LibLink: Danny Alexander: Get real, Lord Lawson, it’s the low paid who need our help

Danny Alexander by Paul WalterLinking to the Daily Mail usually brings me out in hives, but there are occasions when it’s ok. Danny Alexander taking down Lord Lawson for suggesting that further tax cuts should be focused on higher earners is one such case.

In today’s paper he starts by reminding people that it was a Liberal Democrat priority to cut taxes for the lowest earners. He missed a trick by reminding people where Tory hearts lay – an inheritance tax cut for the rich, but that’s by the by.

Right from the formation of the coalition in 2010, the Liberal Democrats have insisted that raising the personal tax allowance to £10,000 is our first tax priority.

It was on the front page of our manifesto and it was a top priority in the negotiations that lead to the formation of the coalition.

We have fought to keep this policy on the agenda at every Budget and every Autumn Statement.

Lifting the personal tax allowance helps those on modest incomes and it rewards work, making it ever-more attractive than a life on benefits.

He then outlined Lord Lawson’s position and explained why it was nonsense:

They argue that we should focus less on the raising the personal tax allowance and should instead raise the point at which people start paying the 40p rate.

With one of the leading exponents of this theory also a noted denier of climate change, it is perhaps no surprise that a cool analysis of the facts and figures clearly shows that they are completely missing the point.

The rises in the threshold over this parliament, including the one that comes into effect on April 6, have benefited a significant majority of all taxpayers on the basic and the higher rates.

And the Liberal Democrats want to go further:

I made it clear at our spring conference last week that further rises would be a top priority for our party in any negotiations that might be required should the British people deliver a hung parliament. We aspire to raise it substantially to £12,500. That’s worth another £500 to millions of people.

And even though there is more to be done to reduce the deficit in the next Parliament, Danny is clear that this will not be at the expense of the poorest:

The Conservatives have made it abundantly clear that they will look only to further cuts to achieve that aim.

As Liberal Democrats, we will propose that the further deficit reduction required after the next Election should be achieved by a balance of cuts and asking those with the broadest shoulders to contribute a little more in tax. For everyone else, we’d reduce tax bills further.

 You can read the whole article here.


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  • I thought for a moment about posting a comment sympathetic to Danny Alexander, but only for a moment.
    It is easy to have a go at the loathsome Lord Lawson with sentences such as –
    “With one of the leading exponents of this theory also a noted denier of climate change, it is perhaps no surprise that a cool analysis of the facts and figures clearly shows that they are completely missing the point.”
    But Danny Alexander sits in The Cabinet with climate change deniers, including the badger shooting Secretary of Sate for the Environment, Owen Paterson —

    Why attack Lord Lawson who is not even a minister and is probably more famous nowadays for being the father of a celebrity chef with a nose for unusual ingredients.

  • While right to attack Lord Lawson et al, notice in the piece that Danny claims that we’ve given higher rate payers a £500 tax cut: “Higher-rate taxpayers will typically have gained about £500 from the personal tax allowance increases.” That doesn’t sit well with the title of “it’s the low paid who need our help”.

    It does seem that while the message is usually that we’re helping only the lowest paid, when it’s politically expedient Danny argues that actually these tax cuts have helped higher earners too.

    Will our election promise really be of further spending cuts (where exactly??) coupled with tax cuts for everyone up to an income of £120,000?

  • Presumably this boils down to a case of more middle income families than low income families vote Conservative, hence it makes more sense for them to introduce tax cuts for middle income families.

    Therein lies an inportant point – if, while in government, tax cuts are targetted at a particular group that needs to (more or less) translate into votes. If the targetted group just blames you for all the negatives (of being in government) and gives no credit for the positives, then you are in real trouble because all the other (non-targetted) groups will lack positives reasons to vote but still have the negative ones.

  • peter tyzack 17th Mar '14 - 11:39am

    ‘Why attack Lawson’? – simple, because he is the one that the media keep shoving on our screens as the ‘elder-statesman with wise words’.. his illogical ideas need taking apart every time he voices them… and Danny is right, if you raise a threshold it does benefit higher rate taxpayers too, as raising the base threshold helps everyone above it, but raising the 40p threshold only helps the higher earners.
    There is, however, a ‘fairness’ argument for ‘reviewing’ the higher thresholds but that should not even be contemplated until we have got the base threshold raised, and tied, to the minimum-wage-week.

  • Mick Taylor 18th Mar '14 - 9:34am

    There really needs to be some historic perspective on the tax debate. Prior to 1979 income tax rates were much higher than they are today. Basic rate was around 33% and the top rate was as high as 98%, tax policies supported by Labour and Tory governments alike. Compare that with now, basic rate 20% top rate 45%. On the whole the post war generation -of which I am one – were, whilst not ecstatic about it, willing to pay taxes in return for good public services. Sure, some very wealthy people complained and some even went overseas, but so what?
    Then in the late 70s along came Thatcher and Reagan with their message that all taxes were bad, especially for the rich, and society didn’t exist or didn’t matter and that all public services were badly run, overstaffed and grossly exorbitant – a message rapidly adopted by Labour and sadly many Liberals as well.
    All this talk about the 40% tax threshold is special pleading by those in our society who don’t want to pay a slightly larger share of their income towards the provision of the public services we all use. That’s the whole point of progressive taxation. Those with the broadest shoulders bear the larger burden.
    It’s right to focus income tax cuts on the lowest paid (though National Insurance needs looking at too) and to face down those like Lawson, who think only of the better off.
    Remember what JK Galbraith said ‘ tax is the price we pay for a civilised society’.

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