Author Archives: David Thorpe

Opinion: There is a reason banks aren’t lending enough to small businesses – the regulator is to blame

Lloyds Bank, Leighton Buzzard - Some rights reserved by dlanor smadaSince the banks were ‘bailed out’ with taxpayers money, a regular refrain from across the political divide has been that the banks are doing decisive harm to the country by refusing to lend to small businesses.

If this refrain were accurate, banks would be denying capital to the businesses that create the jobs to engender a sustainable recovery, instead choosing to deploy the capital in complicated financial instruments that create little value, or pumping up housing markets, or in paying enormous bonuses to bank employees.

This latter is an argument that Vince Cable in particular was vocal in espousing, and as soon as the real state of the bonus culture, now much more shares based than cash based, becomes apparent, he will doubtless claim the credit for that.

Posted in Op-eds | Tagged and | 20 Comments

Opinion: In London, community politics must be less about geography and more about life choices

bicycle route signOn September 22, my friend and London Region Lib Dem colleague Anthony Fairclough wrote in excellent fashion on these pages regarding the particular challenges, and hurdles, that are dampening the party’s prospects in many parts of London.

Anthony made many well informed and cogent points, but the one I wish to pay particular heed to is his reference to our party in the past assuming that we would win votes because we are the party of local campaigners, the party which gets casework done.

Posted in Op-eds | Tagged | 32 Comments

Opinion: Patience, not paranoia is needed if the UK is to solve the productivity puzzle

Workers bankers london bridge - some rights reserved by zoonabarEconomist’ brows furrow when they note that midst the generally positive economic data emerging in the UK and the US, wage growth continues to be absent.

On the surface the answer is simple –  the participation rate in both economies has fallen. For some, particularly those anxious to play Cassandra to the next crisis, this is a sign that economic growth is a mirage.

In the UK context, wild and dangerous theories are granted fertile ground by some determined that coalition economic policy can’t possibly have achieved growth; suggestions that benefit sanctions are forcing the number claiming jobseekers down, but not wages up, has much traction, but scandalously little merit.

Posted in Op-eds | Tagged and | 10 Comments

Opinion: Liberal Democrats must champion our economic achievements

It’s the enduring burden placed upon liberals that we are often found to have made the correct policies calls in the crucible of history. But we fail to turn such perspicacity into a victory in the more immediate court of public opinion.

Whether it is on major issues such as the Liberal party’s historic pioneering of the welfare state before any other; the commitment to green issues which predated Cameron’s hugging of a husky by two decades; Caroline Pidgeon’s proposal for a bicycle hire scheme before either Boris or Ken; liberals have historically been ahead of the policy curve, nut been …

Posted in Conference and Op-eds | Tagged and | 9 Comments

Opinion: How the government can spend billions on stimulus without borrowing a penny more

In his defence of his dexterously lethargic approach to managing the economy, George Osborne portrays his detractors as Icarus-like figures forgoing prudence to pursue fantastical growth amidst the sunny uplands forever just beyond the next horizon.

The Chancellor would contrast himself as a wise head trying to counsel Icarus towards caution, as Daedulus did in the Greek myth.

But if Icarus was wrought low by over-reaching himself and flying too close to the sun, Daedulus’s demise came when he couldn’t escape from a labyrinth of his own creation. Osborne is risking this outcome.

I described the Chancellor’s economic management as dexterously lethargic above …

Posted in News | Tagged and | 14 Comments

Opinion: Miliband’s VAT cut plan is deeply regressive and economically harmful

Ed Miliband’s recent declaration that a future Labour government would seek economic growth through a VAT cut is a disappointing deviation from the recent raft of progressive policies announced by Labour.

Miliband has charted a carefully centrist course for his party- embracing economically liberal ideas, such as the mansion tax, and agreeing with the Liberal Democrats on Heathrow expansion, and ID cards.

In these and other areas Miliband has shown himself to be closer to the Orange Book than the Red Flag, that’s why his proposal to cut VAT is a deeply disappointing return to the “conservative” (Tony …

Posted in Op-eds | 54 Comments

Opinion: Osborne’s mortgage scheme is the worst of both worlds

Perhaps the best outcome from the Chancellor’s budget announcement that the UK Treasury is to underwrite billions of pounds worth of mortgages has been the muted reaction to it.

In a budget which was distinctly underwhelming, the Chancellor must have hoped that his latest attempt to ‘get the banks lending more’ would be hailed in the same way that previous populist capitalist measures, such as the ‘Right to Buy’ scheme were.

