Having predicted difficult years ahead for the Conservatives and Liberal Democrats, almost by default I’m going to have to predict good things for Labour. In terms of voting intention polls and electoral victories they should have a good year, what matters is what they choose to do with the opportunity, to use a well worn metaphor from the past year, will they fix the roof while the sun shines?

Since the election Labour have risen from 30% to around about 40% in the polls, the majority of this increase being at the expense of the collapsing Liberal Democrat vote (there is a small amount of churn between Labour and the Conservatives, but no great shift. The overwhelming majority of people who voted Tory in 2010 would vote Tory again tomorrow).

This means that Labour are narrowly ahead in all the polls just seven months after losing the election, and it will probably get even better next year. The cuts will start to come into play with all the consequential stories of this or that bad thing being attributed to them, further sapping government support. Barring an upset in Oldham, 2011 should be a year of electoral victories for Labour. The polls in Wales suggest a very strong Labour performance there, with the party on the edge of an overall majority. Scottish polling is less regular, but they too suggest a good result for Labour. They should also make good progress in the local elections. All of this suggests Labour should enjoy some healthy leads in national voting intention polls and the way the vote was distributed in the UK at the last election, that should translate into an easy Labour majority if repeated at an election….

But, there probably won’t be an election next year. Labour’s strategy can’t afford to be based upon the assumption that the government will fall early, that the economy will still be up the spout come 2015, nor that the spending cuts will automatically bring public services to the point of total breakdown rather than being adapted to over time (of course, things could end up in utter disaster, but in that case Labour will probably win anyway regardless of what they do).

Being ahead in the polls gives a lot of advantages. The party appears on the up, people take you seriously, and it gives the leader a certain authority to act and take the party with him. Labour need to utilise this time to tackle their underlying problems so they are ready for the next election.

At present Ed Miliband’s authority in the party is uncertain because the majority of Labour’s MPs and members voted for a different leader, who was also perceived as the better leader by the public. Miliband’s current ratings in the polls are lacklustre – he already has a negative approval rating, his brother is still seen as a better option and only 27% of the public think he’s up to the job.

The worst case scenario for Labour is that Ed Miliband is their IDS – little bit awkward looking, vocal mannerism that makes it hard to take him seriously, has the right ideas about reforming the party, but fatally underminded by the fact his MPs never actually wanted him in the first place and never felt any loyalty to him.

I’m inclined to withhold judgement on Miliband so far – he hasn’t made an impression with the public, but that also means he hasn’t made a negative impression yet. Think of the rapid negative perceptions Hague built up immediately, or Michael Howard brought with him to the job. There’s still time for people to warm to Miliband – more importantly, after May 2011 he should have some victories under his belt and that will give him the aura of success. People will think more positively of him as a victor, and it should win him some loyalty amongst his MPs.

I wrote earlier in the year about the problems that resulted in Labour’s defeat in May. Gordon Brown himself had atrocious ratings, their economic record was shot and they were seen as old and tired and out of touch. Gordon Brown is a problem Labour don’t need to worry about of course, but solving the other problems is less easy and in some cases contradictory.

Building an economic reputation in opposition is nigh on impossible. We saw in my post on the Conservatives that 47% of people now think the government are handling the economy badly compared to 40% who think they are doing well. However, ask people if they trust Labour or the Conservatives on the economy and the Tories still come out top.

On this front Labour also need to worry about the narrative the coalition government build around them. In 1997 Labour successfully painted the narrative of Conservative years of boom and bust and chronic underfunding of public services. The Conservatives will want to paint their own narrative of the last Labour government, of reckless spending pushing the country to the verge of bankrupcy, and have had some success in doing so: 60% think Labour haven’t faced up to the damage they did to the economy, 47% that if Labour returned to government they’d put the country into even more debt. Labour can argue with that, try to put forward their case for the last goverment’s economic record…but that conflicts with trying to distance themselves from Gordon Brown and the last Labour government.

