Danny Alexander lays out Liberal Democrat economic plan

Today the day after George Osborne delivered the final budget of this coalition Government Danny Alexander the Liberal Democrat Chief Secretary of the Treasury laid out our plans for tax and spending.

Lib Dem plans include borrowing £70bn less than Labour and cutting £50bn less than the Conservatives, keeping Britain on the path to prosperity, showing that we still believe in a stronger economy AND and fairer society; the Conservatives recently dropped the latter in a campaign poster and in their budget plans.

Danny announced using the same figures that were available to Osborne that there is still roughly roughly £30bn of fiscal consolidation by 2017/18 to complete the job of economic recovery. To go about funding this the Liberal Democrats will ensure that those with the broadest shoulders to bear the largest share.

To fund this the Liberal Democrats will raise £6bn through shutting remaining tax loopholes, £6bn will come from tax rises, with high value properties and the banking sector paying more. The additional money will come from £12bn of departmental savings and £3.5bn from welfare savings.

Public expenditure can then start to increase once this threshold is met and ensuring that the NHS has the £8bn a year it needs to secure its future.

 The measures to tackle tax invasion include:

•  Introducing a new strict liability criminal offence for off shore evaders so that pleading ignorance can no longer be used in an attempt to avoid criminal prosecution. 
• Introducing a new offence of corporate failure to prevent tax evasion or the facilitation of tax evasion. This would stop organisations from being able to get away with facilitating or abetting others to evade tax. 
• Increasing financial penalties for offshore evaders – including, for the first time, linking the penalty to underlying assets. A billionaire evading £5m of tax won’t just be liable for that £5m. 
• Introducing new civil penalties so that those who help evaders will have to pay fines that match the size of the tax dodge they facilitate. So if you help someone evade £1m of tax, you risk a penalty of £1m or even more yourself. 
• Extending the scope for HMRC to name and shame both evaders and those who enable evasion.

A simple choice says Peter

"Flag-lowering, parade-stopping, gay marriage supporting, pro-water charging, holier than thou Alliance Party".

Was the recommendation that Peter Robinson made of the Alliance Party in his speech this afternoon, so let me take those epithets that raised raucous applause from the small minded, one directioned, homophobic, financially irresponsible, holier than God himself DUP delgates found so humourous and look at them one by one.

Flag lowering: Whilst this relates to Belfast City Council, for Derry City Council and many of the councils to the West of the Bann the Alliance Party policy on flying the Union Flag on designated days is actually a flag raising policy. Yes it is one that Sinn Féin and the SDLP need some work on to see it as being fair to the minority of unionists who live in the council areas that they live in. Some of those Unionists undoubtedly vote DUP but haven't seen the Union Flag fly from their civic buildings for years. Therefore where is the DUP call for the flag to fly on all public buildings to mark the Royal Birthdays, the Queen's Coronation Day etc? Of course designated days is what happens in most council areas in Great Britain, indeed some fly other flags Orkney flies the Norwegian Flag on Norway Day, and many the Rainbow flag for Pride.

So make that Flag Raising or Flag Equality

Parade stopping: No doubt refers to the Twadell Avenue stand off, but it was the Parade's Commission as voted for by 71% of the Northern Irish people in response to the Belfast Agreement who decided that one final part of their parade home on the Twelve in 2013 should not go past a parade of shops in a nationalist area. This was based on previous violence in the area from both sides over previous parades. The DUP of course are supporting the cost of policing the ongoing action there  in hundreds of thousands of pounds, while the PSNI this week announced some cuts to manning of police stations to try and meet budget constraints on top of suspending historical enquiry work.

So make that Police Supporting and People Respecting.

Gay Marriage Supporting: Of course marriage equality is not just about the gays (and lesbians), it also affects the bisexuals and those who are transgender and intersex. But then when you are used to attcking just the G of the LGBT+ spectrum you can't be expected to know the details of some of my potential partners I an marry but others I cannot, spousal vetoes and stolen years of "togetherness". Nor does it allow those faith groups that want to carry out same-sex marriages the same rights as their brethren in England, Wales and very soon Scotland. Of course when you defend the union and attack LGBT+ equality on a par with the rest of the Kingdom you make a certain section second class citizens in their own land.

So make that Equal Marriage Supporting or just Equality Supporting.

