9 Comments

• Robert Eggleston 16th Apr '11 - 7:26pm

  Can I just say that I have spent the afternoon canvassing postal voters in my ward in Burgess Hill. OK I don’t have to worry about Labour because they are not standing BUT the comforting thing is that the response I got on the doorstep was pretty positive for me as a local candidate. Yes there was some REAL unhappiness about the coalition but having spent time with residents they generally came round to supporting us locally at least. Nationally is another matter and the party has to do MUCH MUCH more to distinguish itself from the Tories.

• Ivan White 16th Apr '11 - 9:42pm

  Charlotte. I’m afraid that you’re only deluding yourself. The opinion polls consistently show a 13-14% swing from Lib Dem to Labour in less than a year, so I guess the voters don’t see things your way. And spare us the “we aren’t getting our message across” cliché, please. We’ve seen the message – that rabid right-wing Tories can do what they like as long as they throw a few crumbs in the direction of the Lib Dems – and a lot of us don’t like it!

  Yes, there are Lib Dem achievements, but they pale into insignificance against the damage which the Lib Dems in government are allowing the Tories to inflict on the poor, the sick, state education and the NHS. 96% of nurses have no confidence in Lansley, your own spring conference rejected the NHS changes, but what’s being done about it? Nothing. Just a “pause” until the May elections are out of the way.

  You must be desperate if, like the Tories, you’re still peddling the “Labour’s economic mess” lie. It brought an
  enormous groan from the ‘Question Time’ audience a few weeks back when, as usual, a Tory tried that excuse for all the right-wing ideology being inflicted upon us. I suppose the global credit crisis had nothing to do with bankers and was all Gordon Brown’s fault, was it? And you complain about Labour’s “opportunism”.

  This government hasn’t taken anyone “out of tax”. In case it’s slipped your mind, this government increased VAT to 20% in January. As to the people taken out of Income Tax, as they’re unlikely to get a pay rise, any advantage will soon be eaten up with inflation. If they do get a pay rise, they’ll soon be paying Income Tax again.

• Sunder Katwala 16th Apr '11 - 10:38pm

  “Took over a million people out of tax” is either misinformed or misleading. That is not simply about the VAT rise, though this more than cancels out the income tax cuts, and shifts the distribution of taxation overall further down the income distribution.

  If you want to do this accurately, rather than sloganise either for or against the government, It is important to look at all of the decisions about household finances. including tax credit changes and childcare credits.

  The overall impact can be seen here
  http://www.leftfootforward.org/2011/03/budget-2011-distributional-analysis/

  Both the Fabian Society/Landman Economics and the Resolution Foundation have published more detailed distributional accounts. You can read the Fabian/Landman post-budget briefing here
  http://www.fabians.org.uk/images/FabianSociety-LandmanEconomics_post-Budget_report.pdf

  ***
  Income Tax
  – Increase in the personal allowance threshold from £6,475 to £8,105 (by April 2012)

  Employee National Insurance
  – Primary threshold raised from £110 per week to £139 per week in April 2011 and
  then assumed to rise in line with inflation in 2012
  – Contribution rate increased from 11% to 12%

  VAT
  – Standard rate increased from 17.5% to 20% (effective January 2011)

  Child Benefit
  – Frozen in 2011 and 2012 in nominal terms

  Tax credits
  – CTC per child payment increased by £290 above CPI inflation by 2012
  – WTC family element and 30 hour elements frozen in real terms in 2011 and 2012
  – Tax credit income threshold frozen at £6,420 in 2011 and 2012 (so falls in real
  terms)
  – Tax credit taper increased from 39% to 41%
  – Family element of taper withdrawn immediately after rest of credit at 41% (instead
  of at £50,000 or above, at 6.66%) from 2012
  – Childcare support cut from 80% to 70% of eligible amount (£175 for one child, £300
  for two or more children) from 2011

  ***

  The key findings of our analysis are:

  1) Single-earner families fare worse relative to couples as support is switched from tax credits to income tax cuts. Nearly all single-earner one-child families lose out

  2) Where households gain, the gains are often much smaller than people may have been led to believe

  3) Households claiming help with childcare costs through tax credits will suffer heavier losses. Families claiming maximum help with childcare are set to lose enormous amounts

  4) Despite the rhetoric of ‘lifting low-income families out of tax”, these changes will mean that some groups of low-income families are “pushed further into tax”

  The detailedtables are in the report, but here are a couple of specific family type examples.

  Many low to middle income families become bigger contributors to the tax-man

  By April 2012, a two-child family with a single earner on £20,000 will lose £124 a year, pushing the family further into the tax system:
  o In April 2010, under the system the current Government inherited, this family would receive tax credits and Child Benefit that would offset their income tax, national insurance and VAT, reducing their net tax payment to the Exchequer to just £212 a year.
  o By April 2012, cuts to tax credits and Child Benefit mean this support will offset far less of their income tax, national insurance and VAT. Their net tax payment to the Exchequer will now be £336 a year.

