Tag Archives: economy

Ed Miliband has his economic deficiencies but is the Liberal Democrat response adequate?

I’m getting as fed up with arguments about the economy as I was about the quality of the debate in the independence referendum. We seem to be stuck in a yah-boo soundbite fest that is deeply uninspiring.

Ed Miliband’s latest contribution on the deficit was pretty risible if you looked at it in terms of facts. He’s opposed practically every single cut the Coalition has made over the last four years but presumably his “sensible cuts” won’t actually affect anyone. Of course he’s not actually told us what they are, so we can’t really judge. Our problem is that with the way our newspapers and broadcasters work, neither Labour nor the Tories have to be that good to get their message across. Already we seem to be being demoted to an afterthought in most news reports. We have to work ten times as hard as everyone else to grab even a tiny bit of attention.

The nagging worry I have about Labour appropriating policies like our Mansion Tax is that they can then position themselves to say “vote for us, we come without their baggage”. This, I grant you, is pretty much the same as “vote for us cos we’re fairer than them and more economically responsible than them” which seems to be our pitch.

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Nick Clegg on the “utter nonsense” of Tory spending plans

In another strong demonstration of the differences between the Liberal Democrats and the Conservatives, Nick Clegg went on the Today programme yesterday to talk about deficit reduction and fiscal policy in the next parliament. While the Tories want to reduce the deficit by cutting spending alone, Liberal Democrats want to raise taxes on the wealthy.

From the Guardian:

Nick Clegg insisted taxes would have to rise in the next parliament. Speaking on Radio 4’s Today programme, he said: “What the Conservatives are saying is a complete and utter nonsense. There is not a single developed economy anywhere in the world that has balanced the books and only done so on the backs of the working-age poor, which Osborne has now confirmed several times he wants to do.”

As he set out his party’s plans to remove tax breaks for wealthy pensioners, Clegg also accepted that the public finances were not improving as fast as planned due to tax receipts failing to match forecasts, but he refused to say if this would require the coalition to put back its deficit plans.

He said: “If tax receipts are not as buoyant as predicted then of course that has an effect. Time will tell if that is a semi-permanent effect or a temporary blip, but it means it comes down a little less than predicted.”

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LibLink: Nick Clegg – ensure there is no benefit abuse while retaining free labour movement

Nick clegg rally glasgow 2014
Writing in the Financial Times (registration needed), Nick Clegg argues in favour of immigration for work purposes from the EU, but lists a range of restrictions on benefits for those coming to the UK:

Overwhelmingly, European migrants come here to work and pay taxes.

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Opinion: The Economic Crisis is Now Political

Clacton-on-Sea is going nowhere… This is Britain on crutches. This is tracksuit-and-trainers Britain, tattoo-parlour Britain, all-our-yesterdays Britain- Matthew Parris, The Times

Matthew Parris’s dismissal of poor, coastal Essex adorned thousands of UKIP leaflets in Clacton. It served only to justify UKIP’s rout of the Tory party.

Inadvertently, Parris came close to the truth: Britain as a political entity almost ceased to exist in September. Despite the eventual result in Scotland, the strength of the yes vote saw victory in Glasgow, quadrupled the membership of the SNP and caused Scottish Labour to implode. The high turnout alone belied the modern complaint of political apathy.

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A fair and fast economic recovery

The Labour Party has two attack lines on the economic recovery these days. One is that it is the slowest recovery ever, and the other is that it is happening particularly unfairly. Both are wholly without merit, and show that Labour are living in a fictional dreamworld.

The charge that this is a particularly slow recovery seems to be based on the length of time it is taking to return to trend, looking at graphs such as this:

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The Independent View: The need for a new economic alternative

Mountain roadThe social impact of the measures introduced by the Coalition Government, as I highlighted in a previous article, has demonstrated the failure of a strategy based primarily on austerity, and lends credence to calls for an alternative economic strategy close to the heart of the rank and file of the Liberal Democrats, based on encouraging growth through measures such as tax cuts and increases in the minimum wage to stimulate consumer spending, and investment in public works such as roads, hospitals, and schools to create jobs and boost industrial activity.

Criticisms have been levelled against those who call for expansionary, Keynesian-style measures to encourage growth, arguing that the additional output generated would not yield enough tax revenue to finance tax reductions or higher government spending.

Posted in The Independent View | 35 Comments

The Independent View: The Coalition Government’s economic strategy – time for a rethink?

Credit: Freefoto.com

The global financial crisis of 2008 has left Britain facing one of the most difficult periods in its economic history, as characterised by falling real wages and deepening poverty amongst the poorest members of our society. The actions taken by the Coalition Government since taking office in 2010 have arguably done little to tackle the social consequences of the economic downturn and have, in fact, exacerbated these problems, casting doubts on the validity of the government’s economic strategy as a whole.

