The Tories throw the unfunded kitchen sink at the election

Desperate. The only word I can think of to describe this faltering, backfiring, sinking ship of a government. Oh wait, no, I accidently came up with four others. Not hard, I guess.

The Tories have, in the days since the announcement of the election, made some characteristically random and seemingly unfunded commitments for the sole objective of scraping up whatever support they have left. First, the announcement of national service, mandatory for all 18 year olds if they win. Thankfully, the government will give these young adults a choice: one year of military service or 25 days of community volunteering. Or they don’t do it at all because the government says they won’t arrest anyone who refuses. So it’s not mandatory. Now, at the time of writing this, they also announce a ‘triple lock plus’ or ‘quadruple lock’ meaning that pensioners will not pay income tax on their state pension. Punishing the younger generation as, to pay for this, everyone else will have to pick up the slack.

We, as the Liberal Democrats, need to highlight this during upcoming election. Fervently. The last few years should have taught the government, if anything, that making unfunded announcements and comparable tax-cuts leads to the burden of the fiscal blackhole to fall on the next generations. As people live longer, and the retirement age not being lifted, this will leave massive pressure on everyone else. Probably more austerity and probably more tax-rises. They claim that they will raise the funds for this through “cracking down” on tax evasion and avoidance. The same government that wrote off billions in COVID fraud. The same Prime Minister whose wife avoided paying tax in this country due to a loophole. Nonsense. And this is in addition to the unfunded, unexplained national service!

Now, national service is not an idea I dislike as long as there are options for those involved, i.e. military or civil service or not partaking at all, and as long as they are paid if they enrol. The Tories haven’t really given this much thought, however. Reading a BBC article, the details are lacking around this ‘plan’ and it seems to be, perhaps unsurprisingly at this point, just a publicity stunt. Furthermore, they say this will also be paid for by their newfound love for cracking down on tax and the shared prosperity fund, as known as the levelling-up fund!

One final point. I have mentioned that they will pay for these schemes or plans by improving tax collection. They say this will be around £6 billion in money raised. Just let that sink in. 14 years of this government and they reckon there’s a few billion pounds just sitting around to be collected that they could have collected at anytime with any law. It’s not like an increase on an existing tax where you can calculate how much extra will come in. No. It is like they know how much tax hasn’t been paid and exactly where to get it or who to get it from. But they’re only deciding to do that now… when they’ve ran out of money… because they can’t stimulate a faltering economy… that they helped to crash.

Oh and they might lose power. That seems to motivate their goodwill…

* Jack Lee-Brown is a student and a member of the Liberal Democrats

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31 Comments

  • The state retirement age has already gone up and is set to increase further. From the current 66 years of age to 68 years from 2044.

  • Steve Trevethan 28th May '24 - 9:10am

    Might there be better forms of tertiary education than national service?

    Orthodox tertiary education results in longer, healthier, more effective lives and more money in and for the economy.

    Why do our politicians choose not to invest in our greatest asset, which is our young people?

    Might investment in our young people be an essential policy, being a most wise and humane policy, socially and economically?

  • The Tory party loves three word slogans “Get Brexit Done”, “Stop the Boats”, etc…

    After their latest offerings it looks like this time the three words will be, “Gimmick a Minute”…

  • Jack Nicholls 28th May '24 - 9:25am

    Nice post Jack. I’ve never thought the Conservative Party was particularly consistent, even in their own terms, on tax and investment. In this party we can have interesting debates about whether meaningful and useable liberty is better served by the state acting or getting out of the way – I’ve been on both sides in different contexts – but with the Tories, investment (or the appearance of investment) almost always seems to be about trying to make people be more like the people they would like them to be (in this case, young people), rather than helping people become who they are.

  • Tories want to crack down on tax avoidance? Would that work well for them? Who are some of the major tax avoiders? Tory donors.

  • Peter Martin 28th May '24 - 10:28am

    @ Jack Lee-Brown,

    At least in the way you mean, there is no such thing as an “unfunded commitment”. All government spending comes back as taxation revenue sooner or later. It will be sooner if the recipients of the spending, and subsequent respendings, goes out to buy up bottles of whisky. It will be later if the recipients of the spending save the money in one way or another.

