Opinion: Observer’s dishonesty doesn’t disguise party challenges

I was out drinking with a couple of Tory councillors the other day. This is not a frequent occurrence and has become no more frequent since the Coalition.

I learned that one of their acquaintance had resigned her Conservative Party membership because of the Coalition. She is a Thatcherite.

The days and weeks after the toughest budget for several decades were bound to be uncomfortable. None of us expected to see our Party lauded by the press.

The Guardian lambasted the budget for its effect on the poor, the Mail for its effect on middle England. I gave up and bought the FT, which was more measured but again flagged up concerns about the effects on the more vulnerable.

This weekend’s Observer is a study in intellectual dishonesty. ‘Now economists working in conjunction with left-leaning Fabian Society have created a model [that] concludes that the poorest will be far the biggest losers …’ This would be the Fabian Society that is affliliated to the Labour Party, presumably? The model in fact assumes that spending cuts will be spread evenly across departments – but makes no allowance for what might happen within departments.

On the front page it trumpets the fact that (well, a YouGov ‘fact’) that 22% of people who voted Liberal Democrat are ‘much less likely’ to support the Party because of the increase in VAT. It does not disclose whether Labour voters were asked whether they were ‘much less likely’ to support Labour again now they know that the previous Government crashed the economy into a brick wall.

Elsewhere the Labour leadership contenders are asked ‘What is the Main Weakness in the Coalition Budget?’ but are not asked what the main weakness was in Alistair Darling’s last budget.

There were things, including the rise in VAT, which I did not like. It is not after all my Party’s budget, it is the Coalition’s. But I did like most of it including some of the omissions (for instance massive cuts in inheritance tax and the introduction of a marriage tax allowance).

There are challenges for our Party is registering dissent. The Social Liberal Forum has found a useful role and has made a number of thoughtful interventions.

The role of the Federal Policy Committee is less clear. There are going to be formalised parliamentary teams which will include local government and FPC representatives. These will have a major impact on internal policy making and may help hold Lib Dem ministers to account. But will FPC continue to produce policy papers (especially on reduced resources)? If so, is it working for the Government or the Party?

Clearly FPC, the elected policy arm of the Party, must continue to draft policy for Conference to determine. It must not be a loyalist claque. Equally, however, it will serve no useful purpose in being a disloyalist claque. Some of the interventions this week have been purist self-indulgence.

We must all do better than that.

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26 Comments

  • Sunder Katwala 28th Jun '10 - 2:04pm

    Chris

    Can I just say that is a very lazy comment about the Fabian Society: could I invite you to instead engage with the substance of the analysis and argument, rather than making ad hominen attacks.

    Several LibDems (on LDV, Social Liberal Forum, etc) are calling on Labour voices to make constructive challenges and interventions to the Coalition, which ought to imply a willingness to engage with such interventions. This suggests you aren’t going to engage because research is produced by a Labour affiliated organisation, which rather states the opposite point.

    We think this is important and original research, which should matter to anybody who wants to gauge the fairness impact and ensure outcomes which are as fair as possible. It will help to open up an absolutely vital area of public policy analysis, given that deficit reduction and spending is obviously the number one policy issue. As Robert Chote of IFS said after the budget: “The budget looks less progressive – indeed somewhat regressive – when you take out the effect of measures that were inherited from the previous government, when you look further into the future than 2012–13 and when you include some other measures that the Treasury has chosen not to model … Perhaps the most important omission in any distributional analysis of this sort is the impact of the looming cuts to public services, which are likely to hit poorer households significantly harder than richer households“.

    This research will examine and scrutinise the spending distribution in detail.

    Yes, we await the spending review. he foundational point we should be able to agree at this point is that a “fair cuts” approach depends on demonstrating a progressive, not regressive, impact in the round, on both taxes/benefit changes and on the impact of public spending changes. Surely LibDems will accept that as a starting point for policy scrutiny in this area? (otherwise, you would be saying ‘we want to meet 20% of a fairness test’ on the tax side, but not the spending side, and of course that would be a difficult position to argue for logically).