Pro-Water Charging: Water charging is just one possible way to increase government income. We do have a failing water and sewage provision infrastructure which needs a sizeable amount of work and replacement. One way this is funding in England, Wales and Scotland is through the water charge component in the council tax. So yeah while we have a financial crisis shouldn't we be looking at the various ways that we miss out on the revenue that the rest of the UK can call upon to actually do stuff with, but then doing stuff and the Assembly are two things that very rarely go together. Of course Peter Robinson is looking to get control of local corporation tax, but that is only so he can lower it to match the Republic of Ireland and therefore create more holes in budgets. Taxes and revenue need to meet expenditure not cause even more savings to be sought.

So make that Fiscally Responsible.

Holier than thou: Coming from a party that fails to take into account people of non-Christian, Roman Catholic Faith, or no faith into consideration this seems rather rich. When their definition of what is right is based on a rather narrow reading of the Bible which not even every Christian in Northern Ireland holds to 100%. When they cannot legislate for the state without reference to the bible it is clear who truly is Holier than thou, though I suspect that like the Pharisees and Sadducees before them are actually Holier than God creating extra laws and legislations to go on top of what Moses was given. This is why Jesus said that the greatest commandment was to love. For until you can live up to that one you cannot possibly start to consider the others and that is where the hate for certain sectors and failure to understand equality legislation leads to.

So finally I make that  Being a Good Samaritan for EVERYONE.

So in conclusion what Peter failed to see is that the Alliance Party is actually:

Flag Equality Everywhere, Police Supporting, People Respecting, Equality Supporting, Fiscally Responsible, Good Samaritan for EVERYONE

So yeah it is a simple choice for the people of East Belfast. If they want progress and normality that most of the Western World knows, loves and experiences then they can vote for Naomi Long. If they want to carry on with the bigotry, keeping others down and lurching from one financial crisis to another they can back Gavin Robinson.

David Cameron wants to award the wrong sort of married couple

One thing I've learnt from looking through my family history is that even when there was the so-called married for life example that David Cameron so insists on not all families fit into the model he is advocating for a tax break. Not every family is quite so clear cut as he makes out.

Indeed I don't have to go all that far back to find a family that doesn't fit into the remit of one breadwinner and one stay at home parent. My paternal grandmother was widowed with children of 14 and 9, she never remarried but went out to become the breadwinner and went without much that others took for granted. Both my paternal great grandfathers were widowed one with seven surviving children under 16, the other with two, both remarried and produced even more children.

But the fact that the prime minster wants to "send a signal" that marriage is better than any other type of relationship ignores those that have no choice:

• Those who are widowed
• Those whose partners are abusive and flee with the children
• Those who are single parent families because one of the partners doesn't want that "better type" of relationship (or any relationship) when it brings them children
•  families where even this tax break isn't enough to encourage one partner not to work as they need to make ends meet
• families where neither parent is able to find work

It may only apply to one third of all married couples, but as I pointed out it is not necessarily the married couples with families that need such support, especially not when the caveat is that one of the parents is a stay at home parent. My own mother went back to work part time when I was 8 and my brother 6, and full time 3 years later as the family couldn't continue to maintain the Edwardian ideal of the mother staying at home.

Times have moved on and it is time that out tax code recognised that, not take a step back into the past.

See also check out the Don't Judge My Family website

Jimmy "Mr 1%" Carr

Jimmy Carr took up this 1% tax scam offer himself



Strange that he pokes fun at those who avoid paying tax when he himself has been exposed doing just that. He says "I pay what I have to and not a penny more." obviously he means he pays what he has to for those accountants and lawyers to get him out of paying what he has to.

Miliband Anti-Politics Attack is Thin Edge of the Disappearing Wedge

So David Miliband thinks in today's Guardian it is anti-political to stand up against the social injustices, the political corruption, stand up for our planet, economy and children. That is in essence what he is saying erroneously "Nick Clegg is only clear what he is against." Anyone who has encountered the Liberal Democrat manifesto and it is clear that David Miliband will know that isn't true.

There are plenty of constructive, progressive policies in there. There is also a big thrust to sort out the regressive nature of things that the Labservatives between them have managed to mess up.

• The reversal since 1997 of the top 20% paying proportionately less of their income in tax than the bottom 20% can only be sorted out with the Liberal Democrats policy of fair taxation, even my SNP opponent agrees with me on that one.
• The many inroads into our civil liberties over the last 13 years of Labour rule are going to be dealt with though a comprehensive Freedom Bill.

However, we have constructive plans for better arrangement for mothers and fathers in caring for their children in the early years. For our young people to get the training, qualifications or apprenticeships that suit them, not aiming merely to get 50% into University. There are plans to make the recovery one powered by greening our production, which also greens our planet and helps combat climate change and meet our progressive energy targets making energy production carbon neutral by 2050.

