As David Cameron rolled out another Tory tax cut for the wealthiest in society, Nick Clegg showed where the Liberal Democrat heart lies by setting out Liberal Democrat plans to deal with the deficit without causing more hardship for the poorest. On welfare, the party intends to make £3.5 billion worth of cuts but these will be targeted at the wealthiest pensioners with the withdrawal of Winter Fuel Allowance and free tv licences from households with a higher rate taxpayer. He said that you have to look at who pays to see where a party’s values lie:
So who is asked to pay is one of the most revealing things a political party can tell you about its values
Who wins and who loses, who will make the sacrifices and who will reap the rewards, tells you where a party’s heart really lies.
The Conservatives appear to believe in making the poorest and the most vulnerable in our society pay for the wealthiest.
Labour appear to want the next generation to pay for the mistakes of this one.
The party is keen to show itself as the compassionate, responsible adult in the room when it comes to balancing the books. They have come up with a detailed plan which should appeal to both Labour-leaning and Conservative-leaning voters in key marginals – and both in Scotland where there is increasing evidence of people being prepared to vote tactically to stop the SNP.
Also included are plans to make non-doms pay more which make more sense than Labour’s garbled plan announced this week, and to reform the Barnett Formula to make it fairer to Wales.
Here is his speech in full:
Who pays?
That’s the question I want to address today.
The easiest thing in an election campaign, when you’re charging round the country…
or occasionally swinging along on a zip wire in my case – is to promise people lots of nice sounding things.
Tax cuts, energy price caps, rail fare freezes.
Telling people they can have what they want is the easy bit.
The hard bit is to spell out who is going to pay for it.
Now, as all the main parties are about to publish their manifestos, the question of who pays should be one of the central questions of this general election campaign.
Everybody knows there is precious little money to throw around.
So who is asked to pay is one of the most revealing things a political party can tell you about its values.
Who wins and who loses, who will make the sacrifices and who will reap the rewards, tells you where a party’s heart really lies.
The Conservatives appear to believe in making the poorest and the most vulnerable in our society pay for the wealthiest.
Labour appear to want the next generation to pay for the mistakes of this one.
But neither of them have had the courage to spell out what their plans really mean for you.
I have never been anything less than completely open about the scale of the task ahead.
To balance the books we need to find around £27bn.
It’s a vast sum of money.
And it won’t be easy. It won’t be pain-free. But it is necessary to finish the job of fixing our economy.
So that’s why, when we publish our manifesto this week, we will be clear about what the country can afford and how we will pay for it.
And it’s why today, before we publish our manifesto, and before Labour and the Conservatives publish theirs…
the Liberal Democrats are going to do what they won’t and set out all the changes we plan to make on taxation and the benefits system.
We don’t think it’s fair to make the poorest pay for the wealthiest.
We don’t think it’s fair to pass the burden of our debts on to our children and grandchildren.
We are going to spread the burden of finishing the job of fixing the economy fairly across society.
Yes, that means more cuts, but it also means asking the wealthiest to pay their fair share too.
In a moment, David will set out in detail what we plan to do on both tax and benefits.
Our plan means finding more than £3bn in savings from the welfare budget.
Savings which ask wealthy pensioners to make a small sacrifice.
Savings which involve fair adjustments to Universal Credit.
Continued restraint on the rate of increase of benefits.
And a ground-breaking plan to reduce benefit fraud and error and get the most vulnerable off benefits and into work.
We will also be setting out how we will raise £7bn, fairly, through changes in the tax system.
£2bn of which will be used to pay for our commitments to raise the personal allowance to £11,000 in 2016 and to increase NHS funding next year as well.
None of our tax changes involve increases in Income Tax, National Insurance, VAT or the headline rates of corporation tax.
As you will hear from David, they involve instead the introduction of a High Value Property Levy…
fair changes to the reliefs and exemptions that apply to Dividend Tax and Capital Gains Tax that benefit the very wealthy…
and the abolition of wasteful Conservative tax breaks.
