Daisy Cooper was on Sunday with Trevor Phillips on Sky News. As our new Treasury Spokesperson, she was asked about what she wanted to see in the Budget.
But first, she was asked whether she accepted the Government’s narrative about the £22 billion black hole in the public finances.
She replied that there was no doubt that Conservatives left the economy in a mess. There may be an argument about the 22 billion number but what people want to know is if public services are going to get better. Are they going to get the health and social care they need?
She said that we were deeply uncomfortable about the rumoured increase in National Insurance employers’ contribution because of the effect on smaller businesses. In particular, she mentioned how this might affect small care companies and that might lead to even more care home closures and increase the crisis in care.
However, we would support taxing banks and gambling companies and changing fiscal rules to allow more investment to build more schools and hospitals.
Another rumour is that fuel duty is going to go up for the first time in 15 years. Daisy said that we were concerned about the impact of doing this during a cost of living crisis. If there was a viable alternative with good public transport it might be easier to stomach. The burden of cleaning up the Tory mess should be on big companies, not on ordinary people.
She was pressed by Phillips about the effect of our proposals on taxing banks. What impact would that have on our savings and pensions? She answered that the four or five biggest banks made £40 billion in profit and we want to reverse the tax cuts they have had which could raise just a tenth of that, a small amount of money for them, to help turn our public services around.
She said that we would have to look at the budget as a whole but would likely vote against a rise in employers’ NI contribution.
The main Liberal Democrat priority for the Budget was to see health and social care. Daisy talked about her own experience of serious illness and her Crohn’s diagnosis:
In 2012 I had been very ill, struggling to get a diagnosis and was rushed into A and E. After a few weeks of drug therapy, they concluded that she would have 4 days to live if she didn’t have life changing surgery.
I talked about my personal experience because I am living proof as so many people are that when you have strong health services, not only can you improve people’s lives and health outcomes but you can enable people to get back to work and be productive in the economy and help with jobs and growth. Health and wealth are two sides of the same coin and if the Government want to turn the economy around, they have to put health and care front and centre in their budget.
Often when people talk about budgets and the economy, they do so in a way that doesn’t relate to real lives. Daisy spoke in clear and simple and human terms about where our priorities lay. It was a really good, confident interview. I hope we’ll see a lot more of her around the budget coverage.
* Caron Lindsay is Editor of Liberal Democrat Voice and blogs at Caron's Musings
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15 Comments
I agree that it isn’t a good time to raise NI for employers, but ending the suspension of the fuel duty escalator is long over-due.
I appreciate the concerns about the cost of living, but we can’t ignore the costs to society of the current level of car use. Too many people are still making too many short journeys by car and the trend for bigger and more fuel hungry cars, and that speeding on motorways is entirely normal shows that for a lot of people the price of fuel is not of that much concern. Even if they complain about it.
I would support holding off the raise in fuel duty in rural areas where people don’t have many options, but we need to do more than simply use ‘lack of public transport’ as an excuse to back the motoring and oil lobbies. We can ensure that at least some of the money raised by fuel duty goes towards supporting public transport.
Some people with disabilities are more reliant on cars, but rather than keep fuel artificially cheap for everyone I’d rather these costs were reflected within disability allowance (and pensions). Money raised from fuel duty can be concentrated on those who do need more support, rather than making dangerously large SUVs a more affordable choice for all.
@Fiona
“Some people with disabilities are more reliant on cars”
Indeed but not all get any support – I don’t – I can walk a bit but not very far.
“Money raised from fuel duty can be concentrated on those who do need more support, rather than making dangerously large SUVs a more affordable choice for all.”
No-one NEEDS an SUV. Depending on the disability e.g. need to carry a wheelchair around, some disabled people might need larger cars than others. A small estate car (smaller than SUVs) might do.
The current version of the Ford Ranger Wildtrak pickup weighs 2.4 tonnes with a 3 litre diesel engine. It’s been found that because of the weight and height of the bonnet of these type vehicles if a vulnerable road user (ie not in a car) is hit they are 2 or 3 times more injured at the same speed as if they were hit with an ordinary hatchback type. Also, ofc, in a collision between one of these and a normal car the normal car comes off much worse. There’s probably a case for varying VED by weight rather than
CO2 emissions, and move to payment per mile for all vehicles (not necessarily at a fixedrate) rather than increasing fuel duty. Electric vehicles are still using road space and creating congestion after all.
