The Liberal Democrats And The Scottish Parliament

[Allan Heron]

Vince cable a Barracks boy? Christ, something I didn't know.

 

Councillor for said ward in the 1970's. Was Labour candidate in Glasgow Hillhead in 1970.

[Woodstock Jag]

Realpolitik would suggest putting the brake on the cuts and dealing with the deficit more slowly. All of the projections suggest that's going to allow greater levels of growth. Why continue to cut speedily and deeply whilst the resulting growth will be less than the alternative. Hard to believe that's because it's anything other than ideological - and supported equally by the Tories and the Orange Bookers (although the former description covers them admirably)

 

The point is increased public spending to stimulate growth is just deferred inflation. With inflation over 4% already it's not the answer. The reality is that the cuts being made this year are within £2 billion of those planned by Labour and it's relative tinkering. There haven't even been any notable central government cuts yet, so it's a total fallacy to attribute low consumer confidence on cuts. It's a brave decision to take the hit now and accept that the proper rebalancing between investment and debt is necessary. The cuts aren't remotely ideological.

 

You've also mentioned previously about the impact on our credit rating - that seems to be coming under question again on the basis of the recent cutback in growth projections.

 

One credit agency said that the AAA rating *may* be reviewed if growth is not sustained at revised levels over the next 2 years. Compare and contrast with several credit agencies actually downgrading their medium-term prospect for the AAA rating from good to poor under Alastair Darling's plan.

 

It's still got to get worse as it will only be with the coming of the new fiscal year that the real impact of the cuts will start to take effect.

 

The coalition have lost the battle on their approach being seen as fair given the timid nature of Osbourne's approach to tax avoidance. But can you expect anything more from a Conservative chancellor? If they had been able to convince the public that the approach was fair they would have a good chance of bringing people with them.

 

There's nothing wrong with tax avoidance though! Also the people who avoid tax will always find ways of avoiding tax. The current laws are a total mess. 7 tax volumes taking up a whole bookshelf as it is. Meanwhile they've reduced the incentive to channel profits into capital gains by upping that rate (a Lib Dem achievement) and increased the threshold at which people start paying income tax (another Lib Dem achievement).

 

When you realise that actually NI is just a sham and another income tax, the base rate in this country is 43.8% (because employers' NIC is just a levy on employment thus attributable to a wage someone would otherwise get). That's just appalling. If you look at the upper and marginal rates of income tax and the supplementary levy on upper rates of NI, that means well over 50% of some people's income is being taken by the state in direct taxes. If that's "fairness" then I'm Bob Crow.

 

Clegg's in deep shit with his party - the anti-coalition motions at Sheffield were passed almost unanimously. His speech missed the feelings of the assembled members by a country mile. It is positive that amendments to bills will be put forward on the floor of the house but it will be intriguing to see the reaction of the Tories.

 

This is Clegg's real issue. The Lib Dem grass roots are burying their collective head in the sand. Government's tough, especially when there's no money left. With HSBC already having surreptitiously leaked the potential of leaving London, the reality is clear: the growth generators will leave unless taxes are cut.

 

Until Labour can produce a credible alternative by spelling it out penny by penny what they would be cutting, the only credible spending plan is that of the Coalition. It might be tough and those who rely on state support the most by definition may be the ones that suffer most directly, but that's a consequence of a 6 year structural budget deficit *before* the banking crisis for you. A binge requires a cold turkey remedy.

[Blackpool Jags]

The point is increased public spending to stimulate growth is just deferred inflation. With inflation over 4% already it's not the answer. The reality is that the cuts being made this year are within £2 billion of those planned by Labour and it's relative tinkering. There haven't even been any notable central government cuts yet, so it's a total fallacy to attribute low consumer confidence on cuts. It's a brave decision to take the hit now and accept that the proper rebalancing between investment and debt is necessary. The cuts aren't remotely ideological.

 

 

 

 

 

One credit agency said that the AAA rating *may* be reviewed if growth is not sustained at revised levels over the next 2 years. Compare and contrast with several credit agencies actually downgrading their medium-term prospect for the AAA rating from good to poor under Alastair Darling's plan.

 

Em, who elects these Credit Agencies to whom our fortune seems to be linked? Answering my own question, I suppose, but it wouldn't matter to those for whom the concept of democracy is irrelevant.

 

There's nothing wrong with tax avoidance though! Also the people who avoid tax will always find ways of avoiding tax. The current laws are a total mess. 7 tax volumes taking up a whole bookshelf as it is. Meanwhile they've reduced the incentive to channel profits into capital gains by upping that rate (a Lib Dem achievement) and increased the threshold at which people start paying income tax (another Lib Dem achievement).

 

 

 

 

This is Clegg's real issue. The Lib Dem grass roots are burying their collective head in the sand. Government's tough, especially when there's no money left. With HSBC already having surreptitiously leaked the potential of leaving London, the reality is clear: the growth generators will leave unless taxes are cut.Until Labour can produce a credible alternative by spelling it out penny by penny what they would be cutting, the only credible spending plan is that of the Coalition. It might be tough and those who rely on state support the most by definition may be the ones that suffer most directly, but that's a consequence of a 6 year structural budget deficit *before* the banking crisis for you. A binge requires a cold turkey remedy.

 

The alleged growth generators are parasitic leeches which a civilised society needs like a terminal disease.

[Woodstock Jag]

The alleged growth generators are parasitic leeches which a civilised society needs like a terminal disease.

 

Okay then, let's tell HSBC et al leave. I'm sure job creation would really benefit from that happening.

[alx]

Leaving aside the party politics... I would like to chip in with a positive well done to the Scottish Parliament. I'm really pleased with PR and minority government. It's very refreshing and sporting to see our government actually doing what the people want for a change.

[twinny]

WJ, would you really expect Labour to come out and give an outline on what they would do penny by penny to combat the current climate? If they came out with good ideas they'd be mildly altered and nicked by the tories who would get the credit or if they're poor they'd be kicked to touch as soon as. I seem to remember Cameron having nothing to say regarding policy for years after becoming leader.

 

The cuts are ideological. Without the depth of cuts we would not have seen the unemployment figures rise as much as they have, and when people are in jobs they have money to spend, which is the main issue, nobody has any money to spend.

 

You're right, there is nothing illegal about tax avoidance, however that doesn't mean there isn't anything wrong with it. Those who are in power should be seeking to close those loopholes rather than exploit them. I know that plenty of people will come back and say Labour could have closed those loopholes, but that's just avoiding the issue.

[Allan Heron]

WJ

 

Was going to selectively quote from your post but it's too much bother so here goes:-

 

• No one's talking about increasing public spending - just that the rate of reductions is too fast.
  
• The changes proposed for the NHS down south are ideological. Neither are any mention of such changes mentioned in either party's manifesto. No one voted for it. Indeed, both manifestoes implied protecting what was there within the need for cuts.
  
• The whole approach to benefit cuts playing on all the usual right wing prejudices of scroungers and the like is ideological.
  
• You are defining fairness in relation to the level of taxation. Whist you are correct about the complexity of the tax system this has arisen partly because tax is now seen as a punishment to be borne rather than as a means of providing services to the public. This has resulted in governments of all stripes raising revenues by means other than simply adjusting the basic rate of tax. Thatcher and Blair have between them resulted in a culture that wants more and at the same time not to have to pay for it.
  
• The amendments passed at the Liberal Democrats conference are looking to reform the NHS to push the balance more in favour of primary care but without opening up the service to private companies. Also to ensure that disability benefits are maintained. If that's head in the sand, then I'm happy to have mine firmly entrenched.
   
  

Edited March 28, 2011 by Allan Heron

[Woodstock Jag]

WJ, would you really expect Labour to come out and give an outline on what they would do penny by penny to combat the current climate? If they came out with good ideas they'd be mildly altered and nicked by the Tories who would get the credit or if they're poor they'd be kicked to touch as soon as. I seem to remember Cameron having nothing to say regarding policy for years after becoming leader.