Heck if Billy Bragg the reddest of Red Wedges from my youth (and the last election I couldn't vote in 1987) is turning to the Lib Dems maybe it'll be up to David Miliband to turn out the lights on the Labour party. Billy Bragg is not someone who is swung by the superficial he is all about substance. You know I think even Bragg is now saying maybe I wanted to change the world, I was looking for a new Britiain, and I've found it now in the Lib Dems, as opposed to his 22 year old self.

Miliband claims that Labour have taken on the "forces of inertia", you know he may be right (in the first couple of years of New Labour) but inertia has not only won, but overcome and is dragging them backwards now.

The Fruit of Gordon's Character

"It is for other people to judge but I believe that character is not about telling people what they want to hear but about telling them what they need to know.

"It is about having the courage to set out your mission and the courage to take the tough decisions and stick to them without being blown off-course, even when the going is difficult.

"For better or for worse, with me what you see is what you get."

Well that is what Gordon Brown is saying should be the judgement on which people base their decision for this election. So lets look at Labour's mission over the last 13 years.

On law and order they seem to have been blown by whatever the police want irrespective of the civil liberties that they limit. So that is a course but one that many social progressives who once felt the Labour party was their natural home are wary of.

On Iraq they set out on a mission to get rid of Saddam. They certainly weren't swayed by the advise of legal and military experts that their reasoning for the invasion was flawed or illegal. We've even had David Miliband saying that UN was feeble over Saddam, that only the iron fist of the US and UK could waken them up. But Bush and Blair still kow-towed to New York to get a retrospective resolution even though they broke Article 2 of the UN's founding charter.

On tax that steady course that Gordon has ploughed. He announced he was to remove the 10p tax band. Only for it to be given a temporary reprieve. In effect he had unfairly doubled the tax burden of the lowest paid. Indeed only most earning up to about £2,000 less than the Tories want to freeze public pay everyone was worse off. While at the other end it was Gordon who made a differential in the high rate capital gains and income tax thresholds making it easier for the richest to avoid paying a full amount of tax. Yet now he speaks of a future fair for all.

As for the banks, well it got worse. Gordon refused to listen to Vince Cable, a former banker, and sailed his course of deregulation. Allowing them carte blanch to gamble the nations savings against the market. We'll be paying for that courageous path of the former chancellor for years to come.

Only the Liberal Democrats have consistently stood up for our civil liberties in the last 13 years. Only the Liberal Democrats spoke out about the illegal war on Iraq with one voice. Only the Liberal Democrats are promising to make our taxes fairer. Only the Liberal Democrats are prepared to reform the banks, yes allow the investment banks to speculate, but not at the expense of individuals and firms access to core banking services.<

Gordon Brown as the son of the Manse is no doubt aware that Matthew 7:16 says. "It is by their fruits that you shall know them." Sorry Gordon but Labour have turned out to be a rotten apple. The Tories are merely the same old sour,bitter lemon trying to disguise themselves as a juicy, sweet strawberry. The Liberal Democrats are trying to give real sustenance to our economy, it is time to build a fairer Britain.

Is This the End of Tory Finger Wagging?

"But you do it too!" as Mark Thompson pointed out was not the best defence of the Tories over Lord Ashcroft's non-dom status.

The 'innocent' plea of I'll only do it one I am required to do so, from Ashcroft himself showed how weak and ineffectual first William Hague and latterly David Cameron have been in holding their own peers to promises that they have made to the party.

But now Lord Paul has announced that rather than wait until he told to do so, he will pay full UK tax on his overseas earnings from the start of the next tax year, that is from the 6 April. So if Lord Paul is doing it before any requirement to do so, what now Lord Ashcroft the ball is back in the Conservative court.

20% VAT Whoever Wins Is that Fair?

The ticking time bomb of VAT appears to be rearing its head again and neither of the main parties appears to have a diffusion team looking at fair ways to avoid the explosion.

Having just learnt myself of my annual pay review this news in The Times makes disheartening reading:

Though Labour and the Tories have denied having any current plans to increase VAT, neither will rule it out and The Times understands a rise in the tax is being considered by both parties.

The rate of 20% is bound to hit the lowest paid. My pay review justified the non-increase that the Retail Price Index (RPI) was currently averaging -0,5% but a rise in VAT to 20% as envisioned by both will effect everyone. If this is done before the next round of annual reviews it could leave a lot of people struggling to make ends meet as most of their purchases would rise by 2.1% as a result of the additional 2.5% increase in VAT.