Separately, through a comprehensive spending review at the beginning of the next parliament, we will also have to find close to £12bn in further savings in departmental budgets.
And, as you know, we remain committed to finding a further £7bn through additional action against tax avoidance and evasion.
Because money is still tight there are only three new spending commitments we will make until the point at which the deficit is cleared in 2017/18.
We will continue to raise the personal allowance, as we have every year in this government;
We will protect the NHS budget in real terms and top that up to an extra £1bn a year, ahead of providing the extra £8bn a year by 2020 that Simon Stevens has said the NHS needs;
And we will reform the spare room subsidy, so that existing social tenants will not lose any housing benefit unless they have been offered reasonable alternative accommodation and rejected it.
Once the deficit is cleared, our fiscal rules mean that we will reduce government debt as a share of our economy every year.
We will keep the budget balanced, only borrowing to invest in things that will genuinely help the economy to grow like roads, railways and housing.
And we will increase spending on our public services like schools and the NHS in line with growth in the economy.
What we are setting out today is an unprecedented level of detail from a political party ahead of a general election, about how we will pay for our commitments.
We’re coming clean. So what about the Conservatives and Labour?
Neither are even close to telling you what they will actually do if you put them into Government on May 7th.
They have no intention of telling you who will pay for the deep and unnecessary cuts the Conservatives propose on the one hand…
or the excessive and reckless borrowing Labour are planning on the other.
The Conservatives want you to believe that they represent continuity. They don’t.
They want you to believe they have a plan. I’m sure they do, but it’s not the one they’re selling you.
They plan to veer away sharply from the sensible and balanced course we have set together in Government.
They say they will make £12bn in cuts to the welfare budget, but they have barely spelt out £1bn of it.
If you listen to George Osborne you could be forgiven for believing that they intend to find all £12bn from the grubby hands of scroungers and layabouts.
They don’t. They can’t.
Finding anything remotely close to that scale of saving is quite simply impossible without causing real pain to millions of families and some of the most vulnerable people in our society.
With pensions rightly protected, there is simply no benefit out there large enough where you can find £12bn of savings without hurting children or disabled people.
£12bn is more than four times the size of the Job Seekers Allowance budget.
It’s about the size of the entire budget for Disability Living Allowance or the budget for Employment Support Allowance.
It’s about three quarters of the entire Housing Benefit budget.
Deep cuts to any, or all, of these – as the Tories’ plans imply – will hit children, the disabled or the vulnerable.
Take Housing Benefit for example – around a third of those receiving it are families with children.
If you choose to tax people’s Disability Living Allowance or Personal Independence Payments, as a recent DWP document suggested, you will hit the disabled and the vulnerable.
The Conservatives’ welfare plans are a dangerous deceit that will end up hurting the most vulnerable people in our society and millions of the poorest working families.
They will cause chaos in millions of people’s lives.
And if that were not enough, the Conservatives have spent the last few months piling up unfunded spending pledges in a way that would make Gordon Brown shudder:
Not only have they committed to billions of pounds worth of unfunded tax cuts…
But just in the last few days they have added three new spending commitments without any hint of how they would be paid for:
£8bn for the NHS by 2020;
a five-year rail fare freeze;
and paid days off for volunteering.
And yet they’ve been clear that they will not ask the wealthiest in society to pay a penny more in new taxes to balance the books.
So every one of those spending commitments is piled on top of a multi-billion pound deficit that they say they will clear in the next two years through cuts to public spending…
after which they want to keep cutting even further.
The Conservative plan will take spending on public services back to where it was half a century ago.
It is an ideological lurch away from the balanced approach we have taken in Government.
Labour, on the other hand, want you to believe that they can be trusted with our nation’s finances again…
despite their refusal to accept any responsibility for leaving us with an economy on life support.
They want you to think that they can be trusted to balance the books without saying how they intend to do it.
