Behind the future economic and political relationship between the UK and the EU, and the (mis)management of the COVID-19 pandemic, the question of how to revive the towns and cities of the north of England (and its other marginal communities) will loom in 2021 as one of the key issues in UK politics. Resentment of industrial decline, followed by cuts in funding for local government, education and transport, fuelled support first for leaving the EU and then for deserting Labour. Boris Johnson has pledged to invest in bringing prosperity back to former industrial communities. Keir Starmer is feeling his way towards regaining their support, more by embracing their conservative values than promising massive spending. But what do Liberal Democrats have to offer them?
This raises existential problems for all three parties. Johnson’s promises imply a larger state, with higher taxes, engaging in rebuilding local and regional economies – anathema to the small-state libertarians who now crowd the Conservative backbenches. Starmer is struggling to reconcile the metropolitan liberals who provide much of his activist base with the social nostalgia these communities cling to. But we, too, are a party of university towns and graduates, liberals in the widest sense: we cannot follow Starmer in attempting to embrace rediscovered ‘working class values’, which in any case many of the younger generation in such communities do not share.
We do however have determined local activists in many of these neglected communities, with hopes of winning local elections in May or June. So what should our platform be, consistent with our values? Can we make the future of local democracy itself an issue that will appeal? The Conservatives clearly despise local government: their preference for awarding contracts to multinational companies rather than partnering with local authorities to handle responses to the pandemic has been an expensive disaster. Bullying local government on school closures has been as bad. Moving bits of central departments to ‘red wall’ seats while keeping power in London is a poor substitute for devolving power. But we need to think carefully how best to present a case for stronger local government and less direction from London, if we want to win over discontented voters.
‘Building back better’ has to be more than an empty slogan: so we need to spell out what our priorities are. Higher public spending, with a larger proportion transferred to local authorities that have been deliberately starved of resources, is essential to any form of levelling up. That means that we have to make an explicitly ‘social liberal’ pitch for higher (and fairer) taxes once the immediate crisis is over, to sustain investment in our poorer communities. Local transport links, to connect neglected communities to jobs, are vital; experiments in funding local regeneration should be encouraged. Education and training are key to levelling up. This government has antagonised teachers, and imposed extra burdens on state schools without providing extra resources. Its new apprenticeship scheme has led to a drop in apprenticeships for school-leavers. Teachers, like other public service workers, are part of our natural constituency; we should be offering them, and state schools, full support.
I look forward to seeing our local government manifesto. This year’s elections will be UK-wide, with local activists campaigning to win in communities where most voters are fed up with all politicians. London, Scotland and Wales are attracting most media attention so far. But the future of our party depends on rebuilding our local government base, seat by seat, on council after council. I doubt that the Conservatives can deliver on their expansive promises to level up the poorer regions of this divided country. Labour looks likely to offer confused and contradictory messages. Can we do better?
* William Wallace is Liberal Democrat spokesman on constitutional issues in the Lords.
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31 Comments
“Higher public spending…..is essential to any form of levelling up. That means that we have to make an explicitly ‘social liberal’ pitch for higher (and fairer) taxes….”
You’ve said pretty much the same thing in one election after another. You know it doesn’t work. So why expect it to be any different next time? So what’s the oft quoted phrase, usually and erroneously attributed to Einstein, about the definition of insanity?
Voters might say they are prepared to pay more taxes but when they are alone in the polling booth are they going to back that up with a cross in the right place? The evidence is that they won’t.
There were no overall tax cuts to offset the spending cuts during the coalition years and since. Cuts in public spending slowed the economy which in turn led to lower taxation revenues so nothing was gained as a consequence. So why are tax rises needed if the cuts are reversed?
To answer my own question they might be needed if the economy becomes so buoyant with the increased total spending that it starts to overheat and we start to have an inflation problem. But that remains to be seen. Don’t put the brakes on when the economy is struggling along up a steep hill. Wait until there is a danger of exceeding the speed limit before doing that!