Of course VAT is a regressive tax, it is applied to most of your purchases. Yet Alistair Darling has already ruled out either raising income taxes or increasing the scope of VAT, but not raising the sales tax. Earlier on this year I looked at the promised the Tories weren't prepared to make on the area of VAT.

Whilst the Liberal Democrats have been honest and fair about their tax proposals apparently their has debates within the Government about whether to life the opaque nature of their pre-budget report. As you would expect about a Labour party that has brought in 13 years of stealth tax increases they're not sure whether to be honest about increasing VAT before the election.

Simple answer the reason Labour are having such a debate is that people are expecting tax increases to help pay for the economic mess. But they'd like such increases to be fair, which will not be the case with ignoring progressive increases in income tax and lumping all your eggs on a VAT increase.

Information

The following underlying framework of principles underlies all the Liberal Democrat tax proposals, shame the other two parties aren't as principled.

• Fairness – tax policies should be equitable and ensure that the payment of
  taxes is linked proportionately to people’s ability to pay.
• Simplicity – tax policies should be clear to taxpayers and new policy should
  aim to eliminate complexity in existing legislation.
• Certainty – tax policies should not be retrospective and should provide the
  taxpayer with certainty over the correct treatment.
• Efficiency – tax policies should provide revenue to the government on an
  efficient basis and minimise tax leakage.
• Transparency – the reasons behind the introduction of new tax policy and
  the intention of spending of revenue raised should be clearly stated to the
  taxpayer.
• Competitiveness – UK tax policies should be internationally competitive.

Why We Need Fairness is Two Easy Lessons

Two findings that make interesting reading today.

First up the pay gap between rich and poor is wider than it 40 years ago. Despite Labour saying they constantly doing something about poverty and helping people aspire, their tax regime of regressive tax increases seems to have had the opposite effect.

The other one I heard on the TV before leaving the house on the BBC was that family conflict not whether the parents were together or apart had more impact on a child's well being. Therefore the Conservative incentivisation, through a tax-break, to stay married may have repercussions on the child if conflict ensues.

Indeed their policy only would affect 14% of the poorest families where only one parent works full time, fail to help 230,000 children living in in poverty in one parent families who juggle work to care for them. Nor will it help 29,000 children living in in poverty where both parents work. In total four out of five adults of working age would fail to benefit from this tax scheme, as well as the above 46% of adults living in poverty are single.

Of course the Lib Dems have a message that is clear regarding both those issues. We want a see a fairer tax system. We will lift the tax allowance threshold to £10,000 lifting 4million out of tax altogether and giving £700 to those lowest paid. We'll balance it with taxes on those that can afford it and on how we pollute.

The Cost of Cameron's Marriage Dowry

David Cameron has been promising to give tax breaks to married couples, you may have picked up on this. What you won't have missed is how he is intending to pay for this, because he hasn't told us.

Today the Guardian has looked at the options and just how unfair or untruthful David Cameron is likely to have been with his pledge.

Firstly the most obvious thing is to allow transferable tax allowances between couples. According to treasury figures this would cost a total of £4.9 billion, which in or current climate, especially with the Tories promising to accelerate spending cuts seems a high price to pay. Also such a scheme would only benefit couples where one partner is earning less that £6,435 a year. It really does favour the couples where a wife can stay at home, but does nothing to help two hardworking parents who both work full time to support their family.

However, the Tory think tank the Centre of Social Justice run by former leader Iain Duncan Smith is urging Cameron to only limit such a transferable allowance to couples with children under the age of three. Is is any wonder that Cameron isn't prepared to come clean about his policy? His bribe is to all married couples but his advice is actually to limit it still further to just that three year period.

The CSJ had first proposed the transferable allowance in 2006 but today in their Green Paper on the Family they say:

"In the long term we recommend the implementation of a transferable tax allowance for all married couples, but in the current financial climate we recommend a staggered implementation. We believe that as a priority, a transferable tax allowance should be introduced for married couples with children aged 0-3, the formative years of a child's life."

This will cost £600 million but is nowhere near the promises that Cameron has made in recent weeks. Of course he also had added on civil partnerships to his scheme, even if a same sex couple had children they may be from a pre-existing relationship and not count towards the under three threshold, or be adopted and not give the break for the full or any of the 3 year period. It also means of course that a mother in an abusive relationship with an infant could flee and struggle with the tax hike as not all marriages live up to the Tory idyll.