They won’t even tell you when they want to do it by.
By 2017/18, as we will?
By 2020?
Ever?
They say they will do it fairly by raising taxes, but with just one exception, every tax rise they have outlined has been committed to pay for another spending commitment.
The only tax measure they have committed to deficit reduction is scrapping non-dom status, which might even end up costing them money.
The fact is their plan means they will borrow billions and billions and billions of pounds…
and leave you, your friends, your neighbours and, most importantly, your children paying the price for years to come.
£70bn – that how much more Labour will borrow than we will.
It’s more than we spend on education and the police put together.
Labour will spend an extra £4bn just paying off the interest on our debt. That’s a bill of £134 for every single taxpayer.
It means you, your children, your friends and your neighbours will be left paying for Labour’s borrowing for years to come.
They are playing Russian Roulette with your family’s future.
Labour’s economic house of cards has come crashing down once this century.
Make no mistake, the Liberal Democrats will not let it happen again.
My challenge to David Cameron and Ed Miliband is this:
Tell us what you will do.
And then tell us who pays.
Don’t dodge the question.
Don’t pull the wool over our eyes.
The British people have a right to know.
Whatever happens in this election, this is what you will get from the Liberal Democrats.
We will always act responsibly – we won’t let anyone put your job or our economy at risk by recklessly borrowing money that we don’t have.
And we will always act fairly – we won’t let anyone impose immense ideological cuts on your schools, hospitals and public services.
I can’t promise you that the next two years will be easy. I wish I could.
Your hard work and sacrifice has turned our economy around, but there is still a job to finish.
But, with the Liberal Democrats, there is light at the end of the tunnel.
The only way to continue the balanced approach that the coalition has taken is to put Liberal Democrats in Government again.
We don’t think it’s fair to make the poorest in society pay for the wealthiest.
We don’t think it’s fair to pass the burden of our debts to our children and grandchildren.
That’s why we will cut less than the Conservatives and borrow less than Labour.
We have a plan to build a stronger economy and a fairer society.
A plan to protect our economy and invest in our schools, hospitals and public services.
A plan with a heart as well as a brain.
With Liberal Democrats you don’t have to choose between a strong economy and strong public services. You can have both.
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30 Comments
Labour appear to want the next generation to pay for the mistakes of this one…..
For heaven’s sake, not that old chestnut! EVERY generation pays for the previous one….My generation was still paying WW1 debt…
I saw him on the news. The clip shown wasn’t bad … until he got to his usual key note cliché slot, “That’s why we will cut less than the Conservatives and borrow less than Labour.” Clichéd centrist message and stilted, over rehearsed delivery.
If he were a chef, he would take a classic recipe, cook it as a one pan dish on medium heat and then serve it in a polystyrene tray with plastic cutlery.
‘If he were a chef, he would take a classic recipe, cook it as a one pan dish on medium heat and then serve it in a polystyrene tray with plastic cutlery.’
And then wash them before carefully putting them in the recycling bin! Having, of course, saved energy by using one-pan cooking method.
“….A plan with a heart as well as a brain.”
Who writes this stuff ???
This is the penultimate line and therefore one that people might actually remember because of the emphasis of position.
What can it mean?
It would make more sense if it said “..a FLAN with a heart as well as a brain” – if you like eating offal.
If the party creates a situation where small business owners are paying more tax then the employed on the same income then it would probably be a red line for me.
Small business owners pay corporation tax (with no annual allowance) and then dividend tax if they are a higher rate tax payer. It is similar with capital gains tax too.
These are some of the reasons why I have a sense of foreboding about the next parliament. I don’t think the sums that people want to raise are available.
expats – Somehow you seem to have missed the scale of the problem left by Labour, compared to the past.