    In other words, if a Government cuts its spending it will also cut its taxation revenue. This is why austerity programs are largely unsuccessful in reducing the Govt deficit. They do work to reduce inflation though which is why inflation was relatively low during periods of fiscal squeezes.

    The question you should be asking is whether there are enough unused resources in the economy for the Govt to spend without causing inflation. Probably at the moment there aren’t, so some tax increases will be required, or even worse, spending cuts, in the next Parliament.

  • Graham Jeffs 28th May '24 - 10:30am

    An adjunct to the state pension aspects is that the full basic is £11.5K pa and the personal allowance is £12.5K pa.

    One wonders how many people with only a small supplementary income fall within the net of being required to submit a tax return each year. This may be an issue that needs to be resolved.

    How easy are people going to find doing this? How many haven’t done it, in all innocence? What is the administrative cost of tightening up on this?

    So when the Conservatives talk about making the state pension tax free, is this merely an acknowledgement that potentially having to administer many more tax payers at the margins is not seen as financially positive?

    I daresay that the answer to this question is “no” because they aren’t capable of thinking that far ahead. It’s all opportunist bollocks.

  • Peter Watson 28th May '24 - 1:11pm

    “Now, at the time of writing this, they also announce a ‘triple lock plus’ or ‘quadruple lock’ meaning that pensioners will not pay income tax on their state pension. Punishing the younger generation as, to pay for this, everyone else will have to pick up the slack.”
    Though the official party line is “Rishi Sunak’s stealth tax hikes will blow a £1,000 hole in pensioners’ pockets by 2027, over four times more than what he is giving back with this meagre announcement,” so that’s alright, then? 😉

  • …Ed Davey went paddle boarding on Windermere this morning on a campaign visit with Tim Farron, the former Lib Dem leader and MP for Westmorland and Lonsdale

    Sadly, all we seem to get from the LibDem leadership is “stunts’…”Knocking down blue bricks’, standing at clocks( that don’t work properly), etc….Please. please, Ed. Standing at a lectern with sensible policies, might be boring, but would be far more use..

  • Chris Moore 28th May '24 - 1:40pm

    No, expats, that wouldn’t get us any coverage at all.

    And it’s a total travesty to say all we get is gimmicks.

    In reality, we’ve done well the first few days of the campaign in trying to get some of our policies into public awareness: the guarantee to see a GP within a week – non-urgent – and 24 hours – more urgent – has cut through.

    Likewise the launch in Scotland focusing on dental deserts.

    But in any case, it seems like it’s the gimmicks that have stuck in YOUR mind. Now, I wonder why that would be?

  • David Allen 28th May '24 - 1:54pm

    Davey – Making Sunak look dry!

  • Jenny Barnes 28th May '24 - 2:59pm

    “Ed Davey went paddle boarding on Windermere this morning”
    A brave move, Party Leader
    https://x.com/CountBinface/status/1795412325870018643?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Etweet

  • Steve Trevethan 28th May '24 - 5:18pm

    As our government can, has and does create money and acts as a macro bank and so is a safest place for big savings, might we, please, have more explanation/analysis of « the fiscal black hole to fall on future generations »?

  • Jack Lee-Brown 28th May '24 - 5:33pm

    @Steve Trevethan

    What I meant was an effective tax cut for one subset of the population leaves an income hole for the others to fill, assuming spending plans remain the same. I accept that the hole may be filled eventually due to the freezes on the tax thresholds but this plan is a short-term one. With the population getting older [1], this means more people will be claiming a state pension than was the case previously. Now, I do not oppose the plans in principle. However, potentially forcing the younger generations (i.e. those not on a state pension yet) to pay for the tax cut is not the way to go about it as it creates a generational divide. Furthermore, tax cuts are an incentive for behaviours, purposefully or not, and this plan may encourage people to retire at 66 rather than voluntarily later and thus leads more people onto the pension leading to a higher bill than simply an aging population.

    [1] – https://www.health.org.uk/publications/our-ageing-population#:~:text=Key%20points,health%20and%20social%20care%20services.

  • Peter Martin 28th May '24 - 6:06pm

    @ Jack Lee-Brown,

    I think we’re all familiar with the argument that if one generation builds up too much debt then the following generation will suffer, and be poorer, because they have to repay it.

