My column today looks at Nick Clegg's tax announcement and discusses what it means for the Conservatives. I suspect a lot of people won't be happy with my comments welcoming the LibDems to the taxcutting agenda, but there you go. I also suggest it is time to dump the 'sharing the proceeds of growth' mantra and also the pledge to match Labour's spending plans. Here are a few paras from the columnIt sometimes seems as if Lib Dems have forgotten how to be liberal. Too many of them clamour for "something to be done", jerk their knees for more government action. Their sense of individual responsibility has been replaced by a statist agenda. Perhaps this announcement will reconnect them with their proud tradition of classic liberalism. The ghost of Gladstone has awoken...
...I have no doubt that both George Osborne and Cameron are instinctive tax-cutters. But they haven't felt able to say so in such overt language as Clegg. Instead, they came up with one of the more vacuous political slogans ever invented - "sharing the proceeds of growth". It is time to ditch that mantra. There may well not be any growth of which to share the proceeds. Economic circumstances, unthinkable only a year ago, call for new measures. Osborne must tear up the commitment to Labour's spending plans - which runs out in 2011 anyway.It is a shame that the Tories have poured derision on Clegg's plans. Many Conservatives - including me - believe the day may well come when electoral arithmetic dictates that Cameron will need the support of Clegg and his colleagues. Better to hug them close now and identify common ground, rather than construct an artificial divide where none exists.
Tory strategists should beware. Their Lib Dem counterparts know full well that they are facing meltdown in key Tory/Lib Dem marginals. Clegg's move is aimed at retaining the support of those Tory-minded voters who voted Lib Dem in the last three general elections, but are now tempted to switch back. They have been seduced once: they can be seduced again.
Read the whole column HERE.
46 comments:
Iain, I think you are right up to a point - in that tax cutting is good - but you also don't seem to understand how the Lib Dem brain works. If the Tories are doing well, Lib Dems will pretend to be more Tory than the Tories. If Labour are doing well, they will pretend to be more Labour than Labour. Now the Tories are popular, Clegg is pretending to give a rat's arse about the tax burden because it might win him some of the softer popularity the Tories have picked up. The Lib Dems are absolutely shameless when it comes to this sort of trick, and I'm surprised you don't see it.
Iain Dale,46, prominent Liberal Democrat blogger, today appeared on........
A great piece.
So, are you one, then? You certainly sound it. Do you think its time, to come out, here, on this blog? Can you imagine how Cameron would react? Can you imagine the headlines? Priceless! Time to tell your punters what we all secretly suspected - you are travelling on the Yellow Bus but havn't gotten around to buying a ticket.
The treasury are rewriting the fiscal borrowing rules even as we type.
The perfect opportunity to dump Labour's plans as completely unrealistic as even they can't make them work.
Brown is now totally discredited on the economy. No point doing an ERM and shadowing him.
Dump those pledges the moment his spinning on 'revised in the short term' golden rules start.
Iain this rather depends if you want your politicians to be technically honest or clearly dishonest.
It is perfectly OK for Cameron to state he will share the proceeds of growth, when even a dead millipede can see that there is not going to be any such thing for a very long time indeed. This is not technically a lie.
It is under our current circumstances clearly didhonest to state that you will deliver lower taxes when you know as sure as eggs is eggs that lower taxes are completely out of the question as the country is now bankrupt and rapidly becoming more so.
The Banksters now want their money back with interests, and Cameron knows it. What the Banksters want the Banksters get it really is that simple. That in fact is very mainly the Conservative Parties only real purpose as far as our establishments banksters are concerned.
Have you spoken to any small to medium sized business men lately? Thought not.
If you did you would find most are looking for a cheap strong rope right now rather then any growth in anything but a sense of utter DOOM not to say complete PANIC.
I know many in the building trade that are already looking for a job in Iraq simply to save themselves from going insane with worry. No joke. A Muslim terrorist with a death wish is for many men preferable to a wife who cant feed her own children.
They all know for sure that by Christmas almost none of them will have so much as their own garden shed left to construct.
To claim the wish to cut taxes is like hoping for world peace. Even Gordon Brown claims to wish to do this sometime in the future. Come to think about it he claims he already has, with a straight face as well.
