South West Bedfordshire Liberal Democrats

Commenting on the ongoing crisis where Italy, Romania, Bulgaria, Greece, Turkey and Germany have experienced reductions of up to 30% in Russian gas supplies from Gazprom over the last few days, Sir Graham said:

"The freezing conditions across Europe highlight yet again the dangers of being so overly-reliant on Russia for a quarter of our gas. Gazprom has - understandably - diverted its supplies to keep Russian homes warm, leaving many European countries short and prices on the rise."

"And we just don't know what Gazprom will do next."

"But the wind is blowing harder than ever in the Scottish Hebrides and it is 15 C and sunny in southern Spain and Greece. If, instead of building gas pipelines, we were building electricity transmission infrastructure and switching from fossil fuels to wind and solar power, this week's energy outlook would be a different story. European renewables are the answer to our energy security."

"Indeed, the sun is also shining bright as ever in the Sahara. Importing electricity from North Africa would in fact be more secure than Russian gas, due to the larger number of potential trading partners and the fact that electricity cannot be switched off like gas. Electricity is the ultimate 'just in time' product: that which is not transmitted today is lost forever."

"The sheer hypocrisy of Labour to point the finger on bankers' bonuses is staggering. Labour presided over the biggest boom in bonuses this country has seen, from £3.1bn in 2001 to £11.5 billion in 2007. At the same time, they sat back and knighted the financial speculators who led this country to the brink of economic collapse.

"The Coalition Government inherited this economic mess from Labour and has taken decisive action to put the country back on track. We've capped cash bonuses at state owned banks to £2,000 and overall, the bonus pool is smaller than last year and considerably less than under Labour.

"In Government, Liberal Democrats are doing the right thing - implementing the Vickers' proposals to make banking safer in the future, continuing our fight to get the banks to lend more and introducing the banking levy which raises £2.5bn a year. All Labour can do is complain from the side lines.

"While Labour spent thirteen years being intensely relaxed about people getting filthy rich, Liberal Democrats have made clear that our priority is lifting the lowest paid people out of paying income tax all together."

"Promoting cycling and green transport is the right thing to do and I am delighted Liberal Democrats in the Coalition Government are taking action.

"This comes at a crucial time. Just five days ago The Times launched a cycle campaign in response to the shocking increase in fatalities among cyclists on our roads.

"It is absolutely essential people should be able to walk to work or cycle to school in a safe environment. The extra £8m for Sustrans will go a long way to achieving this.

"And the £7m for improved rail-cycle links will ensure that we continue to build a transport network which puts passengers first."

Clegg calls time on unfair tax system

At the Institute for Government last Friday, the Deputy Prime Minister gave a major speech on tax and supporting working families.

"The tax system," said Nick Clegg, "should be designed to reward effort, enterprise and innovation... and bear down on those things which are bad for our society.
"Attitudes to tax are a good proxy for our deepest political instincts and the three major political traditions in the UK - conservatism, socialism and liberalism - have very distinct approaches."

"The liberal approach, put most simply, is based on a profound commitment to the value of paid work. Citizens are empowered when they can keep the fruits of their own labour. And fiscal liberalism supports taxes on unearned wealth... precisely to lighten taxes on the incomes of hardworking people.

"So the Coalition is calling time on our unfair and out-of-whack tax system.
We've put up Capital Gains Tax; we've reduced tax breaks on pension funds for the very rich; we've clamped down on avoidance - the steps taken already will raise an extra £7bn every year by the end of this parliament. And our priority in government - from the front cover of the Lib Dem manifesto to the pages of the Coalition Agreement - is freeing the lowest-paid from income tax altogether... and cutting income tax for millions of ordinary workers.

"Whether you call them the 'squeezed middle', 'hard-working families', or, as I have, 'alarm clock Britain'… it's the people who whose incomes are too high to qualify for welfare benefits but too low to provide any real financial security who need this extra help. Over the last few decades wage rises have outpaced the increase in the allowance... so that more people have been sucked into the income tax net.

"At the last election my party promised to raise the personal allowance for ordinary taxpayers to £10,000 and I am extremely proud that the Coalition has committed to doing so over the course of this Parliament. I want to make clear that I want the Coalition to go further and faster in delivering the full £10,000 allowance.
Because the pressure on family finances is reaching boiling point … these families cannot be made to wait.

