It was Paddy Ashdown’s dream, and pre-1997 it looked to be tantalisingly within reach, yet with the imminent coronation of Jeremy Corbyn increasingly likely, the realignment of the anti-Conservative Left looks to be further out of reach than ever. Indeed, Corbyn’s happy band of followers have spent months labelling everyone else involved the contest as a ‘red Tory’, particularly Liz Kendall (whose father, let’s not forget, was a Liberal Democrat councillor) and including such known Conservative sympathisers as Harriet Harman and Neil Kinnock.
As Guido Fawkes has demonstrated, the Conservatives’ plan to deal with Corbyn is to paint him as a threat to Britain’s security, both at home (because of his views on economic policy) and abroad (because of his views on foreign policy). We have a real opportunity, if we want to take it, to own the acres of political space between a far-left Corbyn-led Labour Party and a Conservative government which will not be able to resist nudging further to the right (which would in turn put off that party’s own moderate supporters) – a space in which the majority of the British people have made their political home. We may have only eight MPs, but we are about to be gifted a huge opportunity to position ourselves politically between those two extremes and present ourselves as a moderate, sensible party which rejects both Corbyn’s reflexive ‘daddy knows best’ statism and the Conservatives’ love of taking away from those who have least to give.
I can see no real cause for Lib/Lab cooperation on matters of economic policy. Both parties have strong disagreements with major elements of the Conservatives’ programme, particularly where capital investment in infrastructure is concerned (Corbyn’s policy of balancing the current account while borrowing for infrastructure is ostensibly the same as our own), but People’s Quantitative Easing, a maximum wage and renationalisation of the ‘commanding heights’ of the economy are all policies which no Liberal Democrat, whichever wing of the party they identify with, ought to support. We must make our own case, so that we are perceived by disaffected moderate Labour supporters as a sensible and trustworthy alternative to their ‘natural’ party.
Take the policy of reopening capped and flooded deep coal mines, for example, a policy rooted far more in nostalgia and gesture than in meeting the UK’s energy needs or environmental obligations. Where a Corbyn-led Labour Party makes such policies, harking back to a class war which is but a folk memory to people of my own generation, we ought to hammer it hard. It’s not Corbyn’s legion of educated, middle class fans and their children who would be sent down those mines, after all – it’d be kids who live in tower blocks and on council estates in cities like my own. Our desire to inflict a bloody nose upon the Conservative government should not be allowed to prevent us from criticising the policies of the Corbyn-led Labour Party where they conflict with our Liberal principles (in this case, environmentalism and social mobility), especially in northern metropolitan areas which the Tories neglected in the 1980s but where there is no real appetite for a reopening of old wounds.
Foreign policy is an area where Corbyn’s eccentric views have been hammered consistently by both his opponents in the leadership race and by Conservatives during his campaign. While engagement with our enemies and open dialogue are preferable to conflict and strife, Corbyn’s views on foreign affairs have too often been defined by a reflexive anti-Americanism and anti-Westernism in which they are always the aggressor and to blame, while America’s, Britain’s and Israel’s adversaries are given a relatively free pass. So while there are good Liberal reasons to support Palestinian statehood and to oppose sending troops into Syria, we should not allow our own nuanced and thoughtful approach to foreign affairs to be lumped in with Corbyn’s by the Conservatives and their friends in the press – especially where Corbyn’s oppositionalism leads him to give tacit or vocal support to nasty, illiberal regimes and groups.
We Liberal Democrats have something to offer here. Let us work hard to rebuild the British people’s shattered trust in the Liberal Democrats, so that when they grow even more tired of and disaffected by this Conservative government it is to us that they turn. Let us not ride on the coat-tails of Corbynist populism, nor sit back and watch as the Conservatives destroy everything we worked so hard to achieve in government. Let us be Liberals.
* Stephen Howse recently worked for a Lib Dem MP and is now working for a not-for-profit while campaigning for the party in Newcastle.
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76 Comments
Ironically for someone who has (for some reason) acquired a reputation as an “honest politician” I think one of the biggest problems with Corbyn is his lack of honesty in matters fiscal.
This is a politician who, in the course of his leadership campaign, has claimed that there is £120 billion a year in extra tax just waiting to be collected, as unchased, avoided or evaded tax. As he said in a speech in late July: “That’s enough to double the NHS budget; enough to give every man, woman and child in this country £2,000.”
On top of that he reckons there’s another “£93 billion a year of corporate tax relief and subsidies.”
Do people actually believe this person? Clearly a few do, but I reckon the problem for the Labour Party is that the majority of the electorate don’t and won’t.
PART 1
Hmm. Yes, Stephen, I am deeply suspicious of Corbyn, too.
However, I think it will be interesting to see what the policy offer a Corbyn-led Labour party will (OK, might, as we should respect electoral process and it is still theoretically possible someone else might trigger a violent internecine conflict in the Labour Party) be, and whether they will be able to evolve a coherent one.
I think it is too early to assume that Corbyn’s personal preferences will predominate in all matters of detail. In particular the London situation where Livingstone (a key Corbyn sympathiser) has endorsed Khan and not Abbot shows us that Corbyn’s team are serious about taking power and about achieving a compromise with the Millibandites to do so. If they also manage to take on board Brownites like Watson (which they will need to do), the ultimate raft of policy will need to be a genuine compromise, so we needd to not turn our fire on a straw man based on the little we know about Corbyn as a backbencher (of course, the process to build that compromise could break down utterly, in which case all bets are off).
In particular, I don’t think Corbyn will at any point before 2020 offer a genuine ‘reantionalisation’ of the railways in the sense of a one-feel-swoop taking back of passenger and freight management on the railways into full public ownership accompanied by re-integration with Network rail and a centralisation of control and management.
All I think he will offer will be a process by which it might be achieved in the hypothetical future, which in the short term would create a piecemeal, public-private patchwork. And don’t be surprised if he is prepared to be argued into regionalisation by moderates in his party as part of that. All of which is considerably closer to the instincts of many LibDems. If that is his offer, then to attack it in the terms which you are using to attack the vague things what he has said so far (‘… no Liberal Democrat, whichever wing of the party they identify with, ought to support’) could be risky and self-deafeating as it would not ring true for enough of us.
