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The Independent Online

Take care what taxes you raise

While the critical importance of reducing our growing debt burden is universally accepted, the precise means continue to be hotly debated ("Shock capital gains tax rise angers hardline Conservatives", 17 May). The chosen measures will affect Britain for years, possibly a generation; we should therefore avoid those which sacrifice other priorities for immediate, but short-lived, results.

Britain faces not just a fiscal deficit, but multiple other challenges: declining competitiveness relative to other emerging economies; an ageing population with pension and public services demands of iceberg proportions; epidemic-scale social and health problems; feudal inequality; unprecedented levels of personal debt; and structural inefficiencies from decades of misdirected investment. All of these will be placing demands on our finances at a time of rising costs associated with impending energy and resource scarcity, climate change and the transition to sustainability. Most of the world is facing similar challenges.

For these reasons, we need to be extremely circumspect about the policies we adopt. The Laffer Curve shows that there is an optimal level of taxation above which less revenue is generated. With the UK economy staggering toward systemic failure, its citizens already taxed beyond tolerance and a drastic rebalancing needed in favour of thrift and investment, surely we need policies which encourage hard work, reward enterprise, and tax expenditure – particularly by those who can most afford still to spend.

Much of the discussion on taxation policy has focused on harmonisation of income and capital gains tax; but none on harmonisation of VAT. Raising VAT, even to 22 per cent, increases the cost of an £850 television set by a mere £38, yet this would generate an extra £20bn a year in revenue. This is not only far more than by raising CGT to 40 per cent, but would also improve our balance of payments by reducing imports. Beyond this, a carbon tax – ideally hypothecated for investment in greening the economy – will be essential if we are to meet the more ambitious emission reductions now likely to be targeted.

This government set out its stall on a platform for change. It should start as it intends to continue by demonstrating this in its emergency Budget.

Nigel Tuersley

Tisbury, Wiltshire

Bruce Anderson repeats the myth so beloved by right-wing fantasists the world over: that decreasing tax rates increases tax take (Opinion, 17 May). It's their "eat more and lose weight" myth. The so-called Laffer Curve, supposedly demonstrating this verity, serves an overtly ideological purpose: to show that taxing the rich is not only wrong but counter-productive. It is an idealised graph containing a tiny grain of truth.

Plainly, very high marginal rates (say, 99 per cent) will yield very low returns as the rich stop working or use barter, or leave. Reducing the rate significantly could increase government returns in those circumstances.

But at anything approaching typical rates of tax, the idea falls apart. Reducing the rate from 50 per cent to 40 per cent will probably generate new economic activity which will generate some incremental tax revenue, but this will be more than offset by the smaller cut of all the economic activity we already have. So the economy grows while state coffers shrink, and this is exactly what happened under Reagan and Bush when they, influenced by such thinking, did something similar.

The lesson? Any reduction of the marginal rate of income tax for higher earners in the UK will not be self-financing and will not help us out of our fiscal black hole. Cameron and Osborne will do well to resist the siren voices from stage right on this one.

John Clinch

London EC2

Two thirds of the planned cuts of £6bn can be made at a stroke by withdrawing our forces from Afghanistan. The war is both unwinnable and unpopular.

M Riaz Hasan

Pinner, Middlesex

Lib Dems must make this work

I have never voted for the Conservative Party. As a working-class lad, I decided that the Tories weren't for me as they seemed to take the part of the Sheriff of Nottingham instead of Robin Hood, robbing the poor to give to the rich. When I became old enough to vote, I was a Liberal.

My views on the Tories didn't change until Thatcher got into power. Then an intellectual objection to their policies changed to a deep-seated hatred. I saw my mother, who by then was a widow relying on the old age pension and social security, being robbed every year by Thatcher and her cronies as they delayed pension payments and reduced them in real terms.

So, how do I feel about my party, the Liberal Democrats, getting into bed with a party that, given an AV ballot paper, I would have placed after the Monster Raving Loony Party? I'm all in favour of it.

I have experienced almost half a century of my votes being wasted and have seen fine Liberal politicians and Liberal ideas being lost by the wayside. I don't want another half-century of wasted dreams. All Liberal Democrats have to make this opportunity work. We have to show over the next five years that this new form of government works and that the electorate need not fear that a PR system will make it the norm – rather that they will relish it.

Parliament was supposed to be where representatives of the people were sent to run the country by discussion (the clue is in the name) of problems and possible solutions, not to become gang members who would shout down members of the opposing gang.

