Monday, 24 December 2012

Tax cuts for the comfortable.

Paddy Ashdown has nobly  accepted the poisoned chalice of  leading the Liberal Democrat campaign at the next election, and as a start has Emailed leading activists  with the information that " the tax cuts we have delivered in government" will be a prominent feature.

I am not included in this mailing, but my friend John Cole, described scornfuly as a "member of the Liberal elite" by his right wing Tory MP, and as a "throughly good egg" by an anonymous reader of this blog (John would love to know who) is, and respnded as follows.

Dear Paddy

I write as a paid-up Liberal Democrat who joined the Young Liberals in 1960.

I note in the 7th paragraph of your recent missive to local parties a phrase which caused me to puzzle.   It would seem a main plank of our platform is to proclaim " the tax cut we have delivered in government". 

My question to you is:  did we set out to be a tax-cutting party?  If I were to compile a short list of what I consider quintessential Liberal values I do not think that tax-cutting would be one of them.

I can give two cheers for one tax cut (that which raises the threshold at the bottom end).  I can give two cheers only because that does nothing to help those who are not in work. or whose earnings from part-time or low paid work are already so low that they do not pay tax.

Zero cheers for the tax cut at the higher rate from 50p to 45p.

How do I distinguish between the average Tory leaflet for the last umpteen decades, calling for tax cuts and the phrase in your letter?   It is the sort of phrase which sits us comfortably in the Conservative camp.

So depressing!

I want to hear more from you about social justice, the defence of civil liberties, a positive role within the EU (you were superb on this at the Birmingham Conference, September 2011 - I was in the room) and a responsible capitalism.  These are the themes which will get me off my backside and onto the doorstep.  Not the aping of Tory tax-cutting rhetoric.

Good luck in your endeavours.

Happy Christmas

John Cole

To John's surprise, and Paddy's credit, he received the following prompt reply.


Thank you for this. 

I do NOT think tax cuts are our main platform - very far from it. As Liberals we are about empowering people and as you will see when Nick announces over the New Year our core message that empowering/enabling people is central to what we are about.

But cutting taxes for the poorer in Britain IS one of the main achievements of our time in Government and I think we are right to trumpet this since it is a way to express that, although we want a strong economy to get people back to work, it can only be on the basis of a fair society (again something you will see prominently on display in our core message when it is announced) cf your point about social justice - lower taxes for the poor and the rich paying more is how social justice is
 is expressed in fiscal terms by lower taxes.

I agree about the lowering the 50%  tax band but we are in coalition and this was the price we had to pay to get agreement on tax reductions at the lower end - and BTW a very difficult thing for us to fight against since in reality the 50% tax rate yielded very little to the exchequer because it was so widely avoided. I am all in favour of higher taxes - but they need to raise money and this one did only to a very small extent. Also, please note that, despite the 50% reduction the last Budget saw the biggest shift of taxation overall from the poor to the rich of any Budget (including Labour ones) of recent years - thanks to us.

Thanks for writing. Be confident that I share exactly your priorities and hope that we will be able to make them centre stage in the General Election for which, from the New Year, we will have to start to prepare in earnest.

Have a great Christmas and thanks for your support for the Party.

Paddy .

I wonder that "BTW" means.

John comments:

If, as Paddy says, tax cuts are NOT our main platform, then why should they feature so prominently in Paddy's letter?   My guess is that the answer is  drafted by Danny Alexander and speaks for Danny.  I have no evidence for this - just a hunch.

Food for thought.

A Merry Christmas to all our readers.


  1. Why did Paddy write BTW ("by the way")? I suppose because tax avoidance was not the main issue. The real reason for the cut to 45 per cent was to persuade the Tory faithful that the party had not totally capitulated to those villainous Lib Dems. The reason we agreed it was to get through our important tax cut at the other end. Call it horse-trading if you like.

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