PART 2 (sorry! but not much)
I am not saying I back Corbyn or am optimistic about the impact of his leadership on British politics; I just think if we switch on the hyperbole as we attack him we will just end up an echo-chamber to the Tories and get lost in the mix.
There is, I think, a better way which I hope our leaders will take and Vince Cable already seems to be taking.
Do you remember when Cameron used to divide Labour backbenchedrs from Blair by toxically and publicly agreeing very enthusiastically with him?
We need to find policies and language that show the moderate Labour supporters who look to Cooper, to Kendall, that we have much in common – and more in common than they have with their own leader. able co-writinng that article with France O’Grady seems a good start, making a grab to be the voice of a principled, moderate Trade Unionism. Slamming the aspiration to public ownership as if we reject it in all its forms (which is not true, although we do I think largely reject a centrally managed economy for very very good reasons) is not the way as Corbyn will twist this against us.
Why is everyone so frightened of having a man with principles leading the Labour Party? That is the question. Perhaps because it will expose the Westminster Bubble and its careerists?
There’s no point in the re-alignment of the left in its current state anyway. Corbyn’s foreign policy is about selfishness – leave the others to do the fighting and claim the moral high ground by saying you are “pro peace”.
Clement Attlee was a soldier in WW1 and deputy PM during WW2. Corbyn is not a descendent of the same political tradition, besides on economics.
Finally, I agree there is a big space for Liberal Democrats, but there was a big space last time and it didn’t count for much.
Stephen Howse needs to read Professor David Marquand. If we just ‘attack’ Labour, we simply repeat the mistakes of the past. The only ‘political space’ we will occupy is a footnote in the history books if we adopt tactics that might have seemed to work when we were the new kids on the block. We have now been a party of government and have the scars to prove it! If we want a place at the top table we will only achieve it as part of a broader coalition, including what ever finally emerges of the Labour Party, with possibly another force that is yet to show itself. The problem we have in achieving this is the inability of most voters to understand what a coalition actually means, wedded as many still are to the idea of single party (minority) government (unless they happen to live North of the border),
An anti-conservative eh? You mean the sort of people the lib dems targeted with their “it’s a two horse race, labour can’t win here so if you hate the Tories you have to vote for us” leaflets? The very sort of voter who’d run a mile as soon as you went into coalition with the Tories? Them? Yes they’re now out of reach. So yes, why not target people who will want to always vote lib den because they agree with liberal principles? Should have done that from the beginning actually, then the voter bases would not have collapsed like it did.
Stephen Howse,
I hope you will not mind if I express the view that you have got the wrong end of the stick.
John Marriott is correct when he says that –” ..If we just ‘attack’ Labour, we simply repeat the mistakes of the past. ”
Our leadership have spent the last ten years attacking Labour and singing the song of The Mail and The Sun.
Look where it got us.
There are precious few parliamentary seats where we are in second place to any party. If we are to grow beyond 8 seats (and if we are to avoid losing any more of those 8) we need to wake up.
As a matter of basic survival that we need to recognise where our scarce resources can be put to best use.
Ask yourself, how many seats do you expect to win from The Labour Party in 2020 ?
We are in second place behind Labour in just 9 of the 650 seats in the UK.
So who are the enemy? Who do Liberal Democrats need to beat to get more MPs?
We are in second place behind the SNP in 8 seats and there are some real possibilities in a couple of those.
We are in second place behind the Conservatives in 46 seats.
So to maximise our result next time we need to attack The Conservatives.
Even Paddy Ashdown on a bad day with one eye shut and his mouth full of well chewed hat can spot the need to direct our energies to winning seats from The Conservatives.
Here is a basic law of gravity in UK politics —
Liberal Democrats do not (never have, never will) win seats from The Conservatives by attacking Labour.
We win seats from the Conservatives by getting traditional Labour supporters or young leftwing idealists of no particular party or those wanting to protest at the status quo to combine to trust the Liberal Democrat candidate to get the Tory out.
The results of every General Election since 1918 provide evidence of this. If we ignore this evidence we risk extinction.
I think we should look after ourselves and stand aside. Am not sure that the idea of ‘anti-conservative left’ means much more than ‘anti-labour right’ , and we should accept that just sometimes the Tories can deliver our ends more assuredly than Labour.
The Labour Party is in my view the biggest political failure of the last century – if you think about it, it was hardly ever in power and only acheived under Attlee (and even then Liberals had put forward many of the ideas). What acheivements could we really asociate with the governments of Wilson, Callaghan or Brown, and surely Blair’s period represents the single biggest lost opportunity for our country to change, ever. Now that they have lost Scotland, and also abdicated the responsibility of opposing, I am yet more sure that we are watching the death throes of Labour. The problem will be if they have a long slow death, taking up space.
So hopefully, we shall stand aside, make common cause with others where we can to achieve liberal ends wherever they are (Greens, Nats, some Tories, even kippers on electoral reform) and leave Labour to implode either before, or just after, May 2020, and then we might just see the moderate wing of their party seek to make common cause with other progressives. Let them do the running then, I say.
While I agree with most of the article I think the headline draws the wrong conclusion. There never was any chance of the entire Left forming a single block, the idea of re-alignement was that the Left wing of Labour go off & do their Revolutionary thing while the centrists work together with Liberals & Social Democrats. There is every chance of something along those lines happening in the next few years as Labour Centrists find themselves increasingly in the wrong Party.
On a comic note I just remembered that I used to know Corbyns brother slightly back when we were both involved in the Squatters movement, along with Christian Wolmar who came 5th in the Labour Mayoral race. Back then me & Piers Corbyn were Trots & Christian was an Anarchist.
And meanwhile lord peter flimsy insults northerners, but that’s okay because great people the Tories and anyway in they are only in power so it makes more sense to drone and on about the imagined policies of someone not in power who’s one stated policy so far is to consult with other members of his party before making any definite policies!! I for one know that as a lib dem voter Corbysatan hysteria is making me even more likely to vote Lib which was I 100% certain to do anyway. Keep up the good work, we need much more coverage of Corbyn than Tim Farron here on Lib Dem Voice!