Yesterday defending his claims that he wasn't guilty of 'social engineering' David Cameron said:

"I will celebrate our commitments. I believe we need to try and build a society that is more about "we" that about "me" where we celebrate togetherness."

Seeing as his tax proposals so far benefit married couples, or with inheritance tax the super-rich 3,000 including George Osborne and David Cameron, doesn't seem to not be much about "we" and somewhat about "me". The Tories are also going to freeze all public sector pay over £18,000, or in other words even if you earn over £8,000 less than the national average, while giving away these tax breaks to others.

David Cameron also said:

"The tax burden for everybody is going to go up unless we get public spending under control. We should be trying to help couples with children."

The Lib Dems have realised that the tax burden is unfair, but rather than focus on couples with children who need help we are focusing on the poorest in our society. Raising the tax allowance to £10,000 will raise 4 million out of income tax altogether, including most of our pensioners. It also means those that have to scrimp at save at the bottom end of the ladder will get help. The Tories are not making promises to the poorest apart from the fact that your tax will go up, but if you're married with kids we'll try and help you out.

UPDATE: I'm quite glad that Cardiff Blogger has also called it a half-baked idea emphasising the element of the CSJ document that seems to suggest the allowance will make people get married quicker.

What is Dave Throwing Out with Baby's Bath Water?

Rachel Sylvester in The Times today draws an interesting analogy out of the child rearing reading material of the political leaders. Considering all three have young families and have said something about families in the last week, there is some logic in her thinking.

But after pointing out that Gordon Brown can't decide which school of thought to follow "tough love" or "tender loving care" it leads to the interesting contrast between the other two main party leaders. Of course we all know what Nick Clegg's view are after the weekend interview in The Sunday Times, indeed all the 'broadsheet' papers have been running with the theme since.

Of course what Nick has objected to is the rigidity of the ideas of Gina Ford's approach. As Rachel Sylvester puts it "the age-old clash between liberalism and conservatism has been reinterpreted for the Mumsnet age". Indeed looking at some of Dave's policies you can see the Gina Ford "Ikea manual" approach.

• You will get married for the sake of the children
• We'll even give you a tax break
• At the age of 65 you will give us £8,000 to insure you get 'free' personal care
• We'll add to word 'Public' into the Department of Health so you remember we care, oh about you (changing the logos and letterheads will cut the deficit)
• At 65 we'll raise the personal allowance for (the 40% wealthiest) pensioners
• When you start saving we'll abolish the basic tax rate on savings, giving up to £5 p.a. who those earning less than £30,000
• When you die we'll help out with your inheritance tax, increasing the threshold to £1m, giving an extra £200,000 to the children of people like George and me.
  

Yeah Dave certainly sets out a lot of milestones to look forward to, if you are wealthy enough to benefit. As for family you'll benefit as long as you are married (he recently added civil partnered) , heaven forbid you get a tax hike upon being widowed, divorced, fleeing a violent husband or wife, of your partner undergoes gender reassignment (forcing a divorce even if you remain together). Of course if your partner is killed in the line of duty fighting our wars, we'll keep you're kids alright, but only they will benefit from no tuition fees.

There are all of these promises of tax breaks, while at the same time David is promising to cut the deficit quicker than anyone else. So what else gives. You may not know, if you are a naughty little person you may be put away on the naughty step (you single parent you), or locked away in the cupboard.

Of course following the regimented top to bottom approach of family, of tax breaks etc means that something other than baby is going to end up being thrown out with the bath water. Surely the Tories cannot keep up all their commitments and race to cut the deficit all at the same time.

Question for Cameron

OK Dave here's the score. As you eventually made up your mind this evening about recognising marriage in the tax code, are you:

a) going to expand the same provision to civil partnerships?

or

b) going to allow same sex marriage?

I suspect the answer to both is likely to be in the negative. Even though Cameron himself has said:

"I stood up… and said that marriage was important, and as far as I was concerned it didn't matter whether it was between a man and a woman, a man and a man or a woman and a woman."

Therefore I suspect that the Conservative party are going to put heterosexual commitment through a marriage act above that of heterosexuals.

Read also: Helen Wilkinson CiF in the Guardian, Mark Valladares on where you rank in the Tory scheme of things, Nick Robinson of the Camervows "I do", "I might", or "I won't tell", or Mr Valladares again on which awfully familiar (or airbrushed) person helped started dismantling the Marriage Couples Allownace in the first place.