How Labour respond to the cuts may be the trickiest. There will be pressure upon Miliband to simply oppose all the cuts and reap the rewards of public unhappiness. This may be superfluous anyway, as the only main opposition party, Labour are going to benefit from public unhappiness at cuts whatever, but it would bring with it its own risks – it can be portrayed as Labour not having their own plan, running away from hard decisions and, worst of all, raises the question of what happens if the cuts work… if the economy comes back on track, and public services don’t collapse?

On one hand, Labour are in opposition and by the time of the next general election the deficit will probably have been addressed. It’s not the opposition’s job to govern, and there’s no point Miliband tying himself into an inevitably tricky policy on a problem that someone else has the unenviable task of solving. On the other hand, if they don’t put forward some sort of coherent stance they will firstly be mocked for it, but more importantly, the government will invent a stance for them. If Labour don’t define themselves, then come the next election the Conservatives will paint the choice as being “the party that took the hard but necessary decisions while Labour suggested nothing” or “the party that took the steps needed to bring the economy back to health, opposed at every step by Labour”. It would fall on fertile ground: if you look again at the YouGov trackers on party image, the Tories have an overwhelming lead (58% to 10%) on the perception that their “leaders are prepared to take tough and unpopular decisions.”

Then there is the fairness agenda, this is the Conservatives’ great weakness. As I wrote in the first of these pieces, polls show people increasingly think the cuts are unfair and many still see the Tories as a party that puts the rich and affluent first. That’s an open door that Labour can push at. However, in order to win Labour need to appeal to middle class and aspirational voters. YouGov polling in August found Labour was seen as being closest to trade unions, to benefit claimants and to immigrants, with comparatively few people seeing them as close to the middle classes or people in the South. In opposing the cuts Labour mustn’t allow themselves to become too closely associated with the benefit recipients losing out from cuts, or the trade unions striking against them (hence, of course, Ed Miliband’s focus on the “squeezed middle”)

Finally Labour have to make themselves seem renewed and relevant again. It will be easy for Labour to say what they are against, trickier to say what they are for.

The short term position for Labour is good, and will get even better next year. It may be that the economy sours and they have an easy ride back to power. If not though, they have an awful lot of hard work to do – Ed Miliband needs to ensure that the relative ease with which the party has re-established a lead in the poll doesn’t lead them to think that it’s in the bag. The good news for Labour is they have the luxury of being able to do all the work from the position of an opinion poll lead.


413 Responses to “End of year round up – Labour”

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  1. @all

    (I’m broadening this out from Robin because I don’t want him to think I’m getting at him personally).

    When I first heard Ed’s claim about the VAT costing an average family >£7pw, I dismissed it because it’s obviously silly: average people’s expenditure on VAT stuff isn’t enough to justify it, in fact it’s not even close. But a lot of people have attempted to defend it, albeit with liberal applications of handwavium. And this has got me thinking.

    Previous assertions of [Ed Miliband] regarding the “average family” start to make sense if you define the “average family” as earning around £60K. Now that’s nowhere near *any* definition of “average” in the UK, but married professionals in the South-East would be earning that much and their circle of friends may also do so.

    So I’m beginning to think to [Ed Miliband] the words “the average family” mean “two married professionals, each working full-time in the South-East, with two children”. This would match Ed’s usage of “the squeezed middle”.

    Is this actually [Ed Miliband] ‘s perception of “the average family”?

    Regards, Martyn

  2. This is a downright silly discussion. Ed Miliband was quite explicit about the source for his figure – it was from a Lib Dem claim during the election campaign, he clearly chose it for sound political and tactical purposes (i.e. the government couldn’t dispute the figure without some consequential embarrassment). There’s no point trying to make partisan points about it meaning he thinks the average family earn X, etc, etc

    In terms of what the actual impact would be on a family of average income, it would be a relatively simple calculation given average family income after taxation, average spending on housing costs, utility costs and reasonable assumptions on spending in other categories where VAT is zero or at a reduced rate.

