spoke to him recently regarding his views on Enron, WorldCom, business regulation, tax and e-government.
In June 2001 the Liberal Democrats enjoyed their best general election result for more than 70 years, seeing 52 MPs elected and increasing its national share of the vote by a healthy margin.
Much of the credit for this success must rest with Taylor. Back in 1999 he was the campaign chairman for Charles Kennedy’s successful bid for the leadership of the party.
Later that year, he was promoted to Liberal Democrat treasury spokesman, opposite Gordon Brown and Michael Portillo, before the Conservative Party somewhat surprisingly recalled Howard into the thick of the action. He replaced Malcolm Bruce, who became chairman of the parliamentary party, enforcer and co-ordinator.
But for the 39-year old, London-born MP, his near-three year position as ‘shadow chancellor’, as the party now like to call the role, has been full of policy building and dogged opposition. He was the youngest MP in the UK for ten years until 1997, but that has not deterred him from shooting from the hip.
Being shadow chancellor
The fact his position is now called shadow chancellor is an insight into how confident the party has become and how it believes it is maturing, coupled with the belief the Conservative party is a long way from office and far from ready to offer ‘effective opposition’.
With more MPs, the party set about forming a shadow government, a move Taylor believes marks a new dawn in politics.
And, if the dream, however far away it may seem, becomes real and the Lib Dems do get into power, he is in a position to grab one of the most influential posts in government. Well, that is if the Lib Dems can dent New Labour’s popularity and start to overturn their parliamentary majority – easier said than done, but a glimmer of hope prevails, and while that exists they will fight on.
‘The political system in this country has changed , it’s a buyer’s market and people treat politics in the same way as they would buy a car. They will plump for the people that are making them the best offer.’
Different approach to tax
The Truro & St Austell MP says the party would not have raised income from tax in the manner the government did in the last Budget to pay for the much-needed £5bn increase for the NHS. Indeed, the party is famous for wanting to add 1p in the pound to pay for education.
‘We would not have increased taxes on business and jobs, instead of through income tax,’ he says. ‘However we are not going to sit and pretend the government was wrong, it is broadly right but we believe there should be an independent audit of the NHS to ensure long-term spending in this area.’
On the much debated area of national insurance, Taylor would like to see reforms from a record keeping point of view as much as for any other reason.
‘National insurance record keeping is very expensive for businesses. There is no real personal fund to national insurance and we would like to see record-keeping simplified and the national insurance structure move into line with income tax,’ he adds.
‘However it would need commitment and adjustments couldn’t be made overnight. But the system could be made easier for businesses. I am glad however that the accountancy industry is campaigning for a simpler tax regime,’ he states.
Accountants have long been calling on the government to halt the ‘fiction on national insurance’, and looking into the viability of merging NI with income tax.
Bringing two systems together
The Lib Dems have also campaigned to bring the two systems together, and the party is consulting with accountancy firms on ways to bring the issue forward.
Taylor says: ‘There is currently a massive burden of NI compliance. The system is immensely complicated for business, and the costs to the government and business literally run into billions of pounds. However, we cannot see any change in sight, especially as Gordon Brown has pledged not to push up income tax.’
Another area of concern Taylor highlights is the damage being caused to business as the government ‘continues to sit on the euro fence’, a position he describes as ‘bad news for innovation in the UK.’
He adds that the issue of red tape and tax compliance costs also need to be addressed. ‘It is no good offering tiny tax breaks and introducing higher compliance costs, our preference is to keep things simple,’ he argues.
In a radical suggestion, he also thinks taxpayers should be sent regular reports explaining what their tax is being spent on and any changes that take place. ‘After all, the government requires councils to do it. People should be able to see where their money goes and ask questions about the way it’s spent.’
However, he applaudes the government for doing the right thing regarding the handing over of control of interest rates to the Bank of England monetary policy committee, depoliticising the issue at a stroke.
Taylor adds ‘we welcomed the move and understand it, but then we would, it was originally our idea.’
On the subject of the Enron and WorldCom disasters in the US, he is quick to call for change.
‘It is clear we need to separate consulting away from accounting. We have seen a little action already, but we have only just scratched the surface,’ he observes.
So does he believe it could have happened here? ‘Well, Maxwell happened here,’ he retorts quickly.
Earlier this year, the party called for firms to publish their own annual reports, following the fallout from the Enron affair, in agreement with Accountancy Age, which called for the same action in its first-ever manifesto for the profession.
Taylor says full publication would allow the public to see the extent of donations made by the larger accountancy firms to party funds.
He also expresses his amazement at the extent of the disasters, which have plagued the Inland Revenue’s attempts to bring its services online.
‘Egovernment so far has been a catastrophe, there has been huge spend on the project, yet most of the time the Revenue site is down or not working properly. When it is working, it is too complicated, but that is a result of the tax system being too complicated.
‘The same can be said of the government’s record on e-procurement. It is tied to big organisations and not necessarily the people who understand it,’ he says.
And his opinion of his rivals in the other two main parties?
‘Michael Howard is not making an impact. He is capable but so far hasn’t even glanced off Brown. Michael Portillo made more changes and I wonder whether he will survive this parliament, and I do not see him as potential leader of the party as he is too tied to the older generation.’
He adds: ‘Gordon Brown is a Labour loyalist who wears the football shirt. He is intensely political, but I think his flaw is that he’s a meddler and can often complicate issues unnecessarily. However, he is hugely capable and should never be underestimated.’
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