Business groups have expressed a lack of confidence in the Coalition’s shambolic handling of the economy during much of its time in office. In November 2012, the Recruitment and Employment Confederation awarded the government 5 out of 10 points in its record on creating jobs and opportunities, noting that the government’s decision to cut back on work experience in schools and careers advice could reduce the prospects of young people entering the workforce, while a senior Conservative politician in April 2013 accused George Osborne of caution and timidity by not taking bolder measures in restoring the country’s economic health. The Coalition’s economic strategy also came under fire a year ago from the IMF, which drew attention to the country’s lacklustre economic performance, with output 3% less than it was in 2008.

Posted in The Independent View | 44 Comments

Opinion: Patience, not paranoia is needed if the UK is to solve the productivity puzzle

Workers bankers london bridge - some rights reserved by zoonabarEconomist’ brows furrow when they note that midst the generally positive economic data emerging in the UK and the US, wage growth continues to be absent.

On the surface the answer is simple –  the participation rate in both economies has fallen. For some, particularly those anxious to play Cassandra to the next crisis, this is a sign that economic growth is a mirage.

In the UK context, wild and dangerous theories are granted fertile ground by some determined that coalition economic policy can’t possibly have achieved growth; suggestions that benefit sanctions are forcing the number claiming jobseekers down, but not wages up, has much traction, but scandalously little merit.

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Opinion: The next devolution?

Manchester Town Hall ClockChange is in the air, or that is the implication of the strange alignment of George Osborne for the Conservatives and Andrew Adonis for Labour, whose new report on re-balancing the economy – not that he used those terms – was published on Monday.

If you add Michael Heseltine’s 2012 review into the mix – published with a full-page portrait of the great Liberal reformist Joseph Chamberlain (yes, I know he became something else) – then the shift towards serious devolution of economic power seems unstoppable.

Why has it …

photo by:
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Opinion: Nick Clegg’s fiscal target – splitting the difference

Calculating Taxes Up And DownStephen Tall writes that “in terms of policies, there wasn’t much that was new” in Nick Clegg’s Bloomberg speech. Giles Wilkes and others have suggested that, on the contrary, Nick’s fiscal targets are a welcome change from the excessive deficit reduction the Coalition has pencilled in for the next parliament.

These commentators think that Nick’s deficit target (below) is a continuation of Labour and current Coalition policy – to balance the budget excluding capital spending. My understanding, however, is that what Nick said …

photo by: kenteegardin
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Lib Dems need to take every opportunity to get our message out there

Megaphone, some rights reserved by garrykinghtI’ve made no secret of my view that a change in leadership is likely to do little to revive Liberal Democrat fortunes at the polls given the rather more structural reasons for the decline in support for the party.

But I also recognise that to continue doing and saying the same things over and over again and expecting a different result is not only the definition of insanity but is unlikely to lead to an electoral revival:

We should not simply keep calm and carry on, but nor should we lose our heads either. The long-term success of the party is best served by

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Opinion: What does the evidence tell us about our strategy should be?

evidence of organized lightAs a party committed to evidence-based policy, we should be asking what the evidence tells us about the questions of strategy and leadership we now face. The discussion is currently impressionistic and getting fixated on the past. We need instead to stick to the evidence and to what it suggests we should do in the future. There are many examples one could give about the leadership issue, but here is one about strategy.

Nick Clegg has explained the party’s strategy like this: “

We said in 2010 we were going

photo by: jared
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When Vince Cable warns we should listen

Vince Cable - Some rights reserved by Liberal DemocratsWhen Vince Cable issues a warning we should all pay heed.

According to the Guardian he was speaking last week at the Resolution Foundation and claimed that booming house prices are destabilising the economy. He said we should all be worried about what will happen when interest rates return to normal.

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Danny Alexander: UKIP is wrong on jobs, wrong on prosperity and wrong on security

Danny-Alexander

Today, The City UK publishes two reports which, they say, “show that leaving the EU poses very significant risks to the UK’s future, undermining economic well-being and the ability of business to grow and compete in world markets.” All in all, “A Legal Assessment of the UK’s relationship with the EU – a financial services perspective” and “Analysing the case for EU membership – How does the economic evidence stack up? predict a quadruple whammy of higher prices and unemployment, lower growth and wages should Britain leave the EU. That’s before you …

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Danny Alexander tells Bloomberg of Liberal Democrat contribution to fair recovery and plans for Mansion Tax

Danny Alexander by Paul WalterDanny Alexander gave a big speech at Bloomberg this morning. Interestingly, he mentioned several times that he was from the Highlands and credited his upbringing in a small community with forming his commitment to fairness and managing resources wisely.

