Written by Ollie Bradfield |
I recently spent 4 days in Brighton surrounded by fellow politics nerds, yellow t-shirts, and enough EU berets to make Farage dizzy. This was, of course, the annual Liberal Democrat Autumn conference.
Naturally, it got little coverage from the media – apart from a cursory mention of Gina Miller’s lack of a leadership bid, and Vince Cable’s failing to deliver an “erotic spasm” under high pressure (instead misspeaking by saying “exotic spresms”, much to twitter’s delight).
However, at the conference, members voted for several proposals Cable had outlined in a Guardian article the week before, namely on tackling the economic divide by focusing on wealth as well as income inequality.
He proposes three key policies; a Land Value Tax, a radical overhaul of inheritance tax to include gifts given to children before death, and reforming the pension system to encourage a fairer distribution of wealth, all of which would raise revenue for a “citizen’s wealth fund”, which would fund a system of lifelong learning, to avoid people getting trapped in a changing economy without the skills needed to change with it.
These proposals fit in with a lifelong tradition of the Liberal Democrats; a serious, pragmatic look at the problems the UK faces, and coming up with liberal solutions to ensure a fairer distribution of wealth. It’s not the magic money tree of Labour, and it’s not the ruthless cuts of the Conservatives, instead it sees a progressive, economically sound way of making the economy work for everyone, empowering people to fulfil their own potential as individuals rather than as class blocs.
“It’s not the magic money tree of Labour, and it’s not the ruthless cuts of the Conservatives, instead it sees a progressive, economically sound way of making the economy work for everyone…”
My job now, writing in a student paper, is to convince you that these ideas are not just good, liberal ideas for Britain generally, but especially good for students and young people.
A Land Value Tax, something pined for since the late 19th Century and a cornerstone of Lloyd George’s People’s Budget before being shot down by the Lords, would assist in solving the housing crisis. The housing crisis is an issue that overwhelmingly affects young people; our generation has been dubbed “generation rent” due to house prices far exceeding affordability. Hence housing being one of the National Young Liberals key campaigns this year.
A Land Value Tax would tax property based on the value of its land rather than its income. Shifting to LVT would mean that developers would be incentivised to build on their land rather than sit on it as land banks until it becomes more valuable. More houses would therefore be built and would go at least some way to solving the crisis we see before us.
“Shifting to LVT would mean that developers would be incentivised to build on their land rather than sit on it as land banks until it becomes more valuable.”
By focusing on wealth in addition to income inequality, it means that young people will get a fairer deal. Wealth inequality, as Vince outlines, “entrenches power and privilege…between…generations, by generating additional income for asset owners”.. One way he’s proposed to tackle intergenerational inequality is by removing the loophole of rich parents giving their children their wealth 7 years before they die, thus avoiding inheritance tax altogether.
Vince’s proposal would see all gifts over a lifetime worth over £250,000 be subject to the same amount of tax as income. This would in part level the playing field across and between generations, ensuring the liberal principle of meritocracy remains intact.
Meritocracy is at the heart of liberalism – it’s fundamentally wrong that one child should have more opportunities than another purely based on their parents’ wealth. It’s following this reasoning that Layla Moran reaffirmed in her speech at conference her opposition to selective grammar schools. These schools just don’t provide the social mobility they claim to, and merely serve to divide the rich from the poor rather than provide any kind of benevolent service.
“Meritocracy is at the heart of liberalism – it’s fundamentally wrong that one child should have more opportunities than another purely based on their parents’ wealth.”
Now, the pension reform proposals. The system as it stands currently benefits the top 15% of taxpayers, the reforms would inverse that, by putting a flat tax rate across pensions it would encourage lower earners to save and would avoid giving the very richest a tax break.
It is true that this isn’t especially exciting for young people. It must be stressed therefore that these proposals are part of a package of radically overhauling our tax system to promote wealth redistribution, and giving everyone the same chance in life regardless of their own or their parents privilege, which is naturally in the interests of the young – as we are the ones embarking on the adventure of life, any disadvantage will embed itself as injustice for at least a generation.
“[Young people] are the ones embarking on the adventure of life, any disadvantage will embed itself as injustice for at least a generation.”
Students are understandably wary of the Liberal Democrats, and I’m aware of the tuition fee-shaped elephant in the room (which is a topic for another article), but I believe that the Liberal Democrats can become the default party of students and young people once again, and these reforms, with exotic “spresms” or otherwise, can lead the way in making that a reality.