Evening of debates

April 16, 2010 — simonashall

Yesterday evening saw the first leaders’ debate on television and by and large the media is portraying Nick Clegg as the winner. I didn’t see the debate for reasons that are obvious below but spent a bit of time in work this morning calming down my colleagues about Nick Clegg (they’ve come to expect that of me).

Firstly, it was always going to be easy for him to look like the reasonable man in between the Conservative and Labour warring factions. We saw Vince Cable do it in the Chancellors’ debate; we saw it again last night. Secondly, there is so much more at stake for DC and the PM, it’s no wonder that they looked more under pressure. Particularly for DC – when these debates were agreed, it seemed like it would just be a matter of cementing the lead. Things are different now. Nick Clegg was able to look and feel more relaxed because he’s not going to be PM.

Thirdly,  Nick Clegg can afford to be “honest” about cuts, tax rises etc because it isn’t him that’s going to have to do them. The Lib Dems have always been good at promising wonderful things in the knowledge that they won’t have to deliver. Their record in local government is much more patchy. Fourthly, let’s give Clegg some credit. He prepared well, understood the medium better than the other two and came across well. It doesn’t mean he’ll make a great Prime Minister. Or even prop one up.

Meanwhile at the Lightbox, the first of the Woking Hustings was getting underway with Jonathan Lord up against Tom Miller (Lab), Rob Burberry (UKIP), Rosie Sharpley (Lib Dem)  and the lady from the Peace Party whose name escapes me. The event was organised by the Federation of Small Businesses and focussed on the economy. Around 40 people turned up but mostly people I recognised as businesspeople or activists.

I thought Labour’s Tom Miller gave a good account of himself faced with a sceptical audience and the impossible task of defending this government’s mismanagement of the economy. He’ll be an MP for sure – just not for Woking. Rob Burberry spoke with the usual UKIP over-earnestness and although he talked a little sense about the European dimension, he wasn’t at all convincing in any other dimension.

Jonathan Lord spoke confidently and knowledgeably, gaining quite a bit of applause from the audience, although perhaps that was to be expected. The contrast though with Rosie was less expected. I thought that she’d bear up well in these hustings given her background. Not so – she stumbled around answers, had to be stopped when she started answering a different question to the one that was asked and from what I hear it got worse after I left.

She might know Woking “like the back of her hand” but in the end so do many people. What we need in Parliament is someone with the influencing skills, the energy and the strength of personality to push Woking’s case forward in among the great melting pot of conflicting interests.

Jonathan is in the process of moving here and whether you vote for Rosie or Jonathan, you will have an MP living here in the constituency. The question is what qualities you wish that person to have and the contrast couldn’t be starker. The Lib Dems have been pushing the sophistry for months now that Woking was Jonathan’s “third choice” seat. Not true. But even if it was, I’d rather be a third-choice seat than have a third-rate MP.

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You don’t con, Vince

April 1, 2010 — simonashall

It's Yoda from Star Wars - no, not really, it's Vince Cable

Just a few words about Vince Cable. I watched the Chancellor’s debate the other evening and I’m not going to claim that George Osborne wiped the floor because he didn’t.

But given that he was being ganged up on by both Alistair Darling and Vince Cable, I think he came across well enough for me not to be persuaded of the case for him being replaced by Ken Clarke. The party is lucky in Phillip Hammond and Clarke to have two minds with plenty of economic experience to back George Osborne up and Osborne himself is made of far sterner stuff than I believe is immediately apparent.

Darling, on the other hand was an utter bore. His budget speech was more interesting and yes, although he did land a hit on the Conservatives over the NI part-reduction, subsequent events may  be more significant in this regard. He wasn’t nearly commanding enough for the man holding all the aces.

Vince Cable won the debate and that’s easy enough to understand. He was able to stand in the middle and come across as the voice of reason, hopping (albeir deftly) onto the “plague on both your houses” feeling that currently pervades. But did anyone notice a policy in there? At least Darling and Osborne were discussing whether or not an extra 0.5% on NI was a good thing to do – Vince was only bashing the other two. The debate may be politics; but politics isn’t necessarily the debate.

Frankly, anyone could have done what Vince did. And I think underneath it Vince doesn’t have any more in the way of policy than anyone else. Which is less forgiveable because the Lib Dems aren’t constrained by having to say things that will ever come to pass.

