Are the Lib Dems' policies really credible?

Kohoutek

There seems to be a bit of Lib Dem euphoria at the moment, which is not hard, considering how poor the competition is. But IMO too many of their policies don't make any sense:

• Making the adult minimum wage apply to anyone from 16 - I would be surprised if this didn't have a negative effect on youth unemployment, given the difficult economic situation

• Taxing capital gains the same as income - again, terrible for business. What incentive is there for an entrepreneur to start a business if he can't sell it without confiscatory taxation?

• Scrapping any new coal or nuclear power stations - absolutely mad! How do we keep the lights on with wind turbines that only generate electricity intermittently?

• Scrapping all tuition fees - surely not appropriate given the government's fiscal situation.

• Increasing the foreign aid budget - why? We can't afford it.

• Bringing the UK into the single currency - the flexibility of being able to devalue and being in control of our own monetary policy has been essential to the recovery.

Masomnia

Kohoutek wrote: »

There seems to be a bit of Lib Dem euphoria at the moment, which is not hard, considering how poor the competition is. But IMO too many of their policies don't make any sense:

Making the adult minimum wage apply to anyone from 16, raise the rate from £5.8 to £8.1. In terms of damaging the recovery by disincentiving employers to hire more people, this makes Labour's NI hike look like nothing.

Taxing capital gains the same as income - again, terrible for business. What incentive is there for an entrepreneur to start a business if he can't sell it without confiscatory taxation?

Scrapping any new coal or nuclear power stations - absolutely mad! How do we keep the lights on with wind turbines that only generate electricity intermittently?

Scrapping all tuition fees - surely not appropriate given the government's fiscal situation.

Increasing the foreign aid budget - why? We can't afford it.

Bringing the UK into the single currency - the flexibility of being able to devalue and being in control of our own monetary policy has been essential to the recovery.

Couldn't agree more.

wymondham

Yes, but clegg was good on TV, so all of this is irrelevent!!

apt

Kohoutek wrote: »

There seems to be a bit of Lib Dem euphoria at the moment, which is not hard, considering how poor the competition is. But IMO too many of their policies don't make any sense:

• Making the adult minimum wage apply to anyone from 16, raise the rate from £5.8 to £8.1. In terms of damaging the recovery by disincentiving employers to hire more people, this makes Labour's NI hike look like nothing.

Applying to 16 and 17 years olds won't make a major economic difference. An immediate rise to over £8 would be damaging, but are you sure that is what they are proposing?

• Taxing capital gains the same as income - again, terrible for business. What incentive is there for an entrepreneur to start a business if he can't sell it without confiscatory taxation?

Will not apply to selling businesses up to £2 million according to Clegg.

• Scrapping any new coal or nuclear power stations - absolutely mad! How do we keep the lights on with wind turbines that only generate electricity intermittently?

How would building new nuclear plants which cost an absolute fortune and would take a decade or more to build fill the energy gap?

• Scrapping all tuition fees - surely not appropriate given the government's fiscal situation.

To be phased out over time, although you are rightly sceptical about whether the state can finance universities.

• Increasing the foreign aid budget - why? We can't afford it.

All three parties are proposing this. It is still well under 1% of GDP and a lot goes on buying British products anyway.

• Bringing the UK into the single currency - the flexibility of being able to devalue and being in control of our own monetary policy has been essential to the recovery.

Not a proposal for this parliament and with a guarantee of a referendum so it will not get a majority anyway.


I don't think you've been very accurate in describing the Lib Dem manifesto, but you've been generous in missing out the biggest shortcoming. Like the Labour and Tory manifesto it is not credible setting out how the budget deficit will be reduced.

Masomnia

I should say though I'm still voting for them. It's very close between Labour and Lib Dems where I am so I'm voting against Labour; doing my bit to at least cut their majority

Wookster

Perhaps this is why a hung Lib Dem/ Conservative parliament would be so good for the country.

Parties temper each other's policies and instead of having more extreme policies we end up with reasonable policies. At least that's what seems to happen in many European countries.

Kohoutek

apt wrote: »

Will not apply to selling businesses up to £2 million according to Clegg.

Does it apply to selling shares in a business, or just the whole business? If not, then it will still be very detrimental to venture capital investment. I don't understand why they've reduced the annual allowance from £10,000 to £1,000 too - why is that necessary?

apt wrote: »

How would building new nuclear plants which cost an absolute fortune and would take a decade or more to build fill the energy gap?

Because nuclear power is a reliable source of energy, and even taking into account decommissioning costs it is cheaper than wind. Intermittent forms of energy by definition will not solve the energy gap.

Denmark has the world's largest supply of wind energy - but has the highest energy bills in Europe, and has not decommissioned any fossil fuel power plants, because an intermittent form of power cannot replace one that can generate energy all the time.

This is the future of cheap, reliable, non-polluting energy, not nonsense like wind power:

http://www.elrst.com/2008/11/13/mini-nuclear-plants-available-within-five-years/

JamesU

apt wrote: »

I don't think you've been very accurate in describing the Lib Dem manifesto, but you've been generous in missing out the biggest shortcoming. Like the Labour and Tory manifesto it is not credible setting out how the budget deficit will be reduced.

I thought all three parties have agreed that the electorate do not need to know how the annual deficit and government debt are going to be paid off, and that we need to focus on the real issues that they want to talk about?:)

I still cannot understand why £17 billion in annual savings need to be spent on a £10K personal allowance for everybody. For sure, advantage those on lower incomes, but everybody irrespective of their income? Does not make any sense to me.

