Sunday, 2 September 2012

Clegg says the rich should pay more tax- a real progressive would mean it.

Deputy Prime Minister Nick Clegg said last week that the rich should pay more in tax to ‘hardwire fairness’ into society, cue much wailing and gnashing of teeth from the Tory turnips and the Daily Mail.

In an interview given to the Guardian he says he wants to make sure ‘high asset wealth is reflected in the tax system in the way that it isn’t now, making sure that we crack down very hard on avoidance, making sure that tax breaks don’t go disproportionately to people at the very top.’

If you think that sounds vague, then you’re probably right, the deputy PM isn’t calling for the top rate of tax to be raised back to 50% and seems to be advocating a revival of the ‘mansion tax’ his party got into such a tangle about a couple of years ago. Then again he might mean something else entirely, depending on which newspaper he’s talking to.

Whatever, vitally important that the policy goes through because ‘ if we want to remain cohesive and prosperous as a society, people of very considerable personal wealth have got to make a bit of an extra contribution’ as part of fighting what he sees as ‘in some senses a longer economic war rather than a short economic battle.’

Crikey! The squawking and hissing you can hear is probably the sound of a not very small cat being set loose amongst a flock of Tory pigeons. Chancellor George Osborne said the government was ‘clear the wealthy should pay more tax’ but added that ‘we also have to be careful as a country we don’t drive away the wealth creators that are going to lead our economic recovery.’ Especially, you’d imagine if they just happen to be generous when it comes to making donations to the Conservative Party.

Anyway George isn’t happy, not one little bit and neither is Citizen Dave; there’ll probably be a bit of an atmosphere at the next cabinet meeting.

Labour aren’t happy either, shadow Treasury Minister Chris Leslie accused Nick Clegg of ‘taking the British people for a fools’, before laying into him for ‘supporting a failed economic plan which has pushed Britain into a double dip recession.’ Quite rightly too since the Lib Dems have willingly toed the ‘austerity’ line since 2010, sometimes, as in the case of Danny Alexander with stomach churning enthusiasm.

In the Guardian interview Nick Clegg defends himself by saying he is ‘proud of some of the things we have done, I actually think we need to hardwire fairness into what we do in the next phase of fiscal restraint.’ He adds that ‘if we don’t do that I don’t think the process will be either socially or politically sustainable or acceptable.’

A senior member of the government getting to his hind legs and calling for the rich to pay a fairer amount of tax, what’s not to like? Almost everything I’m afraid because Nick Clegg didn’t mean a word he said; not one.

This is confirmed by the conspicuous lack of detail making that more of a woolly aspiration than a concrete policy proposal. Then there is the small matter of timing, the Liberal Democrat conference is just around the corner and the party faithful are not please with their leader after another year of u-turns and electoral disasters.

By suddenly ‘outing’ himself as a supporter of a more progressive approach to taxation Clegg is hoping to hang onto his position as party leader. He probably will too since very few people actually want to be captain of a sinking ship.

He has though at least highlighted again the fault-line between the two approaches to how we tackle the current economic crisis and build for the future that will follow it.

On one side of the chasm are the supporters of ‘austerity’, who think that the best thing to do if one round of painful cuts has proved ineffective at getting the economy moving is to embark on another. In their world ‘wealth creators’ will only do their job if bribed to by tax cuts.

On the other is the small, but growing, band of people who realise that we will all have to pay a little more for decent services and social cohesion. That doesn’t necessarily mean ‘soaking’ the rich, just asking them to pay tax in proportion to what they own or earn, under the current dispensation a company director pays less proportionally than a cleaner because he or she can take advantage of, legal, tax planning measures unavailable to other workers.

The former group have people like George Osborne and a compliant right wing media to articulate their case using blood curdling warnings that we might follow the path taken by Greece if we don’t appease the cruel and jealous god of ‘austerity’ at every turn. Those who support a more progressive approach to taxation have, well, nobody really. Ed Milliband, sometimes, sounds like he might do, but then tends to trundle off to ‘review’ policies he hasn’t yet explained to his party or the wider public, confusing pretty much everyone in the process.

The progressives though do have a compelling case, its one that says creating wealth and building a strong and fair society aren’t mutually exclusive. Look, for example, at the Scandinavian countries, they operate on a more socially democratic model and have by and large avoided recession and have happier and healthier societies too.

What’s stopping Britain from following their example? A lack if imagination and political courage. Building a fair society where people are free to create wealth for themselves, but bound by an obligation to use some of it to benefit the common good will be no less difficult than pursuing ‘austerity’; but in the longer term it will pay far greater dividends.

The public are, I suspect, moving inexorably around to an understanding that chasing growth alone won’t cure the problems they see around them, to do that we will all have to work together for the common good rather than individual gain. What they need is a politician with the courage to say so and mean it, Nick Clegg isn’t such a politician, neither is Ed Milliband or David Cameron; so who is?

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