The coalition agreement: social care and disability & taxation

Welcome to the nineteenth in a series of posts going through the full Conservative-Liberal Democrat coalition agreement section by section. You can read the full coalition document here.

Although when talking about other parts of the agreement I’ve sometimes been quite critical about the parking of issues with commissions or reviews, the commission on long-term care is a good move. It has a clear remit, has to report within a year and tackles an area which requires policies that have a chance of long term cross-party agreement given the nature of the subject. The failure of cross-party talks prior to the election means the chances of achieving this are far from high, even if coalition should at least force an agreement between two parties. So fingers crossed…

The rest of this short section continues one of the agreement’s main themes, namely giving individuals more discretion over public services and more scope to pick their own route in life.

For social care that means, “we will extend the roll-out of personal budgets to give people and their carers more control and purchasing power”, “we will use direct payments to carers and better community-based provision to improve access to respite care” and “we will reform Access to Work, so disabled people can apply for jobs with funding already secured for any adaptations and equipment they will need”. Finally, there is also a promise to “break down barriers between health and social care funding to incentivise preventative action”.

The taxation section contains one of the major Liberal Democrat policy objectives yet also one of the Conservative proposals that most makes many Lib Dems feel uneasy.

On the positive side is the promise to “increase the personal allowance to £10,000, making real terms steps each year towards meeting this as a longer-term policy objective”. Then there is also “we will also ensure that provision is made for Liberal Democrat MPs to abstain on budget resolutions to introduce transferable tax allowances for married couples”.

Elsewhere there is a significant presence of other Liberal Democrat proposals, including switching the taxation of flights from per-passenger to per-plane (so encouraging fuller plans and less pollution), a promise to “seek ways of taxing non-business capital gains at rates similar or close to those applied to income”, developing the Lib Dem approach to tackling tax avoidance, increasing the proportion of taxes coming from green taxes and reviewing the taxation of non-doms (the last a tacit admission perhaps that neither the Conservative nor Lib Dem proposals on this were quite right).

For the Conservatives this is balanced out by their priority of opposing Labour’s ‘jobs tax’: “the increase in employer National Insurance thresholds proposed by the Conservatives will go ahead in order to stop the planned jobs tax”. However, rather than increasing employee NI thresholds, the funds the Conservatives earmarked for that policy will instead go towards funding the increase in income tax allowances.