I suppose it’s all been carefully thought out by the experts in Cowley Street, but (as the Telegraph article demonstrates) people are confused enough over the party’s tax and spending plans already, and I think dividing things up like this only increases the scope for confusion.

“After a three month study Mr Clegg will today(MON) unveil how he intends to pay for the £20 billion targeted tax cuts he announced last autumn.

As the first stage he will reveal how £7 billion can be saved….”

Of course, the Telegraph has most of that completely wrong – the plan to save £20bn was announced a lot longer than 3 months ago, and the money isn’t to fund tax cuts, but (mostly) to fund other spending priorities. But at least that makes it clear that the £7bn is the first instalment of the £20bn.

The savings mentioned are:
(1) Over £3bn “by removing higher earners from tax credits altogether”
(2) £510m by scrapping the child trust fund
(3) Around £1bn by “shelving 90 per cent of the major motorway and trunk road building programme”
(4) £1bn from various savings in education, including not raising the school leaving age to 18, abolishing the National Teaching Strategy and paring down the National Curriculum.

Presumably there’s another billion and a half in smaller savings elsewhere.

Only another £13bn to go …

“Liberal Democrat leader Nick Clegg is to set out how his party would pay for its childcare and education policies.

But his internal critics will be pleased that none of the £7bn of savings to be set out later will be devoted to cutting taxes, our correspondent added.”

Is this £7bn the first instalment of the £20bn? If so, what about the other £13bn?

If the real policy is that tax cuts for the majority will be paid for by tax rises for a wealthy minority, then that’s a different thing. But that’s not how what Nick’s been saying recently has been spun. The message put across in the press is that he’s been converted to the “small state, low tax” message which previously was associated primarily with the Tories. If he actually intends tax rises on the rich so large that it’ll make “big permanent tax cuts” for the majority, then he’s really “squeeze the rich until the pips squeak”, and I don’t think he is, is he? After all, the “small state, low tax” message which Nick seems happy to have the press say he stands for has a history of being put forward to argue in particular for tax cuts on the rich, on the grounds that they are the most entrepreneurial people, so it’ll be better for all of us if they keep more of their money and use it to “create wealth”.

Nick has already put forward policies like more parental leave, better early years childcare, more green spending, which would cost us more – LOTS more. We might just hope there’s some “waste” elsewhere which could be cut to spend it, or these things will cause such a boom in the economy that more wealth will be created to pay for it, but unless I can see more evidence that it’s been thought through, I will just dismiss it as the sort of whistling in the wind politicians do.

There is a real answer to “If we’ve put in a lot more money and haven’t seen much benefit, then what’s gone wrong?”, but it’s not a comfortable one. There have been big changes in society which mean we must run faster to stay still. One of the biggest is the fact that lifespans have increased markedly with many more people living many more years and the last of these requiring expensive support. Another is that we live in a more complex society requiring people to have a lot more education before they become useful contributing members of society. Another is that we are making more waste, driving more cars, etc, various factors requiring more spending on services and infrastructure just to keep still. Another, which I was hinting at in the discussion on the Baby P issue recently, was that a cost of our more free society in terms of such things as breakdown of rigid rules on family and relationships is more people falling through the gaps and requiring expensive intervention to survive. I was the one – almost the only one – whose line on this was “well, the sort of intervention you really want to stop this happening completely is going to cost big time – are you really prepared to pay for it?”.

Pick up any issue of, say, the Daily Mail, and the answer to many of their “Why, oh why” rants is “because you wouldn’t pay the taxes it would need to pay for it”.

If we’re looking for radical reprioritising fine. If the line is “All these social workers expensively intervening with problem families costs too much, so get rid of them all, and if they want to batter their children, well, so let it be”, fine. Or “Why bother spending so much money on keeping sick 90 year olds living till 92, let them die”, well, ok. But are the public willing to accept this? No. If they aren’t, I’m afraid it does mean taxes going up and no visible benefits. If the line is taxes stay the same, or are cut, and we pass it down to the NHS and social services to find the “waste” we think must exist, well, actually what we’re saying means the above, only we’re not being honest enough to admit it.

Now actually, my feeling is that New Labour spent too much throwing money at expensive building projects in health and education at a time the economy was booming and labour costs were high, when they could have saved and waited till now when the bids would come in MUCH cheaper. We do have some fancy PFI funded projects as a result of this. Plus expensive long-term contracts to pay for them. But that’s another story.

- low and middle (ie 2/3 of the population) should pay less, and the top 1/3 pay more. This is step one”

I thought it was meant to be tax cuts for 90% of the population:
http://www.dailymail.co.uk/news/article-1054542/Lib-Dems-pledge-cut-taxes-slash-spending-ease-recession-pain.html

Though admittedly that was 4 months ago, back in those far-off days when Nick Clegg’s great ambition was to reduce overall public expenditure …

I have no quibble with a drive to cut out truly wasteful spending. As long as we understand that most of the waste cannot effectively be identified by top-down edict from the centre, or by non-specialist political people like ourselves. It has to be done at the micro level.