Why not look at things from the other end, cutting fixed costs for people which would be immensely popular – get rid of council tax, tv licence, standing charges on energy as well as business rates, the lost revenue found via a new transaction tax. We have huge govn dept’s and councils that absorb most of the money in their own fixed costs that need constant bloat to keep them in existence…
Resentment of industrial decline, followed by cuts in funding for local government, education and transport, fuelled support first for leaving the EU and then for deserting Labour.
Let’s not forget that those cuts were imposed on us by the EU…
‘Austerity has not been a Tory choice, but an EU one’:
https://joelrwrites.wordpress.com/2019/07/04/austerity-has-not-been-a-tory-choice-but-an-eu-one/
@Jeff
We aren’t a eurozone member so the EU doesn’t have that kind of power, unlike what this blog stated besides euro having Portugal pursued it’s own non-austerity fiscal policy anyhow.
In addition, deficit reduction isn’t the same thing as austerity as practiced over the past decade. You can cut deficits by raising taxes without reducing public expenditure.
I apologise in advance for hassling our heroic, overworked LDV Team but they need to grasp the nettle & start blocking comments from people who keep writing the same sort of trash, usually wildly off-topic. Jeffs comment is an obvious example but I could point to others in nearly every comment thread. Printing this stuffs wastes our time & energy & probably puts lots of readers off.
Liberalism is not the same as license.
Paul Barker is certainly onto something here. I suspect that some people find a well thought out piece like that from William Wallace above threatening. I also suspect that the kind of comments Paul rails against help to ensure a disproportionate number of male contributions.
Paul,
You , me, and many others, are constructive and have made significant contributions to discourse here and elsewhere.
You, me and many too, agree on the distinction , you make, re Liberalism, and licence.
But trash is a strong word and few here deserve the postings to be referred to as this.
Free speech means comments, unless deeply offensive, inciting of violence, personal attack, should be met with a good response that is withering rather than a complete barring of the argument made.
Withering as you have been here, calling it trash.
I’d rather read the comment that inspired that strong response as well. And then we can engage.
@Paul Barker “… start blocking comments from people who keep writing the same sort of trash, usually wildly off-topic. Jeffs comment is an obvious example …”
I disagree with “Jeff” but I don’t think your characterisation of him and his post is fair, and I don’t believe there is a problem with “others in nearly every comment thread”. “Jeff” has obviously read the article on this page and is responding to a particular point that “cuts in funding for local government, education and transport, fuelled support first for leaving the EU …” by blaming the EU for those cuts. We could debate instead whether it was Labour’s fault for causing a financial crash or the Lib Dems for helping the Tories to implement those cuts, but it all seems to be on topic and relevant to the question posed in the article article: “But what do Liberal Democrats have to offer [former industrial communities]?”
In order to improve things, it is important to understand both why these communities are in their current state and to understand why they believe they are. In recent years there has been an apparent lack of empathy in Lib Dems for these communities which are outside the Lib Dem comfort zone, typified by an arrogantly dismissive attitude towards their reasons for supporting Brexit. The suggestions in this article for “Building Back Better” look like a step in the right direction.
William Francis 7th Jan ’21 – 2:03pm
We aren’t a eurozone member so the EU doesn’t have that kind of power,…
They don’t anymore, but we did have a treaty obligation to comply with EU recommendations…
‘Council Decision (EU) 2015/1098 of 19 June 2015 establishing that no effective action has been taken by the United Kingdom in response to the Council Recommendation of 2 December 2009’:
https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32015D1098
Might we have some detail and definition of “working class values”, please?
At the moment the country ‘s top priority has to be managing the pandemic and to a certain extent we will not know it’s economic and social effects until after this has happened. However, it seems pretty clear that it will have exacerbated pre existing inequalities, especially in education. Our party should therefore be creating a Plan for the North which can be put into place once we are relatively Covid free.