If disability benefits don’t help enough people who need it I’d argue that needs to be fixed within the disability benefits system, and not used as an excuse to continue to externalise the costs of fuel use.
There are a number of issues with SUVs and other needlessly large vehicles that go beyond their fuel inefficiency, which IMO would be better dealt with via VED. Those who have a need for a particular sort of vehicle that has higher VED could be offered a discount if revision of disability allowance isn’t sufficient.
The other way of looking at it is that everyone, including those in the countryside and with disabilities, will benefit from the taxed raised by increasing fuel duty. Whether that’s being spent on schools, GP appointments or an increase to carers’ allowance, or simply not putting up a different tax.
It should go without saying that aviation fuel should be taxed properly, and ideally we should be working with the EU and internationally to make that happen. Income from that could go towards investing in our railways and/or reducing the tax burden for public transport.
@Jenny – I posted before seeing your comment.
I agree about the dangers of SUVs. Part of the danger is the reduced visibility at close range. I’m not sure if it’s reduced visibility, the size of the tyres making it less obvious, or that poor drivers are more likely to pick those vehicles, or if those vehicles make people poorer drivers, but when I see car clipping kerbs in the narrow streets near me, it’s usually boxy SUV types.
I’d argue that VED should consider vehicle shape as well as weight, emissions and mileage. As you say, EVs contribute towards congestion, wear and tear of roads and particle emissions from tyres.
Raising employer’s NI rates is a dreadful way of raising money – literally increasing tax on the provision of employment. It’s only merit seems to be that it wasn’t explicitly ruled out in Labour’s manifesto. Corporation tax at least carries a link to an ability to pay, as it is based on profit. Unlike corporation tax, raising employers NI will hurt struggling companies, along with growing start-ups.
It’s also disappointing to see that the furious lobbying from the wealthy and their representatives in the Tory Party and right-wing press against pre-election proposals to tackle inheritance tax, non-dom status and the very favourable tax treatment of private equity investments might be paying off. They seem to have pulled off the same confidence trick with inheritance tax as they did with ULEZ during the London mayoral election – persuading far more people they will be affected by it than in reality actually will be.
We should also challenge the notion that modest increases in tax on the wealthy, and the accompanying ‘Laffer Curve’ nonsense, would cause an exodus of billion/millionaires and an overall loss of tax income. There is no serious evidence to support that (without excessively punitive rises). Anyone wealthy who’s primary motivation is minimising tax has already gone, and the majority still here have personal/business reasons or family ties keeping them in this country.
Whilst I’m glad Daisy isn’t keen on raising Employer NICs (though unless I’ve missed something, not addressing that a raise would continue to suppress wage growth), it’s a shame that she doesn’t want to end the fuel duty freeze, and reverse the cut made by the last Tory government. We are an environmental party and whilst we do have policy to eventually replace fuel duty, we need to raise it to meet our commitments to reduce reliance on driving, fuel duty value has eroded after all!
Shame too we continue to parrot that banks have had taxes cut when the overall rate they pay has remained largely static, and raising bank levy will be counter intuitive to us wanting not to penalise people, such as those already on mortgages. Hopefully this is something that can be reviewed by the party in its policy review!
|Totally agree with Fiona. Fuel duty absolutely must rise subject to redistribution to those who have special needs (and I don’t include people living in rural areas (including me) as special in this context.) It will drive people use more efficient cars and drive the shift the electric vehicles.
Environment trumps pretty well everything in my view.
Fuel Tax has been frozen for a long time, surely at a minimum it should increase every year in line with CPI? And why not look at Car Tax? As others have mentioned SUV’s and ‘Chelsea tractors’ are gas guzzlers, and have greater emissions. So why not increase the levels of tax for cars over 1800cc or 2000cc, and reduce it on hybrids etc under 1500cc.
And BTW I agree with Nick on inheritance tax (paid on about 4% of inheritances) and tax on the wealthy. If a few more billionnaires want to leave the UK and live in Dubai well OK, they’ll soon get bored with living in permanent air conditioning as it’s over 40 degrees in the shade for much of the year!
