Sunday, 18 January 2009

Nick Clegg still in a tangle over tax

I went to the one day Lib Dem conference today at the LSE. It was an excellent forum, but once again the issue of taxation was raised and the answers were not forthcoming.
Nick Clegg spoke about "tough choices" - a favourite phrase of Tony Blair from years gone by.
Steve Richards, who chaired the next event has heard it all before. He reckoned that it was a complete myth that the Liberal Democrats will find £20Billion public expenditure cuts (albeit cuts that will be reallocated to expenditure elsewhere, plus tax cuts if anything is left over), and he warned about politicians who talk about tough choices and then not say what they are.
Of course student tuition fees - which the LDs plan to scrap but the leadership intend otherwise - is an example of the kind of cuts we will have to make.
Danny Alexander had to respond to that, but instead of talking about hard choices, he downplayed the prospects, saying that a lot of the cuts had already been accounted for (scrapping ID cards for example), and that 3% of overall spending is not very much.
Well come on then, are there tough choices or aren't there?
The question I wanted to ask was a) how much of the £20Billion cuts has already been accounted for and what are they, and where of the remaining £xBillion are the rest of the cuts going to come from? Students tuition? NHS? Scrapping and not replacing Trident? Afghanistan troop withdrawal?
Will we get a say in these cuts, or will they appear rabbit from a hat just before the next general election?
These tax cuts are the remnents of the ideas proposed by parts of the Orange book, an emblem of free-market economics of the kind that we do not need just right now.
However the marketisation of public services has fallen short. Private companies cannot be trusted anymore than the public sector. I am sure that the original idea of tax cuts was related to streamlining public services, but how it has turned out the Liberal Democrats are simply resorting to cutting budgets. This is what Danny Finkelstein calls "Punk Tax Cuts". Cuts not made possible by public services being run more "efficiently", but by simply being cut.
Of course I have my own suggestions; scrap Trident and don't replace it, and withdraw from Afghanistan (as well as Iraq), but I am sure I will not be taken up.
The issue of student tuition fees has not gone away. Despite a change in policy having been rejected on the Federal Policy Committee (FPC) by a massive 14-5, it looks like the matter will be discussed in our Harrogate conference coming up soon. The FPC vote indicates that the party is not ready to make these tough choices, although I would submit that without seeking to change our policy on Trident and Afghanistan, then the same is true of the leadership as well.
All the more absurd that we passed this policy on taxation in Bournemouth in the first place.


Joe Otten said...

Tax cuts in the Orange Book? I must have missed that. Can you give me a quote?

expriest said...

The proposal going to conference will be to extend the 2005 scrap tuition fees pledge to part-time students.

Left Lib said...

On the point about the Orange book, there is a distinction to be made between what it actaully says, and what it stands for.
It is only the chapter by David Laws that was really controversial. It signalled a belief on his part that Liberal Democrats should support the marketisation of public services, although his chapter was only on the health service. The belief then was that the NHS could be organised to deliver better quality services with less public spending. From that sprung the myth that the investment by New Labour in the NHS was wasted. At Bournemouth the argument made by those opposed to the amendment to the motion was that if you spend more money it will simply be wasted.
The chapter by Laws did not specify that the LDs should cut public spending, but it was clear that was the direction of travel. Nick Clegg has not denied that the Liberal Democrats will cut public spending in the NHS. Possibly that is the "tough choice" we have to make, but he has not yet made the tough choice to specify that this is what the LDs will propose at the next general election.