The recent local and European election results were incredibly difficult for the Liberal Democrats. It’s been completely gutting to see good friends, longstanding councillors, outstanding MEPs – people who worked their socks off – lose their seats.
I’ve spent the last two weeks talking to lots of my colleagues in the party, listening to what people say about what we should do next, and I want to take a bit of time today to do three things.
First, I want to deal with some of the specific suggestions people have made about the campaign we fought. Second, I want to address head on the most fundamental allegation levelled at us: that by being in coalition with the Conservatives we’ve lost our identity; lost our soul. Third, I want to start setting out our distinctly liberal vision of the future we see for our country.
There are, of course, lessons we need to learn from the European and local elections, given how disappointing the result was. That’s why I’ve asked James Gurling, the Chair of our Campaigns and Communications Committee, to conduct a review of the campaign. I’ve heard people say that we suffered in the polls because we didn’t do enough to spell out our differences with the Conservatives.
It’s true that at the beginning of this government I didn’t think we should spend all our time telling people about the internal differences in government – we had a bigger task of showing that coalition could work despite all of the predictions it would fail. We had to work with the Conservative party to take some big, early decisions and we had to take the British people with us. But since then, and certainly over the last year or so, there have been plenty of very real differences which people have every right to know about.
So everybody knows, for example, that we said no to Michael Gove’s plans for the return of O’ levels and a two tier education system, as well as profit-making schools. That we said no to new rights for employers to fire workers at will. No to regional pay penalising teachers and nurses in the north. No to inheritance tax cuts for millionaires. And over the coming year we mustn’t hesitate in spelling out that coalition is exactly what is says on the tin – two parties with different priorities and different values, and we should be grown up about that.
The only thing I would say, however, is that I don’t believe people will vote for us next year solely because we have prevented the worst excesses of Conservative nuttiness or nastiness, important though that is, and nor do I think we should blight the success of two party government by picking synthetic fights.
I’ve heard people say that, in the European elections, our campaign as the Party of IN was too blunt: that we allowed our opponents to suggest that we think the status quo in Brussels is just fine. We don’t think its fine. I’ve been a pro-European reformer my whole political life. It’s precisely because I value Britain’s place in Europe that I’ve not only campaigned for reform, but in the ten years I spent in Europe I’ve probably done more to make Brussels less bureaucratic, more open and more in line with Britain’s interests than any other party leader. And I fully accept that, as this debate rumbles on, the Liberal Democrats must campaign as the Party of IN and the party of reform.
But, from all the commentary, if there’s one criticism that I really want to take head on because I think it’s the most pernicious and misleading, as well as the most often repeated, it’s this: That by being in government with the Conservatives, we’ve sold out; lost our soul; become hollowed out and lost our identity as a party of progressive reform. It’s high time we debunk this myth. It’s thrown at us day in, day out by an unholy alliance of left and right. From the moment we entered government – Labour, their supporters in the Trade Unions, their friends in the press – the Conservatives, their financial backers and their powerful friends in press have all sought to caricature the Liberal Democrats as a party that has traded in what we believe for a whiff of power.
And it’s worth remembering why they do this. Because they hate the fact that we’ve got a foot in the door. Because the Liberal Democrats in government is the biggest threat to the establishment in a generation – the cosy stitch up between the red team and the blue team. They shout at us because they know that if we show that plural, coalition politics works – as it does – plural politics will be here to stay. Because we are fundamentally rewriting the rules of British politics by destroying the myth that things must be done as they have always been done; the assumption that the only people with an inalienable right to run the country are the Conservative and Labour parties, taking it in turns – and there is nothing more reformist, more challenging, more liberal than putting an end to that. And that is why it would be such a devastating setback for what we believe in if we did what some of my critics suggest and pull out of the Coalition altogether.
A few days ago I received text from my good friend, Jan Bjorklund, the leader of the Swedish Liberals, and he said, quite simply, that us liberals must never accept that we can only survive in opposition. He’s dead right. And that is why we must now restate more forcefully than ever before not just what we’ve done, but why we’ve done it. Our motives, our values, the unique mission we bring to British politics.
