Nick Clegg is in Glasgow tonight, talking to CBI Scotland. Much of what he says is applicable across the whole UK, though. Here are some of the highlights:
The economy
At every step of the way, in the Coalition, we’re fighting hard to create jobs, boost growth and make a genuine difference to people’s lives across the UK.
That’s why we’ve committed to raise the personal allowance on income tax. So that basic rate tax payers will get to keep all of the first £10, 000 they earn. We’ve already taken over 2 million people out of paying income tax altogether. And by the time these changes are complete, they will be worth around £700 a year for over 20 million basic rate taxpayers.
We’ve also extended our Funding for Lending Scheme to provide more help to SMEs. And the latest figures show that under this scheme lending to businesses and homebuyers has increased. And ahead of the official launch of our new £1 billion UK Business Bank, we are already accepting proposals for the project’s first investment round.
We’re also protecting and boosting investments essential to our long-term growth. Setting out, for the first time, a long-term Infrastructure Strategy for 21st Century Britain, with a major boost to capital spend here in Scotland.
This is supporting a £100 million roll-out of superfast broadband to communities across Scotland; a £50 million contribution to safeguard and improve the cross-border sleeper service for Scotland; and an investment in faster, more modern electric trains on the East Coast Main Line. That’s in addition to our committed investment in a national High Speed Rail Network.
HS2 – taking on the critics
The Core Cities Group estimates this investment will create around 400,000 new jobs, 70% of which will be based outside of London. And in Scotland, we calculate it will boost the economy by around £3 billion.
And here I just want to respond to those who have criticised this project in recent weeks. That includes the ex-Ministers who green-lighted this idea in the first place.
It’s a pattern, we see happening time and time again in this country. When a deal has been signed, the temptation to undermine it from the comfort of opposition can be too much for some politicians to resist. This clouds the debate and chips away at the consensus.
But the alternatives they suggest – such as upgrading existing lines – aren’t viable answers. For example, the extra capacity created through the £9 billion upgrade of the West Coast Mainline has already been filled.
We’ve tested our business case rigorously. And we’re clear on what needs to be done to deliver this project on time and to budget. That is how Britain builds the infrastructure it needs. And that’s how we compete, as a 21st century economy, with a modern transport system that works to make us stronger.
The economic case for Scotland staying in the UK
Right now, membership of the UK’s Single Market gives UK businesses unrestricted access to over 60 million consumers. As set out in our business and microeconomic analysis paper, in 2011, that was worth around £45.5 billion in trade for Scotland (excluding oil and gas), that’s double the amount Scottish businesses sell to the rest of the world. And the demand for Scottish goods and services from England, Wales and Northern Ireland contributes almost 30% of Scottish GDP. In turn the rest of the UK exports almost £50 billion worth of goods and services to Scotland.
Now I’m not saying that all of this trade will be lost, if Scotland votes Yes in 2014. I’m not here to create an artificial argument. But our latest research shows that the long-term effect of a new border between our two countries – with all of the new rules, regulations and systems it will require – will reduce Scotland’s GDP by 4 per cent, equivalent to £5 billion in 2012, over the next 30 years.
A no vote is not a vote for the status quo (and he actually says Home Rule – this is a big deal)
But if Scotland votes No next year, this won’t be the end of the story. A vote against leaving the UK family is a positive vote to remain within it – and to be part of Scotland’s evolving position within it.
We can’t let this debate be set up as a false choice between separation, on the one hand, and a status quo set in tablets of stone, on the other. Because the more pragmatic reality is – and which business accepts – is that nations must adapt and evolve.
Our manifesto hasn’t been written yet, but I know that in 2015, the Liberal Democrats will be standing on a platform of further powers to the Scottish Parliament. And as Liberal Democrats, we will be working to build a consensus – with the other political parties, as well as businesses and people across Scotland – to deliver this.
Gladstone, Grimond, Steel, Kennedy and Campbell – these are just some of the giants of my party who, down the years, have set the Scottish debate alight. And made a genuine, lasting difference.