"Delivering the £10,000 personal allowance more quickly will need to be fully funded. But to those who say: we cannot afford to do this. I say: we cannot afford not to do this.

"It is often said that to govern is to choose... and, in particular, to choose whose side you are on. That is especially true when there is no money around. My choice - the Liberal Democrat's choice - is clear: I want to help hard-pressed and hardworking families. If that means asking more from those at the top - so be it.

"We are committed to eliminating the deficit... and eliminate it we will. But I am determined that we do so in a way that is fair...that rebalances our economy...that gives the right people the right rewards.
"People look to the Liberal Democrats to keep this Coalition anchored in the centre ground. They want economic competence, but they want compassion too.
It is our job to make sure this government delivers both."

The ASA ruled that the image used in an advertisement for L'Oréal Paris' Revitalift Repair 10 was altered to change Rachel Weisz's complexion, making it appear smoother and more even. It was judged to be in breach of industry code and "misleadingly exaggerated" the performance of the product.

The advertisement has been banned in its current form and the ASA has warned L'Oréal not to use digital retouching to misrepresent the effect of their products.

Commenting, Jo Swinson said:

"In 2010 there were 1,850 deaths and more than 200,000 injuries on our roads. That's some 600 every day. With mechanical failure already contributing to a significant number of these, the Coalition Government has made the right decision to keep frequent MOT-tests.

"This will also see the system strengthened through a combination of open public data and stronger regulation.

"Liberal Democrats strongly believe road safety should be central to the Coalition Government's transport strategy. I look forward to working with the Secretary of State to further this agenda."

"Today's figures show that on the whole young people have not been put off by the changes in the student finance system.

"This is due in no small part to the serious effort put in by the Coalition Government and many others in making sure that each young person and their parents knew all the facts about funding higher education.

"In particular, many families clearly now understand that all graduates will pay less each month towards the cost of their university education than they did before.

"There has been a larger drop in the number of older students applying to university. The Government will have to take a serious look at why this has happened, particularly as mature students for the first time also do not have to pay for their university education in advance.

"However, because mature students have more flexibility in when they apply, there are still good opportunities for people looking to start university this year to put in an application."

More power for Scotland

The Secretary of State for Scotland, Michael Moore, is determined to move Scotland forward towards greater devolution. As well as delivering the Scotland Bill, he is paving the way towards Home Rule.

In an interview with Liberal Democrat News he said: "These are exciting times for Liberal Democrats. We are leading the charge. The central issue at the moment is the independence referendum, which was in the SNP manifesto at their victory last May. We are clear, however, that they do not have the legal powers necessary [to instigate independence]. We are looking carefully as to how that referendum takes place. My job is to work with the Scottish Government to make sure we can devolve powers that are legal, fair and decisive.

"The referendum must be overseen by the Electoral Commission. On timing, we believe that a referendum needs to take place as soon as possible, as the uncertainty is extremely unhelpful to business."

Combining questions on a ballot paper is complex, and devolution is a separate issue to independence. So, while the Secretary of State is consulting the Scottish people on this, the Coalition government's view is that there should be a simple, straightforward, 'yes-no' question on independence.

"The suggestion of a third option, 'Devo-max' question would not resolve the issue and may well end up in the courts," explained Michael. "For instance, 55 per cent of the people could vote for full independence and 75 per cent plus vote for Devo-max. Alex Salmond believes if that was the result, then full independence would carry the day. Most democratic people would strongly disagree."

"This party has always been in the forefront of the debate for Home Rule," continued Michael. "The Liberal Democrats in the Coalition are delivering greater powers in the Scotland Bill. But the Liberal Democrats are not stopping there. Willie Rennie has asked Ming Campbell to set up a Commission to look at what powers Scotland should have within the UK. This would be similar to the Constitutional Convention, the Scottish Parliament and the Calman legislation for the Scotland Bill. In that way you get common ground and consensus before legislation."

There are a number of important questions the SNP has left unanswered: What regulation would be applied to Scottish banks and who would enforce it? Would they be prepared to buy out the UK Government's stake in RBS? Which currency would Scotland adopt? What would happen to Scottish membership of international organisations (including the EU), our armed forces, pension liabilities? What are the bottom line costs of independence?

