And, whichever way you look at it, a Conservative-Liberal Democrat coalition was going to be the most natural outcome of last Thursday’s result.
Not too many years ago, this idea would have made me very upset: I would have been very vocal about it and I probably would have resigned from the Liberal Democrats over the issue, had I still been a member.
If you’ve followed my previous commentary, you’ll see how I idealised a rainbow coalition before the phrase was being kicked around in the media in the last few days. But, the harsh facts are that the numbers in the Commons barely stacked up to it and trying to control its many constituent parts would have been like herding cats. Just as importantly, public opinion would just not have worn it – and we have to remember that where public opinion is formed from what it reads in the press, 80% of the newspaper circulation in the UK is Conservative with a very big and peremptory “C”.
But, having taken a bit of quiet time to absorb certain aspects of the new Coalition’s programme and the matters over which they have agreed, I have to confess that I am pleasantly surprised.
A very important measure is that to increase the basic personal annual income tax allowance to £10,000 (it is currently £6,475). This is a very progressive tax cut as it most benefits those on modest incomes (save for those, of course, who have incomes of less than £6,475). During 13 years in power, this should have actually been a very natural policy for Labour to implement, yet they failed to undertake such a fundamental procedure towards positive redistribution.
Whilst, I am disappointed that electoral reform will not take the form of ‘STV overnight’, I was really quite surprised to discover that there are plans to transform the House of Lords into a chamber elected by Proportional Representation. This is, at least, a step in the right direction and with more and more of Britain’s political assemblies becoming subject to a fairer voting system (and particularly the House of Lords), the day when the House of Commons finally has to yield to the same must draw nearer, albeit still slower than many of us would like.
When every other elected entity in this country is subject to a fixed term, it is absolutely correct that the House of Commons should finally be subject to the same: notwithstanding that that fixed term should be four years not five. (Either way, and the case being what it is, I have long thought it also the responsibility of electors to support the elected throughout an elected term rather than engaging in the very regular populist orgy of fame-envy that it does.)
These are just a few of the issues from which I take heart and so, despite the fact that 80% of the UK newspaper circulation does its level best to discredit the Liberal Democrats and the other 20% does its best to discredit the Conservatives, and, as I sign off watching the panellists on Question Time at each others’ throats with renewed petulance....
(draws breath)
.... I remain cautiously optimistic.
GLAD SOMEBODY IS OPTIMISTIC....cats ARE WELL BEHAVED AND EASILY HERDED IF YOU REALLY WISHED... I NO LONGER TAKE ANY NEWS SERIOUS THAT STARTS WITH POLITICS. IN SHORT IT MEANS THERE IS NO NEW real NEWS, SO HERE IS WHAT THAT SHOWER HAVE BEEN UP TO, TODAY.
ReplyDeleteGiven a choice, would prefer to see what KJordan did next and I despise that. Fingers crossed there are comfidence issues within a year and we have a re vote... rematch.
Still be voting Green, though not sure would like to see them in power with EVERY policy they say would implement....There just is no feasible or honourable, JUST party other than Lucas'
Peace and respect
Russell
One 5 letter word that is plural sums it and them up for me.
ReplyDeleteThe increase in tax allowance is not as progressive as it might seem. It will cost about £17bn (because everyone will pay less tax because of it) but only about £2.5bn of that will benefit those on low incomes. Those on the lowest incomes won't benefit at all because they already fall under the personal allowance threshold. The original LD proposal was to fund the £17bn by increasing taxes for the very rich but this part of the proposal has now been scrapped; it's unclear how the increase in allowance will now be funded but on past performance it seems likely to be through cuts to services or increases in indirect taxation, both of which will disproportionately affect the worst off.
ReplyDeleteThere is some quite detailed though rather partisan analysis here http://www.leftfootforward.org/2010/05/clegg%E2%80%99s-10k-tax-allowance-is-no-tory-concession-its-a-tory-dream/
I'm not sure the increasing taxes for the rich has been scrapped:
ReplyDeletehttp://news.bbc.co.uk/1/hi/business/10111201.stm
Assuming this article is correct, the new administration is 'completing the job' that Labour started. i.e. Labour introduced a higher tax rate for top earners, but L/C have been left to make the amendments to the personal tax allowance that have been long overdue.
You'll see the article also hints that there may be big rises in capital gains tax as well as abandoning the Tory plans to rate the IHT threshold.
Taking all these measures together (rather than the personal allowance increase in isolation) the tax regime becomes discernably more progressive.
Granted, it's not perfect - optimuum progessiveness would require many strata of marginal income tax rate bands - for me, desirable, but unlikely.
And yes, as I did caveat in my article, this is progressive only for those on incomes currently over £6,475 and of course the coalition does need to explain exactly what it is going to do to protect those on incomes below that from the effects of spending cuts and VAT rises. But this will (and must) involve other measures.
That said, there are some very scary things that could happen with VAT - I've had an article buzzing in my head for while, and will post when I get it together..
I must add that raising the personal allowance is always going to be more progresssive than cutting the basic rate of income tax. The last Labour government cut the basic rate by 3p over its lifetime; the Tory government before that made sweeping income tax cuts that were obscenely regressive. Whilst both these governments did raise the allowance, they did not necessarily do so year on year and certainly not at the speed that is currently being proposed.
ReplyDelete