Friday, September 12, 2008

Paul Holmes MP on Make it Happen

I can't do anything better than agree 100% with Paul's article below. It speaks for itself. If you are a Liberal Democrat going to Conference, please vote for his amendment.

"It would appear that Liberal Democrat policy has changed to one of cutting public expenditure to fund tax cuts rather than switching wasteful or less desirable New Labour expenditure to fund needed investment in accord with Liberal Democrat policies. This has been announced at various press conferences and interviews since the 17th July – but has neither been discussed by the Parliamentary Party or passed by Conference.

Given that – as the Times, Independent, Telegraph and Financial Times have all pointed out – this is a major shift in our policy, it is strange that it is not even mentioned in Monday’s motion on ‘Make it Happen’. Instead the assiduous Conference Delegate has to spot 20 innocuous words, buried among 4,000 in that document, in order to realise what they would otherwise be inadvertently nodding through on Monday afternoon.

Two reasons have been advanced to the press and in speeches as to why this massive shift is taking place - a shift which is all the more extraordinary given that the economy is hovering on the brink of recession and tax receipts falling, which already leaves any imminent Government facing either expenditure cuts, tax rises or increased borrowing. Even the Conservatives until now have said that they would need some years in office before they could envisage tax cuts which would otherwise be based on damaging public service cuts.

First we are told that taxation levels in the UK are now excessive and so cuts are more important than otherwise desirable public investment. This year’s taxation level of 36.8% of GDP in fact puts us at the Western Europe average and at 15th position out of 30 among OECD countries. For 22 out of the last 30 years UK taxation has been in the range of 35-38.7% of GDP and for 16 years in the 36-38.7% range. For eight of the last 30 years the UK tax take has been higher than this year’s level. Seven of those record levels were under the Conservatives who were unfortunately using the money to fund the mass unemployment they had caused, rather than on much needed public investment in health, education or transport.

So in fact this year’s ‘excessive’ levels of taxation have pushed us up only to the middle of OECD and Western European levels and firmly in the mainstream range of UK levels over the last 30 years. Of course we do have higher levels than the USA but the USA has appalling provision of welfare and health unless you are personally wealthy and can buy your own. Not a model that I – or I thought the Liberal Democrats – ever wanted to emulate.

Secondly, we are told that ‘all the extra money’ spent by Labour has been wasted with no visible improvement in health or education. This of course is palpable nonsense. New Labour have certainly wasted money on failed IT systems, over expensive medical contracts and the destructive impact of centralised control, target setting and inspection regimes. Clearly, though, there HAS been improvement in state health and education provision as a result of increased investment as anyone who is a regular user of such services can testify. I taught in state schools from 1979 to 2001 and my children have passed through the state system between 1988 to today – the improvements are undeniable. Can the critics really not remember the dire straits we were in by 1997, when Liberal Democrats, Labour, voters, and even most of the press were condemning the appalling levels of investment in public services and the marked appearance in Britain of JK Galbraith’s “private affluence and public squalor”?

I am not of course opposing our EXISTING policy of funding a basic rate tax cut to 16p (the lowest since 1916), via the Green Tax Switch, and closing off pension and tax loopholes that excessively favour high earners. That policy, along with replacing the regressive Council Tax with a progressive Local Income Tax, goes a long way towards ending the ridiculous situation whereby the poor pay a greater share of their income in tax than do the rich. Neither am I opposing our EXISTING policy of identifying £16 billion of Labour spending (such as ID Cards, Baby Bonds, third tranche of Euro-Fighter, etc) that we would switch into areas such as more police on the beat, scrapping tuition fees, or increasing education spending through the pupil premium

I am, however, fundamentally opposed to the proposed policy of making as yet unidentified spending cuts in order to fund as yet unspecified tax cuts. Especially when we are already being told that ‘we may have to abandon our opposition to Tuition Fees as we can’t afford it.’

We have among the worst primary class sizes in the developed world, and some of the highest secondary class sizes too; one of the lowest state pensions in Western Europe; fewer oncologists or radiographers and a worst cancer survival rate than most comparable European countries; among the worst funded childcare systems; fewer doctors per head of population than countries like Italy; we deny patients cancer and Alzheimer’s drugs available at public expense in better funded Western European systems.

I hope that Conference delegates will attend the Make it Happen debate on Monday afternoon and prevent this particular part of an otherwise excellent document becoming party policy. I for one would rather we funded the NHS adequately out of progressive taxation rather than supporting ‘top ups’ for the wealthy, and I have yet to meet a constituent who does not share that view.

* Paul Holmes is the Liberal Democrat MP for Chesterfield.

UPDATE:I and the other movers of the amendment (Evan Harris MP, Richard Grayson and Duncan Brack) agree with 99.9% of Make it Happen. We do not however support the twenty words that are a vague and open ended commitment to reducing overall public spending in favour of unspecified tax cuts. I have written about this in the conference edition of Liberal Democrat News and both Richard and I have both written about this in more detail in the latest edition of the Liberator."

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