Those who watched BBC2’s Newsnight last night will have been treated to the sight of something pretty remarkable: party leader Nick Clegg and the Lib Dems being shown to be the overwhelming favourites – well ahead of either Labour or the Tories – among a selection of voters assembled by US pollster Frank Luntz. You can watch the 13-minute segment in full here.
Now, before we get too carried away, I should note that many Lib Dems, myself included, have expressed a fair degree of scepticism about Mr Luntz’s work for Newsnight in the past; so I’m not about to turn around and laud him simply because now he’s said something nice about the Lib Dems.
But, still, it would be a shame not to mention it 😉
For once, I can’t put it better than the Spectator’s right-wing Coffee House blog:
I imagine that the Lib Dems will be crowing for weeks about its finding that people warmed far more to Clegg than the other two party leaders. … Of more immediate relevance, however, was the further evidence that the focus group provided about what a risk the Tories are running with their tax policy. When Cameron talked about how the Tories can’t promise tax cuts the panel dialled him down, when Clegg talked about tax cuts they almost unanimously dialled him up.
If the Lib Dems can get their new tax cutting message across, they could eat into Tory support.
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45 Comments
mmm, Tory support. yum yum.
http://politicalbetting.com/index.php/archives/2008/09/19/will-lib-dems-be-complaining-about-luntz-this-time/#comments
There is also now a discussion on this over on PBC
This week has proved what a complete joke the Liberal Democrats really are.
Despite living up to their knock-out billing when MP Adrian Sanders delivered a stunning upper-cut to Mark Littlewood outside the conference hall, nothing went right after.
Asked before his speech how much Nick Clegg thought the weekly pension rate for a single person was he said just £30!
Did he not mean that that’s what it would be under the Lib Dems in order to fund his tax cuts?
How anyone can propose tax cuts with a P.S.B.R. of £64 billion is just plain crazy but that is the Liberal Democrats.
Maybe they should change their monthly leaflets from “In Focus” to “Out of Focus?”
Shortly after Clegg’s speech the Lib Dems made a number of automated telephone calls to voters.
Did anyone get one I wonder because guess who said this just last February?
“With every year that goes by, more and more services that used to offer face-to-face contact are being replaced by systems that are centralised, remote and inhuman. We are seeing the progression of an unaccountable state, creating increasingly remote systems that are divorced from the people they are supposed to serve”?
It was The Lib Dem Leader himself!
And there’s more.
Shortly after Clegg’s speech, the former leader Menzies Campbell referred to his leader on The Daily Politics AS Nick Harvey.
And finally, because of the distractions of conference, at Middle Rasen in LIncolnshire the Lib Dems got their dates wrong and failed to enter a candidate for a by-election next month leaving just UKIP and the Conservatives to fight it out!
Never mind.
It’s Labour next week – they couldn’t even get ten names to sign the nomination form in Middle Rasen!
As far as could tell, the upshot of this was that (to paraphrase Phil Spector) to know Nick is to love him.
“How anyone can propose tax cuts with a P.S.B.R. of £64 billion is just plain crazy but that is the Liberal Democrats.”
The tax package which has been passed for a year is tax neutral, Geoffrey. It funds a reduction of the basic rate to 16p by, amongst other things, the Green Tax Switch and the removal of the extra tax relief enjoyed by higher rate taxpayers on their pension contributions.
Offering costed income tax cuts is really perfectly simple. A redistribution of the existing package is all that is required.
Offering an extra tax cut on top of the 16p basic rate cut, if all spending commitments are met, is something we have left ourselves the option to do. But no figure has yet been put on it yet, because you can’t exactly predict government spending in 2010.
“no figure has yet been put on it yet”
?
One of the problems with this is that a lot of different figures have been put on it.
The “vast bulk” of £20bn according to Clegg; £5bn according to Hughes; the equivalent of 4p off the basic rate of income tax according to Cable (i.e. about £20bn)…
Indeed.
It was quite extraordinary. I’ve called Mr Luntz Mr Clutz on my blog. Very amusing I’m sure and inspiring for local Lib Dems who can only dream of polling 70% of Labour and lefty supporters in Manchester – these were not Tories or random!!!
Asking the question just after Clegg’s tax bribes was of course highly likely to bias the result. There they go voting LD before they have a chance to think on!
Mock The Week was probably more informative. Dara O’Brien reported that 37% of Lib Dem supporters (of LDS!!!) said it doesn’t matter what LD policies are … because they’ll never be put into action. Never being quite a long time.
