get frustrated when those of us who argue that we have a responsibility to invest in improving the life chances and quality of life for all our citizens, get tarred as “tax and spend” fruitcakes. Actually, I always want to ask, what on earth is the point of taxing if it isn’t to spend? We need a grown up debate in this country about what sort of society we want to live in. We can have a society with those who can afford to get access to the best services (both public and private) and those who can’t and continue to be pushed to the bottom of the pile. Someone has to be brave enough to say that if we want a world class integrated transport system, excellent education for all our children, an NHS that is yet again the envy of the world, less crime on our streets and a better quality of life for all (including those living in gated communities for fear of being contaminated by the outside world), then it costs.
Put simply, to tax or not to tax, that is the question; whether it is nobler in the mind to suffer the slings and arrows of outrageous Post Office closures, potholes and sprouting trees, or to take arms against the continuing cuts to our public services, and by opposing end them. I long for the time when politicians stop pretending we can get all this for for next to nothing.
But, I do agree that there are places where savings can clearly be made, scrapping ID cards, abandoning PFI, abolishing unaccountable quangos, reducing the reliance on highly paid consultants, reducing red tape and nanny state targets: but would that release enough for the pupil premium and tax cuts? So, in order to be helpful, here are some suggestions for Nick, which I think may release a fair bit of dosh, though, I confess, may need an updating of party policy:
Of course he could also have a word with the Bank of England, they seem able to come up with the odd £5-55 billion at the drop of a hat!
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5 Comments
“Even Cameron (God bless ‘im) has acknowledged that the party of tax cuts can’t promise any such thing in the next parliament.”
Nooooo! Stop! You’re being taken in by Tory propaganda! This is exactly the fallacy I spend all my time on the comment threads trying to dismantle.
It IS possible to offer costed income tax cuts which are revenue neutral by shifting the burden onto wealth taxes instead. We know this because we have a 40 page policy doc explaining how to do it, which is 40 pages more of costed analysis than the other parties have!
The two-party consensus on this is of the “cosy” variety, and should be a warning bell. The reason the Tories won’t offer tax cuts is that they’d have to fiddle with wealth taxes to do it – and they’re not going to risk outraging the Daily Mail.
Please, let’s nail this establishment media lie that tax cuts are impossible once and for all. They *are* possible, but only in a liberal tax system, not in a statist one that obsessively counts all moneys before grudgingly handing them out again, nor in a conservative one that protects vested interests from any change, even if that change is for the greater economic good. I recommend His Fluffiness:
http://millenniumelephant.blogspot.com/2008/03/day-2628-sootys-budget-izzy-whizzy-lets.html
“Please, let’s nail this establishment media lie that tax cuts are impossible once and for all. They *are* possible, but only in a liberal tax system, not in a statist one”
Hear hear.
What are we in now, some kind of Butskellism Part Deux?
‘Tax and spend’?? Isn’t that just shorthand for financial profligacy and waste?
How about allocations within the budget to reduce the waste resulting from an excessive and growing public debt burden (let’s not forget PFI and PPP), thus making government more affordable?
Instead of confusing budget calculations by continuous favourable manipulations of the ‘economic cycle’, how about actually having a balanced budget once or twice? Then there’d be at least some room to manoeuver and make a difference to taxation levels and spending priorities when and where they are needed, especially now in such a gloomy economic environment.
While Northern Rock may end up costing us £50bn or more, the related liquidity crisis that resulted from unrestrained spending against predictions of the economic cycle could easily double that figure.
It’s completely true that we should challenge the accepted truths that have become dogma under Brown, which Cameron and Osbourne are both too lily-livered to do.
Nice article Linda. People say that left and right are outdated concepts, but of course they are wrong, and taxation lies at the heart of the left-right divide. I agree that there is something a bit weird with the way every penny is carefully counted out and then, all of a sudden, billions are found for some disastrous war. And it’s also a bit silly talking about tax cuts and tax rises – surely it’s all relative. Taxation should really be at whatever level it needs to be at – I know that sounds a bit radical. In the long run, I believe we should be aiming towards a low-tax small-state economy. We should move towards this goal when we are ready for it, without forcing the pace of change. I’m all for first rate public services but, at the end of the day, there’s no getting away from the fact that a high-tax set-up is inherently inefficient.
Roy Jenkins had a famous phrase, I cannot remember if it was directed towards Labour or the Tories, that they want “European standard public services with US levels of taxation”.
Previously the LIberal Democrats had the honesty to present the electorate with a hard truth; we will improve public services if you allow us to raise income tax. Today if you believe some Lib Dem bloggers, the Lib Dems are now ideological opposed to raising taxes.
Thankfully that is not the case, but it is difficult to raise taxes at a time when there is such a high level of personal debt in this country.
Some argue we can cut taxes by restructuring the public services, and we can copy best practice from other EU countries. But as Paul Holmes MP points out in his excellent article in Liberator recently, what we appear to be learning from countries like Sweden is not actually what they are doing, and in any case the fact that their public services have been better funded over many decades is an important part of the equation as to why their provision is better.
Personally I think that improving public services is more important than reducing taxes. An aging population will put more demands on the NHS, families breaking up puts more demand on housing, and mitigating the effects of global warming is likely to be hugely expensive on the public purse.
The Iraq war has cost a lot, and there are bound to be more serious international political crises in the future as we approach “peak oil” in competition with China and India. A British nuclear “deterrent” will be of no use whatsoever and it is a joke to say that the UK would have any leverage in international disarmanent talks, so I agree we should certainly get rid of our nuclear weapons.
I think there will be a lot of short term costs in abandoning PFI given that contracts have been signed, so I doubt that would generate any savings.
Although there is scope for cutting back on projects we do not agree with, on balance I think it is absurd to imagine we can go on cutting taxes. The best we can do is make sure the rich pay more than the poor, which is the policy direction of the Liberal Democrats at present.