    So LibDems (and indeed progressive Conservatives) should welcome analysis which will enable you to apply pressure for the Coalition’s future budgets to meet the distributional fairness test which both Coalition partners have committed to, and of course the research’s credibility and value depends on its reception with academic and non-partisan expet opinion formers.This is the background and professional expertise of Howard Reed, who has developed the model.
    http://www.landman-economics.co.uk/staff.html

    If you were to read the initial post-budget analysis produced from the model, it explains that this is based on an even distribution of cuts across non ring-fenced departments, which allows a baseline picture to be drawn. This will be updated when we have the spending review, as the piece says.

    For now, we can show that the decision to have a further £32 billion of spending cuts, and to prioritise cuts over taxation in a 4-1 ratio, looks likely to have a regressive distributional impact. There may be a range of arguments in favour and against doing this, but this does illustrate the scale of the challenge for future spending and taxation decisions to make if these regressive impacts are to be mitigated and reversed.

    Yes, choices both between and within departments will impact the outcome.

    So will the overall scale of spending cuts, and the balance between taxation and cuts to close the gap.

    We can already particularly see that the nature of the tax changes which are proposed make up one fifth of the deficit reduction programme are going to have to be much much much more progressive than budget 2010 if the “fair cuts”/”progressive austerity” aspiration and language are to stand up. Anybody in the LibDems who does want that to stand up should be making that point very very strongly ahead of the Autumn, budget 2011/2012 etc: this research could help you to do that. Of course, some spending cuts are necessary but the overall scale of these, the timing, where they fall and the balance between spending cuts and tax rises in deficit reduction are all political and policy choices. Anybody who describes all decisions taken as “inevitable” should surely get out of politics.

    Here are what I would say are some of the key policy challenges which I would hope LibDems, the FPC would be very centrally engaging with.
    http://www.nextleft.org/2010/06/so-what-happens-to-fairness-when-you.html

    (And I would advise avoiding repeating Nick Clegg’s rather risible challenge to the IFS budget analysis, which was that they have not yet included or modelled decisions which the government has not yet made. Nobody can model future intentions, and I don’t think there are any serious independent voices disputing the IFS analysis that the new budget measures were, on balance, regressive, even looking only at taxation and benefit changes. Similarly, you can and should ask independent and academic experts about the relative distributional impact of public spending (generally) and indeed about specific spending changes that are proposed.

    In addition, you should push your own government to make distributional fairness in spending a central part of its decision-making processes, and to commit to publishing the fullest possible information on this. The increased transparency on spending provides much of the raw data needed. Here is a letter to Nick Clegg about that, previewing our own research. I can’t see why pro-fairness LibDems should disagree at all with the content of it
    http://www.nextleft.org/2010/06/dear-nick-clegg-how-to-meet-fairness.html

  • So this ‘Labour-affiliated’ Fabian society would be the same Fabian society that VInce Cable was a member of? It is just a socialist society, not all Fabians are Labourites.

    On the front page it trumpets the fact that (well, a YouGov ‘fact’) that 22% of people who voted Liberal Democrat are ‘much less likely’ to support the Party because of the increase in VAT. It does not disclose whether Labour voters were asked whether they were ‘much less likely’ to support Labour again now they know that the previous Government crashed the economy into a brick wall.

    You really think the left-wing media would be as concerned about the membership of a Labour party in opposition as that of a coaltion partner in the government? Especially when that government is taking actions a left-wing newspaper is likely to oppose. If you are being serious you are being dreadfully naieve.

    It’s too late to worry about a loyalist clique emerging…. only party tribalism could explain the willingless of some Lib Dem supporters to all the party to send Lib Dem voters like myself down the drain. Criticism seems to have been disallowed and we are all branded as Labour party trolls. For the record I have no intention of voting Labour.

  • If I recall yesterday’s report correctly, that Observer YouGov poll was also paid for by the Ed Miliband campaign.

  • I’m failing to see how the Observer’s article is dishonest-they seem to be voicing opposition & backing it up with factual analysis. Just because you don’t like where that analysis comes from doesn’t make it dishonest, a little unpalatable to some perhaps but that’s not necessarily a bad thing. Now is a time for real ‘new politics’ That involves freeing ourselves from tribalism & standing up for our values, not just our party allegiances

  • David Morton 28th Jun '10 - 5:55pm

    The main issue isn’t that the Observer used dodgy polling data to push an editorial line. All papers do that and don’t always bother even to have dodgy polling data. The main issue is how did the party get it’s self into a situation where by The Scott Trust, a bulwark of this country’s progressive architecture, is trying to crush us after less than two months in office?

