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How to keep the economy regular

October 13, 2008

It has been, to say the least, a turbulent week on the financial markets.

There has been much discussion in the national media of trillions of dollars, worried bankers and a cooling of our national friendship with Iceland.

Sometimes it is difficult to get a handle on what it all means for us at the local level.

Well, as far as we know at this stage, East Sussex County, Hastings Borough nor Rother District Councils have money deposited in Icelandic banks. So we may not be facing imminent Council Tax rises.

On Thursday evening, I went to the local branch meeting of the Federation of Small Businesses to learn from them about how the local economy is bearing up.

Thankfully, there appeared to be a good deal of determination to dig in and to weather the economic storms ahead.

For someone who has spent most of his life working in the public sector, it is important for me to listen to local business people.

As it happens, my parents ran a small estate agency in St Helens, where I am from, so many of the struggles and tribulations being alluded to on Thursday evening were familiar territory.

It seems that there are consequences of the crash wherever you look. Over the weekend I found this article in The Times a useful summary for starters.

In his column last week, our MP Michael Foster gave his own analysis of the impact of Government action to shore up the banking sector.

Michael would like to portray the Liberal Democrats and the Conservatives as having similar approaches to recovering the economic situation.

And on every occasion that he gives in to this fantasy, I must correct him and demonstrate that the Lib Dems are fundamentally different from both Labour and the Conservatives on how to help the economy to recover.

As I have mentioned before in this column, the Lib Dems are committed to cutting taxes for low and middle income families.

Despite the financial difficulties that we have witnessed over the last week, this is still possible through taxation on pollution and by closing tax loopholes for wealthy families.

It is also the surest way of keeping the economy regular, as putting money back into people’s pockets will help with consumer spending, the problems of inflation and the housing market.

It is a key plank of the nine point plan set out by Vince Cable two weeks ago.

By contrast, the Conservatives are reeds in the wind of the Government’s thinking. They have committed themselves to matching Government spending plans. And their only solid policy ideas to date include the raising of the threshold on Inheritance Tax, and to freeze Council Tax for two years.

The first is a tax dodge for millionaires, and I don’t think we’ll be hearing much more of the second policy idea, with (largely) Conservative-run Councils struggling to recover their money from the Icelandic banks.

In the same vein, I wrote to my Conservative counterpart during the Tory Party Conference in Birmingham. I asked her to respond in writing to eight key questions about the economy.

I am still waiting for the reply.

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