Actually stating you will actually do such a thing when elected is only reserved for those that know full well they never will be.
Atlas
Great Iain. So no mention then of the Treasury's decision to rewrite GB's golden rules?
Any chance your next column can focus on Labour's decision to go for the 'scorched earth' policy now that a Conservative victory in2010 is all but guaranteed...but who would want it?
Its a good idea but how real are these tax cuts? I watched Newsnight and what he was talking about was cutting spending on tax credits for better off and pension relief for higher earners - i.e. as Mr Finkelstein said - tax rises. So is this just raising tax on the better off by another name (or at least transferring tax from one group to another). If so perhaps still a moral victory.
By now (2.49am on Friday morning) there will have been a lot comments on your column and I am sure it will provoke many different reactions.
I have to say, Iain, that you are generally right about the approach that Clegg has taken but you should have taken proper note of how much this is a reversal of their previous position on raising taxes. Indeed, it is fascinating how far they have come towards the Conservatives's stated aspiration to reduce taxes for lower and middle income people.
Cameron/Osborne have been very careful not to commit themselves to blanket cuts in taxes which the Labour Party will just portray as cuts in public services. They don't want to give them the opportunity to say to their client state "Vote Conservative - vote for lower living standards."
You, of all people Iain, should know that Labour (and the LibDems) fight very dirty and therfore I am surprised you don't understand the dynamics of the situation.
Cameron/Osborne will produce more eye-catching initiatives on tax and spending reductions in the autumn but they will not fire all their ammunition in one go. Why should they?
Long-term they will aim to introduce a flat tax regime combined with incentives to business and industry to stimulate economic growth but it is impossible at this stage to predict the position they will inherit from this failed Labour government. Not surprising that they will keep their powder dry until Brown has the courage to go to the country?
Nick Clegg, the guy who led his troops to a position of sitting on the fence when the Lisbon Treaty vote was taking place,, whoes Lords voted for the treaty and voted against a referendum (in or out) despite moving such a referendum in the Commons.
The same Lib Dems who promised a referendum on Lisbon then renaged,, the same Lib Dems whoes councils waste tax payers money, and still want more.
Its all very well saying things like we will reduce tax,, however Lib Dems usually talk different things depending on which audience is listening.
So my reply to Clegg saying he will reduce taxes is "B******T"
If you honestly believe that the people will more likely vote for the Euro supporting fox hunt ban supporting Lib Dems then you are seriously deluded because most people recognise Lib Dems as political chancers without a shred of honour or honesty.. at the next General Election both them and their socialist brothers in the Labour party will be annilated,, closely followed by other left wing orginisations like the BBC and Channel 4
John F Aberdeen
So the flip=flop Liberals are now trying to get ahead of the tax-cutting parade ? Very good, at least THEY realise that getting ahead of the right parade IS the definition of leadership.
Who knows when Cameron will also realise this ?
And yet I am not totally despondent - if Cameron for instance says he will cut quango spending back to 1997 levels or even lower, he immediately has the huge quangocracy as Labour voters, so I still hope he will do these things, once the election is over.
Politics after all is the art of the possible.
Alan Douglas
Whatever.
I agree that tax cuts are invariably a Good Thing, but in this case it is all grist to the mill that is Lib Dem infighting, which, because they are increasingly insignificant, will carry on largely unnoticed.
As Guido has noted, he'll have trouble carrying his party with him.
(Blogged, FWIW.)
Sadly Iain, you're writings are becoming less perceptive as you get further sucked into the westminster village where they seem to live on a different planet to the rest of us and treat the electorate as if it were a bunch of congenital idiots. I reckon that most people are sensible enough to realise that tax cuts are not going to be affordable for some years to come and can see through this typical libdem tactic for what exactly what it is, even if you can't. You're losing it, mate!
Clegg said he would reduce the overall tax burden which would clearly be a good thing but Tories should think hard before jumping on this particular bandwagon. Clegg made a point of saying he would reduce taxes "from the bottom up". That could easily be twisted to mean that taxes at lower income levels are cut (and so they should be) but mean that those on moderate and certainly high incomes actually pay more. I find it unbelieveable that Clegg would be able to sell a cross-the-board set of tax cuts to his party but if he organised it so that everyone at 40% paid more, then he may well be able to, while cutting taxes for the poor.