 

The difference being that the opposition don't NEED ideas when things are going well. If you're going to criticise the status quo you absolutely have to offer concrete alternatives. Cameron actually did relatively little to criticise the status quo in opposition. His criticisms were as much of competence as they were of ideas.

 

The cuts are ideological. Without the depth of cuts we would not have seen the unemployment figures rise as much as they have, and when people are in jobs they have money to spend, which is the main issue, nobody has any money to spend.

 

No they're not. There have been hardly any cuts yet. Most job cuts have come from the private sector. That's because the economy is simply in the shit. Bad investments and high levels of personal debt (as predicted and drawn attention to by Vince Cable a good 3 or 4 years before the crash happened) have caused consumer demand to plummet. It was artificially high based on cheap credit caused by fractional reserve banking.

 

The whole "no one has any money to spend" because there's no jobs is also a Keynesian fallacy. People have no money to spend because the money was wasted on a debt-fuelled binge from about 2000 to 2008. Government creating jobs by spending more money doesn't actually cause the economy to improve at all. All it does is create artificially cheap credit which is confused for real funds. That means that "stimulus" spending is just deferred inflation. This is akin to saying that smashing lots of windows in Whitehall is good for the economy because it boosts GDP when the handymen come in to fix them. It's not. It's just a waste of glass.

 

For growth you need to accept high levels of unemployment and a lower standard of living for at least 5-10 years. Harsh but true. The recovery is not to be driven by employment, but by innovation and foreign investment. Growth built on debt is not growth. Growth built on investment of prior savings IS growth.

 

You're right, there is nothing illegal about tax avoidance, however that doesn't mean there isn't anything wrong with it. Those who are in power should be seeking to close those loopholes rather than exploit them. I know that plenty of people will come back and say Labour could have closed those loopholes, but that's just avoiding the issue.

 

There is nothing wrong with tax avoidance. Indeed sometimes it is actively encouraged by government to influence the behaviour of individuals and corporate entities. Tax avoidance does not necessarily infer a loophole, and often includes deliberate methods of relief. Even then, the loopholes are notoriously difficult to close. We have the single most complicated tax system in the world and that's not changing any time soon.

 

The richest are those with the best accountants. The best accountants will always find loopholes. Loopholes by definition are the product of mistakes in the drafting of tax legislation. That's just life. The more you try to close the loopholes, the more loopholes you create. If you then try to use the nuclear bomb to crack the nut, countries and individuals will just up-sticks, because they can.

 

Clamping down on tax avoidance is one of the most futile things a government could ever try to do. It's time they were just honest about it, simplified the tax system and stopped taking such exorbitant amounts from people's paypackets.

[Woodstock Jag]

WJ

 

Was going to selectively quote from your post but it's too much bother so here goes:-

 

• No one's talking about increasing public spending - just that the rate of reductions is too fast.
  
• The changes proposed for the NHS down south are ideological. Neither are any mention of such changes mentioned in either party's manifesto. No one voted for it. Indeed, both manifestoes implied protecting what was there within the need for cuts.
  
• The whole approach to benefit cuts playing on all the usual right wing prejudices of scroungers and the like is ideological.
  
• You are defining fairness in relation to the level of taxation. Whist you are correct about the complexity of the tax system this has arisen partly because tax is now seen as a punishment to be borne rather than as a means of providing services to the public. This has resulted in governments of all stripes raising revenues by means other than simply adjusting the basic rate of tax. Thatcher and Blair have between them resulted in a culture that wants more and at the same time not to have to pay for it.
  
• The amendments passed at the Liberal Democrats conference are looking to reform the NHS to push the balance more in favour of primary care but without opening up the service to private companies. Also to ensure that disability benefits are maintained. If that's head in the sand, then I'm happy to have mine firmly entrenched.
   
  

 

1. Public spending is still going up! All the Coalition are doing at the moment is reducing the rate at which it rises! I only wish the actual public spending figures were being cut!

