Vince Cable has a point. The government does, alas, lack a ‘compelling vision for the economy’ but the Liberal Democrats see this as an opportunity, not a defect. They regard George Osborne’s agenda as a blank slate on to which they can write all sorts of policies: a mansion tax, capital gains tax, even a state bank which would bring to corporate Britain the sub-prime loans that triggered the financial meltdown in America. With the budget looming, open negotiations have begun. It has been a festival of bad ideas, which have prospered in the absence of a Tory agenda.
The risk of the Cameron project was not that voters would be appalled that the Prime Minister went to Eton or that his Chancellor is the heir to a baronetcy. The risk was always that the party’s leadership would be so paranoid about their backgrounds that they would not defend wealth creation, or speak up for those who aspire to own a house big enough for the Lib Dems to tax. The Tories see negotiations as something done behind closed doors; the Lib Dems prefer the medium of BBC microphones. The end result is the anti-wealth narrative which is taking hold of British politics. The rich are portrayed as leeches, somehow not paying their fair share.
Take the plans to remove child benefit from higher-rate taxpayers. In the Commons, George Osborne justified this by saying ‘it is fair for the top 15 per cent of earners to make a contribution towards deficit reduction’. But this group contributes 63 per cent of all income tax collected: might this meet the Chancellor’s definition of a fair share? Time was when Conservatives would have pointed out this statistics.
Ministers who take aim at the wealthy instead hit plenty who are struggling: the strivers, to whom a Tory government ought to be dedicated. Under Osborne’s proposals, a single earner on £42,000, supporting a two-child family, would be best advised to make sure he is not given a pay rise. On £43,000 he would lose the child benefit, and be £1,060 a year worse off. This is an offence against what ought to be the most fundamental Conservative principle: those who work hard should be rewarded, not penalised, by government. This principle is being applied to welfare reform, and ought to extend to society as a whole.
The mansion tax is another appalling idea. The Lib Dems speak as if this is virgin territory for a tax-hungry government, an anomaly waiting to be ended. In fact, stamp duty and council tax already mean that Britain charges more in property tax than any other developed nation. It would be helpful if a Tory minister made this point, and spoke up for those pensioners on a modest income who would be forced, by a mansion tax, to leave a much-loved home. House prices have soared in Britain, the direct result of the asset bubble blown by the Bank of England’s easy-money policy. Should pensioners be penalised for that?
It is said that George Osborne, ever the master strategist, will triumph in the budget; that the 50p tax will be abolished, And that it will be funded by another pensions raid rather than a mansion tax. Maybe so, but the job of Chancellor is not that of a backroom fixer.
The Chancellor should also set out a ‘compelling vision’; he should defend wealth creators in public and lay down the basic principles the government will defend. The debate about the budget has been almost entirely about which taxes to raise — not what further savings can be found in the gargantuan government budget. This, for the Lib Dems, is the biggest victory of all.
Hacked off
The Leveson inquiry was set up by a Prime Minister embarrassed about his own close links with the Murdoch press. It is now in danger of mutating into something that not even Lord Justice Leveson can control. Journalists have been turned out of their beds, their homes ransacked. The Metropolitan police, itself in a panic, has put a staggering 171 officers on the case. For some of those arrested, the pressure has proved unbearable. We now know that two Sun journalists who are under investigation, tried to take their own lives last week. Their ordeal will not be over for months or years.
Not that their plight will raise much sympathy: it is generally thought that tabloid journalists are tasting their own medicine. Murdoch’s News Corporation has been desperately trying to shovel the blame towards its ‘rogue’ journalists, fingering its own employees and — deplorably — revealing their sources to the police.
It is precisely this mood which threatens to turn the Leveson inquiry into a monster. A free and fearless press is a prerequisite for a functioning society. There are many people with vested interests in a more fearful press, and in the phone-hacking scandal, they saw a great opportunity to suborn the media. The BBC, for instance, which petitioned the government to stop Murdoch buying Sky News, has been unable to contain its glee.
As the death of Dr David Kelly demonstrated, inquiries can turn into witch hunts. Some cost lives. The Leveson inquiry has come dangerously close to doing just that.
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