The future's bright, the future's 'Orange' !!
A very good article, Iain [and that is high praise indeed coming from a cantankerous old fart like me..].
You should unashamedly be backing this story to the hilt, defending it with the Labourites and selling it to the Tories.
Who knows, they may even offer you a job of some description - a 'spin doctor' perhaps..?
Spineless is never a pretty site particularly in a Party leader.
Well done Clegg!
It's unclear that Nick Clegg was actually proposing tax cuts overall (ie a reduction of tax as a proportion of GDP). But it's largely irrelevant - as others have said, economic reality means significant tax cuts in the early years of a Conservative government are now, sadly, unlikely.
The key issue is not taxation in itself, but waste in government spending. Any fool can promise tax cuts, but high levels of taxation are the symptom, not the cause. Doing too much, and doing it badly - that is what New Labour has given us. It will take years to put this right. There may be a few quick wins (such as cancelling ID cards), but mostly it will be a hard grind to improve efficiency and cut waste right across the public sector.
But of one thing we can be sure: at the end of the first term of the next Conservative government, tax levels will be lower than they would have been under Labour.
Clegg has been quite good since the May locals. I will not join the attack on anybody who is helping create a consensus in favour of small government, liberty and standards in public life.
He was very good on Newsnight yesterday evening in the face of Gavin Esler's distortions.
The only reason that Clegg has gone further than Cameron is because he knows that his plans will never come into force. Clegg is playing fantasy politics with his promises of tax cuts as, unlike Cameron, he won't have to face a crippled economy and a bankrupt country in 2010.
You should have started the article "it sometimes feel as some Conservatives have forgotten how to be Conservative" before laying in to your party's leadership team.
These growing signs of intolerance and indiscipline offer real hope that all is not yet lost for Labour.
Iain is too quick to applaud the LibDems. As some one living in Islington where the LibDems run the local government, I have some familiarity with LibDems thinking. They are not instinctly tax-cutting party, whatever they say. They are basically a left-of-centre opportunistic party who say different things to different people. This recent stunt by Clegg is meant to retain their seats SE England where they face the meltdown in the next election. Iain should look at the LibDem package as a whole. There are lots of leftist items there. A party cannot be on the right and on the left at the same time. Cameron is playing a clever game. It will be suicidal for the Tories to promote tax cuts (as that muddled thinker Letwin did in the past)which gives an opportunity for Brown to rubbish Tories, and say that in these days of economic problems, cutting taxes means reducing public services. As far as I know, we British unlike Americans, love public services, still want the current NHS model, free education at
primary and secondary levels, benefits of all sorts etc.. and Brown will say that Tories tax cuts means all this will go. There goes Cameron credibility. The best service that Iain and others who support Tories is to say nothing that undermines the prospect of next Cameron government.
http://iznewmania.blogspot.com/
Newmania which has roared back into life deal with this today. Sadly , consideruing Mr. Dales last words to me were"You haven`t got a clue" we seem to have made many of the same points.
I do not share his optimism about the possibility of tax cuts soon though.
'We think of the Libs as a dull permanence ,a faintly irritating ache . Sometimes it plays up, buts always there. This is an illusion.In the progressive sixties the Liberal vote collapsed to 2,000,000 and the Party was almost wiped out .The SDP “event “ saved the beards and that reached its zenith in the lection of 1983. They scored 25.4 %( Labour only got 27.6%) up from13.8%. So if we are going back to real Liberal Party lets remember how small it was . The birth of the modern party , its “new” moment ,was all about yoking together irreconcilable positions and mushing them into porridge . Socialists ,and preening antiquarians have rubbed along with a motley crew of animal rights campaigners wimmin and assorted whingers. Their rag tag crusade has no steady course ,but like any asymmetrical army they use whatever anyone leaves behind . Luckily there has been plenty of carrion for the scavengers since …
When the Labour Party became infected with Marxist dominated activism, and Trade Union power, in the 70s ,it made itself unelectable . This gave the Liberals some meat and eventually they consumed the SDP , or visa versa. The Conservative Party then took over by refusing to believe no-one liked them after Major, and being sent to cultural Coventry . The Liberals darted to the left vacated apparently by New Labour and began doing business as real Labour . So at each stage since the 60s the Liberals have fed on some structural weakness with the big two.
We are now in what is , in my life , a unique period .New Labour are unpopular because of the economy a drift left and general arrogance born of power. There are however ample intellectual resources in the Party to reinvent itself and are suffering nothing like the disconnect of the Militant days .The Conservative Party has roared into life , alive with ideas and lean from ,long years of famine and both crowd the middle .Notwithstanding the current polls it is quite possible the next General Election will be close. In those circumstances the current flat line of 18 % would look like living high on the hog and the Liberals risk returning to a tiny Party of assorted protests , a status 2/3 of the electorate granted them in a recent survey . It could be the end for' three , (not two) Party politics'
Clegg`s implausible side step is born of fear not hope . As he told Martin Bright , (discussing a Lib Lab pact) 85% of Liberal seats are ex Conservative seats and with their being no good reason not to vote Conservative his MP`s are sweating profusely . All thoughts of “leading the attack against Labour “ in its heartland , are gone .
As a desperate Political strategy this makes sense but Politics is not just a game , the idea is that you wish to achieve something other than a spot on Question Time . People judge your sincerity by consistency and willingness to be unpopular . The Liberals Party will find rebranding is a game of diminuishing returns......
Thats wot I fink
Could the Right of the LD and the "liberals" of the Tory parties merge to form a New Liberal party?
moral victory my foot! Clegg is desperate as he sees the opinion polls moving in the wrong direction for him and his group.
I have suspected that iain is a closet Lib Dem for some time, he is certainly, in my view on the honourable left of the Tory Party. Perhaps he would like to see a fusing of the Lib Dems with the Conservatives. There are one or two good people in that group, BUT, after the election will they be there.
It is also worth pointing out that the vast majority of Lib-Dem supporters up and down the country will certainly not welcome this announcement.
I think I am right, but doesn't the Lib Dem Conference dictate policy?. So if anything it is just a soundbite and will be quickly forgotten.
Cameron and Co. have a major problem with the Nation's finances and they will inherit an almost bankrupt country.
I believe, as I have mentioned, that they should promise in their manifesto that they will have a root and branch audit of the Nations Finances and promise to publish that audit.
Only then, when the full extent of the problem facing us all is shown, will they be able to plan ahead on what tax rises or cits they can make.
There is one obvious area that can save us a great deal of money,Iain, and that is the EU.
IF Cameron was to promise a referendum IN or OUT (as the Lib Dems want!) and the majority said OUT the savings would be immense.
If the libdems can have the brass neck to stand their traditional policy on its head and hope to get away with it - then might a few people in the labour party fantasise about what they might do if they get rid of Gordon Brown ??
Meantime - why should returning Tories vote libdem, no matter what their policies if its likely to result in keeping labour in power?
I think the conservative policy and principles are fairly clear and have been for some time. Tories will follow good housekeeping rules (I think that was Camerons phrase), they will spend wisely and tax as little as possible.
On spending I would like to raise one point - look at police and the army. We desperately need MORE spending there. Latest news is 2 police were attacked by a mob for having the temerity to ask a girl to pick up litter (one in hospital suffering from bite wounds). We need more police, more aggressive police in the face of thugs and street crime. Its hard to make tax cutting pledges stick in the face of these harsh facts.
Norman -I used to live in Islington and I know excatly what you mean. Last time I looked that prat James Kempton was relying on one nutty green .
The comments seem to have a theme that we get it .We are too broke for tax cuts.
Iain, you, like the Liberals, will never get a whiff of real responsibility, so you can afford to be macho on tax.
Cutting taxes would be liberal. However the Libdems aren't liberal. Don't be fooled that they have dropped their statist agenda.
Having said that us Conservatives are only slightly conservative. Moderation was/is always the mantra. Lefties have always incorrectly painted us as reactionary.
As for Labour, they know nothing of the value of money and hard work.
They've got the right soundbite on tax, not all they have to do is stop making unfunded spending commitments.
