Nick Clegg’s Letter from the Leader: “Delivering fairer tax”

Nick Clegg’s latest letter looks ahead to the local elections in England, with a particular focus on the Lib Dems’ successful delivery of £600 in tax-cuts for the low-paid compared to Labour’s time in power. Here are three quick, clickable ways of promoting this achievement:

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  • Here’s Nick’s letter…

    libdem letter from nick clegg

    It’s now less than a month until polling day for the local elections. I want to say a big thank you for everything you’ve been doing. This week I’ll be out campaigning in Cornwall and Oxford – and I’m looking forward to campaigning with you elsewhere in the country in the weeks to come.

    We’re officially launching the campaign on Monday, but today’s important too. The new tax year has just started and that means Liberal Democrat tax reforms are coming into effect. From now on, more of the money people earn will go into their pockets and less will go to the taxman.

    That’s because we’ve raised the point at which you start paying income tax. Over 20 million people will now pay £600 less than they did under Labour. In households where two people are working, that’s an extra £1200 a year. £1200 to cover energy bills, or mortgage repayments, or to go towards a family holiday. And next April it’ll go up again. The vast majority of British taxpayers won’t pay a penny of income tax on the first £10,000 they earn. Millions of the lowest earners won’t pay any at all.

    This is real help in tough times and it wouldn’t have happened without the Liberal Democrats.

    Of course, the new 45p upper tax rate – down from 50p – is also coming into effect. But don’t let Labour pull the wool over people’s eyes. They may complain now, but of the 13 years they were in power, the 50p rate was in place for just 36 days.

    In fact, for most of the time their top tax rate was 40p. Not 50p. Not 45p. But 40p – 5p less than now. And under Labour a cleaner would pay a higher rate of tax on their wages than a hedgefund manager selling their shares – a gross unfairness we have fixed.

    What matters most today is that millions of people feeling the pinch will see their income tax cut – a promise from the Liberal Democrats in opposition, delivered by us in government.

    Nick

    PS This Thursday, Liberal Democrats across the country will hit the phones for the local elections, creating a national phone bank for the day. Every call helps. Click here to get involved.

    Do you know someone who would like to get Nick’s weekly email? Forward this message and they can sign up here:
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    For those Lib Dem members wanting to receive Nick and the party’s emails, Mark Pack has produced a handy guide to help ensure you’re signed up: Why did I not get that email from the Liberal Democrats?

    * 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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    12 Comments

    • Simon Hebditch 7th Apr '13 - 10:19am

      Just one question because I am confused! Nick claims that each individual taxpayer will be £600 better off in terms of income they can retain than when Labour was last in power. I thought I read that the IFS have calculated that average income earners and those on low incomes would be worse off if you take account of all the income tax changes and various benefit changes since 2010. Who is right?

    • Max Wilkinson 7th Apr '13 - 10:39am

      Wouldn’t that depend on whether you were actually getting any benefits in the first place? Most people I know, who are working 20-35 year olds with no kids, didn’t get any benefits. This group of people are surely almost universally better off due to these changes (just don’t mention VAT).

    • @Simon: Both and neither. Really, it completely depends on your individual situation. I am going to be better off because I am a low earner with no entitlement to any benefits. As such, a tax cut directly increases my wage income, and benefits cuts/changes have no impact on me, well directly speaking (the one thing the Tories have never been able to grasp is that what affects one group of people is going to have knock-on effects for everyone.) Thus why, when we consider the changes in real-terms to the costs of living, I probably will not notice this.

      Now, if you are receipt of some kind of benefits, then you probably will be adversely affected by ‘all’ the changes, when they are considered as a whole, but you will be slightly better off tax-wise. However, considering that a tax-cut for those on benefits will mean less than one for me, alongside rises in the costs of living, means that in many, but not all, cases these tax-cuts will not completely offset your loses in terms of benefits. However, cynically speaking, that is the point.

    • Tony Dawson 7th Apr '13 - 12:01pm

      @Liberal Al :

      ” Both and neither. Really, it completely depends on your individual situation.”

      Which is why it is ridiculous for politicians to make sweeping statement soundbites referring to various selective income changes as if they were ‘net’ and as if they affected all households similarly. Such statements do not ring true (even among quite a lot of people who actually DO benefit) and just increase the overall cynicism which the electorate apply to politicians as a whole.

      My question is whether it is the politicians themselves who are responsible for such poor judgement or if it is some unknown hidden coterie of ‘advisors.’ Of course, the politicians are responsible for the advisors with whom they chose to surround themselves.

      I am quite prepared to accept that the Coalition’s fiscal changes ahve, overall, hit the top ten per cent harder than was the case under the last Labour government. It would assist this PR battle, however, if there were clear statisitics from an unbiased source easily-available to justify such statements. Also, such graphs as I have seen of economic affects of this government appear to show the top and bottom deciles suffering most with the eighth/ninth deciles doing the best (or suffering least). This does not seem to be a particularly efficient way of bringing in ‘fairness’.