  Some households become net contributors for the first time.

  By April 2012, a one-child family with two earners each working full-time on £13,000 (total gross income: £26,000) and claiming maximum help with childcare costs will lose £1,416 a year, turning the family from a net recipient
  of support from the Exchequer to a net contributor to the Exchequer:
  o In April 2010, under the system the current Government inherited, this family would receive tax credits and Child Benefit that would not only offset their income tax, national insurance and VAT, but would give
  them a net payment of £1,199 a year.
  o By April 2012, cuts to tax credits and Child Benefit and the rise in VAT will (even taking into account the income tax and national insurance cuts) see them become net contributors to the Exchequer to the tune of £217 a year.

• Paul Kennedy 16th Apr '11 - 11:03pm

  I think we’ll do OK if we get a chance to speak to voters.

  Gordon Brown may not have caused the global credit crisis, but everyone knows it was his neglect that made us so vulnerable to it (and they also remember that the Tories were screaming ‘hands off the City’ even louder than Blair’s billionaire chums).

  The Lib Dems warned last year that there would have to be ‘savage cuts’, and we never ruled out increasing VAT (Vince on the last QT before the election specifically said this): all we said was that we were the only party with a costed programme which would not require a rise in VAT. It was obvious the other parties were planning to increase VAT, and it was inevitable once the Tories vetoed our mansion tax and closing loopholes for the better-off, and we vetoed the renewal of Trident, their loony Euro-policies and their tax cuts for the wealthy (eg inheritance tax).

  The cuts in welfare benefits are also what Labour were planning last year: how they are loving being able to watch the Government introduce all their policies and say how terrible they are. But Labour won’t reverse any of them, and I think the electorate will recognise their hypocrisy eventually. And I think the public will appreciate what Steve Webb is planning for pensioners and the low-paid through the universal credit and a reduction in the rate of means-testing (although it is still too high).

  For me, our only broken promise is tuition fees. Yet the irony here is that it is Lib Dem members who feel most betrayed. We have introduced the means-tested system which Labour was planning all along, and Labour didn’t mind a bit being able to oppose their own policy in the confidence that it would be safely introduced. I don’t think the Tories even insisted on an increase; more likely it was Vince the old socialist objecting to the wealthy enjoying a subsidised education at taxpayers’ expense. Most Lib Dems hate the policy, because we instinctively believe in universal benefits based on need or aspiration, matched by progressive but proportionate taxes on the wealthy. The Tories were never going to agree to higher taxes. But are Labour really going to reverse the changes?

  I think if all this is explained, the voters will understand.

• Malcolm Todd 16th Apr '11 - 11:08pm

  “I think if all this is explained, the voters will understand.”

  Bless.

• Ivan White 16th Apr '11 - 11:36pm

  “our only broken promise is tuition fees”

  Paul Kennedy. So what was Clegg’s “VAT bombshell” poster all about?? And weren’t the Lib Dems going to protect the NHS? How about “no deep cuts until the economy could withstand them”?

  Don’t worry about getting a chance to speak to the voters. On 5 May the voters will speak to you, loud and clear.

• Anthony 17th Apr '11 - 12:56pm

  Hypocrisy is rife amongst all the parties, the coalition constantly talking of Labour’s mess whilst the Tories in opposition wanted even lighter touch regulation on the city and were promising to match Labour spending pound for pound.

  The Lib Dems on tuition fees and slower rate of cuts.

  Labour on issues they were planning to implement now criticising those very measures.

  They are all guilty of hypocrisy.

  However opportunism and spin are rife too, the Lib Dems opportunism for seats at the government table to change their tune, the Tories implementing policies that aren’t even in the coalition agreement, and Labour the opportunism to try and deny their stance would have been much different.

  Ignoring the VAT rise by the Lib Dems may suit their argument, but it doesn’t fool the electorate who know they have less spending power because of this policy.

  Politics is still the same as it ever was.

• daveN 17th Apr '11 - 5:33pm

  @Paul Kennedy. If it is the case that LibDems “hate” the means-tested tuition fees policy, and feel “betrayed” by the whole tuition fees “broken promise”, then the voter is entitled to ask why were the LibDems right there with the Tories introducing these “hated” policies. To many, many voters all your principles and your New Politics evaporated instantly and forever with “the fees” about-turn. And if you are fair, can you blame them?

• david thorpe 19th Apr '11 - 5:44pm

  @ iwan
  we were at these sort of poll numbers under ming campbell, they are nothing new to us.
  we came sixth in a bye election in 2009 in glasgow when recieving less votes than we got when coming sixth in barnsely.
  there have been three parliamnetray bye elections under the coalition, our vote share was up in two of those and down in one.
  the party that gverns by short term opinion polls is not fit for governmnent