We have no special expertise that our opponents could not offer, though I accept that Labour may not have the motivation to do it well, and the Tories often assume that a “cutter” ideology absolves them from the hard work needed to make it happen and make it work.

What I do oppose are policies that would decimate real public services – either by design, or by circumstance, when the hope of cutting waste is replaced by a political imperative to cut anything that can get cut.

I do not assume savings will be staff cuts rather than capital cuts. Indeed I do not assume that one would be any worse than the other. My concern is not primarily to protect jobs in the public sector. It is to protect the delivery of essential public services.

Nick has not made it clear whether what he stands for is merely what you and I are talking about here – a serious efficiency drive: or, whether it may be something else again, a drive to take the State out of education, health, pensions and much else. In the current parlous financial situation, I fear that only the latter could deliver “big permanent tax cuts”.

Matthew, whether you agree with it or not, the current narrative is that public services have had an awful lot of money put into them, but with not much in the way of improvement.

Unsurprisingly, many people then ask themselves “If we’ve put in a lot more money and haven’t seen much benefit, then what’s gone wrong? And would putting more money in be a waste?” Consequently we have to address this narrative and scope a response.

Nick’s message is essentially this:

- low and middle (ie 2/3 of the population) should pay less, and the top 1/3 pay more. This is step one
- step two is to look at reprioritisation
- step three is to look where savings might be made

Savings can come from (i) staff or (ii) capital or non-staff expenses. David Allen assumes automatically it will be (i) and this is “bad”. But savings equally can and will come from (ii).

Our old line “1p on income tax for education” made sense because it balanced a commitment with how that commitment would be paid for. It made the point that we felt better education was a priority, it made the point that we were a party who had a sound sense of economics, and it made the point that we weren’t making a party making rash promises. I think it appealed greatly to a certain demographic which is big in those constituencies we hold – middle class people who didn’t mind paying a bit more tax in return for better state services – particularly those state services most used by middle class people. The old one-dimensional view in politics that there was a left-right spectrum, with the left getting the votes of poor people who would vote for high taxes and high state services, and the right getting the vote of wealthy people who would vote for low taxes and low state services was wrong, and we had worked out that and played to it. The reality was that tax rates had so flattened out that it was poorer people who were most anti-tax, and that state services often do offer more to wealthier people, so it was wealthier people who were more positive about having them at good standards. I remember making the point that this is just what wold happen when the flat-rate poll tax was introduced – it would lead to wealthy people wanting better council services and willing to pay the tax for them being frustrated by poor people who would vote against them because they couldn’t afford the tax rate the wealthier people were happy with.

If the “1p on income tax for education” is the source of the claim seen in places that previously we were some sort of dogmatic socialists, that’s rubbish. It was a specific and quite pragmatic response to the situation that existed then, and worked well to pick up a key chunk of the electorate who didn’t feel either of the big political parties was putting across what they wanted. I’m not saying we should return to it, because times have changed, but I am saying we should learn from why it worked. One of the reasons it worked was that it appealed to people’s cleverness, they could think “I’m clever enough to work out that taxes and state services balance, so I’ll vote for a party which seems to be doing something silly by saying out loud the ‘bad’ thing it wants to do”.

Are we being nearly so clever now and trying to appeal to a demographic that wants to support us, isn’t satisfied by the other two parties, and is big in those constituencies where we already have existing strength? Or is the “big permanent tax cuts” message just going to make us look like Tories and lose us the support of the “I’d pay more tax for better services” crowd who were such a mainstay of our support?

David,
I don’t think we’re stuck in the mire like our opponents, but the course of this thread (specifically anon’s contributions) should provide ample demonstration of how easy it is for them to be dragged down to their level.

The political challenge for all sides is twofold – to rise above it by explaining why full and exact details can’t be given at this stage while staking out a substantive position with solid reasoning.

I think we have done the intellectual legwork very well, but I also think we have been less than brilliant in ensuring this strategic vision has been transmitted down the line, which is where snappy slogans and a short list of tangible key pledges form a vital plank of the communication process.

Our announcements should be designed to give an indication of what will be in our election manifesto rather than to lay it our precisely, as this is the biggest weapon opposition parties have to influence the debate before the people decide.

‘Independence for the BoE’ was a good message in ’97, but the institution of a tri-partite regulatory regime in parallel clearly wasn’t (which is why it wasn’t used and proceeded into practice without sufficient scrutiny).

If the manifesto team can do anything it can help clarify our messages.

Suggestions on a postcard…

Please just read what I actually wrote. Or better still, go away and do something useful.

If it’s the “enemy will steal our best ideas” argument you want to rely on, well, surely the things we might hold back on publicising might be attractive new commitments, e.g. the childcare agenda. Not boring low-appeal stuff like trimming the budget of the Regional Development Agency. You’ll note that on those rarer occasions when we do come up with a genuine great money-saving idea, for example ID cards, we happily shout it from the rooftops!