    • You don’t need to do any fancy sums to realise that is is the lowest paid that have been hit the hardest by the income tax threshold change. Someone earning 6k per annum will have seen no benefit arising from the increased threshold yet will still be expected to pay more tax through VAT. Indeed, the raising of the threshold benefits most, proportionately, those in the middle of the income distribution. Maybe that’s why the poster is so basic and aimed at appealing to the most coarse of human instincts. You might as well put together a poster saying you are giving away free sweeties. No mention of how the tax-cut is being paid for, no mention of who benefits and who doesn’t, no mention of the services that will need to be cut to pay for it and no mention of why a tax-cut is wise when we are supposed to be so concerned about the deficit. If you try to sell tax-cuts without any justification then how does that make you different to small-government right-wingers?

    • Stuart Mitchell 7th Apr '13 - 8:23pm

      Clegg’s claim is well up to his usual standards of veracity.

      Let’s just remind ourselves of what the 2010 manifesto actually promised :-

      “Fair taxes that put money back in your pocket. The first £10,000 you earn tax-free; a tax cut of £700 for most people… PAID FOR IN FULL by closing loopholes that unfairly benefit the wealthy and polluters.” (p.6; my emphasis.)

      On pages 13 and 14 it goes in to more detail, claiming that the higher threshold will be financed by, among other things, a mansion tax and increased taxes on air travel.

      The reality, of course, is that the threshold increase has been financed by higher VAT and cuts in benefits for some of the poorest in society.

      The manifesto promise of a tax cut for ordinary workers financed “in full” by taxes on the wealthy and polluters has not been delivered and it’s dishonest to claim that it has. The government is acting like a mugger who pinches your wallet, gives you half the contents back, and then expects you to thank him for it.

    • Max – I am in that 20-35 age group.

      In that age group Ive never had benefits – even my university costs were funded by a loan, which I now pay back through an extra 9% tax,on my below-average earnings. Let me also remind you that we did not get paid a wage for those years of hard work at university.
      (But good to hear those earning over £150,000 are getting a 5% tax cut! *Fuming*.

      Everyone I know has pretty much always been in work, until the 2008 crisis, when many lost jobs, and finding work suddenly got a lot more difficult.

      Except that now Ive lost my job too, the housing benefit for this age group has been halved. The government is telling us that after years of tax and national insurance, they will fund everyone else not to lose their home, but the 25-35 age group has to lose their home and move in with strangers. Thanks a bunch!

    • Tony Dawson 8th Apr '13 - 8:36am

      Could somebody find a VERY deep hole to ditch that awful artwork (and any paper copies of it if there are any lying around). It epitomises precisely why the national Party is sitting where it is in the opinion polls.

      If you went out into the street and asked people how bothered they are about what is in manifestos (Lib Dem or other) then you would ask hundreds before you got a sniff of interest. A fractionally higher hit-rate if you were in a newspaper editorial canteen at coffee time.

      Such an approach might be useful were we delivering this ‘promise'(sic) in a time of plenty. Where there is so much else going on in people’s lives that is detrimental, it comes across as a combination of cynical weak propaganda and self-obsessed defensiveness.

    • Max Wilkinson 8th Apr '13 - 9:00pm

      CP – My girlfriend and I have a combined income of about £38k, but still have to share a two-bed flat with another chap in order to pay rent and bills, while maintaining some sort of life aside from the grind.

      You imply that you’ve had to ‘move in with strangers’, which must be annoying. However, it’s normal for most single people aged 25-35 to share housing these days. Most single people I know are house-sharers and those who are in a couple would be in a house-share if they were single. Renting is an expensive way to live, but housing is another matter.

      This tax cut for low and middle earners is a positive step. I think we should focus on that for now.

    • Matthew Huntbach 9th Apr '13 - 10:13am

      Max Wilkinson

      However, it’s normal for most single people aged 25-35 to share housing these days. Most single people I know are house-sharers and those who are in a couple would be in a house-share if they were single.

      25-35 is the age at which biology determines we have children. Across history and across the world, it is considered normal for people to have their own children. Most societies are organised around that central aspect of humanity. Therefore, if our society no longer provides that possibility, if it works in a way where most people of child-bearing age cannot get the housing required to raise children, which is what you are saying, it is highly abnormal.

      Liberals don’t like talking about this. We fear that talking about families and having children and this being “normal” makes us sound like conservatives, we fear it suggests an agenda which is conformist and homophobic. I don’t mean it that way, I myself am well beyond that age and don’t have children and don’t intend to. I’m not saying that calling it “normal” means everyone should be forced to live that way – but I am suggesting as it is what most people want, for deep-seated reasons, it ought to be an option available to all, not just to an elite class of wealthy people.

      However, we ought to be able to see how it demonstrates the underlying contradiction in modern conservatism – it espouses an economics which directly contradicts the social values it claims to be about. Conservative economics is what is pushing house prices beyond the reach of people who need housing. We ought to be attacking them for this.

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