Nick Clegg’s letter from the leader: People count

This week Nick covers the economy, the fall in unemployment, the big problem with David Cameron’s speech on the EU, and rounds off with reform of the royal succession.

The point that while the economy is weak, employment is surprisingly strong is something that is perplexing the economists (video) and I’m surprised it doesn’t get more attention.

It hasn’t hit the headlines, perhaps because the fall in unemployment was thought to be a blip. But after over a year, this is clearly something to be welcomed. I’d like to say that it is a result of the coalition’s extra investment in skills from May 2010 onwards, but I suppose that remains to be seen.

Nick writes:

The week in Westminster has been dominated by two events: the Prime Minister’s speech on Europe and this Friday’s Gross Domestic Product figures.

The GDP figures are always surrounded by secrecy. I am among a small group of people who get to see the data the day before it is released but with strict instructions not to breathe a word to anyone. In other words it’s the exact opposite of the Prime Minister’s speech, which seemed to be the subject of about a year’s open speculation before we finally got to hear it.

The GDP numbers were disappointing, but not entirely surprising. This country is still recovering from the massive economic trauma of 2008 and our recovery will be slow and a bit choppy. But I firmly believe we are slowly but steadily pointing things in the right direction. The fragility of the recovery makes it all the more important that we remain pragmatic, rather than dogmatic, as we reduce the budget deficit. We faced a choice in the autumn, when it became apparent how badly damaged our economy was, and how deep the black hole in our finances had become. We could take more time to balance the books or rush to cut expenditure even more deeply. We took the sensible option and decided to take more time.

For me there was a number this week that was just as important as GDP, and that was the encouraging unemployment figure that we received on Wednesday. I don’t say that just because those numbers showed another improvement – another 90,000 people in work – but because every number represents a person’s livelihood, their ability to look after their family, and their hopes for the future. The difference between having a job and not having a job matters far more to people than fluctuations in the decimal points of GDP.

That’s one of the reasons why I disagreed with the Prime Minister about his speech. I believe our focus in Government has to be on making sure we get people in work and keep them in work. And with millions of jobs in Britain relying on our participation in the EU now is not the time to be putting that into doubt.

Of course, life in Westminster isn’t only focused on the big things like Europe and jobs. This is a place that can get completely lost in its own introverted debates, as I learnt on Tuesday when I presented legislation to change the rules of Royal Succession so a princess can’t be usurped by her younger brother and heirs to the throne are permitted to marry a Catholic (they can already marry anyone of any other religion). You’d think that in the 21st century, when we have outlawed sex and religious discrimination everywhere else, MPs would be able to agree quickly on outlawing it in the Royal Family. But no: MPs argued for a full hour about whether we were rushing things, before we even got to the debate about whether it was the right thing to do!

Ensuring the next royal baby accedes to the throne might not affect people’s everyday lives. But it’s another small achievement for liberal principles, even if it isn’t one we’ll be discussing on every doorstep.

Speaking of doorsteps, I hope you will all join me in our day of action of February 9 when we will be getting out and telling people how we have cut their income tax and put money back in their pockets, how we are creating green jobs and protecting the British economy. You can sign up here.

I believe the Liberal Democrats are delivering real help to people on the issues that matter, and we should all take pride in getting that message across.

Best wishes,

Nick Clegg

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* Joe Otten is a councillor in Sheffield, and Friday editor of Liberal Democrat Voice

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8 Comments

  • Wrong, Joe, it has hit the headlines, and has been discussed several times on prime time BBC tv news (can’t speak for the Sun, however).

  • For me, this is more about moving more and more jobs into a casual, unprotected status. This helps absolutely no-one (except fat cats, who are enabled better to exploit the increasing number of people in that vulnerable position). This is notsomething either Nick Clegg or the rest of us should be celebrating. I do believe we are moving into a new era, but there should be debate to understand and recognise this, and decide what best to do about it, not knee jerk reactions based on outdated “orthodox economics”, as apparently still pursued by the Treasury.

    We need to recognise that we are in a world with rapidly diminishing / harder to exploit natural resources, where we have to share more creatively. Politically, it means encouraging people to do things more slowly, to realise that material blessings are not infinite – more make do and mend, and as a first step to recognising this emerging reality, to redraft our economic indicators, especially ditching GDP growth as currently measured.