Union Backs Lib Dem Tax Policy

The Public and Commercial Services Union has said that to beat the recession the concentrating on tax avoidance, evasion and non-collection instead of making merely "savage" heavy cuts. They reckon that £70 billion was lost through tax evasion and £25 billion through avoidance, while uncollected tax increased by £2.7 billion to £27.7 billion this year.

Now where I have heard that message before?

Alistair Darling?

No.

George Osbourne?

No.

Vince Cable?

Absolutely and not just a random statement but an ongoing statement of intent.

Yes he did mention it in his conference speech in Bournemouth:

"Spending first. If public spending is cut in the usual way – slash and burn – there will be great damage to local and national services. Good will be cut with bad. Front line services will be butchered and lower paid workers will bear the brunt of cuts.....

"The Liberal Democrat approach to tax is also fundamentally different from the Tories. The Tories top priority is to cut taxes on millionaires. Our top priority is fairer taxes for those on lower and middle incomes.....

"So, my priority would be to cut income tax for those on low and middle incomes. Any such tax cut would be paid for by closing tax loopholes and privileges enjoyed by the relatively wealthy: the big differential between top rate income and capital gains tax; the exceptionally generous tax relief on large pension pots; and the blatant abuse of tax haven status including businesses paying stamp duty offshore. A programme due to be screened this evening will expose complicity on a large scale in tax dodging by Lloyds: a bank part owned by the tax payer. This must be stopped, now."

Oh yeah, Vince yet again looks at the big picture and sees a flaw in the perception of the other two parties in what to do. As I said this was far from an isolated statement. In June writing in the Independent he noted:

"The danger of allowing big differentials to arise between taxes on earnings and capital was clearly understood by Nigel Lawson and the last Conservative government, which taxed them at the same rate. This Government's enthusiasm for incentivising entrepreneurs led to a tapered rate, then widely abused and now abolished, leaving a gaping hole in the defences against tax avoidance.

"Another tax boost to bankers' bonuses is continuing higher rate relief on pension contributions. The Government has removed relief for earnings over £150,000 but that still leaves over £100,000 which enjoys the relief.

"And those with entitlement to non-dom status will also have calculated that it is worth paying the Government's poll tax of £30,000 if they can continue to channel income or capital gains offshore, outside UK tax.

"I am not a tax accountant and I am almost certainly underestimating the scale and scope of tax avoidance under the highly abusive, complex, structured arrangements designed by specialists for the banks' clients and staff. The Government has, in recent years, moved towards an Australian-style general anti-avoidance rule in order to help HMRC combat abuses and it is unclear whether these new bonus-related schemes have cleared that hurdle. If they have, someone in HMRC is being taken for a ride"

You see he is a man who has even noticed that current Government policy has made it easier to avoid paying full taxation, for those with the nous and resources to be able to take advantage of the system. Gordon is telling voters not to wreck the recovery but he and Darling have already wrecked the system in ways that has led to the tax gaps mentioned.

Back in February writing in the Guardian he also said:

"The evidence of systematic tax avoidance by rich individuals and UK-based companies strikes a particularly ugly note in these straitened times. There is an all-party consensus that non-domiciles should pay more (though the Conservative-backed government scheme makes no distinction between the super-rich and non-doms of more modest means). My own party wants to tackle more systematically the anomalies that make it possible to avoid paying even the top 40% rate, let alone 45% or more.

"The tax avoidance by corporations is, however, much greater and more difficult to identify. The simple point is that companies should be paying 28% of their UK profits in tax, while the evidence suggests that many high-profile British companies pay much less.

"Companies are, of course, not individuals but legal entities. Any corporate tax is ultimately passed on somewhere else - in reduced dividends or wages or in higher prices. Corporate profits may not be an ideal tax base. But there is surely some basic justice in the proposition that companies should pay the government of their host country for the infrastructure and other tax-financed services they receive: education, health, transport systems, policing"

Here is a man who has been talking about this all through 2009. Sure Darling and Osbourne may well take action based on the Public and Commercial Services Union's New Year Press release. But who do you want leading the economy as we run into the next general elections? The parties taking a knee jerk decision to follow last minute advise from the experts, or the party that has been talking the talk and making the decisions that have pre-empted that call?

The Lib Dems believe in fairness and getting the balance right between spending, tax rises and getting hold of what is rightfully HMRCs but has been overlooked or neglected.

