Vincent Cable

Liberal Democrats | Twickenham

Dr Vince Cable MP: We Can Learn Lessons From The Reforms Of The 1906 Liberal Government

In a speech hosted by Bloomberg LP to celebrate the hundredth anniversary of the Liberal General Election landslide in 1906, Vince Cable, Liberal Democrat Shadow Chancellor today examined what ‘economic Liberalism’ means 100 years on.

Dr Cable highlighted that the 1906 government was characterised by a combination of economic liberalism versus the protectionism of the Conservatives. The Liberal Government laid the foundations for welfare- pensions for those aged 70 plus, benefits for the sick and disabled and they also created employment exchanges. The 1906 Liberal government was radical in its approach to taxation including the tax of wealth and high incomes, and was noted for its budgetary discipline- Dr Cable explained he wanted these elements to be combined again in the 21st century.

Dr Cable highlighted that the Liberal Democrat tax commission is working towards a set of proposals, not yet agreed which may include substantially lifting the threshold at which people start to pay income tax, possibly by as much as £10,000. The commission is also examining a fairer system of taxation which involves scrapping the council tax but does involve removing some of the provisional allowances enjoyed by those with substantial income and wealth, particularly on capital gains tax. A greater emphasis on environmental taxation, in particular aviation tax is also being examined.

The Tax Commission is also looking at ways to give meaning to localism in taxation. Dr. Cable will discuss ideas that the commission are considering, which include replacing council tax with local income tax but offsetting cuts in national tax, transferring business property taxation to local authorities (with safeguards,) and a progressive form of property tax which unlike council tax is related to people’s wealth and ability to pay.