If it’s the “future circumstances will change and so the costings will go awry” argument you want to use, well, so why does that never stop us producing new spending policies like childcare and tuition fees? Because it’s easy to deal with future change, that’s why. If you find out that what was affordable in 2005 is no longer affordable in 2009 (as some say is the case with tuition fees), you just explain those facts to the public. Nobody will pillory you for dishonesty in such circumstances. Everybody knows that events can blow you off course, it’s just a fact of life.

The truth is, overall savings targetry can’t be done, and we should stop pretending that it can. And yes Oranjepan, our opponents are often to be found floundering in the same mire, but is that any good reason to join them?

The standard defence against publishing full details of any taxation or spending commitments is that there is much that can change between now and when we might reasonable expect to first begin to implement them.

Furthermore announcing them now enables our opponents the opportunity to steal our ideas.

Now I’m not averse to our opponents being converted to our cause, but if that is to happen they should join us in fighting for them because time and again (such as with the welfare state or privatisation) whenever non-liberal parties have got hold of our ideas they have twisted and perverted them to their own dogmatic ideological ends and undermined their solidity which has lead to counter-argument gaining weight (just look at what’s happening to Royal Mail under Labour).

If you want a liberal and democratic legislative agenda we need Liberal Democrat politicians presenting them and ensuring sufficient checks and balances are also brought in.

I still can’t make any sense of this at all.

Do you mean that the savings _were_ identified by the Ming Campbell review, and the plan is to use those at the next election but keep the details secret until the last minute?

Then why did Nick Clegg say he had ordered another review last year, claim to have been working feverishly with Vince Cable on it over the summer, claim they would have the savings identified within “a few weeks” (that was months ago, mind)? Was none of that actually true – was it all just some kind of weird publicity stunt?

There is an alternative, which is (c) that people think it is sensible to do otherwise (for reasons touched on in various comments above).

Yet when Paxman asked Clegg for the details (Newsnight around last year’s conference time), he got as far as £3.5bn, then said he didn’t want to reveal any more of our ideas, because if he did, our opponents would steal them! Well, nice try Nick!

To be fair, this fiasco pre-dates the Clegg era, and it isn’t directly related to his semi-hidden agenda on tax cuts (though that agenda does exacerbate the problem and magnify the risks it poses to us.) So let’s leave the Clegg era out of it. What are we doing so badly?

Part of the answer has to be simply what motivates individuals. People who want to spend more money on e.g. childcare can get passionately keen on producing detailed policy papers to do so. Nobody actually has the same enthusiasm to attack the question of saving money, even though we all want to cut waste. Nor, in reality, has anyone the tools and the information to do a Gershon type of job from outside government. So it doesn’t get done.

Now just ask yourself, if let’s say the government did a defence review and came up with £20bn of cuts, would it be remotely credible to announce “we are going to save £20bn, but we haven’t written down the details anywhere”? Is it remotely credible if we announce likewise?

There is a simple answer to all this. An end to global savings targetry. Drop the £20bn figure. Announce only specific cuttable items, such as the ID card project, as and when they arise. As to the generic question of minimising waste, we’ll do what every government does, which is to have some sort of continuing drive against inefficiencies. So apart from showing equal willing, and giving a nod to the possibility that localism might (or might not) mean cheaper, we have nothing much to say about that.

Probably the best thing we can do is to harp on about the tractor-production mentality of Brown’s Labour, which does indeed seem to encourage a rather mechanical form of wastefulness, such as the blase assumption that every school in the country must deserve rebuilding in the next twenty years. But let’s be honest. Cutting is hard to do. That wish-list of spending is almost certainly going to remain a wish-list. Britain is bankrupt. What will shortly happen (after our temporary fiscal stimulus) is tax rises, and spending cuts, whoever is in power.

I’m sorry, but at the moment I really don’t have time to waste answering your nonsensical questions. We’ve been over this ground many times. Look at the figures for yourself.

Your whole argument depends upon your ability to back up this assertion.

“… you are saying that any review set up in 1909 is as relevant today as it was then.”

Of course I’m not saying (or even implying) any such thing.

I’m saying that if a review was set up by Ming Campbell in 2006 with a view to identifying 3% of public spending cuts in time for the next election (which would have be expected to take place in 2009 or 2010), and if this review was successful completed, then there would clearly be no need for another review to be initiated by Nick Clegg in 2008 to identify essentially the same spending cuts!

Rebuttal of charges that cuts/savings can be made without damaging public services is a circular argument predicated on entirely subjective opinion of whether the particular service in question is best funded by the taxpayer and informed by personal political preference – it is playing to the gallery rather than making an evidentially-based argument (which I accept should also be part of any party’s armoury).

Perhaps you could stop confusing the issues with your presumptions.

Why would Nick Clegg have been so completely clueless when asked in interviews where the savings were going to come from, if the savings had already been identified?

Why would Gordon Brown have been allowed to bang on for months and months about £20bn of Liberal Democrat spending cuts, if the party was in a position to rebut the charge by demonstrating that the savings could be made without damaging public services?

If the party had really identified 3% of savings in 2006-7, then the mishandling of this issue would make all Clegg’s other blunders look mild by comparison!