Standing in the middle with nothing to lose isn’t difficult (and will no doubt be repeated by Nick Clegg in the leader debates). But sooner or later, the waiverers that the Lib Dems are hoping to attract will catch on.

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Whatever happened to savage cuts?

March 17, 2010 — admin

Nick Clegg describes how big the savage cuts are now he's had time to reflect

Having spoken at length on Conservative economic policy below and how we need a more cohesive and better communicated philosophy on how to achieve recovery and longer-term prosperity, it’s worth considering that the other parties don’t have a universally stable position on this either.

They may have St Vince of Twickenham in their ranks but the Lib Dems have been equally confused on the issue. A few short months ago in September last year, Nick Clegg announced to a somewhat bemused audience, who believed they had turned up to the Lib Dem conference, that “savage cuts” might be needed to safeguard important budgets.

Although that message was officially given support by the party at the time, Nick Clegg has increasingly turned away from that position to the point where, seven weeks out from the probably election – and the possibility of a hung parliament stronger than it was – he now won’t have anything to do with spending cuts.

Well, call me a cynic but either a) the Liberal Democrats have conducted a fairly direct U-turn on the biggest question of the election within the space of six months or b) they are changing their economic policy according to polling data. Neither inspires a great deal of confidence and I suspect the matter would be thrown into greater relief by the media were their prospects in the election better.

Getting us to a point where the deficit or borrowing requirement is neutralised so that we are not piling on more debt year-by-year is only a part of the problem. We also have a substantial standing national debt as well, which needs at some point to be paid back. That’s pretty long-term and the pain needed to achieve that is considerable. I’m not sure I want someone as changeable as Mr Clegg taking a tough decision like that, nor the PM, who got us into this position in the first place.

Nor, one might say, someone as inexperienced as George Osborne. But he has Ken Clarke and a good shadow Treasury team behind him and the strength to withstand the criticism that will surely be directed from the people who got us into this mess towards those  attempting to get us out of it. I’m not convinced the others are prepared for the political cost.

Posted in Economy, lib dems, politics. Tags: , , , , , . No Comments »

Don’t Mansion It

November 30, 2009 — admin
The nation's favourite bean-counter - pity his idealogy isn't as good as his maths

The nation's favourite bean-counter - pity his idealogy isn't as good as his maths

I wouldn’t like to buy a mansion from the Liberal Democrats because they only seem to price them in increments of £1million. Back in conference season, just after Nick Clegg promised “savage cuts” to assauge the thirst of the Orange Book brigade, the nation’s favourite economist Vince Cable stepped forward with a plan to surcharge people with homes worth more than £1million 0.5% of the value above the £1m threshold.

Unfortunately, the Liberals forgot that, somehow, they hold seats in places likes Winchester, Lewes, Oxford West and Abingdon, Richmond and Kingston. Many of the MPs in those areas, almost all of whom face a serious Conservative challenge at the next election, came forward to say that they didn’t like the policy much. Today, Nick Clegg made appearances on a number of popular news outlets announcing a re-think. Otherwise known as an admission that the policy was a silly idea.

Instead, they are going to charge people with homes worth more than £2million a whole 1% in tax above the £2m threshold. I can’t think of many people in Woking with houses worth that much, although I know there are a very few. This copious nonsense of a policy will affect just 70,000 households in the UK and raise just £1.7billion a year. Not only is this a paltry sum compared with the £175bn the government will borrow over the next two years but Mr Clegg is not even proposing to use this money to pay off the debt.

Instead it is part of a muddled package to increase the income tax allowance to £10,000 taking four million people out of income tax - but also giving £700 to every taxpayer, including the super-earners, each year. To counteract this, he wants to reduce the tax relief on pensions for higher earners. Fine. If you want higher taxes for the rich, you can try – but you’ll always end up paying more to get the money from them than you’ll recover in tax, which is why the 50% tax band is nothing more than classist posturing. The best way to raise the tax take is to solve our economic problems, get business booming and increase people’s incomes. When they earn more money, they pay more tax.

So not for the first time, the Lib Dems have a credibility gap on tax. I understand they want the rich to pay proportionally more tax. Yes, so do I. But the way to do that is not to single out the rich, or even “super-rich” for special treatment because wealth has its own way of avoiding penalty. You have to engage the economy, make everyone richer and give the rich a reason to stay in the country - a favourable business and earning environment – to contribute a fair share. I don’t think that 50% is too high a figure – but doing it as Labour have done will not produce anything.

