Liberal with your money

Last week I had a look at the Conservative party proposal to fund £12bn of savings through a new Efficiency drive in the public sector. I concluded then the plans were unlikely to generate a fraction of the sums quoted. In part this was because they were covering ground that was already the focus of efforts to generate savings and in part because some of the proposals were based on full year projections when an incoming Government starting in May would not have a full year to start with.

So if I am sceptical about the Conservative's plans the Liberal Democrats financial proposals appear eye-wateringly fantastic. £17bn tax redistribution alongside a spend and save package aimed at generating a net £10bn a year after 2010/11. I am not a great expert on the fiscal arithmetic but the critique of the Lib Democrats tax proposals here is fairly balanced. It has been costed and independent observers generally believe the figures quoted are reasonable. What it fails to observe is that the projected savings may be eroded by the tax avoidance industry. Certainly the £5bn targeted from anti-avoidance measures strike me as a triumph of hope over experience. I also cannot believe that those home owners sitting on a £2m+ pile will not sit by and let the state take a 1% levy. Finally hitting the airline industry with a per plane duty may not be viable in the wake of the current disruption to services - huge losses are currently being suffered by carriers. So overall a creditable effort but not one that quite does it for me. Either those ambitions of a £10,000 threshold will need to be phased in or like all the other parties there will have to be an increase in either the scope or basic rate of VAT.

So on to the spend and save package. Here I think they have done a good job. The savings proposals for the most part in quite specific areas. Whilst many will welcome the end of the ID card scheme and biometric passports, they may feel less comfortable about the proposals on Trident and the reform of winter fuel payments. There are weak spots in these proposals. A lot rides on our old friend Whitehall waste. The Lib Dems also appear to dislike Quangos so much they are going to abolish them twice (once in Education and once everywhere else). These proposals may not withstand scrutiny once they see the light of day but I doubt whether any party does not have a bonfire of the Quangos in its sights. And we do at least we know what a Lib Dem Government would do to save money. And no-one - even the Labour and Conservatives who must now consider how to deal with resurgent support for the Lib Dems - can argue that the proposals lack transparency.

My challenge to the two main parties would be for equal transparency. Do I think we'll get it? If they want to recover lost ground I think they must. The two party cartel is having to deal with a challenge to its inalienable right to take it in turns to run the country. They should stop trying to tell us what they think we want to hear and tell us instead what we need to know.