    The Delliote figures in the Times this morning seem perfectly reasonable (though the Times headlines rather overegged them). Deloitte had the top ten percent of households (an income of £70,000 a year) paying an extra £561 a year, and a household on an average income of £25,000 paying an extra £150 a year.

  3. @Anthony Wells

    Er, you expurgated me unfairly: I was using the word “Red” to refer to Labour, not to Ed Miliband (I would have thought you knew me well enough by now to know I do that). When I used the word “Red”, I was refrerring to Labour: when I used the word “Ed”, I was refrerring to Ed Miliband.

    If you’d like me to be more explicit (say “Labour” and “Mr Miliband”), then fair enough, but you’ve condemned me for a sin I didn’t commit. Even worse, you’ve made my post slightly nonsensical.

    Regards, Martyn

    [Sorry Martyn – I did indeed think you were flipping into calling him Red- AW]

  4. If these government interferences (taxation) have no effect on the economy what is the point about discussing their level?

    If they do, why do politicians dissemble that they won’t have an effect, or that they will, depending on whether they are in power or out of it?

    I know the answer, the question is whether all voters are as aware as I. We may find out this evening.

  5. @Neil A

    “VAT is not payable on second hand goods. Surely someone on £10k pa would be well advised to source their “big ticket items” second hand? ”

    And where do second hand goods come from? From high income families replacing their furniture. The supply can only be maintained if the well-off continue to replace their furniture with high quality (i.e. expensive) items that will still be useable after a few years.

    [As an aside, talking about £10k families is stupid. £10k for a full time job would be below the minimum wage, and a family with just that income would have substantial benefits and tax credits.]

  6. Well, whatever way(s) we cut and dice EdM’s comment we know it has caused a stir if the discussion on here is any measure.

    He should be feeling really pleased.

    It will be interesting to see how quickly if at all VI is affected by the VAT increase.

  7. @Robin: Not necessarily. £5.93 x 35 x 52 = £10792.60. Less tax gives ~£9900. But you’re right about the benefits and tax credits etc, just being a pedant.

  8. @Robin,

    My £10k example was meaningless, and was simply plucked from a previous post…

    We can argue about exactly who the VAT hits hardest (and that rather depends on what you mean by ‘hard’ – £7 pw is nothing to someone on £100k, but is a great deal to someone on 10k)

    … a previous post by someone called “Robin”. Clearly not you, I imagine. Must be someone else with the same name?

  9. @Mike N

    He should be really embarrassed: he’s not just slightly factually incorrect, he’s wildly factually incorrect. Aren’t Labour meant not to lie to their constituents?

    @Robin

    Er, purchased second-hand furniture, like second-hand suits, comes from dead people (estate liquidations). The British Heart Foundation runs a second-hand furniture chain (h ttp://www.bhf.org.uk/shop/our-local-shops.aspx) based on this very fact.

    Regards, Martyn

  10. @Martyn

    I refer you to AW’s first para in his post at 4.27.

  11. We need the daily You Guv – roll on 10pm.
    Although most of any VAT spat effect will not show til tomorrow as most people will not be that aware til tonights news programmes.
    Also as the previous one was – 12 days or so ago we will have little idea what produced any movement (if there is any) in today’s daily poll, although I look forward to joining in the speculation.
    Personally I would not be surprised to see an ephemeral Con gain v Lab to at least neck and neck plus LDs up a tad (11/12%) due to less bad news on TV and a few recent LD deserters to KN coming back as they see their ministers fighting their corner etc…..but I am often wrong.

  12. @Colin & Martyn – accept the point over number of households – I just did a very rapid google search and found a figure of 17.1m but I couldn’t vouch for it’s validity and happy to accept yours.

    I guess one way to look at this is that we’re all talking about it, so at least on that score it might be valid to argue that Labour has done reasonably well on the news management front?