    It all sounds superficially fine until we start to think about it and look at what did happen the last time the country built up a lot of debt during WW2. The post war generation, the so called baby boomers did extraordinarily well!

    The fact is that each generation has a standard of living which is defined by the goods and services that it can produce. This rose in the post war period and so living standards rose too. No generation can send goods backwards and forwards in time to repay debts in a real sense.

    This is not to suggest that the government should spend without limit. If it overdoes it there will be inflationary consequences. However this is for the present generation to be concerned about rather than the ones to come.

    We can do them a favour by not stuffing up the environment. That’s much more of a potential problem than the money we may or may not lend to each other.

  • Peter Davies 28th May '24 - 6:32pm

    The debate about the overall tax burden will never be resolved with otherwise inteligent economists disagreeing endlessly. What we ought to be able to agree on is for any overall level of taxation, which taxes produce a fair distribution of spending power and which produce the best incentives.

    There is a general assumption that redistribution produces unwanted incentives. Some taxes fit this stereotype but many don’t.

    Land Value Taxation produces both redistribution and good incentives.

    Inheritance tax hits directly at the biggest cause of inequality (That’s why Hunt calls it profoundly anti-Conservative). It doesn’t seem to deter many people from building up a retirement pot by doing something useful.

    Taxes on investment income are more redistributive and provide less disincentive than those on earned income. Nobody deliberately invests for a low return but people do decide to work shorter hours or take a more enjoyable, worse paid job if they don’t keep much of what they earn.

  • David Blake 28th May '24 - 6:33pm

    Ed Davey really should stop these stunts. Politics Live showed him falling into the water but didn’t say anything else about us throughout its programme today. They have had three programmes since the election was announced. The first mentioned us, but only when they were telling us the latest poll figures. The second programme had a very brief piece with Sarah Olney. The third one was today. And all of those programmes had Labour and Tory representatives throughout the programme, with the usual additional Tory. In effect the BBC is giving the Tories double coverage.

  • @ David Blake Agree, David. It’s literally an over the top way of dealing with Sunak’s failure to have an umbrella wearing an expensive suit. Things can only get wetter.

  • Steve Trevethan 28th May '24 - 7:02pm

    Thanks to Jack Lee-Brown and Peter Martin!

    1) It is suggested that younger generations have been profoundly and avoidably harmed by the Neoliberal socio-economic policies implemented by successive governments of all major parties, starting with that/those of Mrs Thatcher.
    2) It is suggested that the root of this abuse is that the basic purpose of Neoliberal policies is to transfer wealth from regular citizens to the very wealthy.
    3) This suggestion is supported by the effective refusal of successive governments to reform our tax set up to be one which uses assertive, transparent vertical and horizontal taxation.
    4) Neoliberalism deceit is also assisted by the promotion of the ideas that a generation owes money to the next and the avoidance of the reality that this generation and past ones are wrecking our world to accommodate Neoliberal theories and practices.

    What does « balance the books » mean in practice and in detail?
    To whom does the government owe money and under which terms and conditions?

  • Roger Billins 28th May '24 - 7:04pm

    Whoever thought it was good idea to have our leader falling off a paddle board into Windermere seriously needs their head examined. I understand that gimmicks are needed. The best gimmick I can remember is Jeremy Thorpe ditching the battle bus for a few days in 1974 and landing in coastal constituencies by hovercraft.

  • David Allen 28th May '24 - 7:31pm

    https://www.bbc.co.uk/news/articles/c033m49r1pro

    “The Liberal Democrats have pledged to put environmental experts on (water company) boards…”

    Let’s hope they can stay on those boards!

  • Chris Moore 28th May ’24 – 1:40pm…And it’s a total travesty to say all we get is gimmicks….But in any case, it seems like it’s the gimmicks that have stuck in YOUR mind. Now, I wonder why that would be?….

    It caught my attention, but for all the wrong reasons.. If you want to highlight the dangers of sewage dumping in Windermere deliberately falling off a paddleboard is NOT the way to do it…A child could point out that, “If the problem is bad why is it safe to jump in the water…

    I was reminded of Minister of Agriculture John Selwyn Gummer’s burger fiasco..In this case ED could have carried a sign that said, “Come on in, nothing to get het up about”

  • Laurence Cox 28th May '24 - 8:43pm

    Ed Davey falling off the paddleboard reminded me of when we exposed the pollution of the River Thames. That was just Sarah Ludford and Dee Doocey, the former holding the petition to clean up the Thames and the latter a bottle of dirty Thames water. Simple but effective – that campaign led to the Thames Tideway tunnel which will be coming into operation next year.

