LibLink: Danny Alexander: We ignored siren voices in the Tory party on 40p tax rate to give £100 tax cut for all

Screen Shot 2014-03-19 at 19.44.37To write for the Mail once might be considered unfortunate. To do so twice in three days has to be considered careless. Mind you, Lady Bracknell would no doubt have read that paper.

Danny Alexander follows on from Sunday’s article with this piece on how the Liberal Democrats stopped the Tories from confining tax cuts to the rich alone. First, a little differentiation:

We’ve forced it onto the agenda at every Autumn Statement and Budget and by April this year will have delivered a tax cut worth £700 to 25 million working people.

I’m delighted that the Liberal Democrat campaign to go even further has been successful.

Today we announced that the personal income tax allowance will rise even further to £10,500 giving an extra £100 tax cut.

As Chancellor, George Osborne announced this today.  Both he and I worked closely to deliver a Budget of which we can both be proud.

But many Conservatives wanted us to do something different.

You only have to listen to what some Tory back benchers have been saying in the run up to the Budget urging action on the 40p rate instead.

He then went on to talk about help for businesses:

It particularly helps the small and medium sized businesses that are the back bone of our economy.

The type of firms that we see on our High Streets and in our local enterprise parks.  The kind of businesses that tend to be family owned and have really strong ties with their local areas.

For some years, businesses have been able to get tax relief on money they invest to modernise equipment and plant.

Today, we’ve doubled that amount to £500,000.  This encourages businesses to invest for jobs and growth. There’s a simple reason that underpins why I am ‘pro-business’.

You can find it in the statement that sets out my Party’s vision – A stronger economy and a fairer society.  To have a strong economy you need thriving businesses.

Without a stronger economy, it’s almost impossible to have a fair society.

And, finally, on liberalising pensions:

Today we have taken the axe to the myriad of restrictions that have grown up around pension pots.

This has been made possible because we have introduced the highly liberal reform of the single tier pension under the leadership of Liberal Democrat Pensions Minister Steve Webb, and have more people saving for their retirement.

We are now able to make dramatic reforms and liberalise how people can access and manage their own money in retirement.

Gone are the days when people will be forced to buy an annuity as the main part of their pension income.

You can read the whole article here.

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15 Comments

  • Stuart Mitchell 19th Mar '14 - 9:08pm

    I think the banner is hiding the fact that all those smiling Lib Dems’ pants are on fire.

    Lib Dem manifesto, 2010 :-

    “Under a Liberal Democrat government, you will not have to pay any income tax on the first £10,000 you earn…
    This change will be paid for by:
    • Giving tax relief on pensions only at the basic rate, so that everyone gets the same tax relief on their pension contributions.
    • Taxing capital gains at the same rates as income, so that all the money you make is taxed in the same way.
    • Tackling tax avoidance and evasion, with new powers for HM Revenue & Customs and a law to ensure properties can’t avoid stamp duty if they are put into an offshore trust.
    • Ensuring pollution is properly taxed by replacing the per-passenger Air Passenger Duty with a per-plane duty (PPD), ensuring that air freight is taxed for the fi rst time. We will also introduce an additional, higher rate of PPD on domestic flights if realistic alternative and less polluting travel is available.
    • Introducing a Mansion Tax at a rate of 1 per cent on properties worth over £2 million, paid on the value of the property above that level.
    In addition we will reform the system of ‘non-domiciled’ status, allowing people to hold such status for up to seven years; after that time they will become subject to tax on all offshore income in the same way as domiciled British citizens.”

    Hmmm, not much of that stuff happened… so where’s the money come from?

    This is what you call a con.

  • Caron Lindsay Caron Lindsay 19th Mar '14 - 9:46pm

    So you said on the other thread, Stuart. I disagree. At a really challenging time economically, we’ve delivered something that helps those on the lowest incomes when in coalition with people who instinctively want to help the rich. And the money has been found for this – by increasing taxes on the rich, including raising capital gains tax by 10%, which we all seem to have forgotten about.

