by Stephen Tall on March 30, 2010
Date: 30 March, 2010
Subject: ‘Honest Vince’ yes; fast and loose no
Thank you for your article in today’s FT, Now ‘Honest Vince’ plays fast and loose. It was very much a column of two halves, the first praising Lib Dem shadow chancellor Vince Cable, the second seeking to bury him.
I’m guessing the source for most of your attacks on the Lib Dems’ pledge to cut taxes by lifting the personal allowance to £10,000 was the Fabian Society’s recent hatchet-job, published via Left Foot Forward. A number of Lib Dem bloggers took its tendentious claims to task at the time.
Even more significantly, so did the Lib Dems’ manifesto author, Danny Alexander, in a reply on Left Foot Forward published yesterday. You won’t have had chance to read it before penning your article, so let me highlight a few key points that Danny emphasises:
- Under Labour, the poorest 10% pay 48% of their income in tax while the richest pay just 34%.
- The tax bill for the poorest 10% of families includes £270 in income tax. Under the Lib Dems that bill would be £0. The next decile pay £599 in income tax; again under the Lib Dems that would become £0.
- Tax credits do not benefit the poorest decile of people the most – the second, third and fourth decile all get more than the bottom one.
- Tax credits increase the poverty trap. When you add up income tax, national insurance and tax credit withdrawal the poorest face a marginal tax rate of 70%.
- And when you add in lost council tax benefit and housing benefit, marginal tax rates can easily reach 92%. For someone earning the minimum wage that would mean an extra hour’s work earns you about 50p
As Danny concludes:
I am not going to apologise for being the only party proposing to provide an extra £1bn for those at the very bottom. I am not going to apologise for thinking it’s important for families on low and middle incomes, as well as the most deprived, to be able to make ends meet and put a little aside for the future. Our tax plans would be the most radical tax reform in a generation, and it is only cowardice from Labour that prevents them following us down this progressive and radical road to a fairer tax system.
Your article focuses on the Lib Dems’ tax cuts, but fails to look at the package of measures the party is putting forward, such as scrapping council tax or the pupil premium, both of which will be of especial help to the poorest in society.
Perhaps oddest of all, though, is the inconsistency in your attack on Vince Cable.
In one paragraph you suggest he lacks political savvy: you talk of “swingeing tax increases” which “might politely be called heroic”. But then you conclude that Vince “is not quite as sainted as some suggest. In truth, he is a politician like the rest.”
Either he’s an impractical idealist, or a cynical politician: you can’t have it both ways. Not unless you are, in truth, a journalist like the rest.
Looking forward to a return to your usual tip-top form soonest.
PS: Lib Dem blogger Nick Thornsby highlights how Philip Stephens attacks on Vince differ from his newspapers editorial line here.