Instead of having charity appeals for MRI scanners, air ambulances and the like,perhaps we should fund public services properly and have Crownfunder appeals, and lotteries to buy the likes of Phillip Green and Michelle Mone a new yacht!
We as a party I think are moving away from making things more expensive to change people’s behaviour as it affects the poorest in society the most. We should change people’s behaviour by making the alternatives both cheaper and more convenient. And give financial assistance to poor people to make the changes necessary. So, I welcome our not supporting increasing the taxes on petrol.
It is good that Daisy is saying the party will support changing the fiscal rules to allow more investment.
I can’t see in our manifesto anything about taxing gambling companies more, perhaps that is a new idea, since the general election. As the government is saying it needs over £40 billion extra revenue, I would have expected that Daisy would also have mentioned taxing the tech giants and water companies more, and introducing a tax on share buybacks. She could also have mentioned our policies to reform Capital Gains Tax and aviation taxes. Recognising the large need, she could have come up with a policy suggested in one of our consultation papers – reducing pension relief to the basic rate of tax (worth around £13 billion in 2021 according to consultation paper 146).
What I think is particularly bad is that it seems she said nothing about increasing work-age benefits above the 1.7% inflation rate, or reversing the policy to make the Winter Fuel Allowance means-tested.
@ Michael, the poorest people in society don’t own cars, and freezing fuel duty as inflation rises means subsidising those who do drive even more than we do now. I know it can be a harder sell to parts of the electorate, but we must avoid the trap of letting wealthy people use ‘the poor’ as an excuse for them not to pay fair prices for things. Don’t forget, the poorest in society are usually the ones that face the brunt of the harms of driving.
Poorer people already disproportionately experience bad air quality, and are the ones who struggle most from food inflation caused by food price increases caused by poor harvests that result from climate breakdown etc.
Far better to ensure that the poorest in society have enough income, and to use monies raised from fuel duty to invest in better, and cheaper public transport and other alternatives to driving.
Brandon Masih,
I believe that Corporation Tax for medium and large companies increased by 6% to 25%, while the bank surcharge was reduced from 8% to 3%. Therefore, banks were paying 27% before the changes and 28% afterwards. So, they didn’t get a tax cut as we keep saying, however most companies had a 6% increase but banks only 1%. There is a case to be made that banks should be paying 33% (8% above 25%).
Fiona,
Poor people do own cars. If a person has always been poor and comes from a poor family then they might not own a car. If a person is poor for a long time, they might no longer own a car, because of the cost of its maintenance and running. Most young people own a car after passing their test as it gives a person freedom.
Indeed, poor people do suffer disproportionately from food inflation, as their benefits are not increased in line with food inflation. We need to continue to pressure politicians to provide them enough income so they don’t live in poverty.
Even if we invested more money in public transport to make it cheaper and increase its availability having your own car in most places will still give a person a greater amount of freedom. The answer is not to make petrol more expensive, but to make the alternative ways of fuelling a car cheaper.
Some ‘poor people’ do own cars, but the poorest in society don’t, and at a population level people who are poorer own fewer cars and drive fewer miles than people who are wealthier. Policies to protect car drivers are just that – they protect car drivers, at the expense of all of us, and at disproportionate expense (environmental as well as financial) to those who don’t drive.
If we want a budget to protect the poorer people in society then we need to be proposing policies that benefit poor people more than they do the wealthy.
If we are giving tax breaks (which is what the freeze in fuel duty is) to car drivers, it’s removing the choice from government to give a similar tax break or opportunity to spend money on those who need it more, or to give people choices and the freedom of not needing to rely on expensive car ownership.
The British People love their cars. Like it or not, one way for a popular party to become unpopular is to declare war on the motorist. Increasing fuel duty is a way to become unpopular.
When people say they support more public transport, the unspoken part is almost always “for other people, so I can still use my car”
Fiona,
I accept that poor people are likely to drive fewer miles than richer people. I agree we need to provide higher levels of benefits for the poor.
If petrol increases in price, as we can see from the last few years, this effects other prices. Food inflation has been particularly high because of this and benefits have not kept pace with it. So increasing petrol prices has a disproportionate effect on the poor, not only reducing further how much they can travel but making it harder to afford food.