Could NHS reform be the Lib Dems' downfall?

Dissent among party members over the health and social care bill has overshadowed spring conference.

This weekend's Liberal Democrat party conference has been dominated by one issue: the NHS. Yesterday, it looked as if dissent among the party rank and file had been stifled, when a vote to "kill the bill" was blocked. A rival motion that called on Lib Dems to support the health and social care bill, put forward by Baroness Shirley Williams, was selected instead. This was a relief for Nick Clegg and the rest of the party leadership, under pressure from rebels who see the Lib Dems as having sold out their social democratic principles. Clegg, speaking to Sky News, was adamant that reform did not threaten the NHS:

Of course it's unsettling when you see lots of people saying "it's going to privatise the NHS and destroy the NHS". If I thought it was going to privatise or destroy the NHS, it would never have seen the light of day.

But the reprieve was short lived: today, members partly rejected the "Shirley Williams motion" and refused to fully endorse the bill. Activists voted 314 against 270 to remove a crucial line calling for peers to support its final stages.

This will have little effect on the bill's passing - Lib Dem members have not called on peers to block the bill, but in a sign of how unhappy many are, they can not bring themselves to support it, either.

This is an embarrassment for Clegg, who will now be accused of supporting a reform that not even his own party members want. It's an embarrassment for the party, too, who now appear to be pushing ahead with NHS "privatisation", even though they can't decide if they like it or not. If the Lib Dems were hoping this conference would galvanise public support, and start winning back voters who have deserted the party since 2010, they may have been sorely mistaken.

Daniel Trilling is the Editor of New Humanist magazine. He was formerly an Assistant Editor at the New Statesman.

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Autumn Statement 2015: whatever you hear, don't forget - there is an alternative

The goverment's programme of cuts is a choice, not a certainty, says Jolyon Maugham.

Later today you will hear George Osborne say there is no alternative to his plan to slash a further £20bn from lean public services by 2020-21. He will also say that there is no alternative to £9bn cuts to tax credits, cuts that will hit the poorest hardest, cuts of thousands of pounds per annum to the incomes of millions of households.

But there is.

As I outlined here the Conservatives plan future tax cuts which benefit, disproportionately or exclusively, the wealthy. Suspending those future tax cuts for the wealthy would say, by 2020-21, £9.3bn per annum.

I also explained here that a mere 50 of our 1,156 tax reliefs cost us over £100bn per annum. We don't know how much the other 1,106 reliefs cost us - because Government doesn't monitor them. And we don't know what public benefit they deliver - because Government doesn't check.

What we do know, as I explained here, is that they disproportionately and regressively benefit the wealthy: an average of £190,400 per annum for the wealthiest.

And we know, too, that they include (amongst the more than 1,000 uncosted reliefs) the £1bn plus “Rights for Shares Scheme” - badged by the Chancellor as for workers but identified by a leading law firm as designed for the wealthiest.

Simply by asking a question that the Chancellor chooses to ignore - do these 1,156 reliefs deliver value for money - it is entirely possible that £10bn or more extra in taxes could be collected without any loss of  public benefit

To this £19bn, we might add the indiscriminate provision - both direct and indirect - of public money to wealthy pensioners.

Those above basic state pension age enjoy a tax subsidy of up to 12% on earned income.

Moreover, this Office for National Statistics data (see Table 18) reveals that the 10% of wealthiest retired households - some 714,000 households - have gross pre-tax and pre-benefit private income of on average £43,983. Yet still they enjoy average cash benefits from government of £11,500 per annum.

Means testing benefits to exclude that top 10 per cent of retired households would save £8.2bn per annum. And why, you might wonder aloud, should means testing be thought by the government appropriate for the working age population, yet a heresy for retired households?

Add in abolition of that unprincipled tax subsidy and you'll save even more. 

So there are alternatives. Clear alternatives. Good alternatives. Alternatives that enable those with the broadest shoulders to bear some share of the pain. Don't allow yourself to be persuaded otherwise.

Jolyon Maugham is a barrister who advised Ed Miliband on tax policy. He blogs at Waiting for Tax, and writes for the NS on tax and legal issues.