  • Chris Moore 28th May '24 - 9:59pm

    Nonetheless, in spite of the whingers and purists on here, the stunt did get coverage on mass media and the point of it was explained in the footage I saw.

    I wouldn’t expect it to figure on specialist political shows. That’s not where going to win over undecided voters.

    Some of you are living in an ivory tower: we’re trying to cut through a heavily two party dominated media.

    We have to take risks. It’s unnecessary for Labour or Tories to do this as they already get huge amounts of coverage.

    Standing behind a lectern reeling off our policies is a non-starter.

  • Nonconformistradical 28th May '24 - 11:07pm

    “the stunt did get coverage on mass media and the point of it was explained in the footage I saw.”
    Quite.
    e.g.
    https://www.dailymail.co.uk/news/article-13467007/Election-Lib-Dems-Ed-Davey-Sewage-Windermere.html

    https://www.bbc.co.uk/news/videos/cjkkn6pvgppo

    https://www.msn.com/en-gb/news/uknews/ed-davey-falls-into-lake-windermere-as-he-reveals-lib-dem-plan-to-fix-sewage-crisis/ar-BB1nbVAV

    https://www.itv.com/news/border/2024-05-28/liberal-democrat-leader-in-windermere-he-calls-for-tougher-water-regulations

    The fact that (at east part of) Lake Windermere is in Tim Farron’s constituency and was all over the media with the story of sewage being dumped in it a few weeks ago makes it work.

    And unlike Sunak when announcing the election – Ed was properly attired for the occasion – complete with life jacket.

  • Next up, to highlight the plight of the dairy industry, a custard pie in Ed Davey’s face?

    Stunts are fine, provided you don’t pose as the fall guy, and provided the stunt amplifies the message, rather than overshadowing it.

    I hate to admit it, but, Boris bulldozing through that pile of plastic bricks was a brilliant stunt!

  • Depending on how well Reform do in the polls, we can expect more of these handouts to groups that traditionally tend to vote Conservative.

    Tangent: I hope and the LibDems probably should start the call, for Ofcom to go hard on GB News, given it seems the majority of their presenters are active politicians deeply involved with parties standing candidates…

    Another tangent: Given the GE date is July 4th, someone really should be promoting voter registration and possible postal votes, particularly amoung university students, who may have registered at university and not at home.

  • Steve Trevethan 29th May '24 - 11:12am

    Might Mr. Davey undertake another photo-opportunity which involves his having a first rate meal with some of the 25% of our children who are permanently underfed along with a commitment to equalize the tax rates on unearned income to that on earned income, which would raise the £2 million required to eliminate child hunger and leave some £10 million to make our necessary infrastructures less crumbling?

  • Peter Davies 29th May '24 - 3:14pm

    @Steve
    I think the figure is a bit more than £12 million. The Tories are proposing to do the equalisation bit. There proposal is unaffordable. We need to be clear that we would replace employee National Insurance contributions with Income Tax. Capital gains needs to be equalised too.

  • Big Tall Tim 30th May '24 - 1:47pm

    The ultra-purists who are complaining about the stunts, need to remember that what they have remembered, not what Ed said.
    The stunts are excellent and are being talked about at the water cooler.
    They also remind people that the election is more that about Sunak and Starmer.

  • Peter Martin 31st May '24 - 9:21am

    @ Peter Davies,

    “….we would replace employee National Insurance contributions with Income Tax.”

    Is this Lib Dem policy?

    National Insurance isn’t supposed to be a tax although it is effectively and feels like one when it is paid.

    Pension levels are calculated on the number of years of contributions. So how would you recalculate them if NI were abolished?

    At present younger workers qualify for benefits such as JSA which are based on NI contributions. Older workers, past the official retirement age, don’t pay NI and therefore don’t qualify for JSA even if they pay income tax.

    It’s not an easy change to make. You’ll probably end up offending more people than you please and you’ll lose more votes than you gain!

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