On Budget day: What Lib Dem members think of the Coalition’s economic policy and ring-fencing of spending

Lib Dem Voice polled our members-only forum recently to discover what Lib Dem members think of various political issues, the Coalition, and the performance of key party figures. Some 650 party members have responded, and we’re publishing the full results.

George Osborne with Red Box, Budget 2012

Just 26% of Lib Dem members support Osborne’s ‘Plan A’

Thinking of the current state of the economy and the Coalition’s approach, which of the following statements is closest to your own view?

    20% – Cutting the deficit isn’t enough: alongside public spending cuts, the Coalition should be aiming to stimulate growth through supply-side reforms (eg, de-regulation to make it easier for firms to hire and fire) and tax-cuts.

    26% – The Coalition is right to keep its focus on cutting the deficit and limiting the UK’s debt: sustainable growth is only possible if we stop spending more than we earn as a nation, even if it is painful in the short-term.

    47% – Cutting the deficit in this way is hurting the economy: the Coalition should ease public spending cuts and borrow more for capital spending to boost the economy, even if it does increase the UK’s deficit and debt in the short-term.

    9% – Other

    1% – Don’t know

Support for the Coalition’s Plan A — focusing on cutting the deficit — is a minority viewpoint within the party: around one-quarter (26%) of Lib Dem members back that option. A further one-fifth favour continuing with deficit reduction alongside increased supply-side reforms and tax-cuts. What’s usually referred to as Plan B — slower deficit reduction and increased borrowing to fund spending on infrastructure — attracts almost half (47%) our sample of party members. It’s an interestingly mixed response. Of the 9% who selected ‘Other’, most favoured some combination of the three options, or put forward particular policy solutions.

Here’s a sample of your comments:

The deficit is rising. No growth means less tax revenue. Borrowing now at low interest rates is sensible.

Need to get away from economic growth as only driver of policy to sustainable path. For example capital spending should be spent on building low-carbon housing, not roads.

there is a difference between “good debt” (which produces a measurable revenue stream that more than pays for the cost of the debt) & “bad debt” (which doesn’t). It use to be known as “investment”, but that word has been bastardised.

Cutting the deficit should be the overriding economic objective, but there should be increased spending only where it is an investment. The primary need is for housing. Having said that, the economy needs to go through a cleansing enabling people, including middle earners, to live without reliance on state support and for state employees in less productive parts of the public sector to be able to eventually find work in productive roles in the private sector. This will take a long time, but is necessary.

The government’s economic policy to date has been an utter failure and offers UK voters merely hardship but not hope.

A lot of economic theory says you can cut taxes & spending and stimulate economy. A lot says you can raise taxes & spending and stimulate economy. I’m not aware of any theory that states you can raise taxes and cut spending and stimulate the economy.

What about stimulating growth through demand-side reforms?!

Deficits are inevitable in advanced economies. Money does in fact grow on trees. The government should create money into consumers’ spending sufficient to match output GDP

I prefer Vince Cable’s view, which is not really offered as an option here. It is bullet 2 (focus on the deficit), combined with actions to boost capital spending that does not impact on the structural deficit.

Deregulation PLUS borrowing for infrastructure investment = one happy growing economy.

I agree with cutting the deficit, some supply side reforms and an increase in some capital spending which is a mix of the answers you offer.

Borrow at low rates for genuinely sustaianble (in every sense) projects

A little more does need to be done to stimulate the economy now, but without adding significantly to the borrowing, and without ‘de-regulation’ that endangers the rights of workers.

we are borrowing MORE under the current policy how can this possibly be the correct approach after several years of it failing, the belief that the private sector will magically grow to replace public sector cuts, without any stimulus is a nonsense.

These are false choices: we should be doing supply-side reforms AND borrowing to fund capital spending. But only once we’ve unblocked the red tape which kills capital projects at the moment.

This isn’t nuanced enough. I agree with cuts and balancing the books but also need more stimulus. Not a straight choice between the two. More A+ capital spending.

Supply side economics is not enough and is proving disastrous. Demand needs to rise and that can only happen if ordinary people have more money to spend.