  • Anthony Aloysius St 28th Jun '10 - 6:22pm

    “The main issue is how did the party get it’s self into a situation where by The Scott Trust, a bulwark of this country’s progressive architecture, is trying to crush us after less than two months in office?”

    At the risk of stating the obvious, isn’t there a clue in the word “progressive”?

  • Andrew Suffield 28th Jun '10 - 6:24pm

    I don’t think there are any serious independent voices disputing the IFS analysis that the new budget measures were, on balance, regressive, even looking only at taxation and benefit changes

    Where did you get that one? It’s a deception. Why is everybody so eager to misinterpret what the IFS said?

    The IFS analysis that you’re referring to concluded that the newly announced budget measures were regressive. Now, if you stop and check up on what that means: they’re talking about just those budget measures which were announced on budget day, and not the ones that we already knew was coming. So the changes to income tax? Not included because that was announced in advance. In fact, almost all of the progressive aspects of the budget were announced in advance. The IFS noted that the bits which hadn’t been announced in advance were, both mostly and in total, regressive. That’s true, but does it matter? It’s just an observation about the way the plans were made public.

    Criticism seems to have been disallowed and we are all branded as Labour party trolls.

    There’s plenty of good criticism and discussions going on. There is also a number of people who are putting out nothing but lies (not a very large number, but they write a lot of things and shout very loudly). A lie is not useful criticism, and it’s not new politics – it’s pure New Labour, as introduced to the country by Blair. It is very important that we sort through the claims made and establish which ones are backed by evidence, and which ones are worthless ranting from people who are more interested in starting a fight than making things better.

  • Sunder
    The Fabian report says that someone on £14200 a year will lose MORE THAN £2840 a year of their income.
    I will get the full tax rebate. I don’t get benefits anyway. My housing costs do not have VAT on them. My biggest expense – fuel 16,000 miles @55mpg will cost an extra £40 in VAT. No VAT on my food. Yes extra on gas & electricity.
    I just do not see it. I am missing something clearly.
    BTW what do Fabians class as poor? I am better off than many who live around me.
    I watched Gordon’s last budget live on TV, when he increased the starting rate of income tax from 10% to 20%, gave richer people a rate cut and cut the tax on banker’s profits, I was gob smacked. When (most) Labour MPs cheered I was in shock.

  • ROB SHEFFIELD 28th Jun '10 - 9:13pm

    The UK currently has a structural deficit of around 8.8 per cent of GDP. But this has not been due to some unfunded spending splurge since 1997, but rather because Britain has just suffered the deepest recession since the 1930s.

    In 2007 on the eve of the recession the structural deficit was about 2.2 per cent of GDP, but rose because national output fell by 6.2 per cent from peak to trough. Rather than following Mr. Osborne’s advice in Opposition and rapidly reduce spending in the midst of a downturn and allow more banks to fail, the Labour government (alongside most others) chose to simultaneously maintain a stimulus program and recapitalise the banks.

    The Labour administration in the last budget planned severe consolidation to bring down the size of the budget by £73bn in 2014/15 and fill 70 per cent of the structural deficit by 2016/17. This implied very serious cuts in real spending of £52bn and increases in taxation of £21bn.

    By contrast, Mr. Osborne has pledged consolidation of £113bn – an additional £40 billion, which includes an extra £8bn of tax increases and £32bn of spending cuts. All supported hapily by Clegg and Co !!

    These are IDEOLOGICAL cuts not cuts designed to address market worries over deficits.

  • George Kendall 28th Jun '10 - 9:46pm

    Sunder,

    Thanks for your post.

    I’d agree that we should take interventions from the Fabian society seriously. But, in a soundbite culture, you’re being unrealistic in your criticisms of Nick Clegg.

