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Sunday, August 08, 2010

A committment to fairness

Yesterday's Daily Telegraph has a detailed and interesting interview with Vince Cable in which he lays out his intention to replace tuition fees with a progressive graduate tax and restates his commitment to fairness:

This mantra of fairness is central to his beliefs. He is often cited as the Lib Dem most likely to quit the cabinet on a policy issue, so what are his "red line" issues that might provoke such an exit?

"I worked for some years to get us committed in our party to what we call fair taxes, lifting low-paid people out of tax, we got that in the coalition agreement and it was in the first budget. So I'm content that that's being carried forward."

Later on Mr Cable returns to the subject of "fair taxes", when asked what he would consider a success after five years as business secretary. He even goes much further than Labour ministers ever dared by using the "R" word (redistribution) and spelling out exactly what he means – "a tax system that means people at the bottom end of the scale pay less and at the top end of the scale pay more."

Changes in the Budget this summer allow Mr Cable to claim this is the case now, but there could be trouble ahead if Mr Osborne, for example, scraps Labour's 50 per cent top rate for the highest earners, or introduces a more generous Inheritance Tax regime, both of which he has said he wants to do.

Fair tax appears to be a much more important touchstone for Mr Cable than his party's key demand of changes to the voting system in general elections, which will be the subject of a referendum next year. Despite intense pressure from Tory backbenchers who want to keep the current "first past the post" system on David Cameron at the very least to change the day on which the referendum will be held (currently it is planned on the same day as local elections, which its opponents say increases the chances of a 'yes' vote), Mr Cable appears to rule out any U-turn, saying there is a "settled agreement on the timing."

However, the referendum is not, he says, a deal breaker for the coalition. "Nobody's ever suggested that that's an issue which will see us [the Lib Dems] collectively walk out if we don't get what we want. As I see it, it's a five year partnership, this is quite an important part of it but there are an awful lot of other things going on as well."

I was quite interested in his views on social housing, which very much reflect my own. The paper says that Vince is decidedly lukewarm about Mr Cameron's plans to end the automatic right of unlimited tenure for council house tenants. He agrees that there is no harm in discussing these ideas, but identifies the key issue to be one of supply.
A 'commitment to fairness'? Interesting use of language from a politician I had previously (make that 'prior to the Coalition agreement')rated as credibly honest. There is no 'fairness' in the Coalition Budget. The pain of the ideological cuts proposed by the Lib Dems and the Conservatives will disproportionately strike at women and the poor.
Then again perhaps I should not be surprised. Wasn't it Mr Cable who suddenly - such is the effect of proximity to power - did a volte face re his pre-election warnings of a 'double-dip recession' should Cameron and Osbourne gain power?
There is nothing fair about this Coalition Government.
Actually a report from the Institute of Fiscal Studies as well as the Treasuries own figures show that the overall impact of the budget is that it is broadly progressive with most of the cuts hitting the better off. See http://peterblack.blogspot.com/2010/06/impact-of-budget.html for more detail.
if Mr Osborne [...] introduces a more generous Inheritance Tax regime [...] which he has said he wants to do.

A major Conservative argument for this is that it would allow more people to pass on their property to their children. It is, of course, wrong for people who rent to be allowed to do this.
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