A tale of two conference speeches: Ed Davey declared the Lib Dems to be the party of low taxes, and outlined £17bn of tax cuts to Income Tax and Fuel Duty, paid for by making a better deal with the EU, whilst Andy Burnham proposed a National Care Service – with an estimated cost of £18bn according to the Health Foundation. Burnham proposed funding this by adjusting the Triple Lock – although he didn’t explain it that well in the speech. The new approach will tackle the “ratchet” effect – where inflation is high one year, wages grow high in the second in response, so the pension grows rapidly twice in a row. The new system will keep it roughly in line with a third of average wages, making it more predictable and affordable. Importantly, it will never decline in real terms.

The triple lock was designed for those halcyon days of the 2010s – low inflation and modest wage growth, not the stagflation of the 2020s which in our hubris we assumed was condemned to the history books of the 1970s.

Now Burnham’s costings don’t actually add up – his proposal will start to save substantial sums over the long term – but will be a few billion short. That’s fine, it’s a conference speech not a Budget. All the major opposition parties came out the gate to oppose this – despite initial polling showing that this trade off is popular and fair.

Davey said that social care can’t wait for the next parliament – we need action now – which we all agree with. He also said it shouldn’t be funded by modifying the Triple Lock, which begs the question, can we afford the Triple Lock? The answer is yes for the next 10 or 15 years, but not as a low tax party.

Choices have to be made – we have already spent all the proceeds of growth on tax cuts, so we can’t grow the economy even more to pay for it. That leaves tax rises or spending cuts to pay for it. We also are in favour of restoring Overseas Development Aid, fixing the crisis in social care, and increasing defence expenditure. I assume we aren’t in favour of savagely cutting education, and are opposed to defaulting on the national debt, which leaves essentially nothing left to cut, despite the rhetoric from the right-wing press about being able to save untold billions from “efficiency”. For instance, Civil Service headcount has grown in recent years largely due to the renationalisation of the Probation Service – nothing to do with bloat or profligacy.

Fundamentally we will need substantial tax rises to pay for everything we want – or we can accept the Triple Lock’s time is over. Fiddling with the Digital Services Tax, growing the economy marginally faster, and taxing “bad” things like gambling and banks will only get you so far.

Substantial tax rises are needed – CGT equalisation and indexation (£19 billion), or applying NICs fairly to investment and partnership income (£6.1 billion) would be the most obvious revenue raisers – which also promote tax neutrality, reducing distortionary aspects of the tax system and promoting economic growth. Reforming Council Tax with a more proportional property tax could also be designed to raise revenue from the most expensive properties and promote labour mobility. We should do all of these things anyway to fix our broken tax system – and if we want to be a low tax party, lower the headline rates after doing it.

This would just about fund a National Care Service and the Triple Lock for the next 10 or 15 years or so – after that things get more tricky as the dependency ratio rises sharply, and doesn’t fund any of the other expenditure we support, that requires further tax rises.

All this assumes China doesn’t invade Taiwan, the USA doesn’t carry on its path to self-destruction, or the climate crisis doesn’t accelerate and shatter global economic growth, in which case tax cuts are for the birds and the Liz Truss’s of this world.

* Joe Wright is a member in Lambeth and who worked at Lib Dem HQ from 2021 to 2025 developing the party's long-term policies.