    Nick Clegg faced with the following headline: “budget cuts will hit Britain’s poorest families six times harder than the richest”. Only the most assiduous reader would have drilled down into the Observer’s article to realise that this was based on an assumption, that the cuts would not be specifically targeted to avoid hurting the poor. Those headlines weren’t written by the IFS or the Fabian society, but Nick Clegg had to respond to them.

    The IFS aren’t pretending that they know what the forthcoming spending review will produce. They accept that their model is speculative, and will update it as more information comes available.

    I would like the spending review to hurt the poor as little as possible, so I welcome that the IFS are going to hold the government to account on this.

    But if newspaper headlines give the impression that we already know how regressive the spending round is, Clegg would be mad not to rebutt that. And you’re being disingenious to claim that he shouldn’t.

  • Anthony Aloysius St 28th Jun '10 - 9:56pm

    Andrew

    Once again, you are blatantly misrepresenting what the IFS is saying. Look at page 20 of this presentation, where the meaning of “pre-announced” is explained. It is nothing to do with the _present_ government having announced things before budget day. What the IFS presentation says is that the progressive nature of the reforms is “mainly because of reforms announced by the _previous_ government” (my emphasis).
    http://www.ifs.org.uk/budgets/budgetjune2010/browne.pdf

    You are in no position at all to accuse other people of “deception” and “lies”!

  • Sunder Katwala 28th Jun '10 - 10:06pm

    Andrew Suffield

    Your interpretation of what the IFS report says is, I think, based on a misreading about “the plans were made public” was about. I am sure your LibDem colleagues will confirm this point, but I think you have misunderstood what the IFS analysis shows.

    The distinction the IFS were making was
    (i) between pre-announced plans for this financial year which had been proposed in its own 2010 budget by the outgoing Labour government (which the Coalition did not reverse) on the one hand,
    and
    (ii) new measures from the Coalition on the other which Alastair Darling had not already proposed in his budget as measures for this financial year. There is no distinction made about whether Coalition plans were or were not publicly mooted before the budget at all in its analysis.

    Overall, those measures together have a slightly progressive impact for 2012-13 (so you can say “we should be able to count Darling’s policies where we have kept them”) but the progressive work is being done by measures inherited from the Labour government, and it anyway then gets worse as the welfare budget cuts for 2013- onwards come in the next year)

    So the income tax threshold changes are included by the IFS in the “new” group not, as your reply implies, the “previously announced” group. (Though the coalition agreement says it is an aspiration of the government, the decision on the £3.7 bn spent on the threshold change was new). However, the impact of the tax threshold change is overwhelmed by the impact of the VAT change.

    Reed and Horton have compared the gain and loss by income decile of both measures: see graph here.
    http://www.leftfootforward.org/2010/06/budget-2010-regressive-not-%E2%80%9Cprogressive%E2%80%9D-whichever-way-you-look-at-it/

    I think the point stands that you will struggle to find independent voices disagreeing with the IFS claim about the Coalition’s proposals having a net regressive effect.

    That is why the Social Liberal Forum correctly says that “Despite the government’s protestations, the broad consensus is that the overall package will lead to greater inequality, not less. ndeed, the debacle over whether the package is fair on the poor or not has made our case superbly about the need for the Office of Budget Responsibility to be both genuinely independent (ideally appointed by parliament directly) and have inequality written into its terms of reference. If it had been, I genuinely believe that it would have lead to a fairer budget: George Osborne to his credit understands the need for transparency in fiscal policy and has taken great strides to improve this. Ensuring that they can’t spin about inequality is a very crucial part of the jigsaw puzzle”
    http://socialliberal.net/2010/06/24/did-the-budget-meet-my-tests/.

    On Saturday the Guardian tried to find a silver lining, suggesting that constitutional reform “is the prize that has to be weighed against the pain of a regressive budget”. At present, that appears to be a trade-off being accepted. The LibDems would have to exert much greater influence towards budget progressivity if they do not want that to be the case.

  • Sunder Katwala 28th Jun '10 - 10:20pm

    George Kendall

    Thanks. I appreciate that. As you say, media coverage isn’t something any of us control, and these are important issues for discussion in the print and broadcast media. It is also a benefit that online discussion now offers really good opportunity for detailed scrutiny of claim and counter-claim, for those engaging in more detail.