It was a wide-ranging speech, which looked back at the almost four years since he entered the Treasury. He said that some of the detail of getting to grips with the economic crisis would have to wait for his memoirs which he hoped would be “some way off”.  His main theme was that the Liberal Democrats were, uniquely, capable of managing the economy fairly. It was another variation of the “stronger economy, fairer society” melody.

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Opinion: The Generation Gap

Day 46: Generation GapThe generation gap used to refer to the differing attitudes of young people and their elders to sex, drugs and rock and roll. For young people today, it has come to mean what the American author of the article linked below describes as “the economic hellhole our parents have handed us.”

Earlier this year, Rolling Stone magazine published an article under the title Five economic reforms millennials should be fighting for.

photo by: quinn.anya
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Opinon: The Calder Valley needs a modern transport system to maximise economic potential

The declaration that Hebden Bridge is the UKs ‘second city’ – lying at the heart of the suburbs of Bradford, Leeds & Manchester – has come as something of a shock to most people living there, including myself. However, underneath the hyperbole lies a serious point; that the Calder Valley lies in a sweet spot for ease of commute to the major employment centres.
But what the Calder Valley lacks – and what holds back prosperity and employment opportunities within it – is a modern, efficient transport system.
We are cursed on the Caldervale line which runs along the Calder Valley

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John Pugh MP writes… Grim up north

You may have read the Observer article entitled “Northern Lib Dem MPs rebel over cuts.”

It’s a source of wry amusement to behold how the national media treat our internal democratic procedures. Not since primary school have I been referred to as “ringleader”, let alone of a bunch of “rebels” – Northern council leaders, peers and MPs who endorse the pre-budget submission “Grim up North?”.

The title is meant to be a little ironic because there are many promising signs up North and a lot of support for the Coalition’s objectives of re-balancing the economy.

However, your typical Northerner is classically known …

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Opinion: Are payday loans impoverishing our neighbourhoods?

There is a central moral conundrum at the heart of the payday loan phenomenon.

It is that payday loan companies are designed to help people through what are intended to be unusual and temporary periods of financial difficulty.  Long-term and repeated use of payday loans is seriously expensive.

Yet – and here’s the rub – the business plans of most payday loan companies envisage growth.  Their business purpose, and the purpose of their investors, is to maximise their profits – and this is bound to be at the expense of some of the poorest families and the most vulnerable places.

My report for …

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Uncomfortable truths from the IFS on public spending and tax cuts but cautious optimism on economic growth

Last week, the highly-respected Institute for Fiscal Studies produced its annual “Green Budget”: its attempt to inject some realism into the national debate on the economy ahead of the chancellor’s actual budget in March.

The document makes for uncomfortable reading in parts, particularly as we head towards another general election in which the complicity of silence on deficit reduction is likely to be as deafening as it was in 2010.

IFS borrowingDeficit reduction: significant progress, but some way to go

Starting with the deficit, the IFS’s conclusions are stark. Had the government not taken steps to increase taxes and cut spending in the years since 2008, they estimate that the deficit would have reached 10% of national income by 2018-19. Because of the estimated 16.7% permanent reduction in economic capacity caused by the crash of 2008, 98% of that deficit would be “structural” – i.e. would not be expected to reduce naturally once growth picked up:

For an economy such as the UK, this level of borrowing would have been unsustainable on an ongoing basis. Public sector net debt would have increased markedly year-on-year, likely surpassing 100% of national income before the end of the current decade, and 200% within the next two decades.

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Michael Moore MP’s Westminster Notes

 Liberal Democrat MP Michael Moore writes a regular column for newspapers in his Borders Constituency. Here is the latest edition. 

A Stronger Economy 

Last week, I welcomed the announcement of the strongest GDP growth figures since before the financial crisis began in 2007, with the UK growing by 0.7% in the last financial quarter and 1.9% throughout the whole of 2013.  Growth is vital for our prosperity so this is a really important development.

We have also seen the inflation rate dropping to 2% from a peak of 5.2% in September 2011, decreasing unemployment and both the World Bank and the IMF indicating …

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Nick Clegg MP writes…The recovery would not be happening without us

This morning we’ve seen yet more proof that the economy is firmly on the path to recovery. Growth is returning, with today’s figures showing the longest period of growth since 2007. We’ve also had good news on jobs – with youth unemployment down, jobs outside of London up and a surge in new full time jobs.

In Government we’re clearing up Labour’s mess. Here are four reasons why it would not be happening without the Liberal Democrats.

