Leader's Monthly Report
July 4, 2010 12:00 AM
The biggest news of the last month has been the coalition government's budget. Clearly the country's finances are in a horrendous mess - that is Labour's legacy. I was at a meeting of Lib Dem Group Leaders recently where Nick Clegg said the situation the government had inherited was far worse than expected.
There are things I am not personally comfortable with - the VAT rise, for example, which hits the less well off disproportionately. At the micro-level the Government have chosen to take 77% from expenditure cuts and 23% by increasing taxation whereas Liberal Democrats would have adjusted that balance, in particular with more tax for higher earners. There are clearly things in there we didn't campaign for but that is the nature of coalition politics; you can see the Liberal Democrat influence in:
• The rise in personal allowances
• Increase in capital gains tax
• Levy on banks
• Child tax credit adjustments
An exclusively liberal Democrat government would have come up with a different package but this is all about compromise and our influence is curbing the right wing of the conservative party.
Keeping the council tax increase to 0% is superficially appealing but it will mean council cutting services even more and is an attack on localism, taking power away from elected local councillors.
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