  • Tim13 says:
    “We need to recognise that we are in a world with rapidly diminishing / harder to exploit natural resources, where we have to share more creatively. Politically, it means encouraging people to do things more slowly, to realise that material blessings are not infinite – more make do and mend, and as a first step to recognising this emerging reality, to redraft our economic indicators, especially ditching GDP growth as currently measured.”
    I agree 100% , with this statement, but we can’t expect much change whilst Keynesian economists are still in charge, and sprinkling their pixie dust over the problem. But the good news is that there are influential people who ‘get it’, and are working behind the scenes on possible and practical solutions to what all will soon see as, ~ the end of growth.
    Even Westminster has its maverick thinkers on this :
    http://www.teqs.net/
    As does Richard Branson and other business leaders :
    http://peakoiltaskforce.net/download-the-report/2010-peak-oil-report/
    There is increasing evidence that growth, as previously understood, is not going to return, and we need urgent contingency planning. And we need as a society to re-calibrate what we mean by growth, and tailor it towards what is socially acceptable for everyone.

  • Joe Otten:
    You are on the nail, when you ask the obvious question, ” How do you?,….. tell millions of people that the 50 year long party is over, and the punch bowl is empty?” I too, want to be very wrong in my analysis re: the future. I too want the growth party to continue, not least for my children’s sake. But wishing for it, does not make it so. We need more people to understand. We need a descent plan. We need it now.
    Thanks for the Tullet Prebon link.

  • @ Joe Otten
    “But there is a real challenge for growth-sceptics like yourselves.”
    Does that mean sceptical that growth is possible, or sceptical that it is desirable? I think there are limits on the first, without new fields of economic activity being opened up (such as they were in the IT revolution) which are difficult to predict in advance but may well occur, so I’m a bit 50-50 on that one. For the second, while it suits me as a businessman for the economy to grow, I am not sure that in and of itself it is a legitmate aim for politicians who claim to believe in economic freedom rather than social engineering. People who want to work part-time or stay at home with kids become the enemies of politicians who let growth be their yardstick and rod for their backs. I would prefer an approach that gives more recognition to differences in life aims. Also, I would hope that we would, at some point, reach a level called “enough” in terms of material things after which we would not want any more, otherwise we are just pointlessly running on a treadmill all of our working lives. A good exercise is to make a list of the material things that you think you would need to make you happy in material terms – then read it and think how ridiculous it would have seemed to your parents or grandparents at the same age (for example their own list may well have specified having a colour TV rather than a black and white one, or the difference may not have been important to them). Then put it away and pull it out twenty years later, when in all probability you will have the things on the original list but also have a new list of other things that you have now learnt that you wanted. However for the foreseeable future, I don’t see other people coming round to my way of thinking, so even if it was no longer a political aim, growth would still continue to occur for some time, because people would still be finding new rooms in their houses that don’t contain televisions and such like. At the point at which large numbers of people think they have enough (which is a psychologically healthy state to be in) then it would start to be difficult to make the economy grow, but we’re not there yet. So I don’t know if the above makes me a growth-sceptic or not (and actually I still have material things I think I want too).

    “How do you say to millions of people that wage restraint is not just temporary? How do you – politically – abandon ambition for spending more on public services? ”
    The great thing about not being in politics is that have the freedom to think if something is true first, and only then, to think about how and whether to pass the idea on to someone else, and you don’t need to bother about passing it on to people who don’t want to listen. On public spending, yes I see the connection, which makes it pretty odd that people who are sceptical about the desirability of growth generally consider themselves to be on the left of politics. But wage restraint doesn’t need to be permanent on the individual level. Someone can always gain new skills and earn more money. One idea is false though, namely that without changing anything they themselves do, that their own production can buy an every-increasing share of other people’s production, without (heaven forbid) replacing those people with robots (which is only possible in certain fields of work anyway), If that idea is unpalatable and not to be shared with the public then you need to constuct an alternative reality that your policies and public pronouncements relate to, and that the public would prefer to live in.

    “And how do you justify a public sector deficit of any kind if the future is no better able to pay it back than the present?”
    You can’t justify it. So if we think long term growth* is not possible then we shouldn’t be running one. The primary question though is “Is long-term growth possible? Yes/No” and the secondary one is “If no, what does that entail for public finances among other things”. The fallacious approach is “What would be the consequences if long-term growth weren’t possible, and therefore should we wish really hard for it to be possible?”

    *By long-term growth I mean a long term trend of growth averaged over 10, 20 years, as has been the case for the economy up to now. It doesn’t have to be uninterrupted growth.

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