Graham P Davis

Bracknell, Berkshire

The Conservatives can hardly believe their luck. Their great fear that the Liberal Democrats would not come on board proved unfounded. The extraordinary charm offensive that so swept the Lib Dem negotiators off their feet worked its magic.

The list of Lib Dem concessions ranging from the entire foreign policy portfolio to Europe to defence and to such policy areas as immigration, social care and localism, speaks more of a rout than a compromise of equals. Two of the Lib Dems' four major manifesto pledges – voting reform and fair taxes – have vanished in a haze of words. Gone also is Nick Clegg's pledge to put people before markets, shoved aside by David Cameron's "Britain's open for business again".

The only notable concession made by the Conservatives is on inheritance tax. The wealthy will have to wait a bit longer before the country can afford to give them more.

As a Liberal Democrat it breaks my heart to write this. We have sacrificed our internationalism, our realism and our compassion. We may never be trusted again.

Stephen Jackson

Bexhill on Sea, East Sussex

As a former Labour supporter, I sympathise with all Lib Dem voters who are confused and upset about the Lib Dems forming a coalition with the Tories, but I am not despairing or upset.

Political confusion began when Tony Blair moved the Labour Party to the right of the Tories and renamed it New Labour. Gordon Brown didn't do anything about it, but stubbornly held course. Under these circumstances the most left-wing government possible (with the seats the parties won in this election under first-past-the-post) is in fact a Con-Lib coalition.

I strongly believe it to be better to deal with openly right-wing people than with U-boats like Frank Field, John Reid, David Blunkett, James Purnell, and Blairites in general (whose policies are more right-wing than those of the Tories).

Given that the majority in a Lab-Lib Dem rainbow coalition would have been only a few unstable seats, it would have needed less than a handful of these Blairite/ New Labour types to hold the leadership at knifepoint. The bottom-line would have been new elections with a new, more right-wing, but more charismatic New Labour-leader under the current voting system within 12 months. No thanks.

It has to be held to Nick Clegg's (and the Lib Dems') credit to see through this confusion and put policies before political colour.

Ben Lotz

London N14

The search for longitude

Often overlooked, as in Steve Connor's article "How Britannia came to rule the waves" (14 May), is that, while John Harrison's H4 chronometer demonstrated that a marine chronometer could be made, it was too complicated to be produced in numbers at an acceptable cost. Affordable chronometers did not become available until Arnold and Earnshaw designed simpler mechanisms at the end of the 18th century.

In the meantime, the only practicable method of finding longitude was the method of lunars, in which the moon's position was measured accurately with a sextant. Another important achievement of the Board of Longitude was to fund the development of Jesse Ramsden's circular dividing engine. This engraved angular scales mechanically; sextants could be more compact and made in quantity at prices affordable to many mariners.

A lesson for today is that the Board ensured that Ramsden's dividing technique, developed at government expense, was quickly disseminated to other instrument makers.

John Brooks

Harpenden, Hertfordshire

The plight of record shops

While we are sympathetic to the plight of independent record shops like the one highlighted in your article "The revolution that killed Soho record shops" (12 May), it is rather unfair for councils to be blamed for their current woes. Recent dramatic changes in shopping habits are well beyond our control, but we do recognise that councils like ours have a duty to ensure that their area continues to attract the visitors and shoppers upon which these businesses rely.

There is significant demand for retail space in Soho and across the West End, which has proved surprisingly resilient in the face of the downturn, outperforming the rest of the country. We have invested heavily in the area, along with the Mayor of the London and the private sector, and schemes such as the Oxford Circus X-crossing and our £30m plans to revamp Leicester Square and Piccadilly Circus demonstrate our commitment.

While we can't subsidise rents in the very few properties we actually own in Soho, we do offer flexible payments and help tenants as much as possible. But one of the biggest problems facing our businesses has been the increase in business rates, which are set by central government. Many businesses mistakenly think local councils set these, but we have no power over them. We simply collect them on behalf of central government and the average increase in Westminster is 37 per cent.

We have contacted all small businesses urging them to check to see if they are eligible for small business rate relief.

Rosemarie MacQueen

Strategic Director Built Environment

Westminster City Council

Stately titles gone for ever?

It is disappointing that the Prime Minister and First Lord of the Treasury in a predominantly Conservative government has not seen fit to re-establish traditional posts: Lord Privy Seal (as once was Gladstone) for his deputy; Lord President of the Council, in place of Cabinet Office Minister; and Chancellor of the Duchy of Lancaster, a compelling title for Baroness Warsi.