David Evans, if you squint really hard you can see the problem left by Labour in this debt:gdp graph from Paul Krugman.
http://krugman.blogs.nytimes.com/2013/03/04/cockroaches-at-the-european-commission/
PS, I’m not bothered if it is just a tiny amount that can be resolved by changing company structure, but if the party tries to equalise dividend or capital gains rates with income tax rates, which ignores corporation tax, then it would be a red line.
Not only would it be a red line, but lots of people would get laid off and revert to a self-employed structure in order to avoid it. It’s not about greed, it’s about avoiding double taxation that others don’t have to pay.
Regards
So, when he voted to freeze benefit payments, reduce the top rate of tax, introduce the bedroom tax and reduce payments to the disabled that wasn’t hitting the poorest and protecting the rich?
David Evans 12th Apr ’15 – 2:52pm…….expats – Somehow you seem to have missed the scale of the problem left by Labour, compared to the past….
Ah, more of the “Labour caused the global financial crash by reckless public spending”?
AS someone who grew up just post WW2, I believe I know what a country in dire straits REALLY looks like….
Expats, your memory really does worry me. What with ‘Ah, more of the “Labour caused the global financial crash by reckless public spending”?’ – No as the government in charge of policing only the second largest financial market in the world and which was so full of itself as to proclaim “An end to boom and bust”, Labour are just responsible for about 40% of it. Followed by ‘AS someone who grew up just post WW2, I believe I know what a country in dire straits REALLY looks like.’ Yes and as such you of all people should realise that for Labour to make such a mess in peace time (excepting the Blair Bush Iraq escapade), now that took real incompetence.
The BBC is saying Lib Dems plan to align dividend tax rates with income tax rates. If this means net alignment then it is fine, which is broadly is anyway, but if it means gross alignment, which would lead to higher rate tax payers paying 52% tax on dividend income, but 40% on employment income then it is a red line. Or 42% if we include national insurance.
Clarification please?
Nick Clegg: “and set out all the changes we plan to make on taxation and the benefits system.”
And: “In a moment, David will set out in detail what we plan to do on both tax and benefits.”
Please can Liberal Democrat Voice tell us who David is and publish in full what he said?
I am sure I am not alone in wanting to know where the £27bn to balance the budget is coming from, plus the £9bn+ for the NHS and the £2bn+ (more likely £5bn+) to increase the personal allowance to £12,500.
Then there is funding the 300,000 new homes a year for five years.
@Michael BG –
I believe “David” is David Laws. I don’t know what he said though.
Just found the figures on the Sunday Times website and worked out dividends are going to be taxed at 44.48% for higher rate taxpayers under Lib Dem plans. Previously it was 40% exactly.
There’s no excuse for this and what will now happen is directors will pay themselves salaries rather than dividends, so much of the extra tax won’t be recouped.
There are other plans for double taxation too. Not happy about this.
“Nick Clegg: We don’t think it’s fair to make the poorest pay for the wealthiest”
It’s a great sound bite. But the problem is they have just spent 5 years in government doing just that. Making the poor pay for the crisis caused by people with the most.
Now the election is here and as a party of government the Liberal Democrats cannot avoid running on their own record.
As a centre left, socially liberal kind of voter I can say that it has not all been bad. Some of the Lib Dem’s policies like increasing the income tax threshold have been very positive and they should make a big deal of that and the fact that this was one of their policies and not the Conservatives. But they still have to assume collective responsibility for everything else they voted for and everything else the coalition government did.
If, after a term in government, a party isn’t prepared to stand on it’s own record then it truly has nothing to offer and is well and truly done for.
@David: “If, after a term in government, a party isn’t prepared to stand on it’s own record then it truly has nothing to offer and is well and truly done for.”
I think this one sentence sums things up perfectly.
beings severely disabled I would say I do not see much difference in any of the parties these days Clegg sounds to be honest, sadly I remember what he promised before the last elections.
Sold out again
“Making the poor pay for the crisis caused by people with the most.”
That’ll be the Hampstead Labourites.
