To mark the start of 2012, we’re running a series of posts over consecutive days on the main challenges for the Liberal Democrats in 2012. I’ve already written about the four priorities for the party’s new Chief Executive, Tim Gordon, but as the Liberal Democrats are more than just the one man whilst he has four, this series sets out six for the party.
As with many other liberals, Nick Clegg is strongly motivated by the issue of fair taxation of wealth. In addition, pursuing the issue provides three neat political benefits. First, it offers a clear distinction from at least part of the Conservative Party and one on which, if done right, the Liberal Democrats will be on the popular side of the divide. Second, it raises money and so provides more scope for favoured tax cuts, averted spending cuts or even spending increases.
Third, it side-steps the internal debate in the Liberal Democrats between those who are primarily concerned about social mobility and those who are primarily concerned about social inequality. Although pretty much everyone in the party agrees the two are linked, there is a big difference of emphasis between those who believe that increasing mobility is the priority, and will anyway lead to reduced inequality, and those who want inequality reduction up front. Wealth taxes appeal to all sides in that debate.
Moreover, the country’s tight financial situation may even be a help, for it places an extra premium on finding a source of extra revenue in order to pay for your own preferred piece of extra spending or tax cutting. That makes increased wealth taxation more attractive than in times when there has not been the same overall financial pressure.
There are, however, two problems to be overcome: what sort of wealth taxation (an issue on which there is not a clear consensus within the party) and can enough Conservatives be persuaded to support it in order to make it a reality?