Opinion: what Ed Miliband should put on his blank sheet of paper – part 2

Ed Miliband has invited Lib Dems to make suggestions for his 2015 manifesto. Though I’m suspicious of his motives, and I’m a supporter of Nick Clegg and the coalition, I think we should respond to this invitation with a public discussion of what Liberal Democrat policies should be from 2015.

If he takes up the suggestions, so much the better. If not, public discussion of Liberal Democrat ideas is always a good idea.

In part 1, I’ve already made suggestions on the economy, the deficit, and on local government finance. Part 2 covers other policy areas.

Reducing the poverty trap

Income tax is a progressive tax, but when combined with the withdrawal of benefits, it results in very high marginal rates of tax for the low paid. This will still be true after the introduction of the Universal Credit.

So the government should further increase the tax threshold from £10,000 to £12,500 to increase the proportion of those on benefits who are no longer covered by income tax.

Because everyone benefits from an increased tax threshold, the basic rate of tax should be raised to 21p in the pound to help fund this. The increased personal income from the higher tax threshold should more than compensate basic rate tax payers for the extra penny on income tax.

The Universal Credit proposal is an extremely progressive policy that is designed to make it easier for those trapped on benefits to get into work. It will only be fully implemented in the next parliament, so a cross-party consensus on the issue would be very desirable. Due to the financial situation, it is underfunded. For example, the original proposal was for a 55% withdrawal rate of benefits. This has been scaled back to 65%.

From 2015, once public finances allow, the government should put more resources into the Universal Credit, to increase the earnings disregard (the amount that can be earned without losing any benefits) and reduce the withdrawal rate to 60%.

Pupil Premium

The pupil premium is a very important initiative, £2.5bn per year will make a significant difference to the education of pupils from disadvantaged backgrounds. However, it would be even more effective if it were larger. So, in the parliament after 2015, the government should increase funding for the pupil premium to £5bn per year.

Electoral Reform

Across the country, there are councils with almost no opposition. Indeed, in some cases, with no opposition at all. This is because the current election system, of first past the post, can mean that the largest party wins all the seats, and the party coming second wins none.

A weak opposition leads to poor government. So, from 2015, the government should follow the example of Scotland, and introduce STV for local elections.

Trident

The decision on the replacement of Trident will be after the 2015 election. The Trident system served us well in the cold war, but such an ambitious system should no longer be a priority.
The 2015 government should choose a less expensive alternative, rather than adopting a like-for-like replacement of the Trident nuclear weapons system.

Target payment of benefits to pensioners who need it

The winter fuel allowance and free bus passes are given to pensioners regardless of their income, even if they are millionaires. This is clearly absurd. And, at a time when heart-breaking decisions are being made about public spending, it is a scandalous waste of money. The government should end the winter fuel allowance and free bus passes for those paying the higher rate of tax.

That’s enough of my ideas. Over to you guys for your policy suggestions.

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16 Comments

  • They should take the plunge and commit to nuclear disarmament. Or if that’s too divisive for the party and the public, give vocal support to a Nuclear Weapons Convention (which a majority of countries support) and aim to secure some multilateral reductions.

  • @Adam Michael Foot tried the nuclear disamament route, that didn’t work out well, that isn’t going to happen 🙂

    On Winter fuel allowances they should be based on per person, per household, one home doesn’t cost twice as much to heat because two people live there, the benefits should be opt out, so those who feel they don’t need them can voluntarily opt out, our pensioners get a poor enough deal as it is,

  • I think the WFA should stay the same but make it perhaps per household – after all we’re finding out that this is a cold country. As for the free bus travel most millionaires won’t use it or even have one – it’s something that I think people should have in their old age as a way of feeling `part of the world`.

  • @Matt you might want to look into how low an income pensioners get whilst not receiving pension credits before you start saying winter fuel allowance should be tied to pension credits.

  • Odd how no one seems to give a monkeys about the environment any more, apart from paying lip-service to concerns about global warming. I would like to see encouragement given to local communities to invest in renewable energy sources thus breaking the oligopoly of the large energy suppliers and generating income to reduce dependancy on central government grants. It would also have the benefit that the more reliable sources of wind power are in the north and west of the UK, which also tend to have less wealthy communities than in the south and east.

  • Grant Williams 22nd Dec '10 - 7:19pm

    Beware of Geeks bearing gifts! I think we should be jolly careful about contributing to the next Labour manifesto – it’s for the Labour Party to make its own policy decisions. That’s not to say we shouldn’t advance our own thoughts on policy issues, but then that is rather why we have our OWN policies and manifesto, isn’t it?

  • Andrew Duffield 22nd Dec '10 - 7:52pm

    “Income tax is a progressive tax…”

    No it isn’t. It is entirely passed on as higher costing goods and services, with heaviest incidence on the poor.

    Labour is welcome to it.

  • Ian Eiloart 22nd Dec '10 - 8:12pm

    If Labour want ideas from us for their manifesto, they can have them. We published them in our manifesto. It’s on the web. Next question?

  • The more I see of Ed Miliband and hear his hypocritical posturing and obvious state of denial in his complicity in wrecking the public finances, the less I believe anything he says should be taken at face value. We should treat any idea like this with contempt and suspicion. However, in the spirit of democratic discussion would put the following on the list.
    1) Reform of party funding banning any single party funding donation of over £20,000 from any one person or organisation and allowing voters to tick a box next to the party of their choice on the ballot paper to donate £3.
    2) Raising the personal allowance, as proposed above;
    3) Stricter media ownership laws;
    4) Renationalisation (or other forms of collective ownership) of the railways;
    5) Electoral reform i.e. STV for local and Westminster elections.

  • @George Kendall, per household is a fairer way of applying the benefit, personally though I feel we should leave pensioner perks alone, we can as a country afford these payments, we waste so much money in other areas.

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