Most economic decisions are empirical, and there are valid points to make on either side of any argument.

But the Chancellor’s plan has nothing to recommend it. It will do …

Posted in Op-eds | Tagged and | 54 Comments

Opinion: Cable’s New Statesman article presents a classic Liberal Democrat dilemma

The reason Vince Cable stood so far above his Labour and Tory counterparts during the financial crisis was his unique combination of economic subtlety and political guile; his rivals possessed those attributes the reverse way around.

In his much mentioned essay in the New Statesman entitled ‘When the facts change should I change my mind?” Cable shines a light on the dilemma serious politicians face in trying to balance the economic and political concerns inherent in policy making.

The essay, which takes its title from a famous JM Keynes quote, debunks a number of the left’s cherished myths, and delivers …

Posted in Op-eds | Tagged and | 6 Comments

Opinion: Whatever this government is, it is not neo-liberal

In my wild youth, which was as long as it was fecund, I enjoyed a brief and mutually unsatisfactory fling with Marxism. One of the most fearsome methods used by Marxists to direct debate is to retreat into the world of “ism”’s, where, rather than engage in discussion of the relevant point, opponents are branded with the prevailing pejorative ‘ism’ of the day.

While its probably too late for Marxists to change, it’s rather disturbing when more mainstream political figures fall into the same habits. A recent example of this came when Labour MP Peter Hain, speaking on The …

Posted in Op-eds | 43 Comments

Opinion: A radical idea for the post office network

Isle of Iona Post Office, Scotland - Some rights reserved by Freddie H.A typical Saturday morning in the Thorpe household typically involves me meandering, in my usual untidy fashion, to one of the menagerie of corner shops which cosset Hammersmith high street from the unkempt collection of bookmakers, pawnbrokers and fast food joints which seem to be the fate of most urban centres.

From the shop, I will descend to the most desolate corner of a quiet bar and languidly let the tensions of the week be traduced by …

Posted in Op-eds | Tagged and | 15 Comments

Opinion: the UK has many economic lessons to learn from Ireland

When various commentators and critics of the coalition’s economic policy cast around for alternative solutions, not many look to Ireland for a model to follow, but perhaps they should.

My native country’s economy is in the sort of doldrums which make the current UK growth and employment rate look utopian, but the economy formerly known as the ‘Celtic Tiger’ is healing itself and there are many lessons for UK policy makers to learn. This year growth is forecast to be 1.8%, double what the UK can expect to achieve, while the country was recently able to return to the bond markets …

Posted in Op-eds | Tagged and | 12 Comments

Opinion: Government must act to stop Basel reforms

Lichtkunst "Brillant par Tradition" in BaselMost of my working day is spent scuttling between sombre conferences on Central Banking best practice and meeting city economists to get their instant reaction to economic developments.

So when an opportunity came recently to travel to Basel in Switzerland to cover the latest announcement from the committee which aims to create a new framework for banking regulation, I leapt at the chance. But my delight at getting a free

Posted in Op-eds | Tagged | 11 Comments

Opinion: Liberals must learn the lessons of Thatcher

It is a truth often acknowledged that Tony Blair and David Cameron, in moving their respective parties to the centre ground, left a gruelling obstacle on the road to a truly Liberal Britain.
But it’s not from those leaders that the next generation of Liberal Democrat’s must learn, rather it is from a leader who would regard liberalism as a dirty word, and many Liberal outcomes as inimical to her view of society, Margaret Thatcher.

The lesson for Lib Dems is that Thatcher understood that the less well off are just as aspirational as those born to wealth. The Tory method …

Posted in Op-eds | Tagged and | 64 Comments

Opinion: Radical action need to remedy the economy’s woes

While the Chancellor’s direction of travel in relation to tackling Britain’s economic challenges is improving, his current approach will leave Britain feeling like Sisyphus, labouring hard to push a rock up a hill but never quite feeling secure that it won’t come crashing back down, destroying the hard work already undertaken.

But just as Sisyphus continued to focus on the mechanics of getting the rock up the hill, rather than indulge in any broader experiment to escape his predicament, Osborne toils at the seams of Britain’s economic malaise.

The Chancellor happily wallows in the Bank of England’s myth that giant infusions of credit from Quantitative Easing and the ‘Funding for Lending’ schemes, are any sort of remedy to Britain’s economic woes.

Posted in Op-eds | Tagged and | 16 Comments

Opinion: We must dismantle BBC to reform it

If the BBC has been feeling a little cursed of late it can at least feel blessed in having Rupert Murdoch as an enemy. For the truth is that the BBC and Murdoch need to each other to justify their own world view and block any threat to seriously reform either of their vast empires.