  13. @Robin

    …or Ebay. Or your local freesheet. Or somebody you know in a pub.

    Anyway, the point is that the scenario you’re outlining (high-end earners selling off their silver Sony CRT telly so they can replace it with a brand-spanking new flatscreen LCD/plasma with Sky HD which they then show off to everybody, grrrr) doesn’t happen that often. Your middle classes will pass on said telly to their kids or poorer cousins. Your upper classes will do what they always do: hoard it for their kids and grandkids. *Purchased* second-hand furniture doesn’t usually come from the route you described: this is the UK, not the US.

    @Mike N

    Good point. But for Labour to repeat a LibDem lie doesn’t make things better: it makes things worse – whereas previously, there was just one party lying to me, now there’s two. My life did not get better as a result.

    Regards, Martyn

  14. Martyn
    Sometimes I think you don’t see the funny side. From Ed’s point of view what can be more fun than quoting Clegg to attack the “Conservative-led government” and the people love it. And (sorry Howard) it is manna from heaven to have po-faced rightists telling potential Labour voters to get their furniture in British Heart Foundation shops while Osborne slums it in Klosters looking under the weather.

  15. @JimJam

    “We need the daily You Guv – roll on 10pm.”

    Although as you point out it’s likely to be an outlier. We’re going to need a week’s polls to see properly if anything has moved over Xmas.

    @Anyone

    Are we going to get any public polls on the by-election?

  16. barney

    if i remember correctly, martyn is not a rightist, however it is quite possible that he is po faced

    it is also possible that you have a wooden leg but i would not think less of you for that

    i may be wrong but judging by Martyn’s posts, i’m guessing that he is a man of limited means well used to frequenting charity shops

  17. Barney
    I take your point entirely -it was somewhat ‘let them eat cake’ was it not?

  18. R in N
    I believe Barne was referring to Neil A’s post – anyway I was.

  19. Richard in Norway
    I was not being personal about Martyn and if it seemed so I apologise. Lots of people seemed to be advising charity shops which might be practical but is a god-send to anyone seeking to engage in lampoon about the “conservative-led government”.
    Seriously, I did not mean to say that Martyn was either po-faced or right wing

  20. I’m not sure that asking people to accept a substantial reduction in their quality of life, because nice things are not essential, has ever worked. Even without it coming from the Pious St. Osborn of Klosters, true personal Austerity is a very hard sell.

    And of course, the decision on what food items are and are not VAT applicable has tended to be a little arbitrary. See Jaffacakes and the long struggle to define them as VAT exempt cakes rather than VAT applicable confectionery. And how a microwave dinner is VAT free, but instant noodle are VAT applicable savoury snacks.

    One note is that this year sees TV switch over. DVB television receivers are not VAT exempt. Many people will be quite surprised to be told that continued access to television is considered a luxury.

  21. Howard
    Thanks Howard. You got my point in the way I intended which was also meant to be light-hearted

  22. @Barney

    1) I had my sense of humour surgically removed and replaced by a factchecking gene. You can see the video on YouTube.

    2) I wasn’t telling people to get their furniture from BHF. I was telling Robin that much second-hand furniture comes from the estates of dead people, and submitted the existence of BHF’s stores as evidence. Why did you think I meant the former when it was plain I meant the latter?

    @Robin

    A company called “Survation” are doing a survey. The link is here: h ttp://survation.com/2010/12/oldham-east-saddleworth-by-election/ . I don’t know when it’s due out, and rumours are rife. You may find better answers on Anthony’s thread for O&S, which is here: h ttp://ukpollingreport.co.uk/guide/seat-profiles/oldhameastandsaddleworth

    Regards, Martyn

  23. barney/howard all

    i’m sorry ni got the wrong end of the stick

    it seems i’m the one who is poo faced, who’d ‘av thunk et

  24. Richard in Norway
    That’s something nobody would have thunk!
    Martyn
    My comment wasn’t aimed at you. Apologies.
    On Oldham, I agree and encourage all those risking over-excitement on the byelection to visit the site

  25. I am not suggesting that Tory party representatives should go on TV and tell people to buy second hand. That would be terrible politics, clearly. But I am not a Tory party representative (hell, I’m not even a member, just someone that generally votes for them). It is quite legitimate for me to point out when an argument is bogus, even if I often admire the political nous of those who use bogus arguments effectively.