 

2. The NHS changes are being completely overblown. All that's happening is PCTs' responsibilities are being transferred to GP consortia. It's not privatisation beyond the independent involvement that already exists and spending on the NHS is being protected. Massive ideology, huh?

 

3. That's not what the benefits changes are doing at all! Removal of child benefit from higher rate taxpayers: very "right wing" ; introduction of a Universal Credit that means you keep getting to keep more of your money the more you earn... very "right wing" ; increase in the DWP budget in the medium term... very "right wing"

 

4. Tax is a punishment. It is not voluntary or linked to the right to the service like any other form of (e.g.) insurance or service consideration. The tax system is profoundly unfair and became even more so under Labour, with stealth rises in the taxes of those earning a modest income. To fail to recognise the improvements in the tax system under the Coalition (influenced hugely by the Lib Dems) by bringing people completely out of income tax and closing the CGT loophole, not to mention preventing changes to inheritance tax is very unfair.

 

Coalition tax changes are not only expedient, but they're also very fair and a huge improvement. Next up we can hope that the 50p rate finally gets scrapped, because it's costing the treasury money (it increases the profit margins for tax avoidance) and we'll have a system as we so often see, where lower marginal rates of tax actually shift more of the burden onto the broadest shoulders.

 

5. There's nothing wrong with private sector involvement in the NHS. Indeed you see intensive private sector involvement in some very good health services in the world, Germany being one such example. The disability benefits one is a legitimate point, and I do think it needs worked on, but when taken in the round, the Coalition have made a pretty good stab at dealing with a horrific balance sheet.

[twinny]

 

There is nothing wrong with tax avoidance. Indeed sometimes it is actively encouraged by government to influence the behaviour of individuals and corporate entities. Tax avoidance does not necessarily infer a loophole, and often includes deliberate methods of relief. Even then, the loopholes are notoriously difficult to close. We have the single most complicated tax system in the world and that's not changing any time soon.

 

 

I'm selectively quoting here, but I really should be doing some work so want to be brief. It is your opinion that there is nothing wrong with tax avoidance, just as it is the opinion of both me and BJ that there is. If we're all in it together then shouldn't we all be paying our share? Tax avoidance shouldn't be possible, and just because it is difficult to close these loopholes does not mean it shouldn't be done. The coalition is going to be looking at simplifying the tax system, which is very welcome, however the people at the top of the heap need to pay their share and not be given a way out.

 

Anyway, this thread is about the Lib Dems, who initially did appear to have a leash on the Conservatives, however looking at the budget they're not doing that job very well at the moment. I see them maintaining their share of the vote at the coming election, though I am pretty out of touch with Scottish politics so probably can't comment any further.

[The Devil's Point]

3. That's not what the benefits changes are doing at all! Removal of child benefit from higher rate taxpayers: very "right wing" ; introduction of a Universal Credit that means you keep getting to keep more of your money the more you earn... very "right wing" ; increase in the DWP budget in the medium term... very "right wing"

 

Was about to make exactly the same point on Child Benefit. Introducing means testing to this would probably have been too left wing for most Labour voters!.

 

The attacks on "benefit scroungers" started way before the Coalition took over, and were addressed by Labour by way of the introduction of Employment and Support Allowance (coupled with a brutal medical assessment regime - ask practically anyone who has attended at Cadogan Street recently) to replace Incapacity Benefit.

 

As things stand, the benefit system has not yet been drastically cut (the worst proposal, which would have reduced Housing Benefit for the long term unemployed, has been backed down on).

 

Its probably obvious that this is a particular area of interest for me, although I'd defy anyone to defend the system as it stands and deny the need for reform. Not sure there are easy answers, but its maybe better to try something different.

 

[Woodstock Jag]

I'm selectively quoting here, but I really should be doing some work so want to be brief. It is your opinion that there is nothing wrong with tax avoidance, just as it is the opinion of both me and BJ that there is. If we're all in it together then shouldn't we all be paying our share? Tax avoidance shouldn't be possible, and just because it is difficult to close these loopholes does not mean it shouldn't be done. The coalition is going to be looking at simplifying the tax system, which is very welcome, however the people at the top of the heap need to pay their share and not be given a way out.