In much the same way as the Labour and Tory parties use each other’s existence to drown the genuinely radical voices out of British public life whilst they tinker at their edge of whichever of

Posted in Op-eds | Tagged , and | 39 Comments

Opinion: Now is the time to re-nationalise the railways

Virgin trainAs the 2015 General Election approaches, the principle challenge for Liberal Democrat policy makers will be to come up with distinctive policies which don’t trade in our party’s radicalism while allowing us to trade on our experience as a serious party of government.

One policy which we can be confident won’t be pursued by either of the other two parties is that of re-nationalising the railways.

Readers familiar with my previous posts on this site would be surprised to see me advocating nationalisation as a policy.

Posted in Op-eds | Tagged and | 34 Comments

Opinion: Growth has returned, but what does it reveal?

One of the few tactically savvy moves made by the coalition recently has been its muted response to UK economy’s return to growth. This article examines what the return to growth means for the wider economy.

The first point to make is that, just as the double-dip phase of the recession was caused by international events, the return to growth has similarly been caused by external factors. The coalition deserves neither blame for the double-dip, nor credit for its ending.

Many of those who oppose the coalition’s economic policies on political rather than economic grounds question the validity of the …

Posted in Op-eds | Tagged | 5 Comments

Opinion: The Mansion Tax is unfair and illiberal

Since 2010 the word ‘fairness’ has been deployed on an industrial scale across the political spectrum.

To want ‘fairness’ is to want a distribution of the spoils which reflects the value of the contribution of each to the economic and social resources of society. A fair tax system should seek to tax according to capacity to pay. It must also act to discourage those, such as polluters, whose economic choices negatively impact on society.

Posted in Op-eds | Tagged | 61 Comments

Opinion: Clegg was right to refuse to sign Page 3 protest

In common with most of you, when I saw that Nick Clegg was The Sun newspaper’s hero of the week – I grew worried that the path to populism which Clegg has embraced in recent months had led to a particularly illiberal precipice.

Clegg has, since the unveiling of the differentiation strategy come to resemble politically the drunken man wandering from bar to bar trying to get served one final time, as the Deputy Prime Minister lurches from one initiative to another, hoping to turn the alchemy of populism into the solid gold of popularity. I discuss this further here and here

But in declining to back the banning on Page 3 girls, Nick has taken a position which is

Posted in Op-eds | Tagged and | 33 Comments

Opinion: Pensions for property scheme is profoundly flawed and illiberal

One can just imagine the proposed pension for property scheme (which Nick Clegg has announced) being the product of committee thinking, for, typical of the produce of many committees, it tries to cram all of the trendier topics of the day into one proposal, resulting in something which is less than the sum of its parts.

The current scheme, the product presumably of the Liberal Democrats’ desire to create popular policies which differentiate us from the Tories among the voters of middle

Posted in Op-eds | Tagged and | 20 Comments

Opinion: Why Nick Clegg was wrong to apologise for tuition fees

When he apologised for the tuition fees debacle this week, Nick Clegg went dramatically down in my estimation.

From the start of his leadership, Clegg has taken the longer term view, and cast his gaze upon the country as a whole, rather than simply focusing, as previous leaders have, on playing to the gallery of the party membership.

His is the Liberalism of the historical sweep, as aware of the intellectual traditions that can be traced back to Edmund Burke as to the ‘pavement politics’ of David Penhaligan, and while seeing a place for both, respecting that embracing the former may leave …

Posted in Op-eds | Tagged and | 101 Comments

Opinion: Inflation the biggest threat to economic growth

Economic commentators and politicians searching for that most elusive of phenomena – economic growth appear to be operating a back to basics approach. The Bank of England takes the traditional neo-classical approach to its role as arbiter of monetary policy – Quantitative Easing and liquidity schemes to expand the money supply and make borrowing cheaper to incentivise businesses to expand. The government are taking a much more Keynesian route to growth, announcing house building schemes and other infrastructure initiatives in order that the state injects the demand into the economy …

Posted in Op-eds | Tagged , and | 25 Comments

Opinion: Danish economy shows now is not the time for Plan B

Critics of the coalition’s economic policy come from many and diverse perspectives, from those such as John Redwood who advocate the traditional Tory neo-classical approach of cutting taxes and spending until growth is achieved to those who advocate forgetting the deficit and spending until growth occurs.