Since the general election we have had a prime minister who is anxious not to be outflanked on the right. He wants to abolish the Human Rights Act, may want to abandon our neighbours in Europe, whips up xenophobia by talking of refugees swamping Britain, is axing social security by £12 billion and is ending incentives to invest in renewable energy sources.
It is in all our interests to make alliances where we can to stop or if we cannot stop, slow and mitigate this right wing policy drive.
Would Jeremy Corbyn’s election really make it more difficult to find some common ground with the Labour party? Is the right of the Labour party really a more attractive option?. In 2008 who wanted to bring in 48 days detention without trial? Whose Prevention of Terrorism Act was used to arrest hecklers at the Labour Party Conference and [what irony] students protesting outside an arms fair? Whose legislation was it that had people arrested for reading out the names of the fallen at the Cenotaph. Who bombed Baghdad? Who invaded Iraq? Who wanted us to walk the streets with our ID cards to be produced when any state functionary wanted to check who we were? These weren’t Corbyn’s ideas. These were the ideas of the crowd Cooper and Burnham belonged to.
There will always be areas of Labour party policy which are just very very silly eg reopening flooded coal mines in South Wales. This does not mean that we should shy away from making common purpose when the opportunity presents itself.
John Marriott
In fact, a large part of our immediate losses of supporters following 2010 was a direct result of attacking Labour as a Tory echo-chamber.
Richard
I have always worried that certain members of our party looks to the right-leaning part of the Labour Party, who over the years, frankly, have been the machine politicians, and often inimical to Liberal, and certainly to radical Liberal ideas.
@Simon Shaw
“Ironically for someone who has (for some reason) acquired a reputation as an ‘honest politician’ I think one of the biggest problems with Corbyn is his lack of honesty in matters fiscal.”
You attempt to demonstrate this by listing two claims of Corbyn’s: 1. The UK tax gap is £120bn, and 2. UK businesses benefit from £93bn of subsidies and tax breaks.
All Corbyn has actually done there is quote two highly reputable sources: Richard Murphy, one of the country’s leading tax experts, for the first one, and Dr Kevin Farnsworth of the University of York for the second.
Whether Murphy and Farnsworth are entirely correct or not – and you offer no evidence that they are wrong, other than your own personal incredulity – it seems a tad unfair to describe Corbyn as “dishonest” for relying on such respected sources. If only the average Lib Dem speech were based on such detailed research!
I agree with John and Tim13. If the Lib Dems think that concentrating their ire on Labour is going to win them more votes, you seriously have to wonder just how more unperceptive they could possibly be about what has happened over the past five years.
As a Labour supporter, I guess this should make me happy. But then I realise that the Tories will be the happiest of all with this situation, and that makes me sad.
“Do people actually believe this person? Clearly a few do, but I reckon the problem for the Labour Party is that the majority of the electorate don’t and won’t.”
Do people actually believe anything the Lib Dems say? Clearly a few do, but I reckon the problem for the Liberal Democrat Party is that the majority of the electorate don’t and won’t.
Stephen Howse “Let us work hard to rebuild the British people’s shattered trust in the Liberal Democrats”
How do you propose to do that?
Stephen Howse | Fri 11th September 2015 – 3:30 pm
“… the acres of political space between a far-left Corbyn-led Labour Party and a Conservative government which will not be able to resist nudging further to the right …”
So not a far-right Conservative government Stephen? Oh dear.
“… we are about to be gifted a huge opportunity to position ourselves politically between those two extremes and present ourselves as a moderate, sensible party …”
Stephen, your final sentence is “Let us be Liberals” I agree with you – but please let us not ‘position’ ourselves anywhere, let us simply speak and adhere to Liberal principles.
Nor should we feel the need to ‘present ourselves’ as anything. Our honest, principled, hard working, people-empowering Liberal Democracy should speak for us.
Presentation and positioning, swallowing the post-Thatcherite consensus and playing to the media’s tune has done very little for ordinary citizens or for any of the parties to the left of the Tories.
I was personally delighted to see the back of Cleggism and for Tim Farron to be elected as our leader because I believe in positive Liberal Democracy not in equidistance or filling spaces left by others.
I would be happy with a Corbyn win – I believe it will be good for democracy and will see people re-engaging in the political process rather than the general public increasingly reacting to a gut feeling that all parties and politicians are the same. The fact that it may well assist our party in taking hold of the common ground of decent liberal Britain and make it positively Liberal would be a welcome bonus but without a properly functioning participative democracy, a Liberal Democrat Britain remains little more than a distant pipedream.
Matt(Bristol)
“We need to find policies and language that show the moderate Labour supporters who look to Cooper, to Kendall, that we have much in common – and more in common than they have with their own leader. able co-writinng that article with France O’Grady seems a good start, making a grab to be the voice of a principled, moderate Trade Unionism.”
I really like this. It has the merits of both being good politics, and true to our beliefs. It also involves us in being polite, thoughtful, and reasonable. Which are attributes we were seen to have before 2010, and I think we should seek to re-acquire.
It also will fit into an interesting media story. If the media are constantly talking about relations between Tim Farron’s Lib Dems and the disillusioned Labour moderates … it’ll mean they are writing about us, which is so much better than what’s happening now.
No one knows the future, but I’ll make a guess. That Corbyn will be elected (!), he will stand down in a year or two to be replaced by an unattractive compromise candidate between the far-left and the Brownites. The Labour party will survive as it did under Michael Foot at the next election, but it’ll be badly beaten.
Over the years that this is happening, there’ll be a lot of desperately unhappy moderate Labour activists wondering if they are in the right party.
All this anti-Corbyn stuff is getting a bit tedious and echoes the Daily Mail. If the Liberal Democrats are to have a future it ought to be based on a radical progressive analysis. Being anti Cornyn will win no votes – the Tories will get them anyway. It’s what the Lib Dems have to offer that will count. Being arenas chums of the Tories has produced
Posted too soon. Should end with …… being seen as chums of the Tories has produced a disaster far worse than suffered by Labour. Suggest folk compare Hartlepool 2015 result (barely three figures) compared with second and 35% in the 2004 byelection.
@Stuart
“But then I realise that the Tories will be the happiest of all with this situation, and that makes me sad”
On one thing we agree. When the Tories are happy, we should be sad.