    I also have quite a collection of second hand furniture, CDs, books, DVDs and various other bits and bobs, despite being quite capable of affording new stuff. And I’ve never paid VAT on a car in my entire life, as I’ve never owned one that was less than three years old.

  26. @Barney

    No offence taken, no apology necessary (although it was kind of you)

    Regards, Martyn

  27. Yes you can imagine the reaction, Tory Minister says buy second hand bit like when Edwina told the old to wear another jumper or some such.
    That was the nasty party though, nothing like that now of course after the Camerson re-brand.

  28. Of course if Caroline Lucas advised people to put on another jumper rather than turn up the heating, or to recycle old goods rather than contribute to the “throwaway culture” that would be wonderfully caring, progressive and left-wing. It all depends on your prejudices..

  29. Neil A – If Carolile Lucas said that it would confirm my viewpoint that she is not up to much as a politican and lucky to get voted in to the shadow cabinet.

  30. @ Martyn Neil too !)
    “I wasn’t telling people to get their furniture from BHF”

    You know that.
    I know that
    They know that.

    But you know how they operate by now Martyn-lurking around, watching out for any little phrase which can be turned in an instant manifestation of that which every decent person knows-
    Conservatives Hate Poor People and want to Grind their Faces in the Dust.
    :-)

  31. @ Neil A

    “Of course if Caroline Lucas advised people to put on another jumper rather than turn up the heating, or to recycle old goods rather than contribute to the “throwaway culture” that would be wonderfully caring, progressive and left-wing. It all depends on your prejudices..”

    Very funny Neil

    Got it in one .

  32. @ Colin

    “Conservatives Hate Poor People and want to Grind their Faces in the Dust.”

    I’m fairly certain the Conservatives love the poor – after all if it wasn’t for them, they wouldn’t be able to give benefits to the rich ;)

    “Of course if Caroline Lucas advised people to put on another jumper rather than turn up the heating, or to recycle old goods rather than contribute to the “throwaway culture” that would be wonderfully caring, progressive and left-wing. It all depends on your prejudices..”

    Point taken – but a slight difference in priorities, I imagine Caroline Lucas would be advising it for environmental purposes (she probably does anyway) as opposed to monetary purposes.

  33. @Billy,

    And therein lies the rub. For the left it’s better to do the wrong thing for the right reasons, than to do the right thing for the wrong reasons…

  34. What happened to the OE & S opinion poll, showing LDs in the lead?

  35. I would be interested to know if there is ever any attempt at a measure of the rates of inflation affecting second-hand goods.

    Many charity shops are operating to targets and sell a high proportion of new goods. It is also not uncommon nowadays to find them selling pretty ropey old clothes at prices higher than Primark for instance. There seems to be a growing assumption that anything ‘old’ must be fantastically valuable (correctly in some cases when compared to the quality and durability of what is on offer in the ‘poundshop’ economy.

  36. Raf – that particular OE&S was probably the product of someone’s fevered imagination.

    However, there is supposed to be a Survation OE&S poll some time this week. There is no news yet of what it shows.

  37. @ Neil A

    “For the left it’s better to do the wrong thing for the right reasons, than to do the right thing for the wrong reasons…”

    Same could be said for the right – just the goal posts swap sides.

