November Column (2)

Written by Malcolm Bruce MP on Thu 20th Nov 2008

Tax cuts need to be fair, costed and permanent

Recognising that interest rates alone will not stimulate the economy, it seems that Labour and the Tories are both claiming to be in favour of tax cuts in spite of previously arguing against them

Well as John Maynard Keynes said, "When the facts change, I change my opinion. What do you do?"

The Liberal Democrats, by contrast, have long aspired to reduce the tax burden on lower and middle income earners. Over the last three years we have moved towards a policy of closing tax loopholes for the very rich (loopholes introduced, incidentally by Gordon Brown) and proposing using the money to fund surprisingly large tax cuts to lower and middle income groups.

This is a radically different approach from the other parties. The Tory proposal of paying employers who take people off the unemployment register is modest and limited. The Government's proposals represent a massive increase in borrowing which will have to be paid back in higher taxes at a later date.

Redistributing taxes from the very rich who are likely to spend less of it to lower and middle income earners who are more likely to spend it will help to ease and shorten the recession. It is accordingly even in the best interests of the very rich as it will help to restore the value of assets depreciated by the lack of confidence caused by impending recession.

I and my colleagues have long been pointing out that the dependence of the British economy on excessive and irresponsible credit. The creation of duff derivatives have made a bad situation much worse. It will clearly require a more responsible form of banking in future.

Nevertheless, the Liberal Democrats' plans are thought through, not a reaction to the current crisis and have the advantage of being fair, costed and permanent.

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Crossrail essential to Western Peripheral Route

A meeting of North East MPs and MSPs with the board and director of Nestrans highlighted the deep frustration at the apparent lack of commitment to the Crossrail project by the Scottish Government.

As far as I am concerned the proposals to fund an upgrade of the Aberdeen Inverness line and develop a commuter service with additional station stops between Inverurie and Stonehaven was an integral part of the Aberdeen Western Peripheral Route.

It was never intended to be just another by-pass road but depended on complementary public transport links.

What comes through loud and clear is lack of ministerial leadership and a determination by Transport Scotland not to carry out the kind of survey needed to demonstrate the potential demand for additional services.

Over the years I have campaigned with some success for additional services including Sunday stops, the opening of Dyce station and shorter journey times. I welcome the additional services to be introduced shortly from Inverurie. I hope these will serve to demonstrate that if extra trains are available it will lead to extra demand.

However this is not enough. What is required now is a step change which can only be delivered with extra investment in passing loops, signalling upgrades and new rolling stock.

This was always understood to be part of the AWPR and not to fund it would be an act of betrayal and, by denying people adequate alternative public transport options, contrary to environmental and traffic reduction objectives.

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Card account decision must herald change for post offices

After months of dither and delay, the Government finally scrapped the invitation to outsiders to bid for the Post Office Card Account and awarded it to the Post Office. This was always the right decision for the simple reason that the card account was set up in the first place for those people who specifically wanted to go on collecting their pensions or benefits at their local post office.

Welcome as this decision is it cannot be taken as anything other than a climb down from a political battle the Government has lost the will to fight. There is little doubt that the decision had a lot to do with Peter Mandelson. I said in the House that he clearly cast a long shadow over the decision (assuming Peter Mandelson casts a shadow).

He is also on record as favouring privatisation of the Royal Mail group and may conclude that the Post Office Card Account may help make the post office network more attractive.

However, on its own it cannot. What is required is a complete makeover of the range of services offered by post offices. This could start by the Government using its impending shareholding in RBS and HBOS to insist they offer the full range of services offered by other banks through the post office just limited access for basic account holders.

Thereafter, what is required is a much more imaginative development of public and private services through post offices to give them real commercial opportunity plus recognition that in smaller remoter communities the service is even more important but almost certainly requires a subsidy.

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Expectations high for Obama Presidency

The election of Barack Obama as the next President of the United States of America has been welcomed throughout the world. I twice met John McCain who is a maverick politician whose chances were dished by a combination of the credit crunch and his choice of running mate.

He is far sighted on climate change issues and willing to reach across the political divide for allies which may still make him useful in a changing political climate.

It was not always certain that Obama would win until the last few weeks. Expectations of him are high and many are bound to be disappointed. His critics accuse him of lack of substance but he has shown himself to be calm, composed and intelligent which are qualities the world needs.

Domestically, he has to work to restore confidence in the American economy and hence the wider world. That will require a greater willingness at least to listen to the views of others. It will be helpful to the rehabilitation of the USA as a trusted ally if there is to be more partnership working.

Obama has already indicated his commitment to greater support for Afghanistan and will no doubt be looking for more active participation from those European countries that have so far withheld it. He will need to move forward the Middle East peace process.

He will need to give a lead on climate change and not resort to protectionism.

His approach will become clearer when the shape of his administration emerges.

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Glenrothes SNP hubris alters campaign mood

The result of the Glenrothes by-election was a great surprise to everyone. Even as the polls closed Labour believed they had lost. The SNP were absolutely sure they had won.

That would, I suppose, be the norm for a result which was too close to call. It is not the usual feel for a comfortable win which is what Labour achieved.

My two Fife colleagues, Ming Campbell and Willie Rennie, told me weeks ago that this would be different from Glasgow East not least because Gordon Brown is a Fife MP and people felt he had been unfairly treated and was making a reasonable fist of tackling the financial crisis.

By contrast the SNP was tainted with hubris, seeming to believe that they would win just by saying so - failing to defend their record in Government and in leading the local council.

It is true that many councils have had to take difficult and unpopular decisions (and been roundly attacked for them by SNP councillors when they are in opposition). The difference is that councils have been further squeezed by the council, tax freeze imposed by the SNP Government making it difficult for the SNP candidate (as council leader) to hide.

At the same time the financial crisis has brought into question the SNP's extravagant claims about the benefits of independence and highlighted the considerable risks.

I acknowledge that the Liberal Democrat vote was squeezed although in the circumstances that was not surprising and the Tories suffered too.

What the by-election demonstrates is that Scottish politics is moving into a different phase where the momentum and outcome is less than clear.

My instincts have always been to stand by what I believe in and apply it to current circumstances and not be deflected by short term setbacks or challenges.