    I will certainly welcome from any LibDem the argument “we will do everything we can to avoid that kind of impact” – and we will report on it in the Autumn. However, the strongly progressive distributional impact of public spending is such that it is very very difficult if the budget is driven more strongly by a small state ideology from Osborne (so that you have £30 billion more cuts than the deep cuts Labour had signalled) than by the fairness motivation. And it is very difficult if you are going with an 80-20 ratio (or 77-23 as in the budget itself of cuts to taxes). It is very difficult to see how it can be done by the clever choice of spending cuts. You would also need to look much more seriously at a much more progressive shift on the taxation side.

    PS: However, Clegg went a little further than you imply in his attempts to rebut some of the “regressive” claims, in that he also rejected the IFS *budget* analysis because it didn’t include future policy changes which the government has not yet made. I wrote a light-hearted satirical post about that.
    http://www.nextleft.org/2010/06/has-clegg-made-most-creative-challenge.html

  • George Kendall 29th Jun '10 - 12:29am

    Sunder,

    “It is very difficult to see how it [a progressive approach to cuts] can be done by the clever choice of spending cuts. You would also need to look much more seriously at a much more progressive shift on the taxation side”

    Very true. There are things we could do to reduce the regressive nature of the cuts, such as reducing middle class welfare, but with cuts on this scale, they’re bound to be regressive.

    Frankly, being progressive when facing such a large deficit is impossible. The challenge is to reduce its regressive nature as far as possible.

    I think your suggestion of a more progressive shift on the taxation side is also difficult. According to the IFS, high end taxes like the 50% rate, actually reduce income.

    If only an increase in the basic rate of income tax were on the cards, but it isn’t.

    My current feeling is, I’d prefer a slower approach to cutting the deficit. You’d still end up with drastic cuts, indeed, because of interest on a higher debt, in the long-term, the cuts might be just as deep. But people would have more time to adjust, and there would be more time to drive through efficiency savings, rather than just taking a hacksaw to the state.

    I’d like to hear more explanation of why it’s necessary to remove the structual deficit in a single parliament. It may be necessary, but I haven’t yet heard a convincing argment, and the policy needs to be properly explained and debated.

    In my opinion, the whole debate is too polarised. As you point out on your site, accusing the Lib Dems of treachery won’t work. But neither, I’m afraid, will criticism without offering realistic alternatives.

    Many Lib Dems see any criticism of the coalition as driven by tribal Labour supporters. This is understandable, because it often is. But the country needs a real debate.

    Some on this site have said that being driven by “there is no alternative” is not good enough. That’s true.

    But if critics want to shift the Coalition to a more progressive path, they need to be brave enough to make serious, and potentially painful, suggestions. If they make suggestions that the Lib Dems might possibly be able to persuade the coalition to adopt, I think they’d be treated seriously.

  • Anthony Aloysius St 29th Jun '10 - 12:51am

    “I think your suggestion of a more progressive shift on the taxation side is also difficult. According to the IFS, high end taxes like the 50% rate, actually reduce income.”

    But there seems to be an unspoken assumption here that progressive taxation involves penalising a small group of the very richest people. An alternative would be dropping the pretence that you can get something for nothing, and raising the basic rate of income tax.

    As you point out on your site, accusing the Lib Dems of treachery won’t work.

    It depends what you mean by “won’t work”. Admittedly it won’t do any good!

    But as far as I’m concerned, Clegg and Co have assured us that the most vulnerable would be protected, and now they are supporting a programme in which the poorest are among the worst hit – and that’s true whether you group them by income or expenditure, and it’s true on the narrowest definition of tax and benefit changes only, without taking into account the broader impact of spending cuts. As a Lib Dem voter, I certainly feel betrayed by that.

  • Sunder Katwala 29th Jun '10 - 8:36am

    George

    Thanks. I agree with the central thrust of your last comments, and probably most of the detail too. (My caveat would be the danger of targetting middle-class welfare, when it comes to sustaining the conditions for effective anti-inequality policies in the long-term. A residualised welfare system struggles to do that, which adds a further dilemma if it is the case that short-term measures to meet distributional challenges can have a long-term impact of that kind).

