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The Liberal Democrat conference today is enlivened by a speech by the one member of the party's front bench who registers on ordinary voters' radar: Vince Cable, the party's shadow chancellor.
Mr Cable, who writes on this page today, has been a voice of reason on bank reform. Today he proposes a more controversial measure: a tax of a halfpenny in the pound on houses worth more than £1 million. That, taken together with the party leader Nick Clegg's focus on “savage” spending cuts, illustrates some of the difficulties the party faces. However moribund the Government, the Lib-Dems still need to win over Labour voters at the next election — yet they also need to outflank the Tories.
Mr Cable's property tax may be a concession to the party's left but it deserves scrutiny. The money raised would go to a worthwhile cause: lifting those paid less than £10,000 out of the tax system. Yet it remains unclear how the new tax would be calculated or levied: people of relatively modest means who bought their houses a few years ago could find themselves targeted by a measure designed to catch the wealthy. More significantly, such a tax risks taking the Lib-Dems back to the position they were in under Charles Kennedy's leadership, where they seemed in favour of taxing wealth on principle, with their commitment to a higher top rate of income tax.
Electorally, the new property tax might attract voters in Labour seats where it is a straight contest between the Government and the Lib-Dems. But in much of London and the South-East, where the new tax would fall hardest, the Tories are the Lib-Dems' main opponents — and the Conservatives are challenging them hard, a situation underlined by the Lib-Dems' poor showing in June's European elections. Do the Lib-Dems really want to send a message to the professional classes in marginal constituencies such as Richmond Park?
The Lib-Dems have moved back towards the centre under Nick Clegg's leadership — witness Mr Cable's insistence on tackling excessive public-sector pay and pensions. The new tax proposal risks reversing that shift. The next general election will be crucial for them: they are still stronger at Westminster than for years, and a formidable force in local government. However unlikely a coalition with the Tories in the event of a hung parliament, the party has everything to play for. It is unlikely to be helped by Mr Cable's new tax.
Students squeezed
It was probably inevitable that the National Union of Students should reject out of hand the CBI proposals for increasing tuition fees as “gross hypocrisy” from the “CBI fat cats”. But the students have a point. They already face formidable burdens of debt with fees of £3,225 a year (nil in Scotland); the CBI proposal that they should, for good measure, pay more for their student loans could well deter young people who should be applying for university from doing so; those from poorer backgrounds are wary of incurring long-term debt. Even the Lib-Dems have backpedalled on lifting tuition fees, at least for now.
The CBI is proposing a trade-off, between higher charges and maintaining or increasing student numbers. But there is a good case for reducing the target for young people in higher education and treating those remaining better. There is a high dropout rate for the new universities, whose numbers were boosted by the Government's target of getting half of school leavers into higher education. Fewer but properly funded places would make more sense.
Capital of fashion
London Fashion Week shows yet again that our city is a world leader in fashion. The world's great designers are back here in force — recognition of London's enduring reputation at fashion's cutting edge. But we should not forget the huge economic contribution the industry makes: Philip Green says that fashion is now the second biggest employer in the country.
Fashion may appear frivolous but it is a serious business — and one at which this international city excels.
Reader views (2)
Its only taxed on the value in excess of £1m, i.e. if a house is £1.5m then its 0.5% of £500k so £2.5k a year. This is barely more than the council tax they pay. Is it so much to ask? Lowering tax for people who struggle to get by on a low paying job is far fairer and incentivises and encourages ambition. The lib dems are absolutely right with this proposal.
- Luke, London
If we imprisoned those rich people who not only evade tax but also bankroll the Tory Party we might discourage others from taking a chance in defrauding the taxpayer. When very rich people evade Tax it is the poor majority who have to pay for the perks of the rich.
- S Jones, Kennington England
