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Liberal Democrats best for tax & benefits equality - IFS


Analysis by the respected independent think tank the Institute for Fiscal Studies shows that the Liberal Democrats manifesto is the most progressive, spreading the burden of tax rises to pay for services and doing a lot more to reduce the impact of Conservative cuts to benefits.

Everyone in the first 60% of earners would be better off, long term, under the Liberal Democrats.

The same study (here) shows that the poorest will be hardest hit under Conservative plans, but that Labour would hit the poorest almost as hard as the Tories would.


Further comparison of the Labour and Liberal Democrat proposals by the IFS concludes (here):
"Both the Liberal Democrats and Labour propose increasing income tax. While the Liberal Democrat proposal would affect the highest-income half of adults, Labour’s proposal would only affect the highest-income 2%. But the revenue from Labour’s plans is vastly more uncertain, and highly likely to be lower than under the Liberal Democrats.

"Both the Liberal Democrats and Labour propose increases to benefits. But those proposed by the Liberal Democrats are much larger – reversing nearly all of the cuts planned for the next few years."

Labour has huge spending commitments that give most to those who are already doing well – reversing cuts for better off schools, abolition of tuition fees for those who will get well-paid jobs – but won't commit to reversing benefit cuts for the worst off.  Liberal Democrats have policies like the Pupil Premium that target help on those who need it most.

Labour policy is risky and won't deliver; Liberal Democrats give more help to those in need.

The Liberal Democrats believe that balancing the books on the backs of the poor and disabled, and demonising people who claim benefits, is neither acceptable nor responsible.

That's why we would:
- up-rate working-age benefits at least in line with inflation, ending the Tory benefits freeze,
- end the two-child policy on family benefits and abolish the Conservatives’ ‘rape clause’,
- reverse cuts to Employment Support Allowance to those in the work-related activity group,
- help young people in need by reversing cuts to housing benefit for 18-21-year-olds,
- increase Jobseeker’s Allowance and Universal Credit for those aged 18-24 at the same rate as minimum wages and
- scrap the bedroom tax.

We think that taxation should be honest and fair, which is why we would:
- share the burden of fixing the NHS equally by asking for a penny more on each band of income tax, which means that the better off would pay the most and
- reverse the Conservatives tax cuts for the wealthy on capital gains tax and inheritance tax so that those with the broadest shoulders bear the heaviest weight.

When the Lib Dems were in government, we insisted on policies such as raising people out of paying income tax and raising capital gains tax that Labour had cut. Although the Tories insisted that Labour's "bedroom tax" be extended from private sector to all rented homes, we insisted on a study that showed it was not working, which is why we would scrap it.

In a time of austerity, the burden was shared out more evenly and this meant inequality as measured by the Gini coefficient actually went down.

Liberal Democrats have a proven record of reducing inequality and the best policies to deliver further reduction if elected.


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