Whereas many pundits are suggesting a LD out turn of 10-20 seats Clogg is suggesting a doubling and going into government!! As Dara and Co said:
“What do we want?” – doesn’t matter
“When do we want it?” – it’ll never happen
This being a great summary of the Lib Dem offering to the country just now. Channel 4 Factcheck found the Clogg speech rather disingenuous. In fact blatant fibs.
So how about a series of party leader debates during the next general election –
of course, they will never be agreed because Brown and Cameron daren’t face Clegg. However it seems a great topic for a petition on the Downing Street Website shoudl someone take up the challenge.
I find the insults of our rivals so much music. They really care, don’t they?!
Nickers looks like he’s hit the spot bang on with his speech and his tax cutting agenda. Dim Tories and pseudo Reds have screwed things up for decades so of course they can’t do the sums for sensible taxation. Hapily we’ve got the Mighty Vince, who pretty much everyone listens to.
Can’t wait for the Labour conference, where Gordon will be clinging on by his fingertips, and the Tory conference, when Dave will be sh1tt1ng himself that someone is going to mess it all up 18 months out from the election.
Double the number of seats for us? I wouldn’t bet against it, though dim Tories might.
Chris Paul :
Calling our leader, or other MPs, by “funny” names does NOT make you a political analyst. Neither does misrepresenting what has been said.
If you want to be taken seriously (ambitious thought I realise, but …) then try being serious.
“When Cameron talked about how the Tories can’t promise tax cuts the panel dialled him down, when Clegg talked about tax cuts they almost unanimously dialled him up.”
Yes, and if a lunatic started handing out free fivers in the street, they’d no doubt “dial him up” as well. Sadly for Clegg, an election lasts rather longer than a few seconds. It lasts long enough for all the independent pundits to come along and explain to the voters who is being realistic and who is being dishonest. If Cameron’s PR is such a disaster, why is he on 52%?
Oh and by the way, today’s Indy reports a £20bn “black hole” in the UK financial position. Are you going to comment on how you will adapt your plans to this reality, Nick? Thought not.
This is (i) about redistribution and (ii) it is realistic.
“Oh and by the way, today’s Indy reports a £20bn “black hole” in the UK financial position. Are you going to comment on how you will adapt your plans to this reality, Nick? Thought not.”
Ah, but the black hole is already in the plan (or _a_ black hole is, anyway). If you read Danny Alexander’s article from last week, you’ll see that the black hole is to be plugged after our spending priorities have been fulfilled and before the tax cuts are funded …
Tabman, I wish I had your confidence. Redistribution (as stressed by Vince) is always realistic, whatever the national circumstances you can always shift the tax burden from rich to poor, even if you have to increase the overall tax level, as I think is unavoidable.
However, Nick’s stress was on cuts and savings. That is a policy which as Peter Preston put it, seems designed to “cosy up to the Tories” and indeed, place us to their right.
“However, Nick’s stress was on cuts and savings”
Yes, and isn’t that a pretty sensible approach in the current context? Since 1997 there has been a massive wave of govt spending, some of it excellent (I can think of one or two top-notch health facilities I’ve used recently) and some of it crazy (I can think of some “rural bus initiatives” that have merrily transported fresh air from a place nobody lives to a place nobody wants to go !!).
A good trawl through that to find some savings is just what we need.
from,
“Crewe – socially liberal and fiscally conservative – Gwyn”
““However, Nick’s stress was on cuts and savings”
Yes, and isn’t that a pretty sensible approach in the current context?”
I’m sure there’s not the slightest disagreement about axing spending on schemes we’re opposed to anyway, or about finding efficiency savings if that can be done without damaging services (which is the claim).
The disagreement is about whether it is either realistic or desirable to cut overall taxation – I mean in the context of other objectives, such as tackling climate change and social deprivation. And if it is, whether it should be done by cutting income tax, which would mean the bulk of the benefit going to the middle class, not the poor.
And when people say “this is about redistribution”, that’s just not true – not if we’re talking specifically about these additional proposed tax cuts.
Where would the money come from? Wasteful and unnecessary public spending, supposedly.
Where would the money go to? A combination of cutting the basic rate of income tax and raising personal allowances, according to Cable. Obviously so long as there was an element of cutting the basic rate, the package would benefit high earners more than low earners (and it wouldn’t benefit people who don’t pay income tax at all).
There is no element of redistribution from the wealthy to the poor in this.
And if the spending cuts did have some impact on public services, as I believe they would be almost certain to do, then it would be predominantly the poor who would lose out.
CCF – cutting basic rate tax benefits all taxpayers equally in terms of £s not paid, but it disporportionately benefits those on lower incomes. To someone on £100k per annum, £100 wouldn’t be noticed, but to someone on £10k per annum, £100 etra to spend represents a significant improvement.