    We may not have introduced the Mansion Tax, but we have done more in terms of taxing the rich and reducing the income inequality gap than the last lot did.

  • It’s a bloody coalition Stuart! The headline policy has been achieved. Some of the proposed methods have been used, but resources have also come from other places. As with any budget a game of many-dimensional chess will have been played.

  • Stuart Mitchell 19th Mar '14 - 10:31pm

    @Caron Lindsay
    “At a really challenging time economically, we’ve delivered something that helps those on the lowest incomes when in coalition with people who instinctively want to help the rich.”

    But that clearly isn’t so. Looking at single taxes in isolation is the oldest con trick in the book. It’s the overall picture that matters. Everything else is noise.

    I suggest you peruse the graphs on pages 10 and 11 here :-

    https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/293738/budget_2014_distributional_analysis.pdf

    These are the government’s own figures, and they show very clearly that the only redistribution that’s going on is from the bottom three deciles, and the top decile, to those in the middle and upper-middle deciles.

    If the government is really helping those on the lowest incomes as you claim, how come the bottom 30% are doing worse than anybody else except the top 10%? Apart from that richest 10% (who can easily afford it), the bottom three deciles are the only ones to be worse off.

    “We may not have introduced the Mansion Tax”

    Nor almost everything else on the list I quoted.

    Now, if Lib Dems were being straight with the public – acknowledging that in reality the bottom 30% are doing pretty badly, but making a case that at least they’re not doing nearly as badly as they would be under a pure Tory government – then it would be possible to have respect for that. Instead, Lib Dems are making completely bogus claims about showering the low paid with tax cuts that are flatly contradicted by the government’s own budget figures. It’s a swizz.

  • Stuart Mitchell 19th Mar '14 - 10:39pm

    @Ed Wilson
    “It’s a bloody coalition Stuart! The headline policy has been achieved.”

    To re-use my analogy from the other thread. Suppose I tell you that I’m going to give you £700, and that I’m going to get this money from the rich guy down the road. Instead, I take £700 from your own back pocket, and “give” you that instead.

    Is there any meaningful sense whatsoever in which I have done what I told you I was going to do? Have I even HALF done it?

    Lib Dems have always made a great virtue out of being open about how their pledges are costed. Now, apparently, it doesn’t matter.

  • Stuart

    “law to ensure properties can’t avoid stamp duty if they are put into an offshore trust”

    that would be the 15% stamp duty. I believe this is a bad policy and we should abolish stamp duty but I think it is as close to achieved as is legally possible.

  • “At a really challenging time economically, we’ve delivered something that helps those on the lowest incomes when in coalition with people who instinctively want to help the rich.”

    The trouble is that – as you know very well, because it’s been pointed out to you about 90 times by now – (1) it doesn’t help those on the lowest incomes at all, and (2) it does help all basic rate taxpayers, which includes many on above-average incomes (about a third of all income taxpayers).

    And you also know perfectly well that this is not a policy the Tories are at all resistant to – LDV has spent a lot of time recently moaning about the fact the Tories have been trying to steal the policy! – obviously for the very reason that it gives a huge tax cut to the middle class.

    But is there any point trying to discuss this at all, if people like you are just going to keep on parroting the misleading party line about “helping those on the lowest incomes”?

  • I am one of the people who are on really low pay . I am constantly being told that I now have more of my own money to keep as a result if the increase in the income tax threshold. I don’t see any more money in my wallet. It’s all eaten up by pay freeze and inflation. So yes Stuart Mitchell is right. It just feels like one big con and not even a subtle or a clever con at that.

  • I think it’s good to see Danny writing in the Mail. I suspect many LDs like me dislike the Mail intensely (and support whatever it opposes!) but the fact is, it’s widely read and we can’t shun all Mail readers.

    On pensions he makes the sensible point that it is the earlier changes made by Steve Webb that have made this liberalising possible. Let’s claim credit for this and not leave the grey (or Mail) votes to the Tories!

