Is Nick Clegg about to ditch local income tax?

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Discussing Clegg’s interview with David Mills of GMTV Sunday earlier, it occurred to us that the following quote has potentially enormous implications:

Nick Clegg: Er, yes, but I mean there are other ideas. For instance there are other ideas, I mean for instance I’ve also this week been floating ideas for how I think we should introduce a 10% tax on the non-domestic earnings of so-called ‘non-doms’. In that particular case that raises about £1 billion. I would like that to go to alleviate the burden of Council Tax on those in Band A and band B properties, those on the lower rung of the property ladder, if you like. But it’s just an example of where we can be creative in trying to find that extra money in order to fulfil that pledge, and I’m absolutely confident that we will under my leadership make that fixed pledge by the next general election.

Is this just idle blue skies thinking (which you surely must never do on a TV interview) or a hint that under Clegg the Local Income Tax policy is to be scrapped or at least adapted so that council tax will remain in the picture for the foreseeable future? Because you can’t alleviate the tax for low bands if you are going to scrap the tax altogether.

Is this an unintentional slip, revealing an agenda to move the party away from its existing LIT commitment? He was apparently quoted as saying nice things about site value rating earlier this week although I don’t have chapter and verse. Is a pattern emerging?

Speaking personally, such a shift would be fantastic: despite all the wobbles it could even win my vote (notwithstanding details, etc). Amongst many other party members though it would probably be about as popular as drinking a bucket of cold sick.

This isn’t an issue to be trifled with. If Clegg is thinking along these lines, mere hints will not be good enough. He would have to press it home. It would be a high risk strategy of exactly the kind that so many of us have been calling for him to adopt over the past few weeks.

Dare to do it Nick; you know you want to! 🙂

9 thoughts on “Is Nick Clegg about to ditch local income tax?

  1. Yeah – I spotted that too and wondered. The Oxfordshire LVT/SVR study did show that we could take As & Bs out of local taxation entirely using a so called “homestead allowance”.

    The only response I got to my quest for more information about Nick’s supposed mention of LVT/SVR after the Queen’s Speech was from one Paul Tyler (and I think it was the Paul Tyler by the looks of it) who wrote, slightly confusingly that:

    “The answer to your question: at the latter end of yesterday’s BBC1 coverage of the State Opening Nick made an excellent case for more effective tax incentives to get more, cheaper and browner land for housebuilding, but reference to LVT/SVR.”

  2. To be fair to Nick, and I’m not leaning his way, he mentioned this in the context of LIT at the Cardiff hustings. His line was, and I paraphrase, LIT will take a little while to put in place in the mean time I want to help those in band A+B so I plan to take this immediate action.

  3. Well that’s disappointing and makes no sense. It will take time to introduce a non-dom tax as well and if it’s going to take that long, he might as well replace CT with SVR. The whole objection to SVR is that it will take a while to introduce.

  4. Not according to this story in the Guardian.

    http://politics.guardian.co.uk/libdems/story/0,,2206732,00.html

    “Mr Clegg added that he is committed to replacing council tax with a local income tax, but that he wants to cut council tax for low- and middle-income families by introducing a progressive tax on those living abroad. [sic -means non-doms].

    He plans to raise £1bn from non-domiciles to fund council tax cuts for millions of households. His proposals include taxing non-domiciled taxpayers at 10% on their overseas income, in a system similar to that used in the US.

    “We should reject Labour and Conservative proposals to make a flat ‘charge’ for all non-domiciled taxpayers. I believe it is unfair charging a couple on £60,000 the same as a multi-billionaire.”

  5. I’m sorry but that is a hopelessly confused position. Where is the sense in announcing a new permanent tax to cut another one temporarily? And this will mean that local government will be even more dependent on centralised funds – in the face of established Lib Dem policy.

  6. I dare say if either candidate did promise to scrap a policy, half the party would be up in arms at the threat to the democratic policy making process.

    And perhaps this is why we don’t have a more interesting policy-led debate over the leadership.

  7. If you suggest any policy change in any political party you risk members being up in arms over it; the policy making process is a red herring.

    But half the party? Most party members don’t give a fig about party policy; in any case electing the leader is pretty much the only way in which all members, as opposed to just conference delegates, get to set the direction of the party.

    If a candidate wants change they must signal it; the reason they don’t has nothing to do with the policy making process and everything to do with a political calculation.

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