I fear, if Corbyn wins tomorrow, privately, the Tories will be ecstatic.
@Stuart
When you say “All that Corbyn has done is …” that isn’t all that he has done.
He has stated he would use these ficticious/dubious tax savings to cover his increased spending.
And BTW who says that “Richard Murphy is one of the country’s leading tax experts”? Maybe Richard Murphy?
As it is even Richard Murphy says the correct figure for recoverable savings is “no more than £20 billion”, and many other experts would dispute even that figure.
As to the Farnsworth £93 billion, I assume that you know that the Guardian did an article in early July demonstrating that it is a complete fiction: http://www.theguardian.com/politics/2015/jul/07/corporate-welfare-a-93bn-handshake
You may think that it gets Corbyn off the hook to say “Oh, these were only other people’s figures”, but that’s not really acceptable for someone who aspires to lead a major party, as I am sure you would agree.
While all this has been going on my Local Party has been preoccupied with approving candidates who will be competing for selection in target wards . We have a lot of heart searching to do at Bournemouth and beyond about the future of our party. The easy bit of the strategy is that we have to secure and expand our local government base. Let’s not get distracted by matters beyond our control.
@David Raw
“Being anti Cornyn will win no votes – the Tories will get them anyway.”
That’s a seriously weird thing to say. There’s going to be an awful lot of of anti-Corbyn votes and the last thing we should do is to concede them all to the Conservatives.
Some people seem to be in denial about the results of the 2015 General Election. —
We are in second place behind the Conservatives in 46 seats.
We are in second place behind Labour in just 9 out of all the 650 seats in the UK.
For the time being we need to be attacking The Conservatives not Corbyn. Unless we want to kill our part completely.
Simon,
well, we can probably assume that most of the existing (rather small %, only 37%) of Tory votes will be anti-Corbyn. Probably about half the UKIP votes as well.
Then there all the other votes… Quite a lot of them will be anti-Corbyn but the thing that unites them more is being anti Tory (apart from a few Lib Dems, most of whom seem to post on here…).
So when Corbyn attacks the Tories, can we please do our best not to support them in our anxiety to be anti-Corbyn? That was our big mistake the last 5 years…
I can see an undignified rush amongst some Liberal Democrat twitterrati to be first over the parapet in the rush to attack Corbyn. We are not going to win many votes like that I fear! Lets try being positive for a change!
Geoff Reid:
Hear Hear!!
Simon,
I just read that article in the Guardian that you linked to, and far from saying that the £93 billion was a complete fiction, it went through how it was made up in some detail.. You can argue about whether corporate subsidies are a good or bad thing, but there is no doubt that they exist.
@AndrewMcC
If you read the Guardian article you will have noted that large parts of the claimed £93 billion are indeed “complete fiction”, so there is no doubt that they DON’T exist.
I now realise that when I said “As to the Farnsworth £93 billion, … demonstrating that it is a complete fiction” that could easily be be taken to mean that ALL the £93 billion is fiction. That’s not what I meant.
When you look at the components of the alleged £93 billion of “subsidies and tax breaks” to UK businesses you can see that a lot of them are simply untrue, i.e. that the idea that there is anything like £93 billion a year is complete fiction.
Sorry for the lack of clarity on my part.
“We have a real opportunity, if we want to take it, to own the acres of political space between a far-left Corbyn-led Labour Party and a Conservative government.”
You mean like adding a ‘heart to Conservatives and a head to Labour’?
I don’t think that will wash with voters…just a hunch…
Simon,
Well, I have read the Guardian article again. If parts of the £93 billion are “complete fiction” that is YOUR opinion, and not that put forward in the Guardian article, and you should say so. In your first post you gave the impression that the Guardian had concluded it was “complete fiction”, and nothing could be further from the truth..There is some sort of justification given for each component of the £93 billion. I would think that to dispute the figures would require academic research similar to that of Farnsworth. Have you done that? I certainly cannot make that judgement just by reading the Guardian. As far as I can see all the types of subsidy listed do exist, so it would be the size which is the key thing..
@Simon Shaw
I bow to your better judgement of Richard Murphy than these disreputable organisations can manage:
http://www.internationaltaxreview.com/IssueArticle/3288272/Archive/The-Global-Tax-50-2013.html
http://www.aiaworldwide.com/awards-2012
@John Tilley so your strategy to win seats where the Conservatives fo well is to attack them? O …. K …..
@AndrewMcC
“I would think that to dispute the figures would require academic research similar to that of Farnsworth. Have you done that?”
I really don’t think it does. Anyone with even a basic understanding of business and taxation can see that to describe many of the components of the £93 billion (as helpfully listed by the Guardian) as “subsidies and tax breaks” to UK businesses is simply rubbish. Do you really not see that yourself?
So when you say “As far as I can see all the types of subsidy listed do exist”, many of them really don’t.
Just to give a few examples from the Guardian’s split of the £93 billion:
1. “Subsidies and grants: £14.5bn This includes cash to the train operators to run services …”
That’s NOT a “subsidy or tax break” – it’s a payment for a service provided. If you pay a taxi driver to take you somewhere, would you really refer to that as a “subsidy” to the taxi driver?
2. “Corporate tax benefits: £44bn Of the 93 major tax reliefs provided by the Treasury, 27 are aimed at business. The largest amount was spent allowing businesses to write off billions spent on plants, machinery and equipment among other items.”
I assume Farnsworth is primarily talking about Capital Allowances there. To talk about them as a “subsidy or tax break” is highly misleading as they are mainly a HMRC-sanctioned replacement for the normal legitimate business expense of Depreciation.
3. “Hidden transport subsidies: £15bn …airlines do not pay tax on fuel – support worth about £8.5bn a year”.
That’s NOT a “subsidy or tax break”, it’s simply that tax isn’t charged on the fuel but rather Air Passenger Duty is charged instead.
4. “Energy subsidies: £3.8bn … the dismantling of Britain’s nuclear power stations cost the public £2.3bn in 2012-13 alone.”
That’s NOT a “subsidy or tax break”; it’s a payment to contractors to sort out a problem left by what were, of course, nationalised industies.