Nor this shambles of a Lib Dem policy on mansions. Nick Clegg says that the changearound is not a U-turn and that the policy does “exactly what it says on the tin“. To me, the tin appears to be saying that the Lib Dems have very little idea how to get the government’s revenues flowing again.

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Treasury trolls?

October 26, 2009 — admin

The week got off to a bang this morning with the Boy George going around every media outlet and explaining his bright new policy about limiting High Street banks’ bonuses to £2,000.

What a silly idea. Well, actually, it’s quite a good idea but it was hardly going to be popular with the bank workers who unsuprisingly prefer cash to shares and it completely misses the point that it is the investment banks rather than the High Street ones that had a destructive bonus culture.

More importantly, the BBC has allowed Liam Byrne and Vince Cable more airtime to criticise the idea on subsequent bulletins than they allowed Osborne time to explain it initially. That’s the BBC for you, as we’ve seen in other areas over the past few days – about as balanced as Mohammed Al Fayed and often a good deal less intelligent. Osborne (who is sounding more credible than he was six months ago even if today’s idea was shaky) and DC have to learn to say nothing when they’ve nothing worth saying.

But the biggest ear-opener for me was “The Treasury” slamming the idea. I though the “The Treasury” was a government department staffed by politically neutral civil servants whose job it was to help the Chancellor of the Exchequer and the First Lord of the Treasury deliver government fiscal policy? I thought that political statements were there to be made by useful people like Mr Byrne. Or is the BBC misreporting this?

Whatever the reason, I think trolls in the Treasury would be almost as bad as bats in the belfry.

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Taxing around the houses

September 21, 2009 — simonashall
Vince Cable deep in thought

Vince Cable deep in thought

Up until today, I thought the Liberal Democrats had some good ideas about fair taxation, even if I disagreed about the end result of implementing them. They had argued to replace council tax with a local income tax because they didn’t believe the rich were paying enough and the poor were paying too much. There’s something to be said for that, certainly I feel the council tax is capable of improvement.

But where does this “tax income, not property” stance fit in with Vince Cable’s “£1m homes tax” proposed at the Lib Dem conference? It appears to throw that whole idea out of the window in a headline-grabbing exercise.

Let’s look at this properly. People who own homes worth £1m-plus largely, but not exclusively, have large incomes to match. The Labour government has already increased the top rate of income tax to 50% and I think that is right – I would even support it going higher on a temporary basis but I hope that in due course that it will return to 40%. People who earn enough to pay mortgages on large homes have already paid stamp duty, tax on their mortgage, tax on their income and high council tax bills. I think that’s enough punishment for owning a big house (or a not-so-big house in a sought-after area),

Go to the other end of the scale. A widow, 85, has lived in her family home all her life. Her husband fought in the RAF and subsequently worked for the same manufacturing company for 35 years as a middle manager – he died three years ago after a long illness on which the couple had to spend some of their savings to fund treatment. She has the resultant widow’s entitlement to his pensions and her own state pension.

The family home, which has been in their ownership since 1912, is a 5-bedroom house in a desirable part of Andover, Hants, and would fetch around £1m on the market today (who’s measuring this, by the way?) She has two children, one of whom has expressed an interest in living in the house and they have been putting money aside to pay inheritence tax.

Where is this £2,000 a year going to come from? Her income largely goes on heating, maintaining and paying council tax on the house. If the children are to pay it, that is a mis-directed tax and Vince’s tax should be on them (a tax on parents, the mind boggles). Should she spend more of her savings on paying the tax, even if that means she can’t afford healthcare at a later point?

Should she transfer ownership to her children now, forcing her to relinquish ownership early? How illiberal. Or sell up? Similar. This lady was born in the house and wants to die there – surely she should not be denied that dignity? She also wants to pass it on to her children – it forms the only significant asset of her estate. I cannot believe any party could contemplate legislation that would put that basic wish in jeopardy.

The LDs argued against council tax for precisely these reasons – that there is a small but significant section of society that is capital-rich but revenue-poor. They know very well the impact on pensioners in possession of historical but valuable assets of laws intended to catch the rich.

So why come forward with this poorly considered idea other than to catch some headlines during a conference that is sure to be eclipsed as the autumn continues?

Posted in Tax, lib dems. Tags: , , , . No Comments »
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