Parliamentary Sketch : All in it, but not together

Posted on: 31st May 2012

So, the Chancellor is “shocked” to learn that the richest have organised their finances so that they pay virtually no Income Tax whatsoever.

The shocking thing is that the Chancellor – who must be the only person surprised by this revelation – is also the person we’ve entrusted with the job of making sure that the wealthy pay their fair share!

In his first Budget he properly called upon the whole nation to get behind the Government in its responsible endeavour to restore public finances, to get the deficit under control and the debt down. He insisted that “we are all in it together”; “those with the broadest shoulders will bear the greatest burden”; and “the vulnerable will be protected”. These were messages of fiscal responsibility and fairness. I heard myself joining in the calls of “here, here”, applauding the Chancellor for the sentiments he conveyed.

However, fine as the sentiments were, the reality appears to have been different in many respects. Those with the broadest shoulders will now eat VAT free caviar and the rest will be taxed through the nose when they eat their humble pasty from a paper bag. The old arguments that if you raise taxes on the rich they will simply emigrate elsewhere will cut little ice now. The culture, under the previous Government, of wealthy bankers paying less tax than their cleaners merely continues under a different guise but just as effectively under this.

Of course, the Government should be congratulated for introducing policies which my Liberal Democrat colleagues and I have been pushing for years – increasing the Basic State Pension and linking annual rises with earnings, and raising the tax threshold to take the lowest earners out of tax altogether.

However, changes to Working and Child Tax Credits – introduced through the back door – clobber some poorer families. The working hours threshold has been set above that of many of the now most common part time jobs.

In the light of this, I hope that the Government doesn’t persist with its divisive and counter-productive proposal to introduce regional pay. Cornwall is already on the bottom of the earnings league and is the poorest region in the UK. Giving public sector employers the freedom to introduce ‘regional variations’ in pay in a place like Cornwall is hardly going to be seized as an opportunity to enhance earnings. This will become another “pasty tax” campaign we will have to fight and win.

It’s no wonder Party Leader approval ratings have slumped recently. The “approval rating” is the percentage points difference between voters who think the Party Leader is doing a good job and those who do not. The latest poll put Prime Minister Cameron on “minus 27” and Mr Clegg on “minus 53”! An opportunity for Labour? Even Miliband is on “minus 41”! Perhaps they will defy the laws of political gravity – i.e. that what goes down inevitably comes back up again?

10th April 2012