5. “Insurance, advice and advocacy services: £406m Includes such vital services as the state’s insurance scheme for trading abroad – the export credit guarantee”
I think that IS a “subsidy or tax break”.
I could go on, but I suspect you get the idea.
@John Tilley
“Our leadership have spent the last ten years attacking Labour and singing the song of The Mail and The Sun.
Look where it got us.”
So that’s 2005 to 2015. Would you accept that from 2005 to 2010 we attacked the Conservatives broadly as much as we attacked Labour?
In terms of looking where it got us, what does that mean in relation to 2010? Was that good, bad or indifferent? I’m really not clear what point it is that you are trying to make.
Would those include the nationalised nuclear power stations from Nuclear Electric plc?
@John Broggio
As far as I can make out the British nuclear power stations being dismantled will have been built between 1953 and 1967.
Simon Shaw 12th Sep ’15 – 12:15am
Simon
I may have answered your question before you asked it. See my first comment in this thread, which concluded —
” Here is a basic law of gravity in UK politics —
Liberal Democrats do not (never have, never will) win seats from The Conservatives by attacking Labour.
We win seats from the Conservatives by getting traditional Labour supporters or young leftwing idealists of no particular party or those wanting to protest at the status quo to combine to trust the Liberal Democrat candidate to get the Tory out.
The results of every General Election since 1918 provide evidence of this. If we ignore this evidence we risk extinction.”
You asked specifically about the last two general elections. 2010 was clearly a dissappointment. 2015 was a disaster.
Surely, Simon, whatever lost opportunities there were in the run up to 2010, they pale into total insignificance compared to the continuous Lib Dem electoral disaster of 2010-2015?
Simon Shaw 12th Sep ’15 – 12:34am
“@John Broggio
As far as I can make out the British nuclear power stations being dismantled will have been built between 1953 and 1967.”
Simon, while clearly a statement of fact, it is disingenuous to suggest that it is not a subsidy. Surely you are not suggesting that public liability should continue beyond privatisation of any business?
If it was part of the commercial contract then it shows just what a raw deal the nation received when many of its community assets such as power and transport industries were sold to the private sector for private profit.
Simon,
I am not going to go through your list one by one – suffice it to say that I disagree, and others can draw their own conclusions. The subsidy to railways is the most obvious of your mystifying interpretations… The government calls it a subsidy as summarised here: http://www.rail.co.uk/rail-news/2015/passenger-numbers/. Gradually the subsidy is being withdrawn and fares are going up (which cannot be claimed against tax – see below)
Tax breaks to industry are another example. Writing off expenses against tax is not available to employees, in general – I cannot even write off daily travel costs which are an absolute necessity to perform my work. Even from running a microbusiness for a few years I know that the rules are very complex and can be manipulated to avoid tax (as we see famously in the case of Starbucks, Amazon etc). Couple this with one of the lowest rates of company taxation in the world (as shown in your Guardian article) and we are undoubtedly giving major tax breaks to industry, as Cameron has boasted.
There is also no doubt that with the privatisation of public services we are giving public money to provide profit for the companies that provide those services. That article provides an interesting quantification of this. As with all these subsidies, there is an argument that they save money overall because of the previous inefficiency of publicly run services. I find this argument hard to evaluate, to be honest, but I think councils should be free to set up their own companies where profit would be returned to the taxpayer, rather than to individuals. I like the idea of collectives too, as do many Liberals and Socialists. As with all these things, the theoretical ideal is different from the practical actuality – that is the problem.
So these ARE subsidies and tax breaks. Where I agree with you is there is not £93 billion available for Corbyn to invest in other ways. For example I am sure that a nationalised railway would continue to be subsidised (I think public transport should be subsidised more TBH, as it is in many American cities. That would be the equivalent of tax relief on travel to work above. Plus the desirable environmental result of getting people out of their cars). Corbyn is not going to nationalise all industry into a communist planned economy and unless you do that you have to continue tax breaks for industry or it goes elsewhere.
On nuclear power:
My recollection is that the new private monopolies bought the nuclear power stations from us at an agreed price… Then they said a few years later “But we assumed you were paying for decommissioning!” And we did…
I agree that the government and its advisors completely underestimated the real costs of nuclear power generation, and continue to do so… There is a lot of wishful thinking out there… (including amongst the Corbynistas, on many things)
@Simon Shaw
Thanks for linking to the Guardian article which enthusiastically promotes Farnwsworth’s research – you saved me the trouble.
Subsidies paid to rail companies are indeed subsidies by definition. There is no comparison with a taxi fare, unless you imagine the subsidies are all used to buy train tickets for civil servants. The government knows these payments are subsidies and calls them such :-
https://www.gov.uk/government/publications/rail-subsidy-per-passenger-mile
“He has stated he would use these ficticious/dubious tax savings to cover his increased spending.”
No he hasn’t – not in the speech you quoted anyway. He’s put the scale of the tax gap in to context, which is not the same thing at all.
“Richard Murphy says the correct figure for recoverable savings is ‘no more than £20 billion'”.
Is that really a direct quote, as your quotation marks imply? Or have you made that up?
In Murphy’s lengthy report, which is the original source of his £120bn tax gap estimate, he states that an additional investment of £1bn in HMRC would produce additional tax returns that “might easily exceed £20bn” – which is very different from what YOU are claiming he has said.
@AndrweMcC
“Gradually the [rail] subsidy is being withdrawn and fares are going up”
Well, quite, that’s exactly how subsidies work. As my trusty old Penguin Dictionary of Economics defines it :-
“Subsidy. A payment by a government agency to producers of goods, intended to make prices lower than they otherwise would be. The payment will also in general have the effect of raising the income of the recipients above the level it would otherwise have reached, and of increasing the real incomes of the buyers of the subsidized products.”
Putting aside the technicality that it might not work, what is wrong with a “peoples QE”? Up until now QE has benefitted the banks, the very institutions that got us into the mess we are in in the first place. Whilst people on low incomes and the unemployed have perversely been forced to pay the price.
I object to Jeremy Corbyn because I remember the culture of the hard left in the Labour party in the 1980s, and even today the Stop the War movement still has that sectarian feel to it (otherwise I would join).