As Nick Clegg said last Sunday on BBC's The Andrew Marr Show, "You would have thought for a party whose sole purpose in life is to advocate independence, they [the SNP] would have been able to provide answers about what it means for defence, for taxation, for investment, the currency, and that's what I think we should focus on."

Today I want to make clear that I want the Coalition to go further and faster in delivering the full £10,000 allowance.

Because the pressure on family finances is reaching boiling point.

Yesterday's GDP figures remind us that the road to the UK's economic recovery will be long and progress will be uneven.

Those GDP figures remind us that we cannot simply ride out these troubles.
Waiting for the good times to roll around again, nor can we return to business as usual.

The financial crash and the recession that followed were unprecedented, and they were global. But the UK's weakness in the face of those events was a damning indictment of the way our economy had been run.
An economy that became closed, elitist, driven by vested interests. Where we prized recklessness and short-term gains, and undervalued stability and hard work.

So picking ourselves up for good means fundamental reform. Hitting the reset button to ensure that not only does prosperity return, but, this time, it's properly shared and really lasts.

The first part of that is clearly deficit reduction.
Filling the black hole; wiping the slate clean;
Preventing years of higher interest rates and fewer jobs;
Ensuring that the next generation does not pay for this generation's mistakes;
Creating the sound public finances, the macroeconomic stability that we know is a prerequisite for lasting growth.

But, beyond that, we must also rebalance our economy: ending our overreliance on financial services and the South East;
Shifting from consumption to investment;
From debt-driven bubbles to sustainable growth.

And there is another element of rebalancing.
Rebalancing our tax and benefits system, because both need to be rebuilt with work at their heart, restoring some sense to the assistance and rewards the state provides.

We cannot pin all our hopes on the traders or the bankers. It will be the millions of hardworking Britons who deliver the nation from these difficult times. So we must now make the most of all of our human capital. And we must help struggling families stand on their own two feet. That means a benefits system that gets more people into work and a tax system that ensures work pays.

Today I want to say a word on each.

First, benefits.

I have always believed in a welfare system that helps those in need - those who cannot work must be protected. And those who have jobs must be confident that, should they lose them, there is a safety net in place.

That is precisely why, in the Autumn Statement last year the Coalition committed to the full uprating for pensions and out-of-work benefits from April - 5.2%, in line with inflation. Not everyone agreed that "the unemployed" should receive the full uplift, certainly not in the current climate. And, if you believed everything you read, you would think that these benefits are, essentially, unlimited handouts for the 'idle poor'.
But that just shows what is so often wrong with this debate.

For one thing, for decades now benefits have been uprated in line with prices while earnings have generally increased at a faster rate. So the value of benefits such as Jobseekers Allowance have actually shrunk over the years compared with the incomes of those in work.

But, even more importantly, abuse of the benefits system by a minority has obscured the needs of a deserving majority.
The older people who have contributed to our society for their whole lives.
Those who cannot work due to disability or serious illness.
And - the group most often forgotten - working people who have been laid off, through no fault of their own. And, most often, for short periods of time.

Yes, sometimes the system is exploited - and that cannot be accepted.
But the majority of people who claim JSA are off benefits within three months.
People who pay their taxes, support their families, but are temporarily down on their luck. So we need a benefits system that helps those who can work into work.

And it is that simple principle that drives the Coalition's welfare reforms. From the Universal Credit, to the benefits cap, to the Work Programme and the Youth Contract.

While the economy was booming. We saw four and a half million people stuck on out-of-work benefits.

The number of young and unemployed hardly changed. There are now 2.6m people on incapacity benefits. 900,000 of them have been parked there for 10 years or more. And where children grow up in homes where no one works they are twice as likely to experience long spells of unemployment themselves.

It isn't right; the country can't afford it. The Coalition is determined to see it change.

Nearly 70 years ago, when William Beveridge designed the welfare state he imagined a system that would give people protection from cradle to grave. Not one that would act as a crutch every day in between. The state must offer security in hard times.
But it should not, he warned, 'stifle incentive, opportunity, responsibility'.
In the words of another great liberal, John Stuart Mill, 'assistance should be a tonic - not a sedative'. I couldn't agree more.

Tax - the different traditions

And it is those same values, that same belief in the potential of ordinary men and women to flourish that needs to be instilled in our tax system too.