  • @Mark
    Mark.
    It depends what you mean by “widely read”. If you check out the audited circulation figures, link below, you will see that whilst The Mail has the second highest circulation it is still not that big. Bigger than the poor old ‘Independent’ which with only 70,000 is only slightly bigger than they LDV’s claimed readership.

    The Daily Mail circulation is less than 2 million. A very small percentage of the UK population. In fact it is about the same as the number of people that the Church of England claim go to one of their churches at least once a month. In other words it is a very small minority. By way of comparison despite decades of declining membership there are still around 6 million trade union members. The Premier League claim that more than 13 million fans attend matches in a season.

    It is easy to assume that The Daily Mail has huge influence — but the facts seem to point to some other conclusion. In the UK we used to have a tradition of reading daily newspapers. There is a cultural hangover from that time and a myth is perpetuated by the TV and Radio who cheaply and lazily fill in hours of broadcasting time by “reviewing the newspapers”.

    In reality most of us do not buy a newspaper every day, nor are we necessarily influenced by their editorial line even if we are exposed to it. A story line in Coronation Street is more likely to influence opinion, which is why many advertisers are interested in product placement or influencing scripts. A product featured in a James Bond film or a garden tool brandished by Alan Titchmarsh can get far more sales than an advertisement. It was soon noticed that if Delia Smith mentioned an obscure ingredient on mainstream TV, that ingredient would sell out in the supermarkets the following day.

    So, when it comes to News, it is much less important what appears in the Newspapers. George Monbiot had a campaign about the opinion version of product placement on the BBC. He pointed to the frequent appearances on the BBC of people from the IEA (so-called Institute of Economic Affairs, which is in fact funded by the Tobacco Giants). So people who were appearing in news programmes as ostensibly indepenedt talking heads, pundits, experts were in fact paid employees of a multinational vested interest promoting tobacco.

    I am not sure how much time, money and effort was put into getting a piece into the Mail supposedly written by Danny Alexander but one might argue that those resources might have been better spent elsewhere. Nick Clegg was fantastically popular for a week or so in April 2010 because he was placed like a product on the TV Leader Debates. Before that he was largely unknown to the public, A week or so later when people had got to know more about him that popularity evaporated. He turned up at the TV Snooker in Sheffield and was spontaeneously booed by the crowd. A couple of months later he dropped dramatically in the polling level of disatisfaction: poor personal polling has persisted and worsened since then. No amount of articles in The Mail or interviews with The Telegraph, or photo opportunities wandering around hospitals or nursery schools in tow behind Cameron have improved that low satisfaction rating. For four years we have had almost constant media exposure for Nick Clegg and Danny Alexander and the right wing centre party image they try to put across. — the results speak for themselves. It is all shipping forecasts and flip-flops but not many votes.

    Link to table of newspaper circulation figures —
    http://en.wikipedia.org/wiki/List_of_newspapers_in_the_United_Kingdom_by_circulation

  • Malcolm Todd 20th Mar '14 - 10:12am

    Got an email from Nick Clegg yesterday, headlined “We did it” and containing this gem:
    “Because thousands of people like you backed our campaign, millions of working people are going to get an £800 tax cut.” (emphasis added)

    That’s just a lie, isn’t it? At best, we’re going to get a £100 tax cut. (We can argue about whether it’s reasonable to include inflation-proofing in the amount of the “cut” another time.) Yes, on incomes between £10,500 and £40,000-odd the total income tax take in 2015/16 will be £800 less than on an identical income in 2010/11. But you can’t claim a future benefit as if most of it hadn’t happened already.

  • Malcolm Todd

    Whatever it is — it is definitely not the truth. But in the strange half-light, under the stones where the people who write that sort of rubbish work out their sad lives they would have us believe that it is all a “jolly clever initiative” that will restore Nick Clegg to nationwide mega popularity.
    Except of course it will not. It is rubbish. Everyone knows it is rubbish. Even Nick ‘flip-flops’ Clegg probably knows that it is rubbish. It is not even bad politics. It is what has replaced politics.
    We need a politics which is aimed at working with ordinary citizens to exercise power over their own lives and then we will get rid of this synthetic Westminster Bubble rubbish.

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