But on economic policy, well I am not persuaded on for example nationalising the energy sector but in many ways what Jeremy Corbyn offers is a welcome break from the neoliberal concensus that has governed this country since 1979. This is something we should have been doing years ago.
@Stephen Hesketh
“Simon, while clearly a statement of fact, it is disingenuous to suggest that it is not a subsidy. Surely you are not suggesting that public liability should continue beyond privatisation of any business?”
That might well be the case in relation to existing operational nuclear power stations transferred from CEGB and yet to be decommisionned – I don’t actually know.
But to quote Wikipedia https://en.wikipedia.org/wiki/Nuclear_power_in_the_United_Kingdom
“In 1996 the UK’s eight most advanced nuclear plants, seven advanced gas-cooled reactors and one pressurized water reactor, were privatised as British Energy, raising £2.1 billion. The remaining Magnox reactors remained in public ownership as Magnox Electric. On 30 January 1998 Magnox Electric was merged into BNFL as BNFL Magnox Generation.”
As the stations being decommissioned at present are all Magnox reactors, I take the above to mean that they were always in public ownershtp, and never owned by any private sector company, Accordingly this so-called “subsidy” is the payment to contractors to deal with a mess wholly by a wholly nationalised industry.
Would I assume you agree with me on that, Stephen?
@AndrewMcC
The source of this totally dubious £93 billion a year is a Dr Kevin Farnsworth of the University of York (who Stuart describes as “a highly reputable source”, so he must be). Dr Farnsworth https://www.york.ac.uk/spsw/staff/kevin-farnsworth/ has degrees in Social Policy (no mention of any qualifications in accountancy or economics), so I assume he is best described as a sociologist. Based on his articles on what he keeps on referring to as “Corporate Welfare” he appears to be on the Far Left.
So when he (and other people on the Far Left, like Corbyn) talk about £93 billion of “Corporate Welfare”, of “Subsidies and Tax breaks”, they do so on the basis that they want you to believe that this is £93 billion on money that could be spent on public services or cutting taxes to “hard working families”.
It is totally misleading and I am only sorry that you appear to have been taken in by it (which is, of course, what the Far Left want to happen).
@AndrewMcC
“Tax breaks to industry are another example. Writing off expenses against tax is not available to employees, in general – I cannot even write off daily travel costs which are an absolute necessity to perform my work. Even from running a microbusiness for a few years I know that the rules are very complex and can be manipulated to avoid tax”
But that’s not the main part of Farnsworth claimed £44bn of “tax reliefs provided by the Treasury”. He specifically says “The largest amount was spent allowing businesses to write off billions spent on plants, machinery and equipment among other items.”
You talk about running a small business. You may (or may not) recall how it was taxed. Supposing your accounts showed the following:
£100,000 Turnover
– £65,000 Cost of Sales and General Running Costs
– £10,000 Depreciation on “plant, machinery or equipment”
___________
£25,000 Profit for the year
Because you can decide on whatever basis of depreciation you want, the taxman (ironically, largely to prevent tax avoidance) DOESN’T allow you to include Depreciation in your tax calculation.
So your taxable profits are then £35,000. Instead the taxman permits you to deduct Capital Allowances, which is the tax equivalent of depreciation, calculated under strict HMRC rules. In this year they may come to £8,000.
So your final taxable profit would be £27,000.
The probem, assuming I am not misunderstanding him, is that Farnsworth includes this £8,000 with what all the other businesses’ Capital Allowances and then says “Isn’t it awful, there’s tens of billions of ‘subsidies and tax breaks’ being given to all these greedy businesses as ‘Corporate Welfare'”.
It’s NOT Corprate Welfare – it’s the taxman’s equivalent of depreciation, which is a totally normal and reasonable business cost that needs to be allowed for in calculating your profit.
@Stuart
“Richard Murphy says the correct figure for recoverable savings is ‘no more than £20 billion’”.
Is that really a direct quote, as your quotation marks imply? Or have you made that up?
As you’re such a fan of him I assumed you read what he says on his Blog – see http://www.taxresearch.org.uk/Blog/2015/08/12/how-much-of-the-tax-gap-is-collectable/
@Simon Shaw
Of course I’ve read what he says on his blog – which is why I’m asking where you got that purported quote from, because it certainly isn’t on his blog. What he says there is very different. Google can’t find your quote either.
So was that quote genuine, or did you fabricate it?
Simon,
Well I have no opinion of Farnsworth whatsoever… If he were an economist it would not increase my faith in him however. That is just my prejudice though! Economic theories abound, but it is hard to prove they work…. I see he spent quite a lot of his time at universities in that dangerous communist hotbed, Canada..
What I don’t do though is say “he is on the “Far Left” so obviously everything he says is a load of rubbish” I have read Farnsworth’s website too… He believes in decreasing inequality. To say he is on the “Far Left” is the same as saying Cameron is on the “Far Right”. Relative to the full Left-Right spectrum these people are pretty centrist.. As many have said, what Corbyn advocates was largely the left of centre consensus in 1975. There were many people to the left of him in the Labour Party in those days, and Ted Heath would be left of centre in today’s politics. Quite possibly in 20 or 30 years time the centre will have shifted leftwards again – these things tend to go in cycles.
Anyway it seems to me very very clear that in the years up to 2008 we put far too much trust in Big Business, particularly the banks, and most of us (not the actual bankers of course) are still paying for the consequences. Those policies were conducted by a Labour government but were a continuation of the Thatcherite “small state” ideas. Yes, the New Labour government thought that the boom would last for ever and increased public spending a bit – but the big problem was profligate borrowing and unsafe lending by the banks, not governments. The Thatcherite consensus clearly had it wrong then, and I suspect it still has it wrong now… That does not mean that I think Corbyn has the answer though, but if there is another crash between now and 2020 (leaving the EU would probably do it) I think the voters will give him a chance to try…
Ok, how about an example:
I have recently moved into a house with a 15 year old central heating boiler – I will soon have to replace it.. If I was renting the house my landlord could replace it and claim the cost against tax, but I can’t. Possibly the landlord could then move into my house, rent out his existing one, and claim improving that against tax too (that may be illegal! I have no idea! It is very reminiscent of some of the expenses tricks MP’s were getting up to..). Arguably these business subsidies (along with low interest rates) have helped fuel the housing boom, which is widely thought to be rather dangerous.
