The Liberal Democrats 2015 general election manifesto will be launched this Wednesday, April 15th from 10am until 1pm at “A Venue in Zone 2, London”. This announcement got me googling “A Venue in Zone 2″ to find the address of the venue, only to belatedly realise that they mean ” A venue in Zone 2, London”.
Current members of the party are invited to come along to the event, and there is a form to register for it here.
* Paul Walter is a Liberal Democrat activist and member of the Liberal Democrat Voice team. He blogs at Liberal Burblings.
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27 Comments
Hi Paul
Sorry to add to the ‘That Monday morning feeling…….’ but tomorrow isn’t Wednesday 🙂
Shaun, as Paul knows very well, in Zone 2, jam is always tomorrow.
Thank you both. Getting up at 4am and being on holiday has shredded my brain!
Amid all the huff and puff of Lib Dem Voice I am at times confused as to what the party heirachy want. Is it party survival or more importantly just to be part of a coalition. The public hardly seem to care about our policies because we are so tainted with “Tuition Fees” and the association with Clegg.
Can I therefore just try and look forward to a scenario where the second option is possible. What would that do to the party, what would it mean for its future. Whether that coalition was with either the Conservatives or Labour it would surely have a further detrimental effect on our future. I say this as someone who feels the coalition has overall been good for the country.
With the Conservatives we would surely be drained off even further, to the point of demise. There would be nothing new to offer the electorate and it would be a re-run of the past 5 years, maybe some good policies and actions but the end of the party as it would be overtaken by the Greens.
With Labour. Again as the government became unpopular we would be further squeezed by the Conservatives as they seek to head back to government and importantly overtaken by the Greens.
(Talking about the Greens, I think their economic policies are crazy BUT they are currently demonstrating that they have a more powerful organisation and activist base in parts of the country we thought was our strength. Just looking at their number of Council candidates next month should send shivers through our spines. We as a party seem somewhat naïve and blasé about this but it will surely come to bite us hard in the next 2 – 3 years unless we wake up).
So coalition appears to offer the party more of the same and near death. Supporting a minority government seems to produce little different.
Therefore the option allowing a possible renewal of the party suggests a period of quiet opposition. However this will not be brief, the electorate has long memories and will not forget, the Tuition fees debacle in any sort of hurry. It will be a noose around our necks for some time to come.
It is possible that this election will be a turning point and offer some hope for the party. Maybe some of those at the top of policy will lose their seats and a new much younger team, not from the House of Lords, with plenty of female personalities, will take over for the future.
Whatever happens in three weeks we will have to face up to some harsh realities. It could quite conceivably be the worst election result ever for the party, with its average vote per candidate at the lowest in history. If we want this party to survive and then grow again we have to change. Coalition has been tried and it has all but destroyed us as a national party. Thank goodness the electoral system is still First past the Post, it will probably save us several seats. We will need to regroup as a more gender friendly party, not being ruled by old age male pensioners from the Lords.
So far I’m now spoiling my ballot on the 7th May. There’s no excuse to tax dividend income more than employed income. The idea that one is “earned income” and the other isn’t is ignorant because company directors have to pay themselves dividends to avoid paying both employee’s and employer’s national insurance.
Many pensioners have earned their money too and they will be effected.
Eddie, What are you referring to?
Hi David. Increasing the dividend tax rate to 37.5% for higher rate taxpayers.
Once you add corporation tax and take away the dividend tax credit the net tax is 44.48% (subjected to rounding).
We can’t plan dividend taxation by ignoring corporation tax and the dividend tax credit.
Theakes. What is the point of a political party if not to govern?
Just read in the Financial Times the party is also going ahead with plans restrict the amount of debt interest that can be offset against corporation tax.
Debt interest is a legitimate business expense. There’s nothing centrist about taxing things that shouldn’t be taxed.
People can write off these concerns if they like, but the employed aren’t being asked to pay more tax, so it isn’t fair.
@Eddie Sammon “company directors have to pay themselves dividends to avoid paying both employee’s and employer’s national insurance”
Perhaps this avoidance of NI is something that should be targeted. Many people work as contractors with limited company status, and one of the perks is being able to avoid tax by playing games with the way money is transferred to their own pockets. IR35 was supposed to distinguish between genuine entrepreneurial activity and disguised employment, though I can’t say I’ve noticed much change over the last 15 years.
