As the Liberal Democrats move towards finalizing the party’s manifesto, The Social Liberal Forum sets out the key principles that we believe should be the basis for formulating tax policy and spending commitments:
- The party should commit itself to the goal of reducing income inequality over the next parliament. Proposals to reduce public spending should be assessed in terms of whether they further that objective.
- Tax increases for the richest members of society should take the greater part of the strain in reducing the budget deficit in order to protect vulnerable users of public services, like housing, health services and social care. In 1993 the Clinton Administration faced with a big structural budget deficit expressly chose to use tax increases rather than spending cuts as the major means of deficit reduction.
- We should be the party of fair, redistributive taxation. We welcome the proposal to include a 0.5% property tax on mansions over £1 million and see this as an addition to our reconfirmed policy of replacing the Council Tax and replacing it with a Local Income Tax.
- Immediate action to further the transition to a sustainable, low carbon economy is essential and this goal should substantially influence tax and spending policies. A global climate change agreement should be based on the principles of contraction and convergence.
- Reducing youth unemployment should be another priority for the next government. Academic evidence has shown that youth unemployment generates serious losses in lifetime earnings that can persist up to twenty years after a period of unemployment. In the last two recessions large numbers of people out of work for long periods became stigmatized, depressed and hard to place – a phenomenon known as ‘scarring.’
- The abolition of tuition fees is important so that students from working class communities do not face the re-imposition of barriers at university level. Our policy on fees has been reaffirmed at the Harrogate Conference and by FPC. The policy is right and is popular.
We believe applying the principles outlined above to policy development would make a reality of calls for progressive austerity.
The Social Liberal Forum Executive