  38. @AW

    Thanks for that. I only asked as i’ve noticed that on oddschecker, none of the bookies other than Betfair materially altered their odds, and even Betfair has now returned to its ex-ante position:

    Lab typically 1/5
    LD typically 7/2
    Con typically 14-1

    Maybe the Survation poll will change this, but to date (and apart from the Betfair aberration last night) the market has remained pretty static.

  39. billy bob

    my family are of the opinion that the charity shops have become rip off merchants in the last 5 years, and i did notice the same thing when i was last back home(i like interesting t shirts charity shops are good for the unusual)

    i heard on 5 live this morning that charities are one of the few sectors with increasing wages due to “recruitment” problems. no prizes for guessing what the other sector was

  40. The Guardian is reporting that Clegg will have to compromise on scrapping control orders. Is this drip, drip of news of compromises going to affect the voters’ view of the LibDems in the O & S by election?

  41. Regarding VAT on second hand goods – FYI if you buy them from a shop or dealer who is VAT registered (e.g. Cars, furniture etc), you pay VAT.
    8-)

  42. @Liz

    A compromise on Control Orders may actually help the LDs in a socially conservative constituency like OE & S. Remember, Control Orders were never actually unpopular in Labour’s Nothern constituencies. In fact, at the time of their introduction, every poll found the general public in favour.

  43. @Neil A

    ” It all depends on your prejudices..”

    Indeed, indeed, as long as we always recognise that prejudices reside in all of us and not just in those that we disagree with.

    “It is quite legitimate for me to point out when an argument is bogus”

    As long as my interpretation of what constitutes bogus argument isn’t tainted by prejudice, I presume. Be careful that the definition of bogus isn’t extended to arguments that don’t happen to accord with my prejudiced view of the world and, instead, just applies to arguments that are manifestly false and baseless. The two are very, very different things but can quite often be confused in the minds of people with strongly held political views, be they left or right wing.

    Talking more generally, I think the problem for the Tories with a VAT increase is that they have form on the matter which weakens their “no alternative, we really don’t like having to…” line of argument. The Thatcher and Major governments were quite partial to using it as a quick revenue raising device (in Major’s case to finance his government’s escape route from the poll tax fiasco) and, therefore, they lie accused, historically, of being a party that prefers indirect and regressive taxation to more progressive and direct revenue raising devices. Irrespective of the arcane and impenetrable micro arguments on how much extra tax a particular household will pay, VAT is a tax that takes very little
    account of people’s incomes and is completely random in terms of where the burden most heavily falls. Corporation, Income, Capital Gains and Inheritance taxes, and National Insurance contributions, broadly apply on the basis of the ability to pay and the wealth of the payer . VAT never does and, by definition, never can or will, irrespective of zero rating exclusions on some goods or services. We all benefit from the exclusions, irrespective of wealth or income.

    The political danger for the Tories is that it’s another splash of colour in the slowly developing canvas of a party that protects the affluent at the expense of the more powerless and voiceless sections of society. I suggest that this might not a good place for them to be as the cuts to services, price rises and job losses start to bite.

  44. @RAF
    I agree with you that the voters would probably like to retain Control Orders but it may show Nick Clegg as being weak as he has had to compromise on every one of his policies. The voters might think that even as a junior partner he should have got 100% of at least one policy important to the LibDems accepted by the Tories.

  45. Amber –

    It’s more complicated than that. For new cars, you pay VAT on the whole cost of the car. For a second hand car, the dealer can choose to charge VAT only on his profit margin for the car (on the grounds that second hand car dealers won’t normally be able to reclaim VAT on the second hand cars they’ve bought)

    Alternatively they can choose to charge VAT at the normal rate on the whole price of the car. It’s less paperwork, but obviously involving charging higher prices/paying more tax, so most car dealers will go for the VAT margin scheme.

  46. The following table lists the number of seats, (excluding by-elections held on the same day), which the main parties are defending in the May 2011 local elections.

    The sitting councillors were elected in 2007 and perhaps it will put in perspective just how much the Conservatives have to lose and just how far Labour has fallen back in local government in recent years.