Owes more to recent polling trends than anything else. It's a very sensible mitigation strategy.
Given the complete lack of integrity on Lisbon, Clegg's biggest problem is convincing the electorate that anything in the liberal manifesto is worth the paper it's written on.
I'm sure Mr. Pickles and his henchmen will major heavily on this point come the next election.
I agree with fellow bloggers here that Brown is going to leave an empty treasury and a large overdraft in the form of borrowing, and it is foolish even to utter the words 'tax cut' by accident. I also agree that Clegg has as much chance of forming the next government as me becoming the
next Wimbledon Champion. Like typical LibDems his is a delirious
verbage meant to catch headlines. What Brown has done is to point out successfully the current economic problems we all have as being cooked and served from across the big pond. The Tories rising support is some what amorphous and tax cuts for pensioners like me as Clegg suggested might win him a few gray votes, but it has be substantial to offset the price hikes of all sorts to attract subtantial middle England which is a non-starter. The lowest paid who might benefit will not vote Tory whatever Cameron says and they in large numbers are found in the North which is a traditional Labour land, which I am sorry to say is a'benefit land' largely, and will not be swayed by tax cuts if Brown puts fear of public service cuts in to their minds. I thought David Davies did enough of distraction and we hear the report of Coleman (GLA) running up a taxi bill the size of my annual pension.
It is best to let Clegg stew in his
fanciful juice.
The State is bloated and overspending-a cut is needed to fund those much needed tax cuts.
PS..callind ID a Lib Dem is a bit like calling Dave experienced!
You are quite right about it being more than time, in the current economic mess. to ditch the "sharing the fruits of growth" between government & us. NJothing would encourage investment more than a cut in corporation tax & a promise that, as the economy grows the tax rate will fall to ensure that the tax take doesn't rise. With that Britain could achieve the &% growth rate Ireland managed by cutting CT.
The questions arising are whether (A) Clegg really means it & (B) whether his party would allow it in actuality rather than merely as a promise (the SNP having got into power on similara promises seems laoth to keep them).
Since I was & remain expelled from the party purely for suggesting exactly the same, plus saying that if we let half our electricty go down the lights will go out, I am unconvinced that this promise is worth its paper.
Why would Cameron say he that would cut taxes when DC knows that's not possible?
Nick Clegg can promise things that he can never deliver because he knows he will never be PM. However, Cameron might be PM - so he is right to be sensible and realistic about tax.
Don't promise what's not possible.
Iain, you profoundly misunderstand Liberalism as understood by Liberal Party post-, ooh, post-1880 or something like that.
Ever since Radical Joe with his "gas and water socialism" cames along, the Liberals haven't believed in this warped Cobdenite vision of "freedom" being the freedom of the rich to enjoy even more of their wealth while the poor have the freedom to starve and the freedom to go cold. Even your beloved neo-liberal Gloriana Imperatrix from Grantham didn't share this demented obsession with tax cuts.
As Liam Fox points out, a Tory Government may not be able to fund tax cuts for the wealthy (though tax cuts for the poor are imperative, they shouldn't be paying it in the first place). The middle classes are hardly uncomfortable (second holiday or a new car, anyone?) so the realities of Britain 2010 come first.
Iain, it just isn't going to happen.
Hmmm but thats today's policy, might change by the weekend. It has not been that long since the LibDems were campaigning on bigger taxes, so not a lot of credibility there.
The Libertarian Party is not about cutting taxes, but getting rid of taxes other than for the legitimate role of defence.
The deeper we go into this recession radical changes are going to be needed to reduce this bloated state.
It comes to something when the middle class-appealing Liberal Democrats are the Party advocating tax cuts.
Iain - the Clegg tax announcement rang a bell with me as a life long Tory voter. Cutting taxes by giving a much more generous personal allowance for those in work up to £10k and then removing tax breaks on EIS schemes, venture capital, PEPS/ISAs and imposing NI all the way up the salary scale would be very welcome as it would and encourage more people off benefits into work. It would as well give low and middle income families a real but non inflationary boost in income at this difficult economic time.
I hope Camneron/Osbourbe take note - a tax cut at the bototm end via more generous personal allowances would be solid 'one nation Tory' policy.
