Nick Clegg: Hundreds of thousands of people should pay no income tax
Bubble — By Nick Clegg MP on February 6, 2010 7:00 am
Clegg: "Barnett Formula is completely outdated, and it’s simply not fair"
WHENEVER I spend time in Wales, like most people, I’m struck by two things in particular: first, the stunning landscape, unlike anywhere else in Britain. And second, the warmth of the people. I travel around a lot and the kind of hospitality you receive in Wales simply can’t be found anywhere else.
But there’s a third thing, too. Behind all of this is an immense amount of hardship, which those passing through often don’t see. Incomes are, on average, lower here than anywhere else in Britain. A higher proportion of children are living in poverty. There are districts with chronic levels of unemployment. And too many rural communities have lost local services – and, with them, their energy and life.
It’s the result of decades of neglect by successive governments, Labour and Conservatives alike. Even now, the recession has dealt Wales a bigger blow than other parts of Britain. As analysts were spotting the first ‘green shoots’ of recovery last summer, unemployment in Wales was rising more rapidly than any where else.
Wales needs a new approach. Liberal Democrats across Britain understand that it’s high time that the people of Wales are given a fair deal. When the Welsh Liberal Democrats have had a share in government in the Assembly, they’ve shown what they can do – from introducing Assembly Learning Grants for students, to securing free bus passes for pensioners, to delivering hundreds more doctors and nurses. But we have plans to go much further.
The Liberal Democrat vision for Wales has fairness at its heart. Take our tax plans. We will make the first £10,000 you earn tax free. Low local wages mean Wales will benefit more than most places. Hundreds of thousands of people here will no longer pay any income tax at all, and hundreds of thousands more will get £700 back in their pocket. We’ll pay for that by closing the loopholes that benefit big businesses and the very wealthy, and by getting polluters to pay for the damage they cause.
We have plans to help Welsh businesses, too. Our big banks must be broken up so they can never again hold a gun to the whole economy. By getting them lending again we’ll keep credit flowing to ensure hard working businesses keep staff on and grow. And we can help small businesses by extending broadband connections to all parts of Wales, while extending the scope of Business Rate Relief. The Liberal Democrats also want to create new jobs – jobs that last – by developing green industries in Wales, like low carbon housing.
Fairer funding for Welsh services must also be a priority, too. The Welsh Liberal Democrats have committed to protecting funding for colleges and universities. Unlike the Welsh Government we understand that in this recession keeping young people in training or in work is an absolute priority. We also want to see the funding formula that determines the money Wales receives reformed. The Barnett Formula is completely outdated, and it’s simply not fair. In local schools, for example, every year £500 less is spent on each pupil than on pupils in England. What sort of signal does that send to young people growing up in Wales?
Beyond these plans, we’re passionate that real fairness for Wales can only be achieved through greater power for Wales. The creation of the Welsh Assembly seemed to promise just that. But now, ten years on, the Assembly still doesn’t govern as it should. The Liberal Democrats have consistently called for real devolution, giving Wales equal status with Scotland by transferring full law-making powers to the Assembly. The Welsh Liberal Democrats will go into a referendum campaign for an empowered Assembly united behind a Yes vote.
Fairer taxes, help for businesses, better funding and more power for people. Those are the changes I want to see in Wales. We need to tackle the hardship that is a blight on too many households. Liberal Democrats here in Wales are committed to that. Liberal Democrats across the whole of Britain are committed to that. It’s time – finally – for a fair deal for Wales.
Tags: devolution, Nick Clegg MP, party conference, poverty, taxation, Welsh Liberal Democrats
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6 Comments
Can’t disagree with the plans to raise the threshold for income tax.
On the subject of devolution, you say you will campaign for a yes vote in the upcoming referendum, but you also say that you believe Wales should have the same devolved powers as Scotland (which the referendum wont give us).
How do you propose to go about giving Wales parity with Scotland assuming that the Lib Dems either win the general election or (perhaps more likely) form part of a coalition in a hung parliament.? Would there be yet another referendum? or would you transfer Scottish style powers in the event of a yes vote in the proposed referendum? Or would you simply devolve the powers independently?
What about England, Nick?
Wales gets more to spend per head and Scotland even more than that! If Wales spends £500 per head, less than England, it is because they decided to, despite having more money at their disposal.
England has less to spend on health and education and nO national parliament to decide how it is spent (umlike Wales and Scotland).
What sort of signal does that send to young people growing up in England?
Particularly relevant article to Wales where disposable income is less and regional GDP is much less than other UK regions.
Low Carbon housing and the green economy- we can do this if we have a programme of afforestation and there is hundreds of thousands of acres waiting to be planted for the future in Wales if the political will is there, houses made of wood (the worlds only sustainable building material) instead of concrete and plastic windows.
Afforestation would provide many more jobs (forestry more labour intensive) than what the land currently
employs.
I’m sorry, but I could do without the patronising first paragraph. You realise that when you go to Scotland, Cornwall, the Cotswolds, Cumbria etc, you will have to confirm that they have lovely countryside, but it’s not as nice as Wales!
On the issue of delivering when you were briefly in coalition in Wales, your main legacy was a huge expansion in administration, creating so many new managerial posts that we actually had to go to England as we did not have enough. This disastrous re-organisation is only now being reversed, with Plaid rather than yourselves in coalition.
I welcome the proposal on tax and also note that you recognise the lack of fair funding for Wales. An independent report has the the figure at between £300 and £400 million a year. Are you therefore committing youself in any coalition deal to delivering on this? It would make a hgue difference to Wales and would go a long way in reducing the gap between education spend per pupil in Wales compared to England. On this very real problem, councils in England spend 90% or their monies recieved for education, on schools. In Wales, the figure is between 73%-85%, as councils manage services more centrally. Is it therefore your intention to make schools more independent, along Tory policy lines?
In a recent party statement, you proposed under a new model that Wales would lose 12 MPs and end up with 28, yet there was no mention of Scottish Parliamentary powers to ensure a fair transfer of representation from London to Cardiff. Therefore, if you do end up in coalition with the Tories in London, will you insist on your stated policy of a full Welsh Parliament, if we do lose 12 MPs?
Finally, I note that you intend to slash council pension protection/provision as part of your manifesto. Will you be spelling our exactly what cuts you intend, prior to the elections?
It’s good to have a UK party leader contributing to Wales Home as an accolade, but isn’t this basically just a Lib Dem General Election narrative with a staff member writing a Welsh context in, and Nick Clegg’s name and photo put at the top? It doesn’t offer me anything much different from going on the Lib Dem website.
It’s about as exciting as getting the intro to the Plaid manifesto, putting Elfyn’s name at the top of it and posting it up as ‘Elfyn Llwyd makes heavyweight contribution to Wales Home’.
It’s a pretty good political platform, but not the kind of current and incisive debate we are used to on this site.
This is another example of political cherry picking. Increases in Income Tax allowances mean very little on their own; what is important is the increase, if any, in bottom line income.
For example lower tax will mean an increase in net earnings. That increase will mean a reduction in any Housing Benefit and Council Tax Benefit entitlement. There goes 85% of the increased income.
If the recipient is working part-time, very likely at the lower end of tax payment, then any increase will be taken, penny for penny, pound for pound, from the entitlement to Income Support, Income Based Job Seekers Allowance or Employment and Support Allowance.
Even within the tax system things are confused; it’s very easy to find examples where the entitlement to tax credits matches exactly the amount taken back in Income Tax.
A committment to raising net income may mean something but a promise to tweak one factor in a complex system means very little.