The Liberal Democrat proposition protects the United Kingdom single market, one of the most important things for business. A single currency; a single regulatory system; a single, open, free market.
With Home Rule we truly get the best of both worlds. Local power and authority right alongside global clout, social equity and economic strength.
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12 Comments
He’s just not very interested in accuracy, is he?
“Basic rate tax payers will get to keep all of the first £10, 000 they earn.” — no they won’t. Has he never heard of national insurance? (To say nothing of Council Tax.)
“By the time these changes are complete, they will be worth around £700 a year” — well, arguably. But he’s claiming credit there for the gross change in allowances from 2010 to 2015, ignoring the fact that automatic indexation in line with inflation would have delivered about £200–250 of that anyway.
“Our latest research shows that the long-term effect of a new border between our two countries – with all of the new rules, regulations and systems it will require – will reduce Scotland’s GDP by 4 per cent… over the next 30 years.” — well, let’s be generous and call that “naive”. Their research may suggest that, but it can’t possibly show it, because economies just aren’t predictable to that degree. And given that the government’s 2010 estimate for the UK economy in 2015 was almost certainly out by more than 4%, I think we know how much weight a sensible and honest man would give to a prediction with that level of precision over 30 years.
I used to like Clegg. It was his political honesty, mostly…
Let me guess “All in a night’s work: Nick Clegg faces down HS2 critics and embraces Home Rule” was a direct lift from the press release put out by the office of the Deputy Prime Minister. Hubris and nonsense without the least shred of understanding of the other person’s argument.
Where shall we begin? Well much against my better judgement I have to give Clegg credit for something , the reduction in the tax of those on the lowest levels is welcome but see the other post for a critique. What galls me is the conflation of the LFS into somehow a benefit for SMEs as it transpires yes SMEs slightly increased their borrowings according to the most recent Treasury figures but the actual is that they paid back more than they borrowed so we have a negative of £0.3bn. The Lending For Votes Scheme as Max Keiser calls it, is something which boosts home ownership. This Clegg glosses over rather quickly as this is something which will stoke a housing bubble.. Since when have the Lib Dems become hostage to a short-termist electorally driven Tory agenda which merely seeks to buy votes. Voters incidentally that will not be coming our way but going to the Tories..
Perhaps someone might care to cite the source of the 400,000 new jobs which are 70% outside of London which Clegg quotes for his HS2 bit as this was long on claptrap and short on an actual rebuttal of Clegg’s critics, myself amongst them, as to the merits of HS2. This was a fairly easy audience to have given this counter blast to the Scottish CBI as they would have applauded at all the right moments but this hardly warrants the headline given to this piece . Perhaps if he had gone into the Social Liberal Forum he might have deserved such a headline but he didn’t .This might have been a hard nights work for the press release writer but for some poor sod on a zero hours contract they have a far better idea what work is. This was in short hyperbole.
On Scotland I leave to those best qualified to answer one way or another questions on North of the Border.
@Kevin
“Perhaps someone might care to cite the source of the 400,000 new jobs which are 70% outside of London which Clegg quotes”
It was in the speech…
“The Core Cities Group estimates this investment will create around 400,000 new jobs, 70% of which will be based outside of London. And in Scotland, we calculate it will boost the economy by around £3 billion.”
well at least Malcolm and Kevin are honest enough to give their full names and a photo.. but I do hope they will both be standing for Parliament in 2015, as they know so much.
@ Malcolm Todd “the government’s 2010 estimate for the UK economy in 2015 was almost certainly out by more than 4%”
Be careful with statistics. If we were to apply “4% out” for example to the claim that independence would reduce Scotland’s GDP by 4 per cent, that would suggest an actual outturn of perhaps 3.84% reduction in GDP, or maybe 4.16% reduction (being a 4% variance in the prediction). Of course there’s uncertainty, but I don’t blame Nick for articulating a best estimate.