Well, any change in tax tends to have unexpected consequences, so cutting the tax advantages that businesses have over individuals might not be a good idea. It is probably where I agree with you and disagree with Farnsworth… But still they are there, and companies pay accountants large sums of money to present their accounts in the way that maximises them.
@AndrewMcC
If Simon were in your position, he’d probably be expecting the previous owners of the house to foot the bill for “decommissioning” your boiler…
@Stuart
At the Richard Murphy Blog page that I link to he says:
“3) He cannot find me ever stating that only £20 billion is actually recoverable.” That’s Richard Murphy who wrote that, not me or anyone else.
In this quote “He” refers to someone called Jolyon Maugham QC who is a tax specialist.
Richard Murphy then proceeds to demonstrate that Jolyon Maugham QC is wrong when he says that.
Sorry, but I really thought that was all obvious. If you’d read his Blog like you claim you do, you would know that.
@AndrewMcC
I’m assuming you’ve read a bit more of what Farnsworth says, particularly about what he he refers to as “Corporate Welfare”, as opposed to Welfare for disadvantaged individuals.
You can hear him explaining it here: http://www.taxjustice.net/2014/10/22/tax-justice-network-october-podcast/ starting at 19′ 30″ in.
The problem is that presumeably doesn’t know much about business, accounting or taxation. In trying to advance his political point (which people like Corbyn have jumped onto), he makes complete howlers. So it’s not a case of me saying “he is on the “Far Left” so obviously everything he says is a load of rubbish”, but rather that:
1. He has formed this theory of “Corporate Welfare”
2. He wants to find evidence to support and promote his theory
3. He then starts accumulating items, without really understanding them, that total £93 billion and which he says comprise “Corporate Welfare” and “Subsidies and Tax Breaks”. Although some are (as I said above) most aren’t.
4. That’s why it’s a load of rubbish, not because he is coming from a Far Left position.
@AndrewMcC
At 11.31am I tried to use all my skills as a former Lecturer in Accounting** to explain why Farnsworth’s claims of £44bn of “tax reliefs provided by the Treasury” … “allowing businesses to write off billions spent on plants, machinery and equipment among other items” is misleading rubbish.
Did that make sense to you? I note that you haven’t either agreed or disagreed with me on that point, which is obviously a very large part of the £93 billion.
** Although I must point out that I never taught Taxation, and it wasn’t one of my favourite areas when I qualified as an Accountant in 1983.
Simon,
Well I have no opinion of Farnsworth whatsoever… If he were an economist it would not increase my faith in him however. That is just my prejudice though! Economic theories abound, but it is hard to prove they work…. I see he spent quite a lot of his time at universities in that dangerous communist hotbed, Canada..
Simon,
Well, I was pointing out that these are tax breaks for business that are not available to individual employees.
As I have said several times, I don’t think it would be wise to remove all these tax reliefs, although I note there have been many changes over the years to plug loopholes and abuses and no doubt there will be more. We might also look at why our tax rate on business is so low compared to other countries (although no doubt employer’s national insurance should be included)
@AndrewMcC
“Well, I was pointing out that these are tax breaks for business that are not available to individual employees.”
In a way I find it quite difficult to explain – it’s almost one of those things that you instinctively “get your head round” or you don’t.
I’d try and explain your example as follows:
1. You need to keep in mind that the landlord pays tax on the rent (strictly the profit on the rent) that he receives. You don’t as the owner-occupier.
2. As indicated above, the tax is strictly on the profit, not the gross rent.
3. Suppose the rental is £600 per month, or £7200 a year. The landlord uses an agent who charges 10% or £720 a year. That’s allowable as a business expense for tax, and I assume you are OK with that. After all, allowing for that, the net income the landlord receives is £6480 a year, not £7200.
4. The landlord has to obtain a Gas Safety Certificate each year and that costs (say) £100. That’s allowable as a business expense for tax, and I assume you are OK with that.
5. The landlord insures the building and the premium is (say) £200 a year. That’s allowable as a business expense for tax, and I assume you are OK with that.
6. Finally I’ll assume the landlord shells out £1000 for a major upgrade to the central heating. That’s allowable as a business expense for tax, but I’m not sure you are happy with that.
The point is that the landlord has a gross rental income of £7200 and expenditure of £720 + £100 + £200 + £1000 = £2020, so the net profit is £5180. It’s the £5180 that the landlord pays tax on, which is surely fair. Some (particularly on “The Left”) say “Isn’t it disgraceful that we are giving all this tax relief to landlords”, but the tax relief in 3 to 6 above is all given for genuine business expenses, which all contribute to the true profit of the landlord being £5180, not £7200.
If the landlord is a Basic Rate Taxpaper above the Personal Allowance threshold, he or she will be paying £1036 in income tax on this £5180 profit/net rent received. That’s still £1036 more than you have to pay on your owner-occupied house.
I hope that makes sense.
@Simon Shaw
So you attribute Murphy’s paraphrasing of somebody else as Murphy’s own comment? Interesting. What Murphy actually says – and it’s right there on the page you linked to – is that an investment of £1bn in better collection might “easily” bring in more than £20bn. Get the picture?
Simon,
I did not really need a lecture on how landlords claim tax relief on the expenses in letting a property. I understand that perfectly well!
Obviously I don’t have to pay any tax on my owner-occupied house: I am not getting any income out of it! I do still have some of those expenses though, and if i did not have somewhere to live I would have a lot of trouble doing my job.. So why cant I claim these same expenses against my income in employment, like the landlord does? (and don’t say “because the tax rules don’t allow it”). And why does the landlord get an additional allowance for capital gains tax and a lower marginal rate on that than I do on my income? Capital gains are a major source of income for many landlords.
Ok, no doubt you think my house is nothing to do with my employment, so in that case why can’t I claim tax relief on my daily travel to work?
@Stuart
“So you attribute Murphy’s paraphrasing of somebody else as Murphy’s own comment?”
Yes, absolutely, when Murphy spends so much effort to demonstrate that someone else is WRONG to say that “he cannot find me ever stating that only £20 billion is actually recoverable.”
