One Coalition policy, above all, polls strongly with the British public: lifting the income tax threshold to take the low-paid out of income tax altogether and to give a meaningful tax-cut to the lowest-paid.
As the Lib Dems have never been shy of reminding people, it was the party’s top priority at the 2010 general election. And it’s being implemented now because the Lib Dems are in government.
The Tories, it seems, have, a bit belatedly, noticed that cutting the taxes of the low-paid is quite a savvy thing to do. So, the Spectator tells us, they’ve launched their own posters claiming the credit for this Lib Dem initiative.
Such is politics. It’s worth recalling what the Tory tax pledges were in 2010:
- reverse Labour’s proposed increase in National Insurance contributions (what the Tories termed the ‘jobs tax’);
- raise the inheritance tax threshold to £1m;
- freeze council tax for two years;
- tax breaks for married couples;
- reduce corporation tax.
No mention at all of the personal allowance.
But overall I think we should be reasonably relaxed about such things: that the Lib Dems have established this distinctive policy in the political mainstream such that both Labour and the Tories are trying to muscle in is (as I’ve argued before) good for its long-term health.
Besides I suspect it’s going to take more than a few posters for the Tories to persuade voters that this was their idea. Their decision last year to cut the top-rate of tax for those earning more than £150,000 from 50% to 45% is the tax policy they’re best-known for (also, incidentally, absent from their 2010 manifesto).
Almost single-handedly George Osborne’s tax-cut destroyed seven years of his and David Cameron’s modernising attempts to re-brand the Tory party as ‘fluffy’ enough to be trusted with public services. And much of the Tory rhetoric since then — on the economy, on Europe, on welfare — has re-inforced all the old negative ‘nasty party’ stereotypes. Trying to appropriate the Lib Dems’ tax-cuts to make up for it… well, it’s a simple case of too little, too late.
* Stephen was Editor (and Co-Editor) of Liberal Democrat Voice from 2007 to 2015, and writes at The Collected Stephen Tall.
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8 Comments
Surprize Surprize NOT HaHa
Is there a test we can apply to know which Coalition policies should be attributed to which party?
Because, at the moment it seems if a policy is ‘good’ it is Lib Dem, and if it is ‘bad’ it is Tory.
Which strikes me as a little bit unfair on the notion of collective responsibility.
Despite a lot of the awful stuff this coalition government is doing (I know they are facing tough times and I don’t expect Labour would be fairing much better if they were in this situation but let’s not make excuses), I am very pleased the raise in the allowance has happened. But please don’t stop here, there’s still much you can do…
You could raise the minimum wage up to the living wage without employees having to pay a penny extra. Consider this:
According to http://www.listentotaxman.com, if an employee is paid the minimum wage (£6.19/hr), the employer pays an extra 31p/hr on top of their wage in National Insurance contributions. Employers pay £6.50/hr for a minimum wage worker, but the worker only gets 95.2% of that amount, so they aren’t entirely untaxed, yet.
But if the government were to simultaneously scrap employer NI contributions and raise the minimum wage to £6.50, the employer wouldn’t notice a thing (as far as min wage workers are concerned, of course they would be better off with other workers, and that might allow them to employ more people or drop prices), they would still be paying £6.50/hr for that worker’s labour; however the worker would be earning £604.50 extra in a year (assuming they work a 37.5 hour week for 52 weeks). Of course some of that would be taxed, but what if it wasn’t…?
The living wage is £7.45/hr (Outside London: http://www.livingwage.org.uk). Somebody on the living wage would be earning £12,696.46 per year, post tax (again, assuming they work 37.5 x 52 hours in a year). While somebody on £6.50/hr would be on £12,675.00 per year pre tax.
So somebody on the minimum wage would pretty much be receiving a living wage, if only they weren’t being taxed!
In my opinion what the Lib Dems, or indeed any party, need to do is campaign to abolish NI contributions by employers, raise the minimum wage to £6.50, and raise the allowance to £12,675. (and personally I’d also love to see the end of the regressive national insurance completely!)
It would hopefully end a need for tax credits (a shameful system where workers must be grateful for receiving money off the government that it took off them in the first place), give those minimum wage earners with fewer responsibilities a bit more disposable income (creating more demand), and stops the idiotic tax on something we surely need more of: businesses giving people jobs.
I am almost certain that there will be flaws with this, I am not an expert in this (or indeed any!) field, but hopefully if somebody who is went through it, they would find that there is a lot more right with what I’m saying than there is wrong! 🙂
‘As the Lib Dems have never been shy of reminding people, it was the party’s top priority at the 2010 general election.’
Surely scrapping tuition fees was the top priority at the 2010 general election,I remember the policy was personally endorsed by every Lib Dem MP.
@ john zims
Er, have you read the 2010 manifesto?
Tuition fees appears for the first time on somehting like page 38 with the front of the manifesto dominated bu the “top 4” pledges including the 10k threshold.
Check the facts not the spin.
I haven’t met a single non activist who has mentioned this tax change. I suspect the leadership are out of touch with what people are concerned about.
The first important principle for a party should be to get in touch with the electorate. It is quite obvious that in UK the smaller party is going to be targeted in a pincer movement of the 2 larger parties – to negate any LD policies being shown as LD policies. As very few members of the press are going to help raise the LD policy profile in a positive way, the leadership and the grassroots have to work together to inform the public by writing in the press or on Lib Dem Voice and many other commentaries. And write simply without gobble-de-gook. Not every voter wants to read background – they want clear points backed up by linked articles which have the background and development for anoraks (As my comment will be read either by activists or members of other parties, I allow myself the anorak tag).
The focus of those in government or opposition is to create sound-bites to try to get across what they are are achieving. They forget, at their peril, to use every other moment to listen and learn from the activists. I’m sure the activists know what the parliamentarians are doing and are dutifully putting out the sound-bites. I read the leader’s main sound-bite on here regularly – it has passed into policy without a vote I believe. And it’s not a bad sound-bite either unless it stands on its own without supportive policies. Now tell me, do both sides, parliamentarians and activists, sit down every week to exchange updates and work to a campaign plan on policy-making?
If a party is to be trusted with “leadership” of the national opinion, trusted to create the right policies for the next period, trusted not to play to the gallery but mean what they say – the policies must undergo strict tests of viability. I have no doubt that the university tuition fee saga was tested by LD economists but it didn’t fit with the other party’s policies because the Tories have a different agenda for the rich and the poor. So why have the LDs taken all the flak for the Tory uni-fees policy? Because it suited the 2 major parties to promote the flaw in the LD sound-bites.
Though it became obvious in 2010 that there could be an option to be in government, the planning and “red lines” were not drawn adequately. Why? Were the activists and parliamentarians consulted in advance of the coalition agreement? If not, why? Seems to me that too much is left to too late throughout UK politics and anoraks have a role after all. All parties have this issue to deal with, especially so if we move towards multi-party government via STV.
I was speaking to people at a wedding over the weekend who are benefiting from the 10k tax free allowance. They were very pleased with some of the changes ‘David Cameron’ (their words not mine) had brought about to help those worst off. This is a worry because the people who this helps most seem to believe it is a Conservative policy. We need to do more to make sure everyone knows it is a Lib Dem policy.