Deeper Cuts of the PBR

I'd thought that local SNP candidate Tam Smith would have learnt his lesson and stopped taking attributed quotes to other SNP spokespeople as his own. Sadly I see I've been proved wrong this time he is Michael Matheson MSP on the health committee.

However, the point that Tam raised about how the National Insurance hike will affect the NHS is valid one. As I blogged during and after last week's pre-budget report the pre-budget was full of regressive rather than progressive tax measures. Both the return of VAT to 17.5% and the increase of National insurance are leading to a high proportion of our poorer people paying a considerable amount in tax.

Obviously the rise in National Insurance will have an impact on all employers as their increase is payments is more than that which comes directly out of the employees pay. Those that are public employees obviously are taxing Peter to pay Paul. The SNP are saying that Darling National Insurance proposals equate to £44m out of the NHS Scotland budget. I'm not going to dispute that. Tam breaks that down to £5.99 million and £2.33 million in NHS Lothian and NHS Forth Valley respectively.

That is a considerable part out of the budget of services that Labour say they will be protecting as front line services in England. But of course in the devolved powers that is budgeting that is done by the devolved powers. There are less other departments from which they can draw on resources, because not all areas have a devolved equivalent.

Darling can put a freeze on the top earners in public services to help with that deficit, but elsewhere a cut in top salaries is the step beyond that. Indeed that is the point that Tavish Scott has been making in order to protect our key front line services.

Labour are clearly not thinking of all the implications of their taxing proposals. They are trying to avoid the headline tax issue of doing something with direct taxation, i.e. Income Tax because they are still trying to win the General Election but not hitting that too hard. But their stealth is starting to hit people hard. 32% of taxable income is now paid in income tax and national insurance by us all. If you were to spend all that you have left on VATable items you would actually pay 42% in tax (and that is only if you do not drive, drink or smoke). Labour are already taxing us heavily and doing it stealthily. As the SNP point out they are also taxing devolved powers in other ways as the sectors that are devolved have a high proportion of wages that have to come out of the budget.

Today is the First Day of the Life of My Club

Today may well be a happy day for me following last night's joyous news of the salvation of Livingston football club. But at the same time my heart is going out to the Hearts fans who find themselves next in the crosshairs of a creditor, in their case the HM Revenue and Customs.

Hearts fans have been concerned during the current financial and banking crisis as their owner Vladimir Romanov's fortune is based primarily on the fortunes of Lithuanian bank Ūkio Bankas. From as long ago as the Iceland banking crisis fans of the Gorgie club have looking anxiously at the credit rating of the bank that is also the clubs main sponsor.

I do hope that Hearts can pull through this, administration is threatened over their unpaid tax bill, but that need not be the end of the world. Thinking how down and out Livingston fans were yesterday Hearts are actually in better position asset-wise to ride out this storm. So even though I know a number of Edinburgh based fans of whatever club were prematurely toasting the death of Livingston FC I'll not be doing the same to any other fan just as I didn't with Gretna last year. Times are tough for all of us and our football clubs as well.

So keep your chin up Hearts fans, if Livi can pull through so can you.

There is Hope For Local LIT

Although the idea of the Scottish Tories was to get an airing for their reformed reformed Poll Council Tax, the vote yesterday in Holyrood for the Abolition of the Council Tax Bill to debate all proposals on the table paves the way for various alternatives to be looked at. It may also be a face saving way for the SNP to not implement a 3p Scottish National Income Tax, which seems to break all sorts of binds to Local Authority accountability, without losing too much face. That is of course if Alex Salmond actually listen to the will of Parliament, which would be a nice change.

Of course there is the Lib Dem proposal for a true Local Income Tax and the Green's proposal of Land Value Tax to be considered in the mix. It may please James @ The Two Doctors to know that over the years at various party conferences I have been at fringe events looking at LVT as well as LIT so I know there are benefits to each, just as everyone will also be pointing out there are disadvantages in both (or for that matter any tax system). However, looking at what is on offer in the essence of fairness the ability to pay has to be paramount LVT is still linked somewhat to the property you live in, irrelevant of when you purchased that, while closing up a few loopholes for acquisition of land and leaving it empty and unused.

One thing that recent Labour shenanigans at Westminster over taxes is clear though is that reform is needed. For years now under Labour and the Conservatives our tax burden has been increasingly borne by those less able to pay it while those most able have been getting greater and greater tax breaks. A friend of my said yesterday that they had overheard an elderly couple out food shopping and putting something back because the price was a mere ten pence higher than previously and outwith their budget.