So don’t let our critics rewrite history. They say that, when the General Election result came in, the Liberal Democrats couldn’t wait to get our clammy hands on the levers of power; that we were prepared to sacrifice anything to have our go at governing in Whitehall. But that’s not the way I remember it, or the way any other Liberal Democrat remembers it. Far from rubbing our hands with glee, we sat together through the night, having anguished conversation after anguished conversation, asking ourselves if governing with the Tories was really something we could do.
After election night Miriam and I travelled down to London on the first train from Sheffield and, if you ask me what I was thinking about, it was the good, hardworking Liberal Democrat MPs who’d lost their seats; it was my old friend Paul Scriven who, despite winning an extra 9000 votes for the Liberal Democrats, had just lost out to Labour in Sheffield Central – the neighbouring constituency to mine.
So our mood was not one of carefree opportunism. Instead the decision we took was a gritty, grown up decision based on what was needed for the country. We didn’t go into government because it was the easy thing to do, we went into government because it was the right thing to do. Because the country was teetering on the edge. The biggest economic crisis since the Great Depression. Rioters and flames on the streets of Athens. Crisis meetings in Brussels as Europe’s leaders tried desperately to keep the continent afloat. We knew we would pay a price for working with the Conservatives. We knew we would have to do controversial things to clean up Labour’s mess. We knew we would lose the support of the people who had only ever voted for us to stick two fingers up to the other two. But we did it anyway. This plucky, bold, courageous party, which had never been in power in Westminster before, put the country’s interests before our own interests and we gave Britain a stable government in extraordinarily insecure times. And in providing that stability we’ve helped millions of people keep their jobs. We’ve helped businesses across Britain stay afloat. The country’s shattered economy, now finally back on track.
So don’t let our critics rewrite history. We went into government for good, decent, honourable reasons and no one should be allowed to take that away from us. And then there’s the way those same critics from left and right try to airbrush out our role in the coalition as well. They claim that we’re merely passengers in this government. That we’ve failed to stand up for ourselves or see through policies we believe in. Again this is a myth we cannot allow to stand. We may be the smaller party, but we have all the biggest ideas.
- Ground-breaking pensions reform – Steve Webb.
- Putting infrastructure front and centre of the Coalition’s economic strategy – Danny Alexander.
- Dragging maternity and paternity leave into the 21st Century – Jo Swinson and Jenny Willott.
- Getting our schools motivated to stop the poorest children from falling behind – David Laws.
- Equal Marriage – Lynne Featherstone.
- The world’s first ever bank devoted to green investment – Vince Cable.
- The biggest ever investment in renewable energy – Ed Davey.
- An £800 tax cut for millions of ordinary people – every Liberal Democrat who ever campaigned for it.
So don’t let our critics rewrite history about the reasons we went in to government. Don’t let them airbrush out our role and what we’ve done in government. And don’t let them present us as a party prepared to sign up to any set of policies just to get into government again. The Liberal Democrats are not and will never be a split-the-difference-party. Did we split the difference when we stood alone in parliament and fought for democracy in the House of Lords? Did we split the difference when we blocked the Snoopers’ Charter that had both Tory and Labour support? Did we split the difference by being the only party to stand up for an open, engaged Britain in Europe in the recent elections? Are we splitting the difference as the only party that still makes the environment a priority, or the only party determined to reverse decades of centralisation? Are we splitting the difference as the only party to resist populist sentencing measures supported by Labour and the Conservatives, which will only see repeat crime go up? I have never been interested in power for power’s sake. I have never been interested in coalition at any cost. What I am interested in is Liberal Democrats in government to build a more liberal Britain.
I am interested in giving people this. We’ve talked a lot about building a stronger economy. We’ve talked a lot about creating a fairer society. But maybe we haven’t talked enough about why those things matter. They matter because they are the only way we can enable everyone to get on in life – or as I’m calling it today, quite simply, Opportunity for Everyone. And that comes from something which is unique to us Liberal Democrats: an innate optimism about people. Ultimately we believe that the job of government, above all else, is to enable people to realise their own potential. Because we believe there are talents and aspirations to be nurtured and cherished in every single person. No matter what your background, your race, your colour, your gender, no matter where you came from or who you are: we believe in you. We don’t write off anyone and we don’t think that politicians and governments know best. It’s in the DNA of all liberals.