The traditional Tory arguments were largely demolished by the great Liberal economist JM Keynes in the 1930s, and their reheated version disproved by JK Galbraith in the 1980s.

The arguments of those who wish to see stimulus spending are more cogent but the latest data concerning the Danish economy should provide them with food for thought.

In …

Posted in Op-eds | Tagged , , and | 48 Comments

QE “benefits the better off” say Bank of England – so why are we still doing it?

In the first comprehensive report it has conducted into the impact of its Quantitative Easing (QE) policies on the UK economy, the Bank of England says that QE has “prevented a deeper recession” but that the policy “benefits the top 5% of households”.

It is the contention of this article that the central bank is broadly correct on both of those points-which begs the question, why is the Bank of England intent on pursuing the policy in the future?

I have previously written that QE has had the effect of preventing a deeper recession by effectively ending the credit crunch, but that it is limited in its capacity to deliver growth.

Posted in Op-eds | Tagged and | 16 Comments

Opinion: Liberal Democrats must stay true to our traditions post 2015

The period between now and the next general election in 2015 will be crucial in deciding the immediate future of the Liberal Democrats-but the post general election period will have a much longer term significance. I have long been one of those Liberal Democrats who believe that the word ’Liberal’ has been a little to silent in the party name – as policies around goldfish at fairs and ever increasing public spending without corresponding accountability have cast the party a long way from the roots developed by Beveridge, Keynes and Gladstone.

Posted in News | Tagged , , , , and | 65 Comments

Opinion: Liberal Democrats should abandon support for the single currency

Despite the media perception of the Liberal Democrats as a party of Euro fanatics, there is arguably a wider divergence of opinion

Posted in Op-eds | Tagged | 31 Comments

Opinion: Liberal Democrats must not apologise for cuts

Occasionally Nick Clegg, or his speechwriters create a phrase which deserves to live on in the political lexicon long after the rest of the speech has been confined to the political dustbin. The pre-2010 General Election debates were transformed by Nick referring to the “two old parties” and asking voters to “do something different this time”.

While the phrases were memorable, they were hardly that effective. Voters did what they did the last time they faced a Labour government mired in staggering incompetence and a Tory party leadership tacking to the centre while the grassroots howled. That was in the 1970’s when voters gave Labour a kicking and the Tories the mandate of largest party in parliament but no overall majority. In 2010 the outcome was the same with Labour weakened and the Tories becoming the largest party, except that on this occasion, the Liberal Democrats, from MPs to ordinary members, voted by a huge majority for a coalition. But while the phrases used in the debates were clever and eye catching, it was another of Nick’s phrases which should help set the tone for the party in the future. Nick said there would be “savage cuts”, while Vince Cable joined his Tory and Labour colleagues in saying that post-election there would, under a Liberal Democrat government, be “cuts faster and deeper than Thatcher”.

Posted in Op-eds | Tagged , , , , , and | 38 Comments

Opinion: More QE is not the solution to Britain’s economic challenges

With the predictability of a partner changing ‘our’ plans at the last minute, the announcement that UK inflation has fallen to its lowest level for two and a half years has been greeted with calls for more Quantitative Easing (QE) to stimulate growth.

Much of the media presentation of the facts of this latest inflation data has focused on the fall being a ‘surprise’. In reality most of the drop was predictable enough, as the article I link to above states, the VAT increase in 2011 fell off the index for the first time in May, while the situation in Iran has stabilised, causing oil prices to fall.

Posted in Op-eds | Tagged and | 15 Comments

Opinion: Latest Bank of England liquidity policies not an effective substitute for government action

With every turn of the wheel which drives the Eurozone deeper into crisis, the uncertainty which clouds the UK’s economic prospects grows more pronounced. As events in Spain and Greece, in particular, consign the Eurozone to a state of paralysis, UK consumers, banks and businesses can but bide their time and await the final fallout.

In those circumstances, measures which help to create certainty and boost economic confidence should be welcomed.
But the measures announced by the Bank of England on Thursday, will not achieve their purpose to any significant extent, and should not be treated as a substitute for real policy …

Posted in Op-eds | 4 Comments

Opinion: Lib Dems must avoid “all growth is good” fallacy

Every politician who remains in the public mind, after their term in office has ended, becomes associated, in time, with a particular sound bite or phrase.

John Major will forever be associated with “back to basics”. Tony Blair with “pretty straight kind of guy” and Gordon Brown with “abolishing boom and bust”.

At this stage, David Cameron is probably hoping that “hug a hoodie” is the phrase with which he becomes …

Posted in Op-eds | Tagged and | 34 Comments
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