This is fantasy land. There is no choice now. The public fiances are in a royal mess, with the PSBR running at unsustainable levels. There is no scope for tax cuts, so there is no point in promising them. That promise will have to be broken. As it is public services will have to be cut, but without any corresponding benefit in lower taxes. Brown knows this. And he knows that he is probably going to loose in 2010. So he is about to abandon his 'rules' and go for broke - literally - knowing that the next Conservative government will have to clean up the mess, thereby incurring the wrath of the electorate as 'essential services' are culled. And none of this involves the possible impact of the EU Commission's policing of our financial profligacy.
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/07/18/bcnbrown318.xml
Totally O/T. A familiar eccentric commenter on this blog had a guess of sorts at Iain’s recent ‘Worst Political Autobiography ever’ post. He had this to say over on his own blog:
‘Though the answer is obviously NOT sock puppets' and coastal chip shoppes' fave John Prescott.’
The man simply has an uncanny talent. I wish he'd give betting tips, so you'd know which horse to avoid.
I voted for Nick Clegg as leader hoping for a radical change and that's what we are getting. I think some of you commentators, Iain, forget that none of this wouls have been announced without Vince Cable having given his go ahead, and Vince is hardly an 'Orange Book' liberal.
What people are missing is that Clegg is different to every other leader we have had in the post war period in that he represents an urban area where he is much more aware of the pressures that people are under at the moment. These proposals are intelliget and designed to reduce a burden that is no longer acceptable. Liberals are caring people and I think you will be surprised at how muted the criticism's will be. The party is dominated by its councillors. These are people who like to have money to spend, but they are also people in contact with residents on a daily basis and are well aware of the increasing levels on hardship. Parties change and evolve. As the Tories become a parody of new Labour, something was bound to change - nature abhors a vacumn.
The problem I have with your column is that is ignores the long-term fiscal challenge that Gordon Brown has presented to the British people.
For nearly seven years, Government expenditure, recurring, organically growing, has lead to a fiscal deficit that is structural.
This presents a number of challenges for the British economy and for the taxpayers. We do not have the capacity to meet the demographic shift, and the resulting increase in pension and healthcare costs. We must meet healthcare inflation upwards of 9% p.a. We must reform the welfare system because we have a stubborn real unemployed of over 5 million people. So we have a number of challenges.
However, by arguing that tax cuts under these circumstances results in a positive step, is to confuse populism with policy. I can advocate tax cuts, but that will only ensure that the next generation pays for the mistakes made today.
We need an economic policy that works for the long term and incorporates lateral thinking. This means combining traditional fiscal policy with behavioural economics and finance as well as sociology and psychology.
This is nuanced and difficult to argue in simplistic terms. It is, therefore, incumbent on columnists to explain that this is the type of strategy that needs to be taken. Simplistic "tax cut" calls no longer cut it.
Newmania said...
"There are however ample intellectual resources in the Party to reinvent itself and are suffering nothing like the disconnect of the Militant days ."
That's wrong I'm afraid.
The disconnect of the Militant days was between the Party and its best activists. There is now a huge disconnect between the Party and it voters.
Anonymous said...
"We must reform the welfare system because we have a stubborn real unemployed of over 5 million people."
Heaven forbid that we might consider providing good well-paid jobs for English people. Anything but. Obviously.
I think Tories could be a little more generous to the LDs here without great loss. Liberals are not socialist and never have been - the party's traditions long pre-datethe arrival of the marxist weed in british soil BUT also sometimes the party's priorities have been derailed by the great swathes of former Labour folk who join it, from time to time.
The traditional liberals are concerned with the freedom of the individual, the small state, and - post-grimond - the environment. Where liberal policy sometimes looks like labour's is where the social liberal conscience takes root - the idea that privilige is unhealthy and that to ensure social mobility the state does have to intervene, if only to make the local schools actually educate.
None of this, i think, is that far from DC's stance.
i suspect that we're seeing the start of a new realignment, and the long slow death of labour, which began with the sdp, move forward.
I always remember a nutshell guide to the politics of the 80s: Labour wants to equalise society downwards, the Tories want to leave things as they are (as long as they themselves are okay) but the Liberals want to raise everyone up.
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