    Agree on the elimination of the structural deficit in one Parliament has a number of drivers (a small state vision, rejection of Keynesianism) and there is no way it is a necessary response to a sovereign default risk. The government – paticularly the Conservatives – are doing well at turning “there is a need for deficit reduction” into “our plans are unavoidable or we are on the road to ruin” and I agree that a nuanced argument must accept the first point to scrutinise and refute the second. (For example. Labour was committed to £39 billion of unidentified spending cuts, so I would like to see it be clear about that, acknowledging that it supports some cuts from the coalition – or alternatives of its own – in order to oppose an additional £32 billion (2013-14) to £55 billion (2015-16) of George Osborne’s proposed further cuts).

    While politics (in general, and especially online) can be quite shouty, I think it is also possible to overestimate the idea that (all) Labour voices are retreating to tribalist responses, or indeed that all LibDems are simply being entirely defensive about the Coalition, whatever it does. Of course partisanship in the form party political advocacy and argument is a central part of democratic politics. Your own points are very much in line with those put forward by Will Straw of Left Foot Forward here, and there are several attempts at constructive building of advocacy coalitions, across the pro-anti coalition divide as it were
    http://www.leftfootforward.org/2010/06/progressives-should-unite-for-a-fairer-slower-reduction-plan/

  • Andrew Suffield 29th Jun '10 - 5:56pm

    Your interpretation of what the IFS report says is, I think, based on a misreading about “the plans were made public” was about. I am sure your LibDem colleagues will confirm this point, but I think you have misunderstood what the IFS analysis shows.

    I made a more careful study of the IFS documentation to check up on this… and there isn’t any documentation on it at all. In fact, they don’t ever state how measures were sorted in that graph, or provide the raw data used.

    Given that it was produced less than 24 hours after the budget, the sloppy documentation can be excused, but it’s also not very helpful when there are clearly two ways to interpret it and no way to know what it’s really saying.

    In any event, the IFS concurs with the government that the budget is progressive overall, although they raise some concerns about benefits cuts that haven’t been investigated yet.

  • Anthony Aloysius St 29th Jun '10 - 6:28pm

    Andrew

    As I’ve already pointed out, the IFS presentation by James Browne says that the progressive nature of the “reforms to be implemented between now and 2012-13″ is “mainly because of reforms announced by the previous government”.
    http://www.ifs.org.uk/budgets/budgetjune2010/browne.pdf
    Quite clearly the distinction being drawn is not between the budget and measures previously announced by _this_ government, as you claimed.

    That presentation concludes “So likely that overall impact of yesterday’s measures was regressive”.

    That refers, of course, only to tax and benefit changes. In his introduction, Robert Chote, the Director of the IFS, says “perhaps the most important omission in any distributional analysis of this sort is the impact of the looming cuts to public services, which are likely to hit poorer households significantly harder than richer households.”
    http://www.ifs.org.uk/budgets/budgetjune2010/chote.pdf

    So your claim that the IFS “concurs with the government that the budget is progressive overall” is quite untrue.

  • George Kendall 29th Jun '10 - 6:44pm

    Sunder,

    Really nice to debate with a critic of the coalition who is acknowledging harsh realities: such as that raising the top rate of tax would probably reduce revenue.

    This gives your arguments more credibility.

    And thank you for spelling out your caveat: the danger of targeting middle-class welfare. This should be a matter of serious soul-searching on the centre-left. Do progressives want the poor to take a bigger short-term hit, in order to retain a long-term sustainable environment for anti-inequality politics? It’s a genuine dilemma.

    This situation does, as you indicate, create the political environment which could lead to significant dismantling of the welfare state. The instinctive response of those on the left is to put the entire blame on Osborne.

    To be most convincing, those who want to persuade the coalition to shift gear, need to acknowledge Labour’s contribution.