It is appropriate that a former minister of Ken Clarke's standing should be created Lord Chancellor, but he needs no inferior title (of dubious continental origin, Europhobes please note) as Secretary of State for Justice; and the Justice Department has only to be renamed the Lord Chancellor's Department, with no change in its responsibilities. And why should the Lord Chancellor not sit on the Woolsack?

K P Poole


Matters of faith, not judgment

You report that Mr Justice Eady deplores attempts to make libel courts adjudicate on religious matters ("Courts are not right place for faith disputes, says judge", 18 May). Your coverage refers to two earlier cases where religious groups tried unsuccessfully to muzzle their opponents.

You could have gone back to an even earlier precedent, in Acts 18. The Roman proconsul Gallio refused to hear a case against St Paul. He told the apostle's accusers: "If you were making a complaint about some misdemeanour or serious crime, it would be reasonable for me to listen to you. But since it involves questions about words and names and your own law – settle the matter yourselves. I will not be a judge of such things."

Canon Paddy Benson

Barnston, Merseyside

Own goal

What many of us want to know is whether there is any truth in Lord Triesman's comments about Russian and Spanish football authorities bribing referees at this year's World Cup finals. We all understand why the silly idiot himself had to resign if we want to have any chance of hosting the 2018 World Cup. But is there anything in what he says?

Max Findlay

London SW18

Note of mystery

Further to the letter about the €500 note in Spain (17 May), it is generally referred to as an Osama as it is known to exist but can't be found.

Geraldine Blake

London W5

Better average

Michael Baldwin's information (letter, 15 May) is out of date. It was under Labour that half the population was below average intelligence. With Cameron and Clegg in charge the opposite is true: half the population has above average intelligence.

Peter Garside

Hoddesdon, hertfordshire

Perspectives on dairy farming

The risks of bigger herds

The arguments advanced by the developers of the "super scary dairy" proposed in Lincolnshire ("Pint of the Right Stuff", 11 May) have been liberally coated with greenwash.

An operation such as that proposed by Nocton Dairies will carry high production costs as a result of the huge capital invested. Milk volume will be key to driving profit and the consequent demands on the metabolism of this super-herd will inevitably increase the risk to their health and welfare.

It might be the case that the 8,100 cows will be well fed, but only as a means to an end. There might be an on-site vet, but this is no replacement for the skills of a traditional stockman, who knew and watched his cows, and spotted problems before they occurred.

The use of anaerobic digestion would mitigate only a small portion of pollution concerns. Atmospheric greenhouse gas emissions (GHG) from manure account for only around 10 per cent of the total GHG emissions associated with dairy farming, and the digesters themselves can cause or exacerbate other problems.

Finally, when Neil Darwent commented about UK herd sizes, he was highlighting the huge changes that would occur in the fabric of rural Britain both socially and economically should this country ill-advisedly intensify dairy farming to this degree.

Suzi Morris

UK Director, World Society for the protection of Animals

Neil Darwent

Frome, Somerset

Farmers care about the environment

There is no robust scientific evidence to prove that organic milk is healthier, that organic dairy cows are happier, or that organic farms are prettier. With the need to feed a growing population, and an increasing demand for healthy milk and dairy products, never has it been more important for conventional and organic producers to work together to ensure the future security of British milk supply, rather than compete on unfounded arguments.

There is room in the market for every system and model of dairy farming and the welfare of the dairy cow is of fundamental importance to them all. It is true to say that dairy farms have become larger in the past two decades, with the current average herd size in Britain at 112, but this does not equate to poorer standards.

Dairy farmers, both conventional and organic, also take their environmental responsibilities very seriously, and they are continually looking at ways to make their businesses more efficient while having less impact on the environment. British farms are now relying less and less on "factory-processed fertilisers, pesticides and antibiotics". Indeed Defra figures show a 15 per cent reduction in the first two over the past 15 years.

We have seen a 60 per cent reduction in dairy farmers in the past 10 years due to low prices paid for liquid milk and over-burdensome regulation by government. Only by those remaining in the industry taking up the slack has the UK kept its milk production from the same tragic decline. Now is the time for government to reduce the gold-plating of burdensome regulations and for our dairy farmers to be paid a fair price for their milk.

Mansel Raymond

Dairy Board chairman, National Farmers Union, Stoneleigh Park, Warwickshire

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