Liberal Democrat Newswire #29 is out: an Autumn Statement debrief
Now the dust is settling, how is the 2012 Autumn Statement looking? That was the topic of the latest edition of my monthly email newsletter, which you can now also read in full below.
If you would like to receive the next edition of the newsletter direct to your own inbox, just sign up here. It’s free!
You can unsubscribe whenever you want using the link on the bottom of all the emails, and I won’t pass your email address on to anyone else (except if required by law).
And if you are already a reader and like it, why not Like my Facebook page to help publicise the newsletter to others?
The Autumn statement | |
Welcome to the 29th edition of my newsletter about the Liberal Democrats, this one looking at the Autumn Statement. Now the dust has settled, the numbers have been given a thorough going over and the politics of it is playing out, what to make of it all? If you like this newsletter, the chances are other people you know would like it too, so please do share it. Thanks for reading, Mark In this newsletter:
The importance of income taxAs with the Budget earlier in the year, the Liberal Democrat negotiating position was dominated by a desire to speed up moves towards that £10,000 income tax allowance. This priority comes with significant risks because speeding up something means bringing its benefits forward but not securing something extra from the Liberal Democrat wish list. The risk therefore is that each piece of speeding up sees some Tory policies implemented in return, with the net effect being that the £10,000 income tax allowance is secured at a very high price. Prioritising the £10,000 policy is also however playing to one of the party’s limited polling strengths – this is one of the handful of issues which the public both like and associate with the party. The longer-term politics also look promising as if the £10,000 allowance is secured by 2015, it means the party can go into that general election arguing for a form of mansion tax, funds from which would be used to further increase the allowance so that anyone in a full time job on the minimum wage would pay no tax. That would be a potent combination of both a tax cut and a tax rise which the public overwhelmingly say they support in polls. It is rare for a party to be able to find popular policies which fit together neatly for both sides of that equation. It is also a combination that would be a clear point of differentiation from the Conservatives. Advertising interlude: 101 Ways To Win An Election
101 Ways To Win An Election is available from Amazon (paperback and Kindle editions) and also from Waterstones. For Apple fans it is available on iTunes as an iBook for iPad, iPhone and iPod. Users of Kobo readers are also catered for with the Kobo ebook version. The battle over benefitsLast Autumn, Nick Clegg and colleagues used up a lot of coalition political capital to get benefits increased fully in line with inflation. This time round they agreed to a three-year plan of pegging most benefit increases to the level of public sector pay increases, that is a 1% increase each year (aka a real terms cut). Partly this was a simply matter of money and maths: a third of government spending goes on welfare and benefits for pensioners are still seen as largely untouchable by David Cameron. However, on Monday Nick Clegg returned to that question of richer pensioners, arguing in a speech that the benefits received by the “wealthiest pensioners” need to be looked at again. Looked at, perhaps, but unlikely to be altered during this current coalition. That was more a matter of preparing the ground for the differences between the coalition parties at the next general election. For the Autumn Statement, the calculation Clegg took was better the 1% peg than some of the other changes Conservatives were pushing for. In the list of things successfully stopped were:
That is a fairly significant list of details. And alongside that, the ‘triple lock’ for pensioners means the full state pension is going up by 2.5% in April 2013, benefiting not only those wealthiest pensioners but many other less well off ones too. (Also worth noting are the Liberal Democrat successes on the spending front – protecting the international development budget at 0.7% of GDP – and on taxing the richest, with a real terms increase in tax thanks to that 1% figure also being applied to the top rate of income tax allowance, the capital gains tax allowance and the inheritance tax threshold, not to mention cuts in pension tax relief at the top end.) The tax crackdown hit listAction on tax avoidance and evasion was a consistent theme of the pre-statement briefings, the statement itself and the post-statement interviews. Here are the top five steps announced:
Regional payFor a brief period of time it looked as if Danny Alexander might be a supporter of expanding regional pay beyond its current remit (principally London-weighting and in the courts service). Those days however are now long since gone and Liberal Democrats successfully teamed up with many Conservative sceptics to block its expansion. Whilst ruling out regional pay in the Autumn Statement, George Osborne did announce plans to implement the recommendation of the independent pay review body for performance related pay for teachers. The importance of monetary policyQuantitative easing and other unconventional monetary policies have come to dominate economic decision making and debates. Yet amongst politicians there is very little debate over the merits and details of particular monetary policy approaches beyond, “Help! We need lots of something”. A generation of politicians used to arguing over fiscal policy were also used to monetary policy debates having been largely sidelined and settled by the creation of an independent Bank of England with an inflation target. As a result, monetary policy is an area most simply paid little attention to and hence now find themselves knowing little about. Yet the numbers involved in monetary policy completely dwarf those in the fiscal areas politicians are comfortable debating. Simply look at the number of zeros on the numbers when a bit of extra infrastructure investment or a tax rate here or there is debated compared to when the Bank of England makes QE announcements. It is a matter of a few billions playing tens of billions, and the tens of billions are the neglected ones. And so on to the Mid-Term review…Slimmed down, diluted and late, the Mid-Term Review will eventually limp into the limelight next year. Forget its original intentions; its importance now is the small clutch of major new policies for the second half of this Parliament that it will contain. Most notable looks to be an agreement on social care, implementing the Dilnot Commission’s findings. When he was a health minister, Paul Burstow was a fierce advocate for creating and then implementing its recommendations. Other Liberal Democrats in government have since continued that battle. Free 10 week Campaign MasterclassWant to know how to win election campaigns? You can now learn from the very best of international experience with a free 10 week email course from myself and Ed Maxfield. Sign up at www.CampaignMasterclass.com and each week you’ll receive one lesson by email, helping you become a top election-winning campaigner or candidate yourself. We’ve helped, advised and run election campaigns across Europe and even further afield – and we’ve got many victories to show for it. Now you too can learn from what we’ve discovered along the way. We do hope you sign up and start learning today! What did you make of this newsletter? |
Leave a Reply