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Topic 1: Cuts and the Economy - Merlene Emerson

October 30, 2009 5:47 PM
By Merlene Emerson, Chair of the Chinese Liberal Democrats and Parliamentary Candidate for Hammersmith in EU Chinese Journal: Shadow Parliament

Topic 1: To deal with Britain's increasing deficit, what kind of public spending should be cut? And how these cuts would impact or help, if any, the ordinary local Chinese people?

Public finance is currently the hottest topic among the British major parties and politicians. This year alone, the deficit of Britain is believed to strike 175 billion pound. And the total debts of the government could hit 1.2 trillion pound next year. Under the current situation of economic recession, to cut spending is probably the best choice for the country. The question now is: where should we cut? How, and to what extent, would these cuts influence the Chinese community in the UK?

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Merlene Emerson

Vince Cable MP, our Treasury spokesperson has said that the country has suffered a heart attack with the banks at the centre. We are slowly getting out of the intensive care unit. But when we are out, some serious lifestyle changes will be required to be made.

The next General election will be fought over the economy and on who can be trusted to help us out of the financial recession. The Liberal Democrats believe that:

First we will need to ensure that the banking system is better regulated and it does not happen again. There has been an imbalance in our economy in favour of the financial sector in the City of London. Some banks have grown too large to fail and we certainly must not allow things to go back to business as usual with the return of the high risk high reward bonus culture.

Secondly, at least three quarters of a million people have become unemployed since last year and a million young people under 25 are now jobless. It would be better to pay these people to work than to pay for them to be jobless. Liberal Democrats will introduce incentives, working with the private and voluntary sectors and local authorities to help the unemployed into work, improving homes, working in new environmental projects and in providing training and apprenticeships.

Third, we will have to deal with the huge deficit not just through cuts in expenditure but also with fairer taxes. There is a 13 percent difference between what the Government is spending as compared to what it collects through taxes. This year's deficit is likely to be one of the highest in Europe. We will borrow £175bn this year alone. Total national debt could hit £1.2 trillion next year - £20,000 for every man, woman and child.

Who should bear the brunt of these cuts then? The gap between the rich and poor have grown under 12 years of a New Labour Government. They abolished the lowest band of 10% tax and and even those on minimum wage are currently taxed. The Liberal Democrats want to raise the threshold for tax so that only those earning over £10,000 per year will have to pay tax. This will take 4 million low paid workers and pensioners out of the tax bracket and will also provide greater incentive for those on benefits to get back into work.

The Conservatives have pledged to raise the threshold of inheritance tax to £1 million which will benefit the top 6% in society. The Liberal Democrats will instead introduce a levy of 0.5% on value of homes worth over £1million. Those home owners are likely to have benefited from the rise in property prices over the years and can well afford the levy to help our economy.

In addition to the above, Liberal Democrats have ear-marked a number of new expensive projects to cut which would not affect important front-line services. These include Trident submarine system that UK does not need nor can we now afford. We would also axe the expensive ID card system. It is unlikely to achieve the stated aims of preventing terrorism or routing out benefit frauds. The additional tax burden of setting up the ID card scheme will be £200 per person, a cost which can be better spent on better policing and border controls.

In addition to these cuts, there are also efficiency savings that can be made and all public spending have to be looked at critically. Liberal Democrats support greater power to local government. Local people know best whether public services are value for money and are better placed to choose how their money is spent, in ensuring there are good local schools for our children and hospitals for the elderly.

So how will our policies benefit the Chinese community? Liberal Democrats are a party that stand for social justice and fairness. We fight against both the exploitation by big businesses as well as domination by an overbearing Nanny state. This I believe agrees with the average entrepreneurial Chinese who believe in taking responsibility for our own actions.

Liberal Democrats also support migrants rights and our Shadow Home Secretary, Chris Huhne MP was one of the few MPs at the rally at Trafalgar Square this year 'From Strangers to Citizens' to support the regularisation of illegal workers. We believe asylum seekers should also be allowed to work so that they can support themselves and at the same time contribute towards the economy by way of taxes.

The British Chinese community are in a unique position to assist in the road to recovery by increasing trade and inward investment between UK and China. With our strong eastern sense of family and society, combined with the western traditions of freedom and democracy, we are well placed in contributing towards the rebuilding of our economy.

In conclusion, the Liberal Democrats as our leader Nick Clegg MP said, carries the torch of progressive politics now. We are rooted in principles of fairness and are neither beholden to big businesses nor to the trade unions. We advocate real changes, not just short term cuts and cosmetic surgery. We need to reform our corrupt political system as well as excesses of the past. Only then can we hope to achieve a return to a healthier economy and with the interests of ordinary people at its heart.

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