You don’t get that with the other parties. Labour think that good things are done to people, not by people. They believe we’re only ever really safe when we’re in the hands of politicians and the state. As for the Conservatives – the clue’s in the name. They basically believe in conserving the pecking order as it is. Where you find yourself in the order of things is just where you’re meant to be. And UKIP? Pessimism on stilts – denigrating everything that is great about modern Britain: our diversity, our tolerance, our extraordinary ingenuity. They don’t believe in any of that. They want to turn back the clock to some bygone Britain, not the open and generous Britain we can be.
The Liberal Democrats just see the world differently. Why, in opposition, did this party campaign for a penny on income tax for education? Why, in government, have I made improving social mobility – so breaking the link between people’s backgrounds and their life chances – the Government’s overriding social priority? Why, at a time when money is extremely tight, have I insisted on spending billions on our Pupil Premium? Why have we been adamant about delivering free school meals, and all the health and learning benefits they bring, for little children? Because the Liberal Democrats believe that every boy and girl has something to offer, someone just needs to give them a chance to shine. Because we never fail to be amazed by the things that people are capable of when they’re given half a chance.
And I can tell you today that the manifesto we present to the British people for the General Election next year – a manifesto which will set out our own distinct ambitions for Britain – will have education right at its heart. We are and always will be the party of education and I’ll be saying more about that in the near future. And it is time we now talk more about the future. We’ve spent four years justifying and explaining the decisions we’ve made and we have every reason to be immensely proud of what we’ve done for the country and what we do in government.
But I’m under no illusion that no one is going to vote for us in 2015 out of gratitude for what we did in 2010, in exactly the same way that no one will vote for us just because we’ve stuck it out, through thick and thin. In short, people will vote for us next year not only because of our record of delivery, but also because of our promise of more. And the way I see it is like this: if this five year parliament was about rescuing the British economy, the next will be about renewing it. If this parliament was about reviving the economy, the next will be about rewiring the economy so that it embodies the values of fairness and opportunity, making Britain a place where every person really can get ahead. And having played our part in the rescue, if we want to play our part in the renewal, we need an answer to the most central question in next year’s election. Simply put: who can be relied upon to balance the books, look after people’s money, avoiding the mistakes of past, while still investing in the things people need to succeed? And unless you have a good answer to that, no one should or will listen to a word you say.
So let me tell you how we’d do it. Before anything else, we need to finish the job we’ve started. In Coalition we have set out a plan to get the current structural deficit in balance by 2017/18. That basically means we’ll have finished dealing with the deficit three years into the next parliament – and we’ll stick to that. But, while we’ll stick to the timetable set by the Coalition, we’ll get there in a fundamentally different way to the Conservatives.
The Tories have now ruled out asking the very wealthy to pay even just a bit more in tax to help the ongoing fiscal effort. Instead, they’ve said they’ll take billions more from the welfare budget.
Just to be clear, to make that work – based on estimates from the Institute of Fiscal Studies of the total amount needed if you don’t raise taxes or cut departmental budgets at a faster rate – you have to take £12bn out of welfare. Specifically, once you look at the kinds of things they want to cut, that’s £12bn from the working age poor. That means that when the Conservatives looked across society and thought ‘who should bear a bit more of the burden?’ they didn’t choose the best off. They settled on people scraping by on the minimum wage, the jobseekers who’ve found themselves temporarily down on their luck, the men and women trying to earn their way out of poverty, often working more than one job.
I cannot accept that at all. Yes, we’ll finish the job, of course we will – but we’ll finish it in a way that is fair. So not just through further spending cuts, but also by asking those with the broadest shoulders to make some additional contributions too, including for instance through our banded Mansion Tax – extending new tax bands to higher value properties, as Danny Alexander has explained.
The question then is what you do after you’ve finished the job. First and foremost we have to lighten the burden of debt on our children and grandchildren. There is nothing remotely liberal or fair in handing on sky high debt levels to future generations. All you’ll end up doing is asking those generations to pay billions in interest payments as they service our debts instead of investing in their needs. A lot of people assume that we’re already paying off our debts. We’re not. The truth is that so long as we have a deficit the total debt pile still goes up. Next year Britain will owe around £1.4tr in debt. Paying the interest alone will be the government’s third biggest item of spending, after social security and the NHS. For that money you could build around 6,000 new schools. You could increase the NHS’s budget by more than a half.
