Here’s your usual round-up of comments from Lib Dem party groups following yesterday’s spending round announcements.
Danny Alexander MP will tomorrow announce details of capital spending plans, a result of hard-fought negotiations led by Vince Cable and others. The Social Liberal Forumm recognises that further cuts to current spending in the Chancellor’s Spending Review today are unlikely to repair public finances in the absence of robust economic recovery. Today’s announcements are insufficient to tackle our real economic challenges following the banking crisis and the alarming collapse in living standards; which may take a substantial hit when details of the welfare spending cap emerge.
Liberal Democrats have protected some key areas of spending, whilst agreeing to some very difficult cuts elsewhere, but Britain needs a more effective economic approach beyond hoping that cutting government spending will heal the economy.
SLF has consistently argued for greater investment in infrastructure as a key tool in boosting the economy while banks, businesses and households repair their balance sheets. We are therefore eager to learn the details of increases to infrastructure investment; if such an increase is being proposed, which some reports dispute. However, the scale of investment and how it is carried out needs to be far more ambitious to meet demand; we would like to have seen significant investment in affordable housing and green technology by allowing local government to borrow and invest, alongside a radical shakeup of banking. Furthermore, the government must ensure that the new spending, if it is new money being pledged and not simply future spending brought forward, injects much-needed confidence into the wider economy.
The additional cuts to total welfare spending, local government, transport and public sector pay will squeeze already-strained local services, adding more pressure on the cost of living. Such decisions are the painful consequence of prioritising a balanced budget over a balanced economy and society.
Increases in capital spending, reversing some of the damaging cuts from the last five years, must signal the beginning of a new economic strategy that recognises the role of public investment at a time of crisis. The government must now focus less on its own short-term balance sheet, and more on the radical reforms to banking, investment and green growth needed to kickstart a sustainable recovery. Without such an approach underpinning green growth, cutting yet more central government spending beyond 2016 will be self-defeating at best and actively harmful at worst.
And Liberal Reform:
Commenting on today’s spending review, Alan Muhammed, co-chair of Liberal Reform, a Liberal Democrat internal party pressure group, said:
“The Liberal Democrats cannot achieve their aim of creating a stronger economy and a fairer society without putting the public finances back on a sustainable footing. Reducing the deficit is not an alternative to economic growth, it is a prerequisite to growth that is not built on foundations of ever increasing debt.
“We applaud the commitment of our party’s ministers to bringing the deficit under control while also protecting areas of spending that can make the biggest contribution to creating a liberal society. We are particularly pleased to see the schools budget protected in real terms, allowing schools minister David Laws to go on delivering the pupil premium and improving educational standards.
“We also welcome the reinvestment of some of efficiency savings made in day-to-day spending in capital infrastructure projects, which will total an extra £18bn over the next Parliament. Labour’s disproportionate cuts to capital spending, continued by the coalition, were a damaging mistake.
“The move away from automatic pay rises and towards rewarding performance is also welcome both for the savings it brings and the potential to improve the delivery of public services.
“There is one area where we would have liked to see the coalition be more ambitious, and that is social security spending for the wealthy. In these straitened times, universal handouts like winter fuel payments and free TV licenses are indefensible. It is time to focus welfare on those who truly need it.”
I’m not aware of any other comments from party groups – please do highlight in the comments if you are.
* Nick Thornsby is Thursday Editor of Liberal Democrat Voice and blogs here.