17 September 2008

The Liberal Democrat national conference has agreed to cut public spending and taxes. By how much? There are no figures in the relevant document they approved, Make it happen, which offers data-free vision and values, but by hint and clue and proclamation £20 billion off public spending and, added to a previously announced reduction, 6p off tax. Maybe. Is it sensible to announce a target and then say the details of what it means to whom will be announced much nearer the general election and when you are still identifying the spending cuts? Won’t people wonder where you get the target figure itself from? Is it wise to cut public spending in principle when by west European comparisons our NHS spending is far from extravagant and our average primary class size is among the largest?

Of course, this is theoretical in any case as they aren’t going to form a government and deteriorating government finances in the present crisis may make the Libdem cuts irrelevant. However, as they are currently the leading party in Cornwall, I am going to give a little time to this opportunistic, Tory-chasing nonsense.

The new policy is general and vague. No get-your-teeth-into details, just uncashable promises. Consider:

1 What public spending and investment will be cut? The Libdems have not produced a definitive list but hint that it will be bureaucracy and unloved Labour policies and “waste,” the last formula being standard in these circumstances. As is also standard in these circumstances, there is an assurance that frontline services will not be cut.

2 How much of this public spending cut will go to fund tax cuts? They do not firmly say. Do they know? I believe that no, they don’t.

3 How much of the cut in public spending will the low-paid get by way of tax cuts? They do not firmly say and I believe they do not know.

4 How will tax cuts help those too poor to pay tax? They won’t.

5 Who do the Libdems mean when they say the tax cuts will also be for people on middle incomes? What counts as a “middle” income for them? They do not say but their leader, Nick Clegg, says the rich will pay more and “nine out of ten taxpayers” will pay less so it must be up to something like £40 000 a year. In Make it happen they talk of tax cuts for “ordinary families,” a phrase which means whatever you wish it to. Libdems are tending to emphasise the tax cuts in terms of the low paid and the pensioners though I have no doubt that in the Tory south of England their emphasis will be on middle incomes.

Now for Cornwall. The median average fulltime pay in west Cornwall is about
£18 000 a year. That means half the workers get less than that, half more. How much would a Libdem tax cut be worth to someone on £18 000 a year? They do not say but I calculate that a 1p tax cut, which would cost about £2-3 billion, would give the average west Cornwall worker about £2.30p a week extra. When the Libdems give us more details we can work out the gain.

I think we are expected to forego detail. What they wish the voters to take in from all this is that the Libdems will cut income tax, the only party currently making that promise.

Forget the cloudy figures. Forget Nick Clegg, leader of the party that claims to be in touch with real people, saying on Tuesday that the pension for an individual was £30 a week (it’s £90, and £124 with the Labour add-on pension credit). The Liberal Democrats are selling their proposals, if warm vacuity can be called proposals, as a redistribution of spending and tax from the rich to the poor and middling, a rejigging in favour of equality and of wiser public expenditure and fairer taxes. Hmm, a lot of glittering generalities there.

Without the details, however, we cannot judge whether that is what the Libdem proposals amount to.

In short, the Libdems have bought a slash-and-cut policy that is a pig in a poke and want us to buy it too.

The Liberal Democrat party thinks the blowing wind is Tory and they are happy to jettison their social democrat principles in the hope of catching it. Remember Groucho: These are my principles; if you don’t like them, I have others.

Additamentum 18 September 2008:

You might to read Steve Richards in the Independent 18 September and
Peter Riddell
in the Times 18 September on the Libdem new taxation and public spending policies.

Additamentum 21 September 2008:

See the Sunday Times and the Sunday Telegraph or today where there is a forecast of tax rises because of the financial crisis.