In addition other services which the majority rely on need greater investment so specific investment in deprived areas can be part of a programme of enhanced investment for most of us. This will give our policies a much more general kerb appeal and they should be promoted as such.
I’d never dream of suggesting it – I believe in free speech – but I’m afraid there’s a stronger case for blocking repetitive comments about the latest opinion poll and the merits of ‘flying the flag’ for a derisory vote.
There’s a stronger case for blocking the Covid infection deniers whose suggestion to “let it rip” is sensible.
– Jeff
The EU could recommend that we cut our deficit but they had no power to sanction or compel. I recommend you stop posting disinformation on the internet. Won’t stop you though will it?
@Andrew Melmeth @ Jeff
It’s debatable to what extent we’d signed up to the so-called Growth and Stability Pact. If we were totally out of it we should have made it quite clear to the EU that they should have kept their opinions and recommendations to themselves! There should have been no question of any UK chancellor having to hand in their Budgetary homework to be marked!
And it’s not all about the UK. If the Lib Dems are as Internationalist as claimed they should have been just as concerned about the economic austerity imposed, by EU sanction and compulsion, on Greece as anywhere else.
The European Union, at its heart and above all else, is a fundamentally pro-austerity institution. So why is that many anti-Conservatives who reject the austerity myth on a domestic level, are so demonstrably committed to EU membership on an international level?
https://www.redpepper.org.uk/the-trouble-with-being-both-anti-austerity-and-pro-eu/
@Andrew Melmoth “The EU could recommend that we cut our deficit but they had no power to sanction or compel.”
To be fair, that is exactly what Jeff quoted in his first post: “The United Kingdom, as a non-Eurozone member, cannot be fined or be the subject of punitive action, as it has an exemption to Article 126.” It looks like he was incorrect to refer to a “treaty obligation to comply with EU recommendations” since the document to which he links states, “the obligation in Article 126(1) of the TFEU to avoid excessive general government deficits does not apply to the UK unless it adopts the euro”. However it does then add, “Paragraph 5 of that Protocol provides that the UK is to endeavour to avoid an excessive government deficit”, so there’s some sort of weaker commitment to comply.
Although the Government could choose with impunity not to comply with the EU advice, what was the Lib Dem position on the UK not going along with the EU? Did these EU recommendations influence Lib Dems in Government to double down on deficit reduction?
Certainly – and trying to get back on topic – any Lib Dem involvement in or support for the sort of cuts that Lord Wallace describes in his article might need to be addressed in order to give more credibility to proposals by the party to reverse them.
Jeff writes total nonsense behind the cloak of anonymity. The EU did not impose austerity on the UK. Global financial markets imposed some constraints, certainly; the reluctance of the previous Labour Government to raise taxes alingside raising expenditure hampered the incoming coalition; but LibDems acquiesced too easily to Conservative demands to cut spending rather than fill the yawning deficit partly by tax=raising as well as through cuts. All parties have now promised increased spending. The question is: how do we fund it?
@ William Wallace,
“All parties have now promised increased spending. The question is: how do we fund it?”
The assumption here seems to be that you raise the money in taxation first then you’ll
have enough to fund the spending. But you must know it doesn’t work like that. Where has Rishi Sunak got the money to fund his spending?
If the vaccines do work as well we hope there could be a good recovery later this year. There will be a buoyant economy and a buoyant economy will generate a high level of taxation revenues. However high revenues shouldn’t be used to justify even higher government spending. That will almost certainly create a positive feedback loop creating higher than desirable inflation.
It’s when revenues are low that Govt spending should be higher and vice versa. The government is not a local council. Different rules apply.
Peter Martin: The government also funds local councils (or, rather, cuts the flows of funds to local Councils). The % of GDP spent by public bodies is significantly lower in the UK than in other European countries. There’s no evidence that this has made the UK a more dynamic economy than those.
@ William Wallace,
I agree with your comment of 10.47am. However, in principle, it is possible to have a successful economy with a greater or lesser proportion of public spending. That’s not really the issue.