    Metropolitan

    391 – Labour
    183 – Conservative
    181 – Lib Dems
    49 – Other

    Unitary

    912 – Conservative
    484 – Labour
    374 – Lib Dems
    182 – Other

    District

    3946 – Conservative
    1282 – Lib Dems
    724 – Labour
    699 – Other

    Total

    5041 – Conservative
    1837 – Lib Dem
    1599 – Labour
    930 – Other

  47. @Nick Hadley – “…completely random”

    Unlike the majority of other taxes (which people certainly pay, but appear at fixed intervals as a code on their pay slip, or are something that the accountant draws to their attention to periodically) VAT you pay a little bit pretty much every time you put your hand in your pocket.

    Osborne, very confident this morning, said that everything is already in place now to solve the deficit problem.

  48. ‘NICK HADLEY
    @Neil A
    ” It all depends on your prejudices..”
    Indeed, indeed, as long as we always recognise that prejudices reside in all of u’

    Wrong; I don’t have prejudices; I have clear logic; you have prejudices. I have freedom fighters, you have terrorists. Israel Govt has a capital city at Jerusalem; international law has it at Tel Aviv (Jerusalem under international is an international city); that’s one reason why Hamas view of not recognising (part of( Israel is correct-under international law much of what Israelis call Israel is not Israel, Those of us who belive in international law must therefore also ‘deny’ that much of what Israel calls israel exists. It’s actually occupied territory conquered by violence.

  49. Liz & RAF

    A YouGov poll at the start of December showed voters 56% to 36% in favour of control orders. There was, though, a 4.5% swing away from support since the previous month – an indication that people may be more prone to support civil libertarian stances if the arguments are publicly discussed. Lib Dem voters were against though by 51% to 43% – oddly enough these figures applied both to current Lib Dems and the much greater numbers who voted for them in May.

    I think however the important effect of a Clegg back-down will be not on voters but on activists and MPs. They are the ones who will see this as proof that the coalition is not delivering their policies in any way and Clegg is not being an effective leader.

    I commented yesterday on the possibility of the coalition breaking-up in 2011. It won’t happen over something like this – the Lib Dems are savvy enough to pick something populist such as a complete cave-in on bank regulation. It also won’t happen just because things are going badly if the Lib Dems feel they are getting their policies through. But retaining control orders will probably make ordinary Lib Dems feel there in nothing in the coalition for them or the Party.

    There is some satisfaction that you’d “rather be right than President”. Being forced to be neither, hurts.

  50. @ Nick Hadley

    “Talking more generally, I think the problem for the Tories with a VAT increase is that they have form on the matter which weakens their “no alternative, we really don’t like having to…” line of argument. The Thatcher and Major governments were quite partial to using it as a quick revenue raising device (in Major’s case to finance his government’s escape route from the poll tax fiasco) and, therefore, they lie accused, historically, of being a party that prefers indirect and regressive taxation to more progressive and direct revenue raising devices. Irrespective of the arcane and impenetrable micro arguments on how much extra tax a particular household will pay, VAT is a tax that takes very little account of people’s incomes and is completely random in terms of where the burden most heavily falls. Corporation, Income, Capital Gains and Inheritance taxes, and National Insurance contributions, broadly apply on the basis of the ability to pay and the wealth of the payer . VAT never does and, by definition, never can or will, irrespective of zero rating exclusions on some goods or services. We all benefit from the exclusions, irrespective of wealth or income.”

    Are there any business entities in the UK that receive pass through taxation?

    Even though they’re regressive, sales tax increases always seem popular. I admit though I did once vote for something similar to a sales tax, a property parcel tax of $100 (I’m guessing that’s roughly 67 pounds) for each parcel of property owned in the county. It was regressive because it didn’t take into account the value or size of the parcel of land, it was just flat on everyone. It was voted down though.

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