I had been wondering what happened to all the parties’ manifestos this election. However I can’t get excited about our manifesto launch because our manifesto will not be a radical one. It is a call for more of the same. Even our best policy is weak – ÂŁ8bn or ÂŁ9bn+ or ÂŁ12.5bn (depending on which figures you use) for the NHS but nothing extra in the financial year 2017-18.
We have a policy to build 300,000 new homes a year. If we were serous about this it would be on the front page and be one of our red lines.
@ theakes
If we do go into government after the general election what will we be able to say are our unique policies. Not the increase in personal allowance; not the ÂŁ8bn for the NHS; not balancing the budget.
I agree with you that being in coalition with either party could well destroy our party. Also this will not be exchange for anything meaningful in building a more liberal UK. It would be much better to vote on a policy by policy basis.
It is possible that when we fight the 2020 general election most of our MPs who broke their personal tuition fee pledge will either be standing down or will already have left Parliament.
@Tabman
‘Theakes. What is the point of a political party if not to govern?’
There are answers to that. Obviously, a 100% win is when a party wins an election outright in favourable circumstances and can implement a lot of its policies. (Not always the same thing.) A lesser win is when it can exert pressure on the government, such as by being in a coalition, and get some of its policies implemented. It may also be in a position to influence government from opposition by gaining popularity, winning councils and by-elections and thus getting the government to change course towards its ends.
A lot of this depends on the party actually having a mechanism to develop an ethos and robust policies, something the LibDems have. There have been time when Liberals and LibDems have developed policies, for which there was no room in the two bigger parties. Many of these approaches, after (too long) a delay, have been taken over by one or both the larger parties and even become political orthodoxy.
@Eddie – The taxation of investment income now (as from Apr 2015) has to also take account of the threshold George Osborne introduced, namely: ÂŁ1,000 (basic rate) and ÂŁ500 (higher rate) and the changes to ISA withdrawal rules.
Also in your calculation you omitted NI, which dividend income doesn’t incur, I suspect that if the desire is get directors to pay themselves salary rather than dividends then there needs to be no tax advantage to either the individual or company in paying dividends as opposed to salary. However, this does suppose that someone has actually thought this out rather than simply shout tax evasion!
Hi Roland, thanks for the info on the new thresholds, but small company directors will exceed that easily because of dividend payments.
I know I left out NI, but I didn’t on the other thread and NI is only 2% for higher rate taxpayers, so it still doesn’t get up to 44%.
The idea seems to be to get small company directors to pay themselves through salaries instead, but then they will have to pay the 10.4% or 13.8% jobs tax. It is a hammering.
Let me know if I have anything wrong.
Peter, please see above.
@Peter – Much is made of the ability of contractors to be creative about the way in which money goes from invoice to backpocket. Back in the summer of 2009, I took my previous year’s figures and crunched them through a spreadsheet. What I learnt was that whilst I could improve the amount of money in my backpocket, it would involve greater complexity of accounting and more time devoted to book keeping (both personal and business). I came to the conclusion that for a turnover of under ÂŁ100,000 the return on the effort required was better spent growing the business…
@Eddie Sammon, I wouldn’t worry too much; I doubt you’ll find any Lib Dem policies in the next Queen’s Speech. For a party that should appeal to small independent businessmen and women, it does seem like shooting oneself in the foot. Thanks for pointing it out.
Eddie Sammon “The idea seems to be to get small company directors to pay themselves through salaries instead, but then they will have to pay the 10.4% or 13.8% jobs tax. It is a hammering.”
So, salaries are actually taxed more than dividends even under the new system?
Hi Philip, yes and no. The main point is that if a shareholder makes a profit they have to pay 20% corporation tax before they receive it and under Lib Dem plans a 37.5%* dividend tax too if they are a higher rate taxpayer.
*The 37.5% figure is reduced to 30.56% through the dividend tax credit, but presently it gets reduced to 25%.