The political right like the idea of a small government sector but they usually make the mistake of thinking this means low government deficits too. So they squeeeze both and only succeed in depressing the economy which creates big political problems. Ronald Reagan was possibly the only one to avoid making this blunder.
On the other hand those on the left make the opposite mistake. The left wants to increase the size of the public sector but there are political problems with the fiscal implications which they are loathe to face up to.
However, as the example of Germany shows, a small Govt deficit can go hand in hand with a large Govt sector.
The principle of sectoral balances applies.
Govt Deficit = Surplus (Savings) of PDS + Surplus of Overseas Sector.
The only way any Government can run close to a balanced budget, as Germany does, is to balance the savings of the domestic sector with the Surplus of the Overeas sector.
This is just about impossible for the UK because we do want the domestic sector to save and we also run a trade deficit. So one answer to your question of “how to pay for it” is to run a large trading surplus, but that means suppressing the pound’s value. There are big problems with doing this too!
The other answer is to not worry so much about any Got deficit providing inflation is kept under control.
We need to think carefully about revitalising run down areas. It can cost a lot and not be very effective. Market forces are very powerful. Would it be better to campaign for a more mobile society so communities adapt and adjust to prevailing circumstances?
@Peter Hirst
“Market forces are very powerful. ”
And it is the poorest who benefit least from this. If you cannot afford to put food on the table and/or keep a roof over your head what are you supposed to do when better off people – and rentiers – control the prices?
“Would it be better to campaign for a more mobile society so communities adapt and adjust to prevailing circumstances?”
Why do you think that? And what are the people who are really struggling at the bottom of the heap supposed to do? Because it takes time for prices to adjust – it doesn’t happen overnight.
William Wallace has raised an extremely important issue. The title ‘neglected communities’ is better than the ‘North’; what about the Midlands and some small parts of London ? In our campaigning, while raising taxes (preferably wealth not income) and reforming local government and democracy play a vital part, these cannot be the first focus of what we say; people will not be interested. The first in any messaging must be effective ways of improving people’s lives and their communities. This will involve joined up thinking, not the disparate intellectual policy-making that is such a focus of our party. Education alone is not the answer, for example, because Educational achievement is greatly affected by the inadequacies of the welfare system and housing.
It we as a nation fail in this task, we run the risk of someone becoming the focus again of those left-behind and those of all classes with very socially right-wing views as led to the rise of Trump in the USA. Already Farage is trying to get back involved in politics.
I agree with the thrust of William Wallace article regarding building back better but would add sustainable development has to underpin that regeneration , sadly repeating the old tax and spend arguments of SDP/Liberal Alliance policy does seem a bit out of date but perhaps that is what happens in their Lordship House . I thought we had all agreed taxing wealth and windfall profits was better than taxing income ?. however long term social care may have to be supported by an insurance scheme for those with incomes above 40% average income . This one of the reasons I am supporting the call for a new Beveridge 2 report .
@Peter Hirst “We need to think carefully about revitalising run down areas. … Would it be better to campaign for a more mobile society …”
… and sound a lot like Norman Tebbit with his father’s bicycle? 🙁
‘attempting to embrace rediscovered ‘working class values’, which in any case many of the younger generation in such communities do not share.’
It’s got very little to do with youth I would suggest. We have not had a working class in any sense of that term that my grandparents would recognise for a very long time now. If you go on foreign holidays, drive a car, have owner-occupied housing etc then you are not working class.
We don’t have a production line economy any more an all parties have to stop thinking that way. Love him or hate him Cummings was the first person I think to really ‘get’ it and work out what to do about it in terms of shifting votes. What we have now is an underclass, an overclass a comfortable class (largely the propertied and pensioned) and the coping class. Of course being ‘coping’ does not necessarily mean being poor. I think it is more about the insecurity now. The sort of ‘there but for the grace of god’ outlook.
