Goodbye, New Labour, you won’t be missed. And the fondest of fond farewells to Peter Mandelson, please don’t keep in touch.
Back to Old-style politics in which MPs and cabinet ministers have their say, no more is policy going to be dictated by a cabal of non-elected spin doctors with no understanding of the concept of ‘content.’
I believe that Cameron has given away more than he needed to, but the end result is a sensible compromise…
Cuts to bring deficit under control: Conservative policy wins, emphasis on sooner rather than later. Good.
Tax for low earners: LibDem policy to eliminate tax for those earning less than £10,000. Good.
Inheritance tax: Conservatives wanted to drop this, how many times can you tax the same money? LibDems get their way, IHT tax stays. Bad.
Capital Gains Tax: This could have been very, very bad. Labour eliminated the taper relief whereby tax paid depended on how long an asset had been held. But Labour never did understand how businesses work. LibDems wanted to make CGT rates more like Income Tax. That would have killed all entrepreneurial activity in the UK. Would you rather a) have a safe job, no possibility of losing money and a pension or b) risk your entire worth, risk losing your home and family and have no pension? CGT is supposed to be lower than Income Tax to compensate for the difference between being an employee and being an employer, and so encourage people to start businesses. Fortunately the LibDems did not get their way entirely. Instead CGT will rise on non-business assets such as shares and second homes. Makes a lot of sense since businesses are not discouraged. Could have been far, far worse. I still want to see the details just in case…
Voting reform: LibDems want Proportional Representation, and more resulting power for them but woolly government for us. Conservatives want the status quo. Conservatives have given away a referendum on the Alternative Voting system. This is the weakest possible negotiating point they could have given away, but maybe it was a LibDem dealbreaker. We need to the see details on this. Is the resulting referendum binding in some way?
Immigration: Conservatives want caps on numbers from outside the EU, LibDems want an amnesty on all illegal immigrants. This did not go down well with voters, once they started to examine LibDem policies after Clegg’s game-changing TV appearance. Conservatives get their way on this one, obviously.
Fixed-term parliaments: Next election scheduled for May 2015. Can’t see the point in this.
Mansion tax: I’ll finish on this one because it has a nice quanty element to it. LibDems had wanted a 1% annual tax on the value of homes above £2m. So on a home worth £3m you’d pay £10k p.a. Fortunately this silly idea has been dropped. Why is it silly? Let’s do the math on the £3m house. With interest rates so low, what is the Present Value of an annual £10k? What might happen to the value of that house? Now repeat the calculation for a house worth an arbitrary X.