1. Our decision to go into coalition gave Britain the stable government needed to get the country through these difficult times. Despite the endless clamour …

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A longer read: Vince Cable on ‘Recovery and Beyond’

‘UK economy growing at fastest rate since 2007′ is the BBC headline this morning, following the release of the latest GDP figures showing 0.7% growth in the fourth quarter of 2013, bringing the annual growth rate to 1.9%.

Last night, Lib Dem business secretary Vince Cable delivered a major speech to the Royal Economic Society assessing the current state of the economy – and in particular how the current growth figures can be sustained in the long-term. There will be lots of glib sound-bites today from politicians and pundits trying to make the facts fit their outlook. As ever, …

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Danny Alexander: Labour will deliver less for working people than Liberal Democrats

So, Ed Balls has been laying out his vision for the economy. A surplus by 2020? Really? From Labour? They seem to be trying to make out that they can be trusted with our purse strings after all, despite all the evidence to the contrary that we’ve seen any time they’ve been in government in my lifetime.

The measure getting all the headlines is the fact that they are going to restore the 50p tax rate that was in place for all of a month of their 13 year term in office. It’s worth remembering that their top rate of …

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Opinion: Son of Plan A – why are we supporting?

Economic policy is always a mixture of fiscal, monetary and political policy.

“Nick, George has come up with another of his jolly good wheezes. You remember that Plan A malarkey ..?”

Well, dear reader, you do remember Plan A, don’t you?

Eliminate the deficit by 2015; keep fingers crossed Expansionary Fiscal Contraction (EFC) works; use a 20:80 ratio of tax increases to spending cuts; provide monetary stimulus; flush out the Labour Party, and keep Vince and the ‘SDPers’ in their box.

Well, it put a spanner in the recovery-works and, with no sign of EFC or King’s stimulus working, it was pretty soon shelved …

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Opinion: Vince is wrong about London

One of the oddest statements made by a Lib Dem in 2013 was surely Vince Cable saying that London was “draining the life out of the rest of the country”’.

Odd not just because Vince is MP for a London constituency but because he was so clearly wrong – far from draining the life out of the rest of the UK, London is a huge contributor. The most obvious way is financially: London subsidises other parts of the UK which would have higher taxes or less public spending without the benefits of the London

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Opinion: the Government’s obsession with London is holding back our creative industries – and the recovery

As a failed rock guitarist but still passionate consumer of music I always look forward to the Mercury Music awards at the end of October, and this year’s nominees were as interesting and eclectic as they usually are. What wasn’t as diverse was where these acts originated from. Over 60% were from the Greater London area and only four were from outside the south east of England, which is surprising when you consider the award covers the whole of the UK and Ireland. It seems the advice I heard fifteen years ago during my short and unsuccessful music career is …

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Danny Alexander says there would be no recovery without Lib Dems

Danny Alexander by Paul WalterIn today’s Telegraph, Danny Alexander is ebullient about the signs of economic recovery. He says this revival would not be happening without the Lib Dems.

The decision of Lib Dems to form the coalition is the bedrock on which the recovery is being built. Without a government prepared to do the right thing to tackle the deficit and support job creation the progress we are starting to see would simply not have happened.

Some people thought the Lib Dems wouldn’t stick at it. Now they know different. We’ve worked with the Conservatives, not just to take tough decisions, but to make the right decisions for the long term good of Britain.

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YouGov: Nick edges Vince on economic trust

Which politician (or combination of politicians) would the public most trust to run the British economy? That’s the question YouGov asked, and here are results courtesy the PLMR blog:

economic trust

Overall David Cameron has the single best economic trust figure (35%) followed by Ed Miliband (30%). As you might expect this breaks broadly on party lines: 91% of Tory voters trust their party’s leader; 76% of Labour’s trust theirs. The current Coalition partnership – Cameron and Clegg – are trusted by 29%, with Tories less enthusiastic and Labour supporters overwhelmingly hostile.

Intriguingly …

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Opinion: Liberal Democrats have a unique position on co-operatives. We should use it.

At party conference I asked Nick Clegg why the word ‘co-operative’ appeared only once in our economy paper and not at all in the resolution presenting that paper to conference. He advised me to write my views on a postcard and send them to him, and this is that postcard.

The third clause of the preamble to the constitution sets out the underlying principles of economic liberalism clearly and concisely:

We will foster a strong and sustainable economy which encourages the necessary wealth creating processes, develops and uses the skills of the people and works to the benefit of all, with a

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    @Paul Walter Apologies if "political types" offends you, it was intended as a term to include everyone from the PM down to the lowliest door...
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    One anomaly a basic income for everybody would solve is the fact that while income tax is based on the individual's income, benefits are awarded...
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    John Tilley - I think it's about 50-50 (I write "about" without checking the earlier lists in detail - the last list was 3-3). Paul...