Latest yougov poll for tomorrows Sun:
Lab 36%
Tories 33%
UKIP 13%
LibDems 7%
Effectively no movement in the polls so far, I see, except perhaps a minor shift in Labour’s favour overall. I wonder, has anyone seen paul barker lately?
David Evans 12th Apr ’15 – 3:43pm …….Expats, your memory really does worry me.
And your ability to reason worries me. Do you seriously believe that under the Tories (who complained that Labour’s regulation of the financial sector was too stringent, whilst at the same time promising to match labour’s public spending) the situation would not have been far worse?
We have defined ourselves reactively – we will do less of something that the others will do. And so now it turns out that the Tories claim they will protect NHS funding and Labour say they won’t borrow any more money.
Does that now mean that our slogan is now “Cut more than the Tories. Borrow more than Labour”?
Paul In Wokingham 13th Apr ’15 – 6:45am
Does that now mean that our slogan is now “Cut more than the Tories. Borrow more than Labour”?
On the basis of what I have seen on BBC News over the last week It is clear that Liberal Democrat policy is to be nice to hedgehogs, to stand alone in the rain in car parks, to slide rapidly downward on a zip wire, to completely miss all the pins in a bowling alley, as well as whatever Danny Alexander said yesterday.
This says more about the BBC dumbing-down of political journalism than it says about Liberal Democrat policies.
Unfortunately it is what most voters will have seen and the impression they will have been left with.
@Paul in Wokingham
If we have forced the other parties to agree to our manifesto commitments before even entering coalition talks, that is a triumph not a failure.
”Malcolm Todd 13th Apr ’15 – 12:05am
Effectively no movement in the polls so far, I see, except perhaps a minor shift in Labour’s favour overall. I wonder, has anyone seen paul barker lately?”
I’m sure he’ll be along soon to tell us that Labour will implode completely by May 7th, be will in one figure % tatters, and Clegg will be marching ahead of a party on higher double figure % points.
Philip, the two old masters of power politics are endeavouring to shield their weaknesses, whilst we are continuing to weaken our shields.
Britain appears to ignore all those who fought in WW2 and ensured our freedoms especially in those arms which had high losses such the Merchant Navy, bomber command , fighter pilots, commandos /special forces, infantry , tank crew and those in Japanese POW Camps . Obviously Nick Clegg does not believe Britain owes anything to those who fought, especially those in the early days of the war and in combat units where losses were high.
So pensioners who went to work, saved money and re-built Britain after WW2 who are comfortably off, are to have allowances taken away even if they may have spent 50 years working? Many people used to start work at 14 or 15 years old in the 1940s and 1950s.
Those people who have had it much easier are the middle classes who entered the job market from the mid 1960s onwards, when much of the re-building post WW2 had been completed.
Charlie
“Many people used to start work at 14 or 15 years old in the 1940’s and 1950’s”
That continued until well into the 60’s. My brother started work as an apprentice at the age of 14 in 1965 and I started work at 15 in 1969.
Malc
Your comments support my views that the main beneficiaries of the last 50 years were the middle class, those who attended grammar and public schools, did not need to perform national service and entered buoyant job markets. Why should a pensioner who grew up in the war, endured rationing until 1953, brought up a family in the straightened 1940s to early 1960s and endured the early death of husband due to war injuries, be treated the same as someone who has had a gilded middle class life from the mid 1960s? A major criticism of the welfare state is that some people have taken out far more than they put in. Those who fought in the war and re-built Britain after it have paid not only taxes but in blood sweat and tears.
When it comes to foreigners living in the UK they need to pay in the form of taxes for all those who fought for out freedom and re-built Britain after 1945. They also need to pay for the services they enjoy- the security provided by the armed forces and police, the medical services, the infrastructure, the museums , art galleries and culture in general. Above all foreigners need to pay for the political an economic stability which has evolved since the time of Alfred the Great. We could call it The Gratitude Tax- 4% on the value of the property they buy.