The significance of Nick Clegg's tax plan

What will the impact be of the Lib Dems running on a tax cutting platform?

Let's assume for a moment that anyone, aside from activists and wonks, notices the switch Nick Clegg has made. This, I think, is a pretty heroic assumption. But let's make it anyway.

Let's also assume the strategy doesn't come apart in Nick Clegg's hands.

This is a still more heroic assumption. The plan is preposterously incredible. And even those bits that don't look ridiculous may look threatening. Quite a lot of people are being told that they will face extremely large tax increases under the Lib Dem plans.

It is, from my own direct experience developing such "costed" programmes, quite likely that losers will feel angry and alienated, while winners don't believe a word they are being told.

But these assumptions having been made, there are really two possible ways that Clegg's big move will alter the landscape.

The first is to make life difficult for the Tories. The Libs are puffed by everyone as having outflanked the Conservatives, making Simon Heffer even crosser and activists worried. Then Conservative votes begin to seep to Clegg. 

This was the political logic of Orange Book Liberalism. And very strong it was.

Unfortunately Clegg has implemented it a few years too late. There was a moment, after 2001, when Orange Book Liberalism posed a mortal threat to the Tories. That moment came and it went, and they missed it. So right strategy, wrong time is my reaction to Clegg's speech.

But that doesn't mean it won't have an impact. Because there is a second possibility.

Clegg's big move on tax changes the centre of the debate on tax and spend. It isolates Labour and makes it harder for the noises the Tory leadership is making on long term spending trends to appear harsh and right wing.

For the Liberals to claim there are billions of pounds of efficiency savings to be made lends political support to those of us who agree that public spending has been increasing too rapidly.

I think, therefore, that Clegg's move is very significant. It's just that I am not sure that it is very significant for him.

Comments

[thomas]

Mr Finkelstein, it seems you are somewhat divided over this announcement.

On the one hand you have gone all Victor Meldrew, as you ghast became well and truly flabbered by the possibility that Clegg (Clegg!) would say such a thing, while on the other hand you have sunk into a world of self-delusion that the contrast with Cameroonian economics highlighted by this somehow proves your zealotry right.

Who is unravelling now? How long before Mr Osborne is reshuffled into Grant Shapps' drinks cabinet?