JamesU

rl290

Before tackling your points, I would first say that there are much larger reservations to be had about the Tory's and Labour's policies than the Lib Dems'. Just the fact that Vince has produced a fairly comprehensive schedule for cutting the deficit is much more encouraging than Darling or Osborne (skip forward a couple of pages to page 100 onwards here for the financial tables: http://issuu.com/libdems/docs/manifesto?mode=embed&layout=http://skin.issuu.com/v/light/layout.xml&showFlipBtn=true&proShowMenu=true&pageNumber=96)


[*] Making the adult minimum wage apply to anyone from 16, raise the rate from £5.8 to £8.1. In terms of damaging the recovery by disincentiving employers to hire more people, this makes Labour's NI hike look like nothing.

The £8.10 simply isn't in the manifesto. Not sure where you have got this from? As for lowering the age of the minimum wage, I have to agree with this. If you leave school at 17 and go into full time work, why do you have less rights to a decent wage than if you were 18?


[*] Taxing capital gains the same as income - again, terrible for business. What incentive is there for an entrepreneur to start a business if he can't sell it without confiscatory taxation?

First, having capital gains tax far below income tax creates a huge tax loophole that the richest can exploit: by turning earnings into capital increases, they can cut their tax bill from 40/50% to 18%. This is clearly not right, and this proposal closes this hole. Second, I totally agree - bringing back some kind of taper relief to encourage entrepreneurs may be one solution, or allowing the rules applied to VCTs to be expanded... but this is a policy area that needs to be clarified. Personally, I think the current system is ludicrous though.


[*] Scrapping any new coal or nuclear power stations - absolutely mad! How do we keep the lights on with wind turbines that only generate electricity intermittently?

Nuclear is expensive, both to run and to make safe at the end of a station's life. Indeed, every person in the UK is paying £1,500 to clean up the waste from the last 50 years. The policy is not to suddenly close all the stations and replace them, but to build renewable in place of the new stations that other parties are proposing. The idea is to create jobs in a new green hi tech industry that would rebalance the economy. However, you are right that in the long term a huge energy review would have to be conducted.


[*] Scrapping all tuition fees - surely not appropriate given the government's fiscal situation.

Look in the financial table on the manifesto page I linked to above. Because of the credit crunch, the plan is now to phase these fees out over 5 years, and this is fully costed (it's item 3 on page 101). If it weren't for the crunch, the policy would still to be to scrap the fees immediately, but this is no longer true.


[*] Increasing the foreign aid budget - why? We can't afford it.

At Gleneagles, Gordon Brown and the G8 agreed to each give 0.7% of their Gross National Income to developing nations. At the time, this was hailed as one of the greatest successes imaginable and the press were all in favour of it. You probably remember this. The Lib Dems are the only party to support this pledge (Brown has bottled it), and I think this is what you are referring to. As it is linked to GNI, not an absolute figure, it will move around depending on how affluent we are. The truth is that we are the 4th richest nation on the planet, despite the credit crunch, and I personally think it would be pathetic if we didn't give our fair share of aid. This is a sensible and costed target.


[*] Bringing the UK into the single currency - the flexibility of being able to devalue and being in control of our own monetary policy has been essential to the recovery.

The policy is that if the economic conditions are right, and if there are better Eurozone controls, then there would be a referendum. Certainly not going to happen for at least a decade though. Seems sensible. I am 100% against going into the Euro now, but, given that mainland Europe is our biggest market and we are mainland Europe's biggest market, one day it may be attractive. Never say never! Many changes have to happen first, and the party is committed to a referendum.


R

rl290

JamesU wrote: »

I thought all three parties have agreed that the electorate do not need to know how the annual deficit and government debt are going to be paid off, and that we need to focus on the real issues that they want to talk about?:)

I still cannot understand why £17 billion in annual savings need to be spent on a £10K personal allowance for everybody. For sure, advantage those on lower incomes, but everybody irrespective of their income? Does not make any sense to me.

JamesU

1. The actual deficit /debt plans are totally costed by the Lib Dems - they are the only party to come close to explaining it, and the Institute for Fiscal Studies has independently agreed with the figures! Neither of the other parties has come close. Full details on page 100 of the manifesto http://issuu.com/libdems/docs/manifesto?mode=embed&layout=http://skin.issuu.com/v/light/layout.xml&showFlipBtn=true&proShowMenu=true&pageNumber=96

2. The £10k limit lifts over 3million people out of paying tax, which I'm sure we all agree is great. Furthermore, people earning over £10k benefit by paying £700 less per year. However, as your pay increases you would lose other benefits: higher rate tax relief on pension contributions would affect anyone in the 40% bracket who has a pension; local income tax would link local tax to ability to pay and would increase payments for the richest*; and mansion taxes for properties valued at over £2million would hit the very richest.

* In my constituency, 75% of council funding comes from the government (from income taxes) and local council tax is based on property value, not my ability to pay: three working professionals pay the same council tax as the old lady next door! I don't think that's fair, and agree with the Lib Dem policy of linking local income tax to earnings to fix this injustice.

R

JamesU

rl290 wrote: »

1. The actual deficit /debt plans are totally costed by the Lib Dems - they are the only party to come close to explaining it, and the Institute for Fiscal Studies has independently agreed with the figures! Neither of the other parties has come close. Full details on page 100 of the manifesto.

On page 100-101 there are £17 billion in savings and £16 billion spent on the £10K allowance.

On page 101-102 there are aprrox £15 billion in spending cuts.

That is it as far as I can see in the LibDem manifesto.

Q1: So how do you intend to pay for the £160 billion/yr deficit? 90% of the annual deficit is still not covered for by the proposed spending cuts of £3.5 billion in year 1, rising to £16 billion in year 5.

Q2: And how are you going to pay off the £950 billion government debt (a conservative estimate, rising to approx £1500 billion in 5 years)?

Q3: Have I missed the full details related to Q1 and Q2 somewhere? And if so, could I have a link to these please?

JamesU