Gerald Warner: What is the point of Clegg? Now there’s a taxing question

WHAT is Nick Clegg for? That is an ontological rather than a rhetorical question. Aristotle would have disdained to answer it; Heidegger might conceivably have attributed some notional purpose to the existence of Clegg; David Attenborough, who has expounded the ecological usefulness of many unattractive organisms, would probably offer the best hope of justifying Clegg’s presence among us. To most ­observers, however, the Deputy Prime Minister appears as superfluous as the sinecure he occupies. If Clegg had not ­existed, it would not have been in the least necessary to invent him.

Psychologists might diagnose an unconscious recognition of his otiose condition in Nick Clegg’s increasingly desperate ­attempts to attract attention to himself and in the Walter Mitty delusions that have become a substitute for real life in his fantasy world. “Dear ­Diary, am now entering the pages of history as the greatest constitutional reformer since my fellow Liberal, Earl Grey. Introduced AV ­voting for House of Commons, am; ­abolished House of Lords, pm – or would have done if Miriam hadn’t rung to ­remind me about the school run…”

The frustration of the first of those ambitions by the ungrateful electorate and of the second by a clique of purblind reactionaries who failed to see the great advance of democracy represented by 15-year mandates deeply offended Clegg’s sense of entitlement.

Hell hath no fury like a Liberal Democrat scorned. Clegg’s resultant temper tantrum echoed King Lear: “I will do such things – what they are, yet I know not: but they shall be the terrors of the Earth!” Except, of course, that Lear was a man of more substance and stability than Clegg. The tearful Clegg’s first act of revenge was to vow to block reform of parliamentary boundaries: as commentators remarked, he thus committed the party of Gladstone to the preservation of rotten boroughs. Yet so active a mind as Clegg’s, such a turbo-charged engine of innovation and reform could not long rest without devising some new vehicle for emancipation of the masses. Last week he unveiled his Big Idea: a wealth tax.

So original and devastating was this concept that the Deputy Prime Minister kept it strictly under wraps until the last moment. He did not even admit his Treasury spokeswoman into the secret: she first heard it on the wireless. Indeed, there are good grounds for believing Clegg himself knew nothing about the proposal at breakfast time on the day he announced it. As a further security precaution, to avoid alerting bloated plutocrats to his intention to soak the rich, Clegg supported a reduction in the top rate of tax from 50p to 45p in the last Budget. Cunning, eh?

Cunning indeed: only the legendary Baldrick could devise an equivalent ploy. In the current global financial crisis the greatest fear of every government is capital flight. So Nick has come up with a proposal, on top of his mansion tax, designed to drive the wealth creators offshore.

Financial anoraks are still speculating how a wealth tax would operate: a surcharge on investment income of around 10 per cent, or abolition of the small companies’ rate of corporation tax, raising it from 20 per cent to 24 per cent, are among possibilities being canvassed. The method is immaterial: any such move is a certain recipe for tumbleweed blowing along the deserted streets of Belgravia and through the London Stock Exchange.

A typical wealth tax experience was that of Sweden which abolished its tax on the rich in 2007 after the government recognised it was producing £436m in revenue while driving £47 billion out of the country. As this example demonstrates, a wealth tax does not even satisfy the revanchist instincts of cretinous egalitarians since its targets move offshore.

For the same reason, the Netherlands and Finland have similarly abolished their wealth taxes. Nick Clegg, however, has inserted a special feature into his draft of the Kamikaze Politics of Envy Bill 2012: it is to be “time-limited”. There is a good precedent for that: when Pitt the Younger first introduced income tax in 1799 it was time-limited. So it is a relief to know it will not last indefinitely.

In Britain the richest 10 per cent already pay more than half the income tax raised; more significantly, the richest 1 per cent pays 28 per cent of that revenue – the precise section of the population that would move offshore. Among OECD countries, we currently have the highest property taxes as a proportion of GDP. This nonsense has been floated by Clegg to appease his party. “I agree with Nick” is a sentiment deserving of clinical certification. Nick Clegg is taking up space that might more profitably be occupied by a vacuum. «