There was much to commend about the approach to taxation in the Lib Dems' election manifesto. Plans to tax capital gains at the same rate as personal income and the promise to raise the tax threshold to £10,000 were broadly progressive. A pledge to end an idea first floated in these very pages, the Child Trust Fund - introduced by Labour in 2002 to encourage families to save for their children, with the incentive of a modest government contribution - was not. It is a great shame, therefore, that Mr Clegg has succeeded in persuading his Conservative allies to support it. The Tories, at least, would have maintained a means-tested version of the fund.
Explaining the decision, the Treasury Secretary, David Laws, made the nonsensical argument that "government payments into the scheme are essentially being funded by public borrowing". As the co-directors of IPPR, the think tank responsible for drawing up the original baby bond policy, pointed out on newstatesman.com on 25 May: "Public spending . . . is not hypothecated to particular taxes or borrowing. It would make just as little sense to say that the police force was being abolished because it was being funded by borrowing." And, as Peter Wilby writes on page ten, abolition is particularly distasteful, coming from a coalition cabinet featuring 18 millionaires, several of whom have benefited from inheritances and family trusts.