Julian Tisi
Sorry, I may have misled you with careless use of “percent” where I should have used “percentage points”. So, to be clear:
OBR forecast in June 2010 was that over the five years 2010–2014 the UK economy would grow by about 12.5% (including growth of 6.4% in the first three years). See http://budgetresponsibility.independent.gov.uk/data/ (Briefing paper No.4: Historical official forecasts database; June-2010 forecast)
Actual growth over the first three years (2010–2012) was about 3.1% and current OBR forecast (see http://budgetresponsibility.independent.gov.uk/category/publications/ [Economic and fiscal outlook – March 2013]) is for growth of 0.6% this year and 1.8% next year, which means that overall by the end of 2014 the economy will have grown by about 5.6% over five years.
So the difference between the five-year forecast three years ago (12.5% growth) and the now expected outcome (5.6% growth) is substantially greater than the total effect Clegg claims to be predicted for thirty years in the future.
Peter Tyzack
Is that really the best defence you can muster? A snide “Well, look at you clever-clogs” response to actual data? And what is the point of saying I am “at least… honest enough” to identify myself, if not to imply, without any foundation or evidence, that I may in some other respect be less than honest?
I have simply spent a little bit of time on a quiet day digging out some publicly available data and providing a transparent analysis of it. This is something Clegg could have accomplished with about 30 seconds’ effort by telling one of his staff he wanted it; I’m sure he has people working for him who are at least as clever as I am. Either he didn’t bother to ask about the facts behind the speech; or he couldn’t understand the analysis; or he (or his team) deliberately misrepresented the facts. Or, of course, my analysis above may be flawed in some way — I don’t claim infallibility. But you haven’t made any attempt to tackle the facts or analysis, just sneered. Well done.
“We’ve also extended our Funding for Lending Scheme to provide more help to SMEs. And the latest figures show that under this scheme lending to businesses and homebuyers has increased.”
This is cheeky. Lending to SMEs fell by £583m between March and June. The lending increase is entirely due to mortgages. FLS in a way is even worse than Help To Sell, as it places no restrictions on the type of mortgage, which means the buy-to-let brigade are using FLS to out-compete first-time buyers.
Mortgages should be removed from FLS so that the initiative is aimed at SME lending only.
@Malcolm Todd:
Sadly, sneers and snide remarks are the only defenses the hyper-loyalists have left.
@ATF
I don’t think the Core Cities Group (http://www.corecities.com/news-events/core-cities-welcome-high-speed-announcement) says what Clegg claims:
“HSR alone will: … Widen labour pools, directly create 30-40,000 jobs from HS2, 350,000 from full HSR and support up to a million more”, so nearly all of the 400000 jobs would come from a full High Speed Rail network of which HS2 is a part. Digging further into the Core Cities references, the smaller figure for HS2 comes from a KPMG report, and the larger figure of 350000 jobs does not appear to be directly attributed to a rail network at all.
Five minutes googling is the sum total of my knowledge in this area, so I am happy to be corrected, but on the face of it Clegg;s claim that “The Core Cities Group estimates this investment will create around 400,000 new jobs, 70% of which will be based outside of London.” is at best disingenuous and at worst dishonest.
You can infer that if you like, Malcolm, but I am merely ‘implying’ that I don’t like commentators who hide behind pseudonyms or can’t work out how to put up their own photos. I prefer that we discuss as real people. Though surely it is a backhanded compliment that ‘you know so much’.. ie, more analysis than I am able to give to mind numbing statistics. Had you thought that maybe Clegg had asked for the analysis as you suggest, but had interpreted and concluded differently to you?
. ‘hyper-loyalist’ hmm, no.. loyal yes, but more a critical friend, aware of the negative and divisive effect of hyper-critiscism.
“The Core Cities Group estimates this investment will create around 400,000 new jobs, 70% of which will be based outside of London. And in Scotland, we calculate it will boost the economy by around £3 billion.”
Let me see. Is this the group that is made up of most of the cities that envisage HS2 sucking in even more jobs from the outlying hinterland, because speedier transport links to London will benefit them much more than smaller towns not with stations on the HS2 route?