Willy waving over 50p

It looks like we are set for a “war” in the autumn over the Lib Dem Tax Commission’s proposals to drop the party’s commitment to a 50p supertax. The Federal Policy Committee are insisting that removing it should only be an “option” for the party to vote on, while Ming is staking his leadership on getting the policy scrapped – a risky move given the mindset of some Lib Dems to embarrass the leadership whenever possible.

This whole thing does seem completely unneccesary. The motion could be amended if there is a strong movement to keep the policy – the FPC doesn’t have to keep it in as an option. By the same token, Ming’s intervention means that the debate will no longer be about the issue, but about his leadership. This is not a way to make good policy.

I’m reminded of the debate a few years ago over the party’s Public Services policy paper. The Party’s front bench and campaigns department lined themselves up behind a policy to scrap National Insurance and replace it with a hypothecated health tax (which “by coincidence” would raise roughly the same amount of money as the amount we were spending annually on health at the time). Lots of senior figures in the party lined up to stake their reputations on the policy, leaving just a few of us to vote against it. In the event, once calmer heads had prevailed, the party establishment came to the same conclusion as the rest of us – it was a bloody stupid policy that didn’t really solve anything – and it was quietly dropped.

I can’t help but think the FPC are picking the wrong fight over the Tax Commission. As I’ve written previously, the real problem in their proposals (at least as far as the reports about it – including Ming’s own speech last month – are concerned) are that they have a massive property tax-shaped hole in them. That means we are set to go into the next general election with two of our flagship policies being to drop the basic rate of income tax by 2p in the pound AND to introduce a local income tax of roughly 3.5p in the pound.

As far as anyone’s wallet is concerned that is an income tax increase of 1.5p. It is a virtual invitation for the other parties to tear into us for being confused and misleading. I suspect that after the current round of debate has been resolved, calmer heads will again prevail and we will quietly modify this policy. But all that means is that the debate we have this autumn will be completely meaningless.

If the FPC were doing their job, they would be throwing this back in the Tax Commission’s faces. Instead they’re playing chicken with supertax. Pardon me if I don’t sound impressed.


  1. To be fair, James, I understand it was also FPC’s 13th June? meeting that sent the paper back to have two options for debate on property tax (PPT or LVT) inserted. Though I’ve certainly not seen an updated version with those two options.

  2. If that’s the case, then great. But when I spoke to a senior FPC member about it last week, they didn’t mention anything about it.

  3. James, all I can say is: watch this space. What’s really happening is nothing like the willy-waving exercises being conducted in the national press…

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