 

If there was something wrong with tax avoidance it shouldn't be tax avoidance, but tax evasion. Tax is the specific authority of the government to appropriate funds from those under its jurisdiction. It is factually not immoral not to pay tax by not coming under that jurisdiction. The authority for tax is construed (and always has been) contra proferentem: if there is no explicit authority, it shouldn't happen.

 

By engaging in tax avoidance it isn't that you're "not paying your fair share" but that you are not paying tax on something which the government erm... didn't intend you to pay tax on. The "people at the top" already pay more in actual amount of tax: their companies pay corporation tax and employers' NICs; they personally pay UK income tax where they earn money in the UK (at higher rates). They pay more VAT by buying more non-exempt stuff. They pay more fuel duty for their bigger cars. They pay more alcohol duty for their bottles of Glenmorangie. Tax avoidance doesn't "give them a way out". It is simply a case of them not being kettled into a harsher box in the first place.

 

Anyway, this thread is about the Lib Dems, who initially did appear to have a leash on the Conservatives, however looking at the budget they're not doing that job very well at the moment. I see them maintaining their share of the vote at the coming election, though I am pretty out of touch with Scottish politics so probably can't comment any further.

 

Not doing a good job? Increased personal allowance, abandonment of IHT threshold increase, increase in CGT... what more do you want, exactly?

 

They'll lose votes, but they might not lose that many seats because of the system. Let's wait and see.

[The Devil's Point]

 

I do, however, hope that Glasgow becomes a Lib Dem free area. I wouldn't wish that on my worst enemy!!

 

 

According to the poll just reported on the STV news (didn't catch which polster it was) you shall have your wish. Put the LD's at 8% for the regional list vote.

 

[The Devil's Point]

Vince cable a Barracks boy? Christ, something I didn't know.

 

He wasn't born in Glasgow though. From the North of England I think.

 

Another fascinating fact for today is that Vince was one of the founders of the Maryhill Citizens Advice Bureau.

[B.C.G. JAG]

RE The Health Service - how many GP's want this responsibility on top of their current workload? How many are actually capable of strategic planning of resources on a grand scale? My local surgery can't organise a coherent appointment schedule - how are those GPs going to cope with the arrangements for cancer treatments vs hip operations vs mental health counselling as well as having time to see patients? How are they going to organise themselves? Who will organise minority acute services? I suspect we'll see much of the current tier of PCT managers retaining their jobs, and I wouldn't be too surprised to see them getting a pay rise for their expertise...

Of course, it also gives an incentive to GPs to get people with long term illnesses or disabilities off their books as they're a drain on their resources. How long before we start seeing GPs issuing contracts to their patients? Insurance companies will be rubbing their hands...

Then there is the problem of what happens when private companies bid for the 'easy' bits of the NHS's remit. What might well happen here is that hospitals as we know them just become unviable as they are left with only the uncommercial jobs. We'll see hospitals closing because they can no longer attract enough funding. Expect to travel further for different services, and don't expect there to be any co-ordinated thinking between the different companies providing you with your health services.

Then, as some are suggesting, it will be lawyers who will bring the health service to it's knees as they take legal action against GPs who do not commission services from their clients.

All at a time when there is record satisfaction with the NHS, even amongst Tory voters. These proposals are completely untested and the risks are enormous. It was not included in the Tory manifesto because as they admit, no-one would have voted for them if they had included it.

No-one voted for this, but they're doing it anyway. It's pure Tory ideaology and the Lib Dems will not be forgiven for their complicity in this.

Edited March 28, 2011 by B.C.G. JAG

[Allan Heron]

 

According to the poll just reported on the STV news (didn't catch which polster it was) you shall have your wish. Put the LD's at 8% for the regional list vote.

 

 

That may well be enough to give the Lib Dems one of the list seats.

[The Devil's Point]

That may well be enough to give the Lib Dems one of the list seats.

