50p, or not 50p – that is the question

by Stephen Tall on September 13, 2006

The $64,000 – or ?50,000 if you prefer – question that will (inevitably) dominate conference is simple: 50p, or not 50p? To levy a new tax rate on those earning more than £150,000, or leave them be?

There are respectable points of view on either side of the argument, which I won’t rehearse at length here: pop over to Lib Dem Voice, and read the debate there. But I am expecting to vote in favour of ditching the 50p commitment in Brighton next week, and here’s why.

For the past 15 years, the Lib Dems have fought elections centred around raising income tax to improve public services. We have earned credit (though not always votes) for being seen to be the party which will be bold and honest, clearly stating “If you want good schools and hospitals you’re going to have to pay for them.”

Times change. We are not arguing now that more taxes are needed to fund public services. Our health and education systems have enjoyed massive cash injections in the last six years.

In the process, this has exposed what liberals have always argued – that attempting wholesale top-down change from the centre is doomed to failure, no matter how much money you put in. Only when central government learns to let go will we have public services which respond to the individual, tailored concerns of citizens and communities.

Liberals have consistently staked out this agenda, and now all parties are ostensibly signed up to ‘localisation’ (though we are rightly sceptical that Labour and the Tories, who between them have done so much to centralise all functions of government in the last 25 years, have truly seen the light).

On each issue, it is the Lib Dems who have been at the cutting edge of this debate. We argued that tax rises were needed to boost public services. We won that argument. We argued that public services need to be decentralised, with real power given back to the communities they serve. We are winning that argument.

We need now to move on, and to win the arguments of the next 15 years. This means putting ‘green taxes’ to the fore, showing that Mr Cameron’s warm words are nothing but hot air unless backed up by rigorous action.

And it means lifting the low-paid out of tax, ending the scandal in which the richest 20% in our society pay less of their income in tax than the poorest 20%. Social justice is not just about taxing the rich. It should – and must – be about taxing the poor less.

That strikes me as a message which all Lib Dems should be proud to proclaim.