Selective, controlled but significant borrowings for housebuilding and other investment which has a relatively fast impact, support for research. Ease off on the more vindictive-looking cuts – the “bedroom tax” is a millstone round the neck and should be turned into a long-term policy for housing allocation rather than an apparently vindictive attempt to screw some money out of people who don’t really have it.

Carry on ring-fencing schools, foreign aid and the NHS (ish)

The 2010 Coalition Agreement said the Government would ring-fence budgets for education, the NHS  and foreign aid from public spending cuts. Do you support or oppose these budgets continuing to be ring-fenced from cuts?

Education

    55% – Support ring-fencing
    38% – Oppose ring-fencing
    8% – Don’t know

The NHS

    49% – Support ring-fencing
    44% – Oppose ring-fencing
    7% – Don’t know

Foreign Aid

    55% – Support ring-fencing
    36% – Oppose ring-fencing
    9% – Don’t know

In each of the currently ring-fenced areas of public expenditure — schools, the NHS and foreign aid — party members back their budgets remaining immune from spending cuts. The figures for education and foreign aid are almost identical: in each case, a majority (55%) back ring-fencing. Interestingly, there is plurality but not majority support (49%) for the NHS’s budget remaining ring-fenced, with members pretty much split on the issue — whether because enough Lib Dems think its budget is big enough to withstand a cut, or perhaps because it’s felt no area of spending can be immune.

  • 1,500 Lib Dem paid-up party members are registered with LibDemVoice.org. 647 responded to the latest survey, which was conducted between 14th and 17th March.
  • Please note: we make no claims that the survey is fully representative of the Lib Dem membership as a whole. However, LibDemVoice.org’s surveys are the largest independent samples of the views of Lib Dem members across the country, and have in the past offered accurate guides to what party members think.
  • For further information on the reliability/credibility of our surveys, please refer to FAQs: Are the Liberal Democrat Voice surveys of party members accurate? and polling expert Anthony Wells’ verdict, On that poll of Lib Dem members.
  • The full archive of our members’ surveys can be viewed at www.libdemvoice.org/category/ldv-members-poll
  • * Stephen Tall is Co-Editor of Liberal Democrat Voice, and editor of the 2013 publication, The Coalition and Beyond: Liberal Reforms for the Decade Ahead. He is also a Research Associate for the liberal think-tank CentreForum and writes at his own site, The Collected Stephen Tall.

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    8 Comments

    • Or, put another way; half the respondents favoured Plan B; one quarter Plan A and a further quarter Plan A plus. You seem to have rather downplayed this last fraction. Why?

    • Tom Papworth 20th Mar '13 - 10:55am

      I’d take David’s comment further. Supply-side reforms don’t detract from Plan A; they complement it.

      This poll suggest that Lib Dems are finely balanced with regards deficit reduction vs deficit spending.

    • Peter Watson 20th Mar '13 - 11:31am

      I might be misremembering, but wasn’t Vince Cable’s position and party’s policy before the 2010 election that no department budgets should be automatically ring-fenced?
      Also, isn’t “Plan B” closer to what we campaigned for before the election?

    • Morwen Millson 20th Mar '13 - 6:23pm

      whether because enough Lib Dems think the NHS budget is big enough to withstand a cut, or perhaps because it’s felt no area of spending can be immune. – or even because if social care continues to be cut to protect the NHS, even more older people will be stuck in hospital rather than at home with support from their local council.

    • I think it should be pointed out that the Government is not ring-fencing education; it is simply ring fencing schools expenditure. For instance further education and sixth form college spending is not ring-fenced and this sector educates a substantial proportion of the 16-18 age cohort at significantly less cost than school sixth forms. Governments have for years promised a level playing field and continually failed to deliver. Substantial monies could be saved, or devoted to better activities, if school sixth forms were forced to become as efficient as the further education and sixth form college sector.

    • And on the subject of VAT – FE and Sixth Form colleges collectively pay ca. £250 each year in VAT, while schools and academies are exempt. Much lobbying of David Laws, Schools Minister, has led to an acceptance that this is an anomaly and some sympathy but no real action. Similarly school and academy sixth formers are entitled to free schools meals but college students are not.

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