 

Not sure how this poll works, but I'd imagine thats 8% across Scotland. Orkney and Shetland may be keeping the average up

[Allan Heron]

If there was something wrong with tax avoidance it shouldn't be tax avoidance, but tax evasion. Tax is the specific authority of the government to appropriate funds from those under its jurisdiction. It is factually not immoral not to pay tax by not coming under that jurisdiction. The authority for tax is construed (and always has been) contra proferentem: if there is no explicit authority, it shouldn't happen.

 

At the risk of being seen to publicly agree with WJ, I have to agree with him on this point.

 

Coincidentally, I had a similar discussion with a colleague earlier on today and he was making the same point about it being immoral that individuals could avoid tax, and that they should be paying their fair share.

 

Well, it may be immoral that we have a system riddled with complexity but I can't see that it's immoral that people make their arrangements within that system. Step outside of that, and you're in trouble but in most of the cases that are quoted it's the system that's at fault (and which should be rectified by the politicians) rather than the individuals.

[Woodstock Jag]

At the risk of being seen to publicly agree with WJ

 

Hey you had to be right on something eventually

[Allan Heron]

Hey you had to be right on something eventually

 

This is the dilemma - I don't want to be right.........

[honved]

RE The Health Service - how many GP's want this responsibility on top of their current workload? How many are actually capable of strategic planning of resources on a grand scale? My local surgery can't organise a coherent appointment schedule - how are those GPs going to cope with the arrangements for cancer treatments vs hip operations vs mental health counselling as well as having time to see patients? How are they going to organise themselves? Who will organise minority acute services? I suspect we'll see much of the current tier of PCT managers retaining their jobs, and I wouldn't be too surprised to see them getting a pay rise for their expertise...

Of course, it also gives an incentive to GPs to get people with long term illnesses or disabilities off their books as they're a drain on their resources. How long before we start seeing GPs issuing contracts to their patients? Insurance companies will be rubbing their hands...

Then there is the problem of what happens when private companies bid for the 'easy' bits of the NHS's remit. What might well happen here is that hospitals as we know them just become unviable as they are left with only the uncommercial jobs. We'll see hospitals closing because they can no longer attract enough funding. Expect to travel further for different services, and don't expect there to be any co-ordinated thinking between the different companies providing you with your health services.

Then, as some are suggesting, it will be lawyers who will bring the health service to it's knees as they take legal action against GPs who do not commission services from their clients.

All at a time when there is record satisfaction with the NHS, even amongst Tory voters. These proposals are completely untested and the risks are enormous. It was not included in the Tory manifesto because as they admit, no-one would have voted for them if they had included it.

No-one voted for this, but they're doing it anyway. It's pure Tory ideaology and the Lib Dems will not be forgiven for their complicity in this.

 

But it's OK. These PCT reforms are in England and Scotland is safe meantime, safest of all if you don't vote for a unionist party in May.

[Fellow Traveller]

the Lib Dems will not be forgiven for their complicity in this.

 

I'd have thought you'd have more sympathy for anyone going into coalition to soften the devastating impact of an out of touch and unpopular administration.

[Blackpool Jags]

 

 

There have been hardly any cuts yet.

 

Total and utter pish. You know nothing.

[Allan Heron]

Total and utter pish. You know nothing.

 

There have been cuts so far but the majority of these were put in place by the Labour administration, plus the extra amount from last year's emergency budget.

 

The cuts that follow on Osbourne's first budget mostly kick in with the start of the new fiscal year.

[Blackpool Jags]

There have been cuts so far but the majority of these were put in place by the Labour administration, plus the extra amount from last year's emergency budget.

 

The cuts that follow on Osbourne's first budget mostly kick in with the start of the new fiscal year.

 

Fair comment, Allan. My point was in response to our resident anarcho-free marketeer who, by his own analysis, is slumberingly unaware of the devastation caused, hitherto, in Local Govt., Education, Social Services and the NHS where we are experiencing the impact of the first and second waves of £20billion worth of cuts.