My philosophy on tax is simple: The system should reward effort, enterprise and innovation and bear down on those things which are bad for our society.

That sounds like a proposition with which most people would agree. But attitudes to tax are a good proxy for our deepest political instincts. And the three major political traditions in the UK - conservatism, socialism and liberalism - have very distinct approaches.

For those on the philosophical right, taxes are necessary but there is an understandable fear that tax-done-badly can threaten entrepreneurialism and business, strengthening the hand of an intrusive state. That wariness means the right can be less inclined to promote tax as a way of redistributing wealth and opportunity, putting less of an emphasis on using the tax system to tackle inequality, for example, between those who earn their income and those who are asset rich.

For the traditional left, on the other hand, taxes are the principal means of redistribution. Socialists will support a penal rate of tax on the highest earners, simply because it makes them poorer.

For them, tax is a badge of socialist success: the more, the better. They would rather draw money in through the state and then hand it back to people rather than letting them keep more of their earnings in the first place.

The liberal approach, put most simply, is based on a profound commitment to the value of paid work.

Citizens are empowered when they can keep the fruits of their own labour. As Gladstone said, it is better for money to 'fructify in the pockets' of the people who earn it, rather than in the Treasury and fiscal liberalism supports taxes on unearned wealth, precisely to lighten taxes on the wages of the hardworking.

A simple choice

Those principles could not be more important today. Because, in developed economies around the world, in every country now seeking to get back on the right path, where money is scarce, where every day families are tightening their belts, the biggest question we face is this: how is that burden shared?

That's why, this week, we heard President Obama devote his State of the Union Address to greater fairness in the American tax system. It's why tales of tax avoidance are filling our newspapers everyday. And every politician now has a simple choice: do you support a tax system that rewards the hard-working many? Or do you back taxes that favour the wealthy few?

I know which side of the line I stand on: The UK's tax system cannot go on like this.
With those at the top claiming the reliefs, enjoying the allowances, hiring other people to find the loopholes, while everyone else pays through the nose.

So the Coalition is calling time on our unfair and out-of-whack tax system.

We've put up Capital Gains Tax - Ending the scandal, under Labour, of a hedge fund manager paying less on their shares than their cleaner paid on their wages.

We've reduced tax breaks on pension funds for the very rich.

We've clamped down on avoidance and taken steps to raise an extra £7bn through closing the tax gap.

And our priority in Government, from the front cover of the Liberal Democrat manifesto to the pages of the Coalition agreement, is freeing the lowest-paid from income tax altogether and cutting income tax for millions of ordinary workers.
Raising the personal threshold to help the squeezed middle

Over recent weeks you will have heard a great deal about fairness at the top, through Vince Cables' reforms to curb excessive executive pay.

You will have heard a great deal about fairness at the bottom, through reform of our welfare system to ensure benefits are fair and reasonable, and to get more claimants into work.

This is about fairness in the middle. More money in the pockets of the people who need it.

Whether you call them the 'squeezed middle', 'hard-working families', or, as I have, 'alarm clock Britain', cutting income tax is one of the most direct tools we have to ease the burden on low and middle earners. The people whose incomes are too high to qualify for welfare benefits, but too low to provide any real financial security. The group whose plight the Resolution Foundation has done so much to highlight.

The working mum whose bills keep rising but whose wages do not.

The father kept awake in the dead of the night, worried tomorrow the company will be laying people off.

The young couple who used to look forward to the holiday they would book or the car they would buy, but who now know that if the boiler breaks or the washing machine packs up, the money just isn't there.

Go back 50 years or so and many more working people were exempt from income tax thanks to a more generous tax-free threshold. But over the last few decades wage rises have outpaced the increase in the allowance. Sucking more and more people into the income tax net. And, while in the early 70s, the Personal Allowance was worth around 28% of average earnings. By 2010 that had dropped to around 20%.

At the last election my party promised to raise the personal allowance to £10,000 for ordinary taxpayers. And I am extremely proud that the Coalition is on track to do so over the course of this Parliament. We'll make sure that anyone earning £10,000 or less will pay no income tax at all and for those on middle incomes, the first £10,000 they earn will be tax free.

For millions of basic rate taxpayers - ordinary, hardworking people - that means paying £700 less in income tax each year, around £60 a month.