Tabman
“cutting basic rate tax benefits all taxpayers equally in terms of £s not paid”
Of course it doesn’t. It benefits higher earners more than lower earners.
“It benefits higher earners more than lower earners.”
To clarify, this assertion only works if you define “higher earners” as those on 6k-40k and “lower earners” as those on less than 6k.
Cutting the basic rate benefits all basic rate taxpayers by the same fraction (by 1/5 of their tax, in the case of the 16p). Higher rate taxpayers also benefit (because part of their salaries fall into the basic rate) but their benefit fraction decreases from 1/5 the more they earn. Someone on 80k obviously won’t see their whole tax burden relieved by a fifth. Tax will only fall on the slice of their income that falls between 6k and 40k.
Those on less than 6k who don’t pay tax, as we have discussed, are unaffected and need other forms of help, i.e. a welfare state.
I wrote:
“It [a basic rate cut] benefits higher earners more than lower earners.”
Alix wrote:
“To clarify, this assertion only works if you define “higher earners” as those on 6k-40k and “lower earners” as those on less than 6k.”
Absolute nonsense.
For everyone who paid tax, up to the top of the standard-rate band, higher earners would receive larger tax cuts than lower earners. And those above the top of the standard rate band would receive the maximum tax cut.
They would receive larger absolute sums back, yes. But it would still be a *fifth* of their original tax burden, and it’s important to remember that. Everyone gets the same *proportion* of their tax back. That’s how a banded tax system works.
You’re talking, I guess, about ideally introducing a sliding scale into the banded system, which would indeed be an interesting idea (e.g. earners of 10k-15k to be taxed at a lower basic rate than earners of 15k-20k for example) although wouldn’t do much for simplification.
Personally I would shake the whole tax etchasketch up and down and start again (as would the LVTers) but at that point we run into a credibility problem. Sad, but that’s the way it is.
“They would receive larger absolute sums back, yes.”
So why on earth did you contradict me when I said that?
The point I was making was simple enough. These tax cuts are not redistributive.
CCF, it seems clear from your comments that you fully understand nominal values and that you have no time for proportionality. I’m therefore wondering how you wrap your head around our proposals for electoral reform.
But to return to fiscal policy, our proposals are redistributive, but in a way that redistributes the product of your own efforts in cash terms while redistributing the shared collective effort back in services.
If you want fairness to inform the collection of tax then you must also expect fairness to inform the distribution of spending. If you want evenness, well, that’s a different matter.
““cutting basic rate tax benefits all taxpayers equally in terms of £s not paid”
Of course it doesn’t. It benefits higher earners more than lower earners.”
No – it benefits all taxpayers equally. For each £1 within the threshold of the basic rate band that they pay tax on, they receive the same proportion of tax back.
Tabman:
“No – it benefits all taxpayers equally. For each £1 within the threshold of the basic rate band that they pay tax on, they receive the same proportion of tax back.”
It’s a matter of simple arithmetic. If you cut the basic rate of income tax by a penny, a low earner, who has a smaller taxable income, will receive a smaller tax cut than a high earner.
That is not “redistributive”. Or rather, if it is, it is redistributive away from the poor and towards the rich.
CCF, now you’ve reverted to making an inaccurate judgement on individual policies, rather than taking them all in the round. Now it’s you who are guilty of half-truths.
Yes, it is simple arithmatic, but you’re calculating to the end of the line when you should be looking to the bottom of the page.
Oranjepan
As I made quite clear, I am talking about the additional tax cuts now being proposed.
And I have made no “inaccurate judgement”.
“Or rather, if it is, it is redistributive away from the poor and towards the rich.”
I’m starting to think you don’t understand properly what “redistributive” means. There is a policy package which reduces the basic rate to 16p, right? Which, as has been well rehearsed, is costed via a tax neutral package, i.e. tax is being increased in other areas to pay for the 16p cut.
Now, I haven’t read anything which suggests you have the first idea how that tax package funds the cut to 16p. If you looked this up, and successfully argued that the 16p cut was funded by extra tax on the poor, then you could say that the package was not redistributive.
Just saying “There is a cut across the board, but it redistributes away from the poor towards the rich” is a nonsense, since you’re talking in all cases about a rate *cut*, in which everyone gets *some* money back. No-one has extra money taken away by the cut.
What you really mean, I think, when you say “it’s not redistributive” is that the scale along which the tax cut is applied is not as steeply sliding in favour of the poor as you would like it to be, and we’re back to my sliding scale point of earlier.
CCF, a policy of tax cuts for low and middle incomes and rises (through loophole closures, pension relief) for higher incomes (although they benefit from the basic rate cut too), can quite reasonably be called redistributive, even if is not monotonically redistributive.
But I hope any further income tax cuts are implemented by increasing the personal allowance.
“As I made quite clear, I am talking about the additional tax cuts now being proposed.”
Ah, in that case my post above doesn’t apply. So the question now becomes, given my account of what “redistributive” means, how can you say in advance whether any future set of tax cuts are “redistributive” or not? We don’t know where the money will come from to pay for it yet.
CCF, yes, you have made an inaccurate judgement because you are not looking at the whole picture.
The differential levels of tax are only half of the question – the other half is how we spend it.
The whole ‘tax switch’ idea is about more than just redistributing tax pounds, it is also about changing the way we decide the overall burden by looking at how and why each different aspect in the budget is taxed in order to provide answers for how we spend it.
You seem to have jumped ahead to decide already what those conclusions must be.
Alix:
“So the question now becomes, given my account of what “redistributive” means, how can you say in advance whether any future set of tax cuts are “redistributive” or not? We don’t know where the money will come from to pay for it yet.”
What the …?
You know as well as I do what the story is. The story is that we are going to cut £20bn from public spending – all quite painlessly, without having any detrimental effect on public services – and that the tax cuts are going to be funded from what is left after our spending priorities have been satisfied (and maybe after the “black hole” in the public finances has been plugged).
Aha, I see now, so essentially you would automatically equate “public spending”, whatever its nature, be it on frontline nursing capacity or a fact-finding health QUANGO, be it on a school textbook or a drinks reception for the North West Regional Development Agency, with “help for the poor”.
That’s nice and simple. In that case, we disagree.
These word games are getting (even more) tedious.
What we know: that we have promised a ‘tax switch’ which involves cutting 4p off the basic rate of income tax, to be funded entirely by green taxes and closing of loopholes for the rich. This policy pre-dated the latest announcements.
We have also been looking at how to fund our own policy commitments and what elements of current government spending can be cancelled to pay for that. Having identified the cuts (£20bn) in the current government’s projects, we now believe that there may be additional funds available which may be used to reduce taxes after we have funded our spending commitments.
I assume that everyone is united in the belief that we need to cut some of the government’s current commitments and we’ve gone on record in saying what at least some of those are: ID cards, Trident, the DBERR (or whatever the DTI is called now), baby bonds, some tax credits etc. This will be necessary to fund our own plans (early years education, personal care for the elderly, etc.). Our belief appears to be that the current government has so expanded public spending and in such an ineffective way that there is so much that can be cut that we may end up making room for tax cuts. As yet, we have not announced what form those would take as far as I’m aware, though a cut in the basic rate of income tax seems to be the working assumption (correct me if I’m wrong, I was only at conference for a day and a half and haven’t really caught up on the details).
Well, that depends on whether all cuts in public spending can be deemed to be ‘painful’. Cutting ID cards could be described as painful for the major IT firms that want to provide the scheme, and also painful for the government ministers who have staked their political reputations on the scheme. But I don’t think that this qualifies as ‘painful’ in the general sense, as most people won’t feel a thing. From this example it is not hard to imagine that there is other spending which could be cancelled with similarly minimal effects. And any pain caused by cancelling the budget of certain projects has to be weighed against the benefits to be had by spending money in other areas, whether it’s on Lib Dem policy initiatives or tax cuts.
I’ve got a degree of sympathy with a lot of what you’ve said so far and I appreciate the fact that you’ve taken the time to explain your point of view, but this is just sloppy. The second paragraph just isn’t true, whatever way you read it. The first is true enough, and you didn’t need to add the second paragraph to make your point. You’ve gone on to claim that a tax cut is, in itself, “redistributive away from the poor and towards the rich” which can’t possibly true – the poor are not paying more than they did before, so they can’t be handing over more money “to the rich”. This is in contrast with Labour’s abolition of the 10p tax band where some poor people indeed did end up paying more whilst some richer people ended up paying less. I know I’m being pedantic, but we’ve got to be very careful about our language or this thread will turn into another round of confusion.
You might have a point in saying that the poor could, potentially, receive fewer or lower quality services whilst the middle class (by which I mean people on average incomes, not the media ‘middle class’ which means anyone who isn’t a Duke or a billionaire) benefit more from the tax cut. This depends entirely on what is being cut, and I can only refer back to my earlier examples which hopefully demonstrate that it is possible to have a benign cut in spending. It also depends on the nature of the tax cut provided and who benefits most from that.