According to you what he actually should have said is: “You are absolutely correct to say that; I never said that only £20 billion is actually recoverable.”
Why do you think he didn’t say that?
@AndrewMcC
“Ok, no doubt you think my house is nothing to do with my employment, so in that case why can’t I claim tax relief on my daily travel to work?”
Because that’s what the tax rules say. But it’s no different in a business situation. A business-person wouldn’t be able to claim tax relief on their daily travel to work.
@Simon Shaw
No, according to me what he should have said is what he actually DID say: “[if] an additional £1 billion… was to be spent, bringing total annual spending to about £5 billion, then the potential total yield to HMRC from tackling both tax evasion and tax avoidance would increase significantly and might easily exceed £20 billion per annum”
I’ve used quotation marks there to indicate that those are Murphy’s exact words.
You still haven’t given a source for the quote you attributed to him – which is ironic given that you entered this thread with an attack on the honesty of others…
Simon Shaw 12th Sep ’15 – 10:40am
“… As the stations being decommissioned at present are all Magnox reactors, I take the above to mean that they were always in public ownershtp, and never owned by any private sector company, Accordingly this so-called “subsidy” is the payment to contractors to deal with a mess wholly by a wholly nationalised industry.
Would I assume you agree with me on that, Stephen?”
Yes, I do indeed agree with you Simon BUT your facts show that, as usual, privatised businesses and industries were disposed of under terms generally advantageous to the purchaser leaving the country with the cost of for example continuing infrastructure investment or, as in this case, decommissioning.
@Stephen Hesketh
“Yes, I do indeed agree with you Simon BUT your facts show that, as usual, privatised businesses and industries were disposed of under terms generally advantageous to the purchaser leaving the country with the cost of for example continuing infrastructure investment or, as in this case, decommissioning.”
That may well be the case, but I don’t think the quoted facts show that it is. Further investigation would be needed.
@Stuart
“You still haven’t given a source for the quote you attributed to him – which is ironic given that you entered this thread with an attack on the honesty of others…”
Yes I have, a long time ago. It’s in line 6 of Richard Murphy’s own Blog (which you said you had read) at: http://www.taxresearch.org.uk/Blog/2015/08/12/how-much-of-the-tax-gap-is-collectable/
Jeremy Corbyn has advocated many things that don’t make sense. Some of them, such as his views on mining and energy policy and on foreign and defence policy, seem to me not so much far left as half-baked. That is a problem for Liberal Democrats looking for areas in which they and Labour could co-operate, but it isn’t a straightforward right-centre-left set of issues. As the weaknesses in his proposals are exposed (and who knows, one or two with a bit more work turn out to make more sense than seemed likely) opportunities for co-operation may open up again. In the meantime, by all means let’s expose where he’s being impractical or damaging while welcoming any co-operation we can get on issues where we may have something in common.
Dear Simon
Please could you quote the phrase that you believe supports your argument, so that we don’t get bogged down into what constitutes a line/paragraph etc.? (I’m clearly missing the point entirely – apologies for my stupidity.)
Best regards
John
@Simon Shaw – doesn’t it require quite a lot of mental contortion to see ‘being a landlord’ as business activity at all? Purchasing and letting a property is surely more accurately classified as an investment; the tax breaks involved (which are designed to offset the cost of depreciation of capital assets) thus apply to the object of speculation (i.e. the property owned). This mis-classification does nothing but help fuel a speculative bubble.
Of course being a landlord is a business. Investing in a property fund is not, but actually being a landlord is.
Anti business views like these need to be expunged.
Regards
@John Broggio
“Please could you quote the phrase that you believe supports your argument, so that we don’t get bogged down into what constitutes a line/paragraph etc.? (I’m clearly missing the point entirely – apologies for my stupidity.)”
I did – at 2.26pm yesterday.
That’s where I said:
“At the Richard Murphy Blog page that I link to he says:
“3) He cannot find me ever stating that only £20 billion is actually recoverable.”>/b> That’s Richard Murphy who wrote that, not me or anyone else.”
I think the problem is that Stuart is being deliberately obtuse.
@Simon Thorley
“Simon Shaw – doesn’t it require quite a lot of mental contortion to see ‘being a landlord’ as business activity at all? Purchasing and letting a property is surely more accurately classified as an investment; the tax breaks involved (which are designed to offset the cost of depreciation of capital assets) thus apply to the object of speculation (i.e. the property owned).”
Eddie is correct. In fact most businesses involve investment, although obviously I would accept that ‘being a landlord’ is fairly capital intensive.
The other point is that one thing you DON’T get tax breaks for is the cost of buying rental property – see http://www.hmrc.gov.uk/manuals/pimmanual/PIM2020.htm
As the HMRC say:
“The cost of land and any buildings on it is capital expenditure. So is the cost of any new buildings erected after letting has started and any improvements. Capital expenditure cannot be deducted in computing the profits of a rental business. Nor can a revenue deduction be claimed for the depreciation of capital assets or for any loss on the disposal of capital assets. But there are separate reliefs for some capital expenditure …
In some cases capital expenditure on a property (but not the land itself) may qualify for ‘capital allowances’. … There are no capital allowances for the cost or depreciation of residential property; but a ‘wear and tear’ allowance may be due for the plant and machinery (furniture, furnishings etc) within furnished accommodation. An allowance may also be due for the cost of installing loft, cavity wall or solid wall insulation, draught proofing or insulation for hot water systems in a residential property that is let.”
@Simon Shaw (and @John Broggio)
What you actually said, Simon, was :-
Richard Murphy says the correct figure for recoverable savings is “no more than £20 billion”
Those are YOUR quotation marks. You attribute those words to Richard Murphy. But he didn’t say them. You can’t find the quote, because he never said it. In fact he said something the exact opposite, which I’ve already quoted several times. The nearest you can get to an approximation of what you quoted is, by your own admission (5:47 pm yest), a bit in which Murphy is paraphrasing somebody else.
There is one thing I agree with you on Simon – “a lack of honesty” in politics is a very bad thing indeed.
People’s QE seems thoroughly liberal. Indeed, it’s Keynes (but also Milton Friedman!)