In the 2010 Budget we increased the tax allowance from £6,475 to £7,475. This year we have already announced a planned rise of an additional £630 - meaning that a total of 1.1 million more people will no longer pay income tax at all.

But today I want to make clear that I want the Coalition to go further and faster in delivering the full £10,000. Because, bluntly, the pressure on family finances is reaching boiling point.

Compared to those at the top, these families have seen their earnings in decline for a decade and that's got worse since 2008, with lower real wages and fewer hours at work.

Ongoing consolidation in the UK public finances has meant necessary increases in taxation, reductions in spending, restrictions on public sector pay, and higher contributions on pensions.

Last year brought much higher world inflation, some food prices have doubled, some energy prices have gone up by 50%.

And, yes, we are now seeing some moderation in inflation.

But, in just three years, real household disposable incomes have fallen by some 5 per cent, one of the biggest squeezes since the 1950s, since the records began. These families cannot be made to wait.

Household budgets are approaching a state of emergency. And the Government needs a rapid response.

Delivering the £10,000 personal allowance more quickly will need to be fully funded. We cannot just cut taxes by raising borrowing - that is just extra taxation deferred. And it would undermine our success in restoring stability and credibility to the public finances. So we need to find the money. And that will not be easy, of course.

But to those who say: we cannot afford to do this. I say: we cannot afford not to do this. And it is because of the pressure our economy is under that there is now an urgent need to give families more help; an urgent need to rebalance our tax system so it rewards work and encourages ordinary people to drive growth. And that means those who are better off paying their fair share.

In its recent excellent report Divided We Stand, the OECD noted how the incomes of the richest 1 per cent have soared away from everyone else over the last 20 years and showed that these people could be making a bigger tax contribution.

They also made clear that the right way to do this is not to increase marginal tax rates on work any further. This would simply drive many of the rich away to other countries. Or encourage them to use tax avoidance mechanisms more aggressively.
Instead, they suggest, governments need to look at tackling industrial-scale tax avoidance.

As well as at the allowances and reliefs which favour those on very high incomes that is how we can raise the average taxes paid by the very rich, without any further rise in marginal rates.

To that end the Coalition set up the Aaronson Review to look at a General Anti-Avoidance Rule on tax so that the tax industry cannot spend all its time creating ever more contrived schemes, undermining the principles and intentions of the system.

There are a range of other, specific areas where we need to be tough too, not least stamp duty avoidance, particularly on higher end property sales and the transferring of assets and income abroad to avoid UK tax.

We need to look at what more can be done to "green" the tax system. Not just because we care about the planet we leave our children - although that would be reason enough. But because, when the decision is between taxing pollution or taxing hard-graft, the right impulse is obvious.

And, there is another big part of the tax system where I believe we need to be much more ambitious: Serious, unearned wealth.

The eye wateringly lucrative assets so often hoarded at the top. We still live in a society where, for so many people. How much you earn can never compete with how much others own. Our tax system entrenches that divide. And we need to be bold enough to shift the burden right up to the top.

I know the Mansion Tax is controversial, but who honestly believes it is right that an oligarch pays just double the Council Tax of an average homeowner even if their house is worth one hundred times as much?

And who seriously thinks we would kill aspiration through a levy on the 0.1% of the population who own £2 million pound homes? The Mansion Tax is right, it makes sense and the Liberal Democrats will continue to make the case for it. We're going to stick to our guns.

So, to finish as I began: we are living in tough times. And many families are feeling the pinch. We need more of those who can work in work, and real rewards and incentives for those who are.

It is often said that to govern is to choose and, in particular, to choose whose side you are on. That is especially true when there is no money around. My choice - the Liberal Democrat's choice - is clear:

I want to help the hard-pressed and the hardworking. If that means asking more from those at the top - so be it.

We are committed to eliminating the deficit, and eliminate it we will. But I am determined that we do so in a way that is fair.

That rebalances our economy.

That gives the right people their dues.

People look to the Liberal Democrats to keep this Coalition anchored in the centre ground. They want economic competence, but they want compassion too.
It is our job to make sure this Government delivers both.


Thank you.

Between now and the Budget, Nick Clegg and the Liberal Democrats in Government will be arguing for faster tax cuts for hard-working families, promoting work and growth, and rewarding innovation, paid for by increasing the amount paid by the richest.

And the Liberal Democrats in Coalition are already making the difference: