Unlike Labour, Lib Dem MPs will oppose Budget tax cut for better off

As I said on Monday, the bit that annoyed me most about the Budget was that better off people were getting  a tax cut when the benefit freeze continued and only a third of what was needed was put back into Universal Credit. Add to that the people who have their much-needed disability benefits cut back for the most arbitrary of reasons after deeply flawed assessments and you can maybe see why I am so fuming.

Astonishingly, Labour is backing the Tory plansalthough some may revolt.

So it’s good to see that Vince Cable will lead Liberal Democrats in voting against the tax cuts and asking for the £1.3 billion to be spent on reversing the cuts to social security. The press release actually says welfare, but I really wish they wouldn’t call it that. Social security is important for everyone. There needs to be a safety net to help those in the most difficult situations at any time. It’s what a civilised society does. It should be enabling and freely given, not grudgingly given with unreasonable expectations written into its heart as it is at the moment.

Vince said:

Government is about priorities. With public services desperate for investment, now is not the time to reduce taxes for high earners. Instead Philip Hammond should use the money to further reverse cuts to Universal Credit or end the benefits freeze a year early.

In Government Liberal Democrats focused tax cuts on lower earning families, and we support continued efforts to do so.

We encourage Labour MPs who disagree with both front benches about the raising of the higher rate threshold to vote with us against it and put pressure on the Treasury to change course.

One of the unpleasant trade offs in coalition was that we had to support a cut in the very top rate to 45p. I didn’t like it then but neither did Labour. They called us for everything. And now look at them. They have the most socialist leadership since Michael Foot and they are the ones backing Tory tax cuts when they aren’t getting anything else – we did get the rise in the tax threshold for the poorest which the Tories take credit for every damn budget.

We are doing the right thing tonight. Labour should be ashamed of themselves.

 

* Caron Lindsay is Editor of Liberal Democrat Voice and blogs at Caron's Musings

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19 Comments

  • Scott Berry 1st Nov '18 - 11:27am

    I absolutely oppose the raising of the higher tax threshold but we also need to acknowledge that raising the lower rate threshold also isn’t targetted help for the poor, and the higher it goes the more raising it further isn’t targeted help for the poorest. It doesn’t help anyone who isn’t in full time work – either because they can’t work full time (maybe including some single parents, the disabled etc) or because they can’t find full time work (zero hours contracts, part time jobs and the unemployed). We should target our help better. I personally believe in UBI, but short of that we should be arguing to reduce the withdrawal rate of benefits, using the money to reduce the harms of universal credit (such as removing the waiting period), or at least increasing NI thresholds which have lagged behind income tax thresholds.
    It’s great we’re opposing the raise of the higher rate threshold and awful Labour aren’t, but we should go further.

  • I thought Labour have tabled an amendment calling for an increase in taxes for high earners. Will we support this amendment?

  • David Evershed 1st Nov '18 - 12:32pm

    Have the Lib Dems joined the Greens in replacing Labour as the tax and spend parties?

  • This is a little tricky for the party. Since 2015 increases in the personal allowance have been tied to increases on the minimum wage to keep low wage workers out of tax.
    The Liberal Democrats 2013 policy paper pledged to continue increase the tax-free personal allowance so that no one earning the minimum wage pays any income tax
    and a plan to reinstate the 50p tax band was defeated.
    The Fairer taxes policy paper called for this to be increased further to the level ‘equivalent to a full time job on the National Minimum Wage, and then be index-linked to further rises, to ensure that no-one earning the minimum wage pays income tax on a standard full-time salary’.
    That was then and this is now. We do however need a consistent policy approach to taxation and the message we want to communicate to middle-income earners. National Insurance thresholds were increased at the same time as the personal allowance. Lower earners can now earn £208 a year more before they’ll need to pay any National Insurance and middle-income earners will pay full national insurance on earnings of up to £50,000 before the rate reduces to 2% and the 40% income tax rate kicks in.
    I think it is time we got serious about revamping party tax and benefits policy. The continual tinkering around the edges, giving with one hand and taking away with the other does no one any favours – neither the party or the majority of the public that see little net change in pay packets to meet increasing rents and outgoings.

  • David Becket 1st Nov '18 - 12:53pm

    Whilst it is fair to ensure the higher threshold only benefits the worse off, that should be the end of tinkering, so no we do not support Labour.
    We need to move to a new tax system, where wealth is taxed at least equally to income. We have talked a lot about this, Vince has made some bold statements, there is some motherhood and apple pie on our web site, but we are not developing a radical policy to create an alternative system. Until we do this we will stay at 10% (or less). There are enough commentators observing that our economic system is broke, but we appear unable or unwilling to do anything about it.

  • Three cheers for Vince & co.

    David Evershed. I hope so . Time for social liberalism again.

  • Richard Underhill 1st Nov '18 - 2:39pm

    If this is possible others should be called out for lying about the budget procedures. If they said that the two tax thresholds are bundled together in the Finance Bill. Was it because their lips were moving?

  • John Marriott 1st Nov '18 - 5:15pm

    There should be no tax cuts, period. In fact all except those on the lowest income, who are exempt from paying income tax, should pay more. There, I’ve said it. Do I feel better? Yes.

  • David Evershed
    Hopefully we are moving away from the dreadful derogatory title “tax and spend”. Of course we have to tax and spend. Failure to do that is what has brought this country so low since Thatcher’s time!

  • Peter Martin 1st Nov '18 - 5:48pm

    “Of course we have to tax and spend”

    Except, strictly speaking, the spending has to come first. If the Govt didn’t spend money into the economy there would be no money available for us to pay our taxes.

    Taxes follow spending to create a demand for the currency.

  • Katharine Pindar 1st Nov '18 - 6:34pm

    In the motion passed at the September Brighton Conference, Promoting a Fairer Distribution of Wealth, the policy of ‘Equalising the tax treatment of income from wealth and income from work’ was agreed, David Becket. See lines 43 to 48 of the motion, F34, for the details of how it is proposed to carry this out. I will quote the lines in another comment if you wish.

  • Opposing the tax cuts is an unfortunate position, and one which cries of not understanding the (historic) Lib Dem voter base. It does not lie in the council estates or the lowest earners, it is amongst the more affluent/aspirational who are economically centrist/right of centre but recoil at the social policies of the Conservatives or those more to the left who are not dyed in the wool socialists and cannot stomach the Labour ideology – i.e. the very people who are most likely to favour the tax cuts.

    Policies like these will not help win seats back, and if anything is going to cause needless difficulties in seats like Kingston and Surbiton, Carshalton and Oxford West. As things are going, all look extremely vulnerable as it is.

  • Actually, Michael, there is quite a mix of voters who have favoured the Lib Dems. One of the main reasons our vote fell to 2015 / 17 levels was precisely because we had lost our “economic left” vote.

  • Personally Michael as a winner in the tax stakes i’d much rather it was given to the poor. Is that because I’m an altruistic individual. I’d love to claim that title but no it is because I understand that more equal societies are more successful and happier. We have been fed the myth of reward the rich and let trickle down help the rest, it doesn’t work it leads to an unhappy and bitter country and I’d rather that process was reversed. After all £500 won’t pay for the extra security I need or for the repairs to my car as it bottoms on yet another pot hole. You get what you pay for Michael and if tax cuts are are your be all and end all you’ll get them, but they come at the price of society unravelling, a bit too high a price for me.

  • David Evershed

    Well thankfully we do seem to have come round to the understanding that if you don’t invest in society it tends to go to rack and ruin quite quickly. We are therefore willing to say actually “Much as we hate taxing people it is necessary to pay for a functioning society” as to be fair do the Greens. As to Labour I’m afraid their leadership have retreated to their fantasy wall for all seasons and are sat on top of it shouting “Only the top 5% need pay” when the hard truth is we all will have to pay and those of us that earn more will pay more.

  • Katharine Pindar 1st Nov '18 - 9:21pm

    If we were only to advocate policies which favoured the people we took to be natural supporters of ours, possibly middle-class people with comfortable lifestyles, and took no heed of the needs of the lowest-paid and poorest people, we would in my opinion be no better than the Tories and Labour people who deliberately further their own kind.

  • Hearing today that are we are £1m overdrawn as a Party and £700,000 under annual budget with the result that 20/100 HQ staff are being offered redundancy.

    (And about to create a supporters scheme with equal rights to membership at afraction of the cost)

    Not sure we should be going big on fiscal management.

  • David: Apparently also paying quite significant sums — a few tens of thousands of pounds — to the Canadian company Data Sciences for telling us to set up this scheme. And planning to pay them more in coming years.

  • Callum Robertson 4th Nov '18 - 2:29pm

    I really want to know why we are not publishing an alternative budget and trying to look like a government in waiting rather than a pro-EU protest movement

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