{"id":327410,"date":"2025-12-02T08:52:49","date_gmt":"2025-12-02T08:52:49","guid":{"rendered":"https:\/\/peraltafinancing.com\/uncategorized\/the-liberal-verdict-returnoftheliberal\/"},"modified":"2025-12-02T08:52:49","modified_gmt":"2025-12-02T08:52:49","slug":"the-liberal-verdict-returnoftheliberal","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=327410","title":{"rendered":"The Liberal Verdict \u2013 returnoftheliberal"},"content":{"rendered":"


\n<\/p>\n

\n

I\u2019m sure many of you will be aware of the budget and already digested multiple takes about it. I haven\u2019t bothered writing about Conservative budgets in the recent past as it would\u2019ve been a relentlessly negative critique. I thought I\u2019d cover off this one as there\u2019s a sense that this Labour government is getting into its stride and is trying harder to break with the past. This year\u2019s budget is a mixed bag, which makes it genuinely interesting.<\/p>\n

From a Lib Dems perspective, the costed tax rises at \u00a326 Billion are remarkably similar to the \u00a327 Billion tax increases proposed in the Lib Dems manifesto last year \u2013 absolutely astounding that the mainstream media hasn\u2019t picked up on this. This would suggest that the macro management of the economy is broadly going in the direction we would want, although the methods aren\u2019t necessarily of our choosing (insert gag about Morecambe & Wise and Andr\u00e9 Previn here).<\/p>\n

\"\"<\/a><\/figure>\n

I won\u2019t cover off every measure, that wouldn\u2019t make for an easily digested read, but here\u2019s my thoughts on some of the key measures announced yesterday.<\/p>\n

The Good:<\/strong><\/p>\n

Scrapping the two-child benefit cap: This constitutes a campaigning win for the Lib Dems, and from a political perspective is a rare example of Starmer and Reeves listening to activists within the Labour movement. Scrapping the cap lifts 450,000 children out of poverty and comes at a time when the birth rate is a a 100 year low, way below the natural replacement rate. This is the sort of redistribution you\u2019d hope to see from Labour<\/p>\n

Introducing the council tax surcharge: It\u2019s long been argued that the structure of Council Tax is inherently unfair, that\u2019s finally been backed up with policy \u2013 the surcharge of \u00a32,500 on properties over \u00a32 million and \u00a37,500 on properties over \u00a35 million is the biggest change to Council Tax since 1991 and is welcome IF it means councils will get more money overall<\/p>\n

Introducing the local tourist tax: This is a popular and widespread tax across Europe that we\u2019re only just catching up with. A few people have scoffed at this but if combined with greater Council Tax raising powers it makes the UK slightly less centralised in terms of revenue raising \u2013 97% of all tax goes directly to HM Treasury. As a Lib Dem I welcome more localisation and more discretion to tax and spend at a regional level<\/p>\n

\"\"<\/a>
There\u2019s a 12-week consultation on measures including the tourist tax, hopefully areas without a mayor, such as Newquay in Cornwall, will be able to levy a charge on overnight stays<\/em><\/figcaption><\/figure>\n

Increasing the online gaming + gambling taxes: Another measure widely campaigned for. Online gambling has low overheads, is very lucrative but causes huge social problems for problem gamblers. New measures see Remote Gaming duty increase from 21% to 40% and online betting duty increase from 15% to 25%. My Methodist ancestors would approve<\/p>\n

Freezing rail fares: The financial environment for travel has tied rail up in knots this century \u2013 there have been virtually no rises in fuel duty since the protests in 2000, by contrast regulated fares have risen above inflation year after year. Train travel is back to near pre-pandemic levels of usage, it\u2019s great see it get a boost with a fares freeze, even though they\u2019re still some of the highest fares per mile in the world<\/p>\n

\"\"<\/a>
The first rail fares freeze in a generation, will it breathe new life into the sector post-Covid?<\/em><\/figcaption><\/figure>\n

Increasing the minimum wage: The minimum wage is set to increase by 50p an hour to \u00a312.71 an hour for the over 21s. It certainly has come a long way since being launched in 1999 at \u00a33.60 an hour. Interestingly enough it\u2019s really kicked on since 2020 when it was just \u00a38.72. Through 25 years of real world outcomes we know that the CBI was spectacularly wrong in saying the MW would cause a significant uplift in unemployment, and by its very existence it\u2019s doing what right wingers want \u2013 which is to make work pay (except they\u2019d mainly reduce benefits to make that happen)<\/p>\n