If our proposed cuts end up being in the area of vital public services of which the poor are great beneficiaries, and if the tax cuts do not benefit the poor to a great enough extent, then I’d be outraged. I imagine the entire party would be. As it is, I’m fairly confident that there is enough genuinely wasteful spending which does not provide a benefit to the poor which we would be able to cut, and that we could provide tax cuts which are beneficial to the poor as part of the re-use of that money. I’m certainly not willing to dismiss the idea yet. I suppose the question hinges on A) whether or not you believe that the government wastes a substantial amount of money and B) whether or not you believe that cuts in taxation are a good means of helping the poor. Within reason, I think that A and B are true, and I see no signs of the party going beyond those reasonable bounds with the plans as announced.
Alix, I hope you’re not suggesting that the taxpayer-funded piss-up I attended at the V&A earlier this year wasn’t a “public service”.
Alix
“… so essentially you would automatically equate “public spending … with “help for the poor”.”
I never said any such thing.
Why do you keep inventing things like this?
Rob
You can’t possibly be finding this discussion more tedious than I am!
I made a simple and straightforward point, in response to “Tabman’s” claim that the tax cuts the tax cuts the focus group heard Clegg talking about were “about redistribution”. I pointed out that if we were talking about the new package of additional tax cuts, then they weren’t.
Apparently you agree about that, though everyone else seems to be tying themselves in knots to avoid that obvious conclusion.
As for the statement that “Or rather, if it is, it is redistributive away from the poor and towards the rich”, which you find difficult, it’s fair comment that I should have left out “away from the poor”. The poor wouldn’t lose anything, if the cuts could really be achieved without harming public services.
But my point – which I had made twice before I added that rider – is that the cuts are not redistributive as “Tabman” had claimed.
No advocacy of tapered tax rates, no assertion that “public spending” is equivalent to “help for the poor”, and none of the other nonsense that people are introducing to cloud a perfectly simple question.
Rob:
“As yet, we have not announced what form those would take as far as I’m aware, though a cut in the basic rate of income tax seems to be the working assumption (correct me if I’m wrong, I was only at conference for a day and a half and haven’t really caught up on the details).”
As I mentioned above, Cable was quoted in the press on Tuesday as saying it was likely to be a combination of a reduction in the basic rate of income tax and an increase in personal allowances.
Inventing things is something I leave to trolls, CCF.
My point is simply that you keep claiming a basic rate cut is not redistributive. In so doing you are misunderstanding what redistributive actually means. In order to make a judgement on whether or not something is redistributive or not, you have to know where the money is coming from to fund the cut.
And, as you have pointed out yourself, we don’t know where that money is coming from. It could be frontline nursing services, in which case that patently is not redistributive and I’d be as outraged as Rob, or it could be the annual drinks budget for the North West Regional Development Agency, in which case I would rejoice. What would you do?
BTW, I am all for, as I said before, putting pressure on the party to adopt the personal allowances approach over and above another cut to the basic rate, since it does mean taking more people out of tax altogether (and, critically, most pensioners).
Any suggestions as to how we could mount this pressure, CCF? Or are you more interested in devoting all your energies to attempted pointscoring on the internet than actually promoting the causes you claim to believe in? Surprise me… 😉
Alix:
“Inventing things is something I leave to trolls, CCF.”
Sorry, but I’m not having that.
In the previous discussions about this, you claimed repeatedly that I and others were saying that the poor would not benefit from tax cuts.
You knew perfectly well this was not the case, because every time you said it, it was explained to you that it wasn’t the case. Yet you kept repeating the false assertion regardless.
In your post above, you put into my mouth words I had neither said nor implied.
So kindly cut out the continual misrepresentation. And while you’re at it, cut out the misplaced sarcasm and personal insults.
Alix:
“My point is simply that you keep claiming a basic rate cut is not redistributive. … In order to make a judgement on whether or not something is redistributive or not, you have to know where the money is coming from to fund the cut.”
Well, it seems to me that you are acknowledging that a basic rate cut is not redistributive. Indeed, how could it be, given that it would benefit high earners more than low earners?
In effect, you seem to be suggesting instead that the spending cuts may turn out to be redistributive – and sufficiently so to outweigh the greater benefits of the tax cuts to the rich.
I find it very hard to see how they could be, given the fact that the leadership is presenting them as “cutting waste” and “axing white elephants”.
I suppose it does remain to be seen. but as I’ve said before, my suspicion is that it wouldn’t be the rich who would suffer from £20bn of cuts in public spending.
CCF – High Earners pay a 40% tax rate on their top slice of income, and AFAIK that is not proposed to be cut.
You also haven’t answered my simple point, which is that £100 given to a poor person is of far more marginal benefit than £100 given to a better-off person, so, equal treatment in strict terms is more beneficial in relative terms to the poorer person.