It's not just the credit crunch that is affecting the worse off though it has been the tax squeeze from Labour stealth taxes and high earner breaks, which they picked up and ran with from the Tories that has been endemic in the system for long enough. We need to sort out the tax and benefit system, make it comprehensible, fair and based on ability to pay and true need.

Sorry Darling I Haven't Got Time

Alistair Darling has rather inconveniently made his pre-budget report not just at the start of the week (my busiest period at work) but also at the start of a week when something new is also getting rolled out. Therefore at present I'm unable to give the details of yesterday's offering my full attention, at least for now.

I would recommend my readers to take a trip to Lib Dem Voice, James at the Two Doctors, Malc in the Burgh or Jonathan Calder for some diverse critiques of the PBR.

Lib Dems Offer a Sustainable Fiscal Stimulus

Yesterday Yousuf criticised the Lib Dems based on how things have gone before. The fact is we all overstretched and overreached globally. Brown is determined to spend, spend, spend his way out of this without learning the lessons that brought us here in the first place.

Yesterday Nick Clegg outlined the details of a new way to provide fiscal stimulus when he addressed the Commonwealth Society. Calling for a multi-lateral global response to the current crisis he said:

"We need a cultural change. But I believe that change can be driven to a large extent by institutional and regulatory reform. Changes to the International Monetary Fund, the World Bank, and the World Trade Organisation could make an enormous difference…

"Enabling us to create a fairer, more sustainable economic model."

He critiqued both the Labour and conservative Tax proposals:

"We hear talk of tax cuts emerging from Downing Street, but they are likely to be small, and short term. Funded through borrowing, the money will have to be paid back later…

"So it’s meagre tax cuts today, giant tax rises tomorrow from Brown.

"Meanwhile the Conservatives want a piffling incentive for businesses to take on new workers that won’t put a penny in the pocket of a single family in Britain.

"Neither package comes close to what’s needed."

Before outlying the real alternative.

"Real tax cuts - big, permanent and fair - for the people who need them. Funded by making the wealthy pay their fair share, ending the special exemptions and loopholes they’ve profited from for so long."

Yousuf also said that the Lib Dems had no spending in their plan. Not so we're merely spending where it will boost the economy not on ego enhancing frivolities.

"We are identifying £20bn of government spending that can be redirected to our priorities.

"We need to redirect spending to the things that people really need in a recession: homes for hard-pressed families; good child care, so that people can go out to work; and training for people who have lost their jobs."

Has Tavish Got the Nats Rattled?

Looking around the blogosphere Tavish's call for tax cut such has really got their hackles up. Whether it's calling him a Tumshy and an eejit, asking him to stop havering or just to urge care.

Even Alex Neil seems unwilling to admit that the government as like the people should find ways to tighten their belt in difficult financial times. While their Westminster business and energy spokesman Mike Wier thinks it's irresponsible and and stupid. So the Nats who attacked Brown and Darling over the removal of the 10p tax rate are not even prepared to look at relieving the burden on Scotland's tax payers even though they have the power to do so.

The Nats are havering on about where the money will come from to pay for this, ignoring the fact that they have been irresponsibly and stupidly adding to the number of quangos in Scotland over the last year, as well as extra allocation coming Scotland's way under the Barnett formula. But they probably have plans for that money which more than likely means setting up needless mirror functions to Westminster in their bid for independence or increased centralisation and duplicity of powers at Holyrood away from local authorities.

The Nats have always accused other parties of failing to have an alternative. I think this challenge has really got them reeling as they can't think of an alternative themselves, nor a reason not to look into it.

Well the Vote is to Make it Happen

The big debate for the vision and direction of the party has just been passed, unamended down in Bournemouth, there was excellent coverage of the debate for and against (if slightly biased IMHO) by Stephen Tall over here at Lib Dem Voice.

While as Brian Taylor said there was a rather mixed response from the floor at conference the fact the tax cuts have been passed at conference means that the party will now be promising a radical agenda for social justice whenever the General Election comes along. We're trusting the people to do what is right with more of their money, you can't be more liberal than that. I know that the party will still ensure there is sufficient provision for those unable to earn an income for whatever reason. Those supporting the cuts (many of them big hitters in the cabinet) have said that this is only part of our social justice agenda going forward.

So the Lib Dems look set to deliver a fairer tax system, lifting more people out of poverty than Gordon Brown knows about (at least the ones he keeps claiming to be helping). If we can deliver this plus social justice we really will have the radical edge in UK politics.