The calculation is as follows: divide dividend by 0.9 multiplied by (1-.37.5)
https://www.gov.uk/tax-on-dividends/how-dividends-are-taxed
I used to be a financial adviser, so don’t worry if people are struggling to get their heads around dividend taxation. It took me a while too.
No worries Stevan.
What is the “10.4% or 13.8% jobs tax” of which you speak?
Hi Philip, employer’s national insurance. I agree with most of what you write on this site, but I really don’t want to say much more on this site today.
I don’t agree with the argument that salaries are still taxed more because employees don’t pay employer’s national insurance. If we start thinking like this then we could add 20% VAT to business taxes in many industries too.
Best regards
Unearned wealth should always be discouraged in an effort to maintain a healthy balanced society and indirectly create more competition and jobs. As long ago as Plato this has been a recognised factor. “Those that accumulate wealth simply through the possession of wealth, [do not have a positive effect on their society]”.
The other side of the coin as I suggested in the consultation request was that if we did tax unearned wealth at a higher level that the tax system for businesses should be more alike that for personal taxation. In other words a classification of small business should pay no tax at all, then above a threshold tax would increase as a business gets bigger. Therefore encouraging small businesses to grow.
I went further, through legislation we should encourage the tax free investment in financial products in sanctioned market sectors ie Science R&D, Engineering, Infrastructure building. So that a person choosing to invest can go for a range of ‘bonds’ or other vehicles which direct investment towards areas the government has identified as being in long term need of this private investment.
Sounds sensible Richard, but it is rather against the anti-tax avoidance mood of the times (I think the Greens are planning to raise ÂŁ90bn from cracking down on tax avoidance, presumably by enforcing legislation that says everyone must maximise their tax bill).
Indeed, with talk of massive fines for “tax avoiders” is there not a danger that today’s chancellor’s well meaning tax incentive for small businesses becomes tomorrow’s chancellor’s tax avoidance scandal, leading to small businesses being fined out of existence?
Philip; Well, a small business is not Philip Green living in Monaco signing everything to his wifes name to avoid millions in tax. Just like an isa there would be an upper limit on the amount invested for each individual. Plus it ensures that the money is invested onshore in vital market sectors that means that the government doesn’t need to invest it. Would it be bad if billions of private sector money was invested in essential markets backing small medium business that could florish and address our balance of payment deficit? Even if the interest from the investment is tax free the net effect is that OUR society benefits from the investment, that is the quid pro quo.
Philip; also it’s not a case of tax incentive. We should make a decision on who we take out of taxation, that should include possibly millions of self-employed people who have taken their redundancy money and a lot of risk and start their own small business. They have the dream of one day employing others and building a bigger business so we should support them. I think taking small businesses out of taxation and providing a tax free investment vehicle that meets the needs of our society is fair because it promotes jobs creation in the right places as determined by the people we elect (or even better as they do in Germany an independent body).
Philip; also re: greens proposal, I think it’s a rubbish idea! Why? Because many years ago NZ reformed and simplified their taxation system creating what the OECD described as one of the most efficient in the word. They unexpectedly found that for ‘smaller’ tax payers the tax receipts were up. Why? Because people could understand the system. People with lots of money will always be able to employ people to evade tax. The lower band tax payers, self-employed, and small business owners in my experience do not have the time or money to do so. I also draw your attention to the French idea of a micro-business that has virtually zero admin and is effective.
Hi Richard, interesting ideas, but overall I worry that support for tax cuts for the low paid seems to be contingent upon tax increases on regular higher rate taxpayers, according to many Lib Dems.
I’m not even a higher rate tax payer, although I hope to be one day, but I know people who are.
Eddie, depends who you call low paid. Right now 50% of people in poverty are working! Plus I would argue that your method of employment is not relevant. Self-employed, employed or otherwise. The changes in NZ were designed to be neutral but the new found simplicity increased the tax take. Thus changing the tax distribution curve doesn’t mean people on top rates are worse off IF and I say IF they are given a choice to save tax by investing their spare income in tax saving vehicles set up by the government which directs private investment to sectors and industries which means the government doesn’t have to stump up hundreds of millions in subsidies. Investing spare money like this promotes job creation and should be more attractive that investing in property. Buy to rent helps create a housing boom and unsustainable house prices.