    That’s also true for me, so I’m now going to do just that…

    Andrew Dilnot’s piece [http://www.channel4.com/programmes/dispatches/episode-guide/series-45/episode-1] “Gordon Brown’s Missing Billions” is a devastating indictment of Gordon Brown’s policies. Made in 2005, Dilnot predicted that the deficit spending in a boom would lead to a bust. (And, having made that film, he’s going to have credibility when he critiques the coalition)

    Repeatedly, during Labour’s thirteen years, commentators argued that the extra spending was an opportunity to put in place reforms to improve public sector productivity, and thereby increase the long-term sustainability of the welfare state. Because they didn’t do this, I now know left-leaning state employees who shake their heads at the lax spending of those years.

    I am not at all convinced that a new Labour government would have followed the Darling plan (indeed, would Brown have kept Darling after the election?). As I pointed out in that post which you so hated (‘A budget to make us angry’), there is a massive political incentive for any government to get the pain out of the way early. The cuts wouldn’t have been as severe as Osborne’s, but I think Labour would have used the Greek crisis as a reason to cut faster, and more severely.

    As well as being more critical of Labour, I’m much more tentative than you in my reservations on the budget.

    Some use Keynsian arguments to attack the budget. I’d find these more credible if they’d criticise previous deficit spending in a boom, even more so, if they’d criticised it at the time. The “Greek-defence” argument is used across Europe; and when people airily dismiss it as a right-wing fiction, I tend to dismiss them.

    I am sceptical about the argument that we should have delayed the cuts for a year. Delaying the cuts a year would probably have concentrated the cuts over one less year – precisely what I wouldn’t want.

    And those, like me, who suggest a slower reduction in the deficit, need to acknowledge that this isn’t a pain-free or risk-free option. Repaying the deficit more slowly means, in the medium term, a bigger debt and so larger interest payments. And the borrowing may be at higher interest rates. This could, in the long-run, mean more cuts.

    And then there are political realities.

    I can say what I like. My period as a councillor was a long time ago. I speak for myself, and no one else. Nick Clegg and other Lib Dem MPs cannot be frank. Clegg is constrained, not just by a superficial soundbite culture, but by the need to keep the coalition together. For all we know, he might be sympathetic to a slower reduction in the deficit, but he is the junior partner in the coalition.

    I believe, and I imagine Clegg does too, that the likely alternative to this coalition was a majority Conservative government following a second election. If a critic of the coalition acknowledges that Lib Dems have, and had, a limited hand to play, and acknowledge their progressive influence on the government, I’m more inclined to listen to the rest of what they have to say.

    PS Thanks for the Will Straw link. Allowing for the fact that he’s writing to a Labour audience, it was refreshing to read a Labour supporter making mild criticisms of the previous government.

  • George Kendall 30th Jun '10 - 12:09am

    Sunder,

    A couple of apologies. Firstly, I got you confused with Sunny Hundal. I hope neither of you mind too much! Secondly, re-reading my previous comment, it comes over more negatively, with more Labour-bashing, than I intended. I’d like to correct that with a positive suggestion.

    Those of us who want the spending review to hurt the poor as little as possible should respond to the invitation of the Coalition, and propose progressive cuts. We should also rigorously critique each others proposals, both as to whether they are economically sensible, and whether they are politically realistic in the context of the coalition.

    This will have two significant benefits. The coalition will be presented with critiques that it can meaningfully engage with. That’ll help them resist a bunker mentality which would just make the coalition less progressive.

    Some of the ideas might be really good, but impossible politically. However, if they are championed by the left-of-centre blogosphere, perhaps they’ll then become an option.

    If people who genuinely want the coalition to be more progressive are prepared to think seriously about cuts, they’ll risk attack from others on the centre-left, but it may actually lead to better outcomes for the poor in the coming years.

    Are your people willing to give this a go?

  • Andrea Gill 2nd Jul '10 - 8:37pm

    @George “Those of us who want the spending review to hurt the poor as little as possible should respond to the invitation of the Coalition, and propose progressive cuts”

    Completely agree with that, being constructive is always more productive than just attacking things.

  • John Thomas 4th Jul '10 - 1:29am

    I voted Lib Dem for the first time and was in favour of electoral reform but this coalition has come as quite a shock we have ended up with a mainly Tory agenda which will throw us back into recession for years, what happened to the Lib Dem policies and way forward. I think the Lib Dem’s have lost all credibility and any chance of changing the voting system.

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