Monday, 24 September 2012

The Libdems Are About To Join Forces With The Scottish Tories

Nick Clegg has signed the death warrant of the Liberal Democrats.

'Riches are evil' stated the Deputy Leader of the Westminster Government at his party's conference this weekend.  He may not have used these exact words, but his latest proposals include taxing those who earn over £50,000 even more.

What is the definition of financially 'rich'?  I know several people who earn over £50,000 and I don't regard them as rich. Most work in the south east of England; not because they want to - but because that's where the businesses which require their skills are based.  Their homes aren't large, although they were expensive compared with similar sized homes here and - with the exception of one - they are one car families. Only one comes from what would be classed as a privileged background and all have worked hard to get where they are today.

In Britain these days it doesn't pay to try to improve your lot and I sympathise with the 40-somethings who continue trying - only to find themselves in the middle-income group which Libdem politicians seem hell bent on bleeding dry.

Nick Clegg also proposed a 'pension for property' scheme. Silly idea. He should be insisting banks lend to young people.

The Libdems think the most significant levy on wealth is inheritance tax and wants the current policy changed because too many avoid paying tax by using trusts, gifts or various other reliefs.  Their latest policy suggests an 'accessions tax', where liability would fall on the person receiving the legacy rather than the estate of the deceased.  This would make the tax impossible to avoid.

I find this proposal distasteful and perhaps unworkable.

What Mr Clegg's latest plans will do is drive more of our skilled professionals out of the UK and into countries such as Canada and Australia. Rather than proposing more taxation why doesn't he suggest cutting spending?  Tax increases do not create jobs.

Nick Clegg sounds desperate in his attempts to keep his position as leader of his party and I refuse to believe many senior Libdems support his proposals.  They may think by keeping silent they have allowed him enough rope to hang himself, but in doing so will, very possibly, also bring about the demise of their party.  The Libems could be languishing in the long grass for many years.  They won't find themselves alone though - the Scottish Tories have been there for years and are no nearer to finding a road out than they were 20 years ago.


Edward Spalton said...

I don't think that any government should be in a position to "insist" that banks lend to any particular class of people. It was legislation of that sort in America which led to the property bubble there, which Gordon Brown and others blamed for triggering the financial crisis.

There was a recent American report that, as a community activist, Barack Obama had brought a class action against Citibank on behalf of (from memory) 185 people who had been refused mortgages. He was successful and they got their mortgages. The reporter followed up the subsequent history of these people and found that the overwhelming majority had failed to keep up payments - only 18 had an unblemished payment record.

The one thing which the government, and only the government, can control is the supply of money. At present they have outsourced this to the banks who create it out of this air by simply typing figures into computers and calling it "loans".

The "pension for property" idea is a wheeze of a sort which has been tried many times before on much larger scale. "The "assignats", currency issued by the French revolutionary government against national real estate, were a similar idea. That led to massive inflation because the government, like our own quantitative easing institution, just could not stop printing the things.
The "Rentenmark" which was used to bring an end to the German hyper-inflation of the Twenties was a similar idea (there was no gold backing available) but run by sober-sided bankers of the sort which still inhabit the Bundesbank - now almost disempowered by the ECB.

RMcGeddon said...

Someone should tell them that 'tax avoidance' isn't illegal. The extra 100 staff being recruited to investigate 'tax avoidance' won't get very far unless the laws are changed to make 'tax avoidance' illegal.
I see the lib dems are now 4th behind UKIP in the latest poll.

Woodsy42 said...

I rather object to inheritance tax on principle. But actually taxing the recipient on their gain seems to me much fairer than taxing the dead. It would also mean that a large inheritance spread many ways lost less in tax compared to one handed down to a single recipient, thus encouraging a spread of that wealth.

JRB said...

SR - Kudos to you for taking the time to keep up with the LibDem conference.

If ever there was an exercise in futility it must surely be a LibDem conference, has anything positive ever come from any one of them?
- Tuition Fees – abandoned when power called – now totally dead in the water
- AV – fell at the very first parliamentary hurdle - now totally dead in the water
- Lords Reform – failed to gain any support - now totally dead in the water
- Leaders Apology – ridiculed mercilessly - now totally dead in the water.

There is a common them beginning to appear – everything that LibDems touch ends up – ‘totally dead in the water’.

Come the next election the LibDems as a parliamentary party will equally be - totally dead in the water.

Apogee said...

Hi JRB. Would you agree that after the next election the UK Conservative Party could be - totally dead in the water, due to Lib-Dem contaminating
and frustrating every thing the conservatives have tried to do.
The result has been the Tories looking weak and useless and saddling us with policies the country did not want, anything to avoid another election.What a shower,anything for power.
As for inheritance tax, this tax only hurts the poorer people who cannot afford fancy lawyers to get round it, doesn't matter how its done, ways ways will be found round it, the rich people will eventually realize that the simplest thing is to get a government elected which will do as they want. The really smart ones will buy their way into a country where the lifestyle is better and cheaper than here and the laws are more honest.

Joe Public said...

Typical politics of Envy; and a smattering of mutual exclusiveness:-

".....his latest proposals include taxing those who earn over £50,000 even more."

"Nick Clegg also proposed a 'pension for property' scheme."

He proposes to tax Productive workers so heavily, they'll struggle to have a large-enough pension pot.

Then, the retirees, instead of being able to finance their own care needs in old-age, will need to depend upon Social Services. So, taxes of the younger-generation will need to increase.

A viscous (yes that's the correct word) circle, the only benefit of which is a vast increase of civil servants administering the scheme.


cynicalHighlander said...

So we have the red Tories blue Tories and the inept Tories gawd help the rest of the UK after 2014.

cynicalHighlander said...

Light entertainment.

subrosa said...

Whilst mainly I agree with your first paragraph, I do feel that the banks which have a majority investment of public money ought to be under governmental control and behaving in a manner which helps their client groups.

Of course I'm not suggesting 100% mortgages again, but far more research into the financial position of new applicants.

Interesting final paragraph. Thank you Edward.

subrosa said...

They should RM. Aye, they're well on their way to joining the Scottish Tories in the heather covered wildernesses.

subrosa said...

The problem arises when they are several recipients Woodsy. That's why I think it would be unworkable.

Your point is correct but HMRC would have to employ many more staff to chase all the recipients. I doubt if they're capable.

subrosa said...

Jings JRB, I didn't sit and watch it. Somethings are just futile. :)

Maybe the title should be 'dead in the water' because that's true.

subrosa said...

Good points Joe. If these latest proposals were to attract more members then the objective has been well and truly defeated.

subrosa said...

Gawd help us indeed CH. Many thanks for the link. :)

Crinkly & Ragged Arsed Philosophers said...

Bit late with this comment,but the obvious question on this post is - if an income of £50k takes you into the top 10% bracket how big is the gap between the 10% and the top 1%; and, having removed the top 10% from the equation what is then the average income for the 90%?

Methinks the statistical averager's have supped heavily from their alchemy pots in order to provide yet another detraction on their road to perdition.

P.S, SR -like the dog.

subrosa said...

Perdition indeed Crinkly.

Thank you. The photo was taken during my puppy-sitting duties earlier in the year. Her presence brought back many memories of the years I had my wee cairn terrier.

Hopefully my services will be required again soon, although I was ticked off for allowing her the use of an old sofa on which to rest her young bones. :)

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