And that is why, because of the liberal belief in giving future generations every chance to succeed, we will abide by a new debt rule in which we will significantly reduce national debt as a percentage of GDP, year on year, when growth is positive, so that it reaches sustainable levels around the middle of the next decade.
In other words: so long as the economy is in a good state, we’ll get debt down to safe levels, at a sensible rate.
Second, once we’ve dealt with the deficit in 2017/18, we’ll balance the overall budget but we’ll do it in a way which still allows us to invest in the things we and future generations need. So a second, balanced budget rule, in which we run a cyclically adjusted balanced total budget, excluding capital spending that enhances economic growth or financial stability. What does that mean? It means future governments will have to live within their means and the money we spend on public services will grow roughly in line with the growth of the economy as whole. But we will allow for one significant exception: government will be able to borrow in order to fix our creaking national infrastructure. Because no one looking at Britain’s prospects for the future can overlook the fact that we are relying on roads, railways, an energy network and a housing supply which simply will not be able to support the aspirations and ambitions of future generations. Our railways are a throwback to the 1970s. We rely on water and waste networks from the 19th Century. We have some of the most congested roads in Europe. And if we are to meet our generation’s challenge to decarbonise our economy and prevent a climate crisis, almost all of this – from our energy networks to our homes – needs to be replaced or renewed with the newest technologies.
The Coalition Government has made a good start in this parliament but it will take a very long period of sustained effort and investment to get the quality of infrastructure we need. That’s why I’ve said the next parliament must move us from rescue to renewal. And we cannot build a stronger economy and a fairer society where there are opportunities for everyone unless we are prepared to put our shoulders to the wheel and use the muscle of the state – if necessary through borrowing – to rewire and revamp our infrastructure. Nowhere is the problem more acute than housing.
How can we give people real opportunities if we can’t even give them a home of their own? Just as I feel that it is a betrayal of our children to saddle them with crippling debt, it’s a betrayal to deprive them of the homes they need. Right now Britain needs between 250,000 – 300,000 new homes every year to meet demand. We’re not building anywhere near that. Again, we’ve done some good things in this government, but we have to be honest: we need to go so much further. Last month we heard Mark Carney, the Governor of the Bank of England, warn that the biggest threat to our economy and future growth is our lack of homes, because it drives up prices and that’s how you get housing bubbles. Christine Lagarde, the Head of the IMF, echoed the same warning last week. And yet the Conservatives show no sign at all of understanding the enormity of the problem and the radicalism of the solution needed. It’s time to put our money where our mouth is. We have to give people the homes they need and protect the country from another crisis – and if that means borrowing a bit when times are good and debt is falling, so be it.
We are not the Tories. We don’t believe in an ever-shrinking state. We are not so ideological about making cuts that we’ll deny the country what it needs to prosper. We’re not so dogmatic about borrowing that we’ll jeopardise Britain’s economic health. Responsibility, yes, austerity forever, no.
We’re not Labour either. Gordon Brown used to slap the words ‘capital spending’ on anything and everything just so he could get away with borrowing to pay for it. That can never be allowed to happen again. Sound investment yes, reckless borrowing, no.
You can be fair but responsible with it. You can be credible without being cruel. You can free our children from our debts while investing in their futures too. And I’ve come here today to set this out so that the British people know that every other commitment they’ll hear us make over the coming months is built on that solid foundation. I want people to see that we have a plan for their future. And I want people to know that we have our own distinct vision, based on our own distinct values – a liberal belief in opportunities; a liberal faith in people’s talents and ambitions.
So yes we have a record of delivery to be proud of, but now’s the time for people to know about our promise for the future too. Say what you like about the Liberal Democrats, but we are proud of the things we’ve achieved and we cannot wait for all the things we are yet to do. Say what you like about the Liberal Democrats, but we played our part in rescuing our economy and we are up to the task of economic renewal that comes next. Say what you like about the Liberal Democrats, but we are proud to be a party of optimism while parties of pessimism are all around. Say what you like about the Liberal Democrats, but we hold our heads high as a party of hope at a time when the politics of fear is on the rise.
Whoever you are, whatever you do – this party believes in you, and we will fight every day, with every breath we have to give every single person their chance to shine.