The Average:<\/strong><\/p>\n

Freezing income tax thresholds: While everyone understands that public finances are bad, and tax rises have to come somewhere, freezing tax thresholds is a choice. The Chancellor could very easily introduce a new top rate (or wealth tax) or luxury lifestyle taxes (adding to the private jet tax introduced last year), instead of hitting people on average incomes<\/p>\n

Charging EVs pay-per-mile tax: Road charging has been talked about for decades. At some point all cars will have GPS trackers that will calculate your usage. Certainly it will be a fiscal necessity to tax EVs because fuel duty is a major part of the overall tax take. The devil\u2019s in the detail though \u2013 how usage is monitored, and the initial rate \u2013 3p per mile \u2013 we\u2019ll have to wait and see how it affects the EV sector where the life cycle cost of an EV has just dipped below that of ICE cars for the first time<\/p>\n

\"\"<\/a>
Taxing EVs when they become the dominant vehicle on the road is inevitable. I\u2019m sure the debate about precisely how this is done will rage for the next decade or so<\/em><\/figcaption><\/figure>\n

Restructuring of business rates: The rise in unemployment since Labour took office has happened almost exclusively in the hospitality sector. The government recognises it has to do something about this. The restructuring of business rates, with a higher change set on properties valued over \u00a3500,000 would appear too low to favour small independent businesses that much. The government wants to hit large corporate warehouses more, it probably needs bigger changes to favour the independent foodservice and pub sectors<\/p>\n

\"\"<\/a>
Pubs and restaurants are set to get some help with business rates \u2013 will it be enough?<\/em><\/figcaption><\/figure>\n

Continuing the pensions triple-lock: As time goes by there\u2019s a growing debate about this coalition-era policy which has lifted millions of pensioners out of poverty. Recently that debate has intensified \u2013 for many years the state pension has gone up by more than universal credit, sick pay, holiday pay, PIP or the carer\u2019s allowance. Will we ever see a rebalancing towards working-age welfare?<\/p>\n

The Bad:<\/strong><\/p>\n

Support for new nuclear, large and small: Britain was the first country to have a civil nuclear power programme, however throughout history we\u2019ve been lucky to have significant reserves of all forms of fossil fuels and in the 21st<\/sup> century we can also tap into all eight major forms of renewable power \u2013 hydro, wave, tidal, wind, solar, biomass, biogas and geothermal. This is pretty remarkable considering we\u2019re a small island. The UK could very easily go 100% renewable and become a major exporter of electricity to boot. New nuclear \u2013 large or small \u2013 takes too long to build, is more costly than renewables and still creates hazardous waste that we can\u2019t agree how to store. Fundamentally flawed, and a criminal waste of money when finances are so bad<\/p>\n

Cutting the Digital Services Tax: The government recently published a review into this tax where it acknowledged that it had pulled in a lot more revenue than first estimated and that revenue stream was increasing because the digital economy was growing so fast. The Lib Dems have called for an increase in DST, initial reports that it could be cut due to pressure by Trump on behalf of US tech bros, are disappointing to say the least<\/p>\n

\"\"<\/a>
It\u2019s only a few years old but the DST is a handy revenue raiser from co\u2019s that otherwise pay nothing<\/em><\/figcaption><\/figure>\n

Derisory new support for playgrounds and libraries: New Labour renewed most of Britain\u2019s social infrastructure comprehensively \u2013 a lack of new building programmes for schools, hospitals, leisure centres, council houses is a big failing and that\u2019s encapsulated in the pitiful amounts of money allocated for new school playgrounds and libraries: \u00a318 million for playgrounds and \u00a310 million for primary school libraries. These numbers are so small they\u2019re barely worth mentioning in a national policy speech of any kind<\/p>\n

\"\"<\/a>
We can build world class social infrastructure such as Kingsmead School in Cheshire again if we really want, the level of commitment and confidence has to change, though<\/em><\/figcaption><\/figure>\n

Renewed commitment to the Digital ID: This is simply a terrible idea that Labour just can\u2019t shake. ID cards were not in Labour\u2019s manifesto, nobody asked for them, and will always be problematic for those at the margins of society. At a time when the government can\u2019t afford to fund the Bakerloo Line Extension or build any Olympic sized swimming pools, it\u2019s set to waste billions on a large poorly thought out IT project just like it did on the NHS digital patient records scheme in the 2000s. Will Labour ever listen and learn from its own past mistakes?<\/p>\n

\t\t\t<\/div>\n\n","protected":false},"excerpt":{"rendered":"

I\u2019m sure many of you will be aware of the budget and already digested multiple takes about it. I haven\u2019t bothered writing about Conservative budgets in the recent past as it would\u2019ve been a relentlessly negative critique. 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