MEN Column: Conference, the economy and tax


I always enjoy Party Conference. It is a chance to meet old friends, meet charities and organisations and lobby hard on the issues you care about.

For as long as I can remember, I have always attended with my close friend and fellow MP Mark Hunter. We would search out a pub to watch the City game together. My thoughts are with him and his family following the untimely death of his wife, Lesley.

At this conference, I am chairing fringe meetings on Trams and Metrolink and setting up a Lib Dem “Friends of Football”. I visited Glagsow Cathedral as part of my DCMS responsibilities, and I helped organize a football game with Scottish MP’s. We lost 4-3 (we were robbed) and I managed to pull my hamstring.

During conference so far, I have met with Manchester Airport, ITV, BBC, SKY, The Football League, Sustrans, World Vision UK, Prostate Cancer UK and CAMRA. I also had a meeting with Adam, a 15 year old deaf boy, who talked to me about his experiences coping with deafness.

One of the biggest debates at conference is our Tax policy for the next election.

We promised at the last election to raise the poorest out of Income Tax altogether by raising the threshold to £10,000. In Government we have delivered this pledge.

That’s taken 14,000 Manchester workers out of paying income tax at all, and given a £700 tax cut to 133,800 local workers.

This is good but I and the Lib Dems want to go further. We should promise at the next election that if you are on the minimum wage, you should not be paying any income tax.

We have delivered on other tax policies. We have changed capital gains tax, closed tax loopholes and taxed the bankers. This has resulted in billions of extra tax revenue to the Treasury.

There is, however, a down side. It was a mistake to cut higher rate tax from 50p to 45p. Don’t get me wrong, I remember that Labour had a 40% tax rate for 12 years 11 months of their 13 years in power. I also remember that the Tories actually wanted to reduce the top rate of tax to 40p, and that we stopped them as part of the budget negotiations.

The problem is that slashing income tax for people earning over £150k is rightly unpopular with millions of people who hear “we’re all in it together”, but then see income tax cuts for millionaires, while benefit and wage increase are capped at 1%

It does not matter that all the tax changes mean that the richest are actually paying more – nobody really understands the closing of tax loopholes or capital gains tax, while the rate of income tax is very easy to understand.

We should continue to point out that reducing the 50p rate was the Tory priority, not ours, but everyone knows that a skint Government has delivered a tax cut for millionaires.

The only way that we can disassociate ourselves from this top rate Tory tax cut is to commit to reintroducing it. It is the right thing to do.

Opponents of the 50p rate argue that it does not raise any money, or at best, very little. This is only because of systematic tax avoidance on an industrial scale. Rather than take the view that people will simply avoid paying it, HMRC should do their job properly and actually collect the tax that is due.

I also believe that the party should introduce a Mansion Tax on homes worth more than £2 million. It is a myth that this would lead to a mass exodus of wealthy people leaving the country.

What these two changes would show is that the Liberal Democrats are commitment to fairness on tax and the better off paying a greater share than they currently do.

The compromise we made so that we could deliver a tax cuts for millions of low paid workers should not be one we make again.

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