Treating the coping class as though they were some sort of latter-day working class, just without the secure work is what got politics into the mess it’s in now. We saw this shift in values played out of course at the EU referendum where the comfortable class saw holidays, sabbaticals and au pairs and the coping class saw wage arbitrage and just another set of pressures and headaches.
What to do about all this is rather another question. But this really isn’t about local or central or even necessarily big state/small state. This is about a form of capitalism that has been fantastic just so long as you are the one with the capital. But how to reverse that is anyone’s guess. I think the answer lies in what might be termed a revaluation of labour. Anyone know how that might work gets a medal. Nick Clegg once talked about ‘alarm-clock Britain.’ A very clumsy term but probably on the right lines.
@Little Jackie Paper – Thanks for that, building on what you said, I think what is part of this, is a new framework in which to frame matters (I seem to remember a while back there were articles on LDV about framing…) according to the new viewpoint.
In some respects “working class values” plays to the old us-and-them dynamic. Whereas having a underclass, coping and comfortable class maps the divisions differently, in Cummngs case this neatly placed a lot of “working class” people in the category as many Conservative voters.
>“If you go on foreign holidays, drive a car, have owner-occupied housing etc then you are not working class.”
Having a degree (and any formal education post 16) also means you’re not “working class”.
@ Roland @ Little Jackie Paper,
“If you go on foreign holidays, drive a car, have owner-occupied housing etc then you are not working class…..Having a degree (and any formal education post 16) also means you’re not working class. ”
What nonsense! We don’t have to work in a mine, race pigeons, smoke Woodbine cigarettes, wear a cloth cap and drink tea out of a saucer to be working class.
Times change and so does the nature of the proletariat. But essentially the relationship between capital and labour is what it always was.
@ Jeff @ William Wallace,
“Jeff writes total nonsense behind the cloak of anonymity. The EU did not impose austerity on the UK”.
This old Gruaniad article (2006) shows how the rules of the S&GP are used to put political pressure on governments even when they’re not in the Euro.
“European Commission reprimands Brown over UK Deficit”
I notice Vince Cable wasn’t saying “Take no notice of them, Gordon! They don’t have the power to fine you or impose other sanctions.” But he could and should have!
https://www.theguardian.com/politics/2006/jan/11/economy.uk
Peter Martin 7th Jan ’21 – 7:09pm
It’s debatable to what extent we’d signed up to the so-called Growth and Stability Pact.
We were signed up to the Stability and Growth Pact (SGP), but Protocol 15 exempted us from 126(1), (9), and (11) in the Treaty on the Functioning of the European Union (TFEU). This replaced “shall avoid” with “shall endeavour to avoid” and removed the sanctions detailed in 126(9) and 126(11)…
‘Legal basis of the Stability and Growth Pact’:
https://ec.europa.eu/info/business-economy-euro/economic-and-fiscal-policy-coordination/eu-economic-governance-monitoring-prevention-correction/stability-and-growth-pact/legal-basis-stability-and-growth-pact_en
‘Consolidated version of the Treaty on the Functioning of the European Union’:
https://eur-lex.europa.eu/eli/treaty/tfeu_2012/oj
‘Protocol (No 15) on certain provisions relating to the United Kingdom of Great Britain and Northern Ireland’:
https://eur-lex.europa.eu/eli/treaty/tfeu_2016/pro_15/oj
Peter Martin 7th Jan ’21 – 7:09pm
There should have been no question of any UK chancellor having to hand in their Budgetary homework to be marked!
Even after we’d decided to leave, the Chancellor still had to hand in their homework…
‘2018-19 Convergence Programme for the United Kingdom: submitted in line with the Stability and Growth Pact’ [April 2019]:
https://ec.europa.eu/info/sites/info/files/2019-european-semester-convergence-programme-uk_en.pdf
Little Jackie Piper is on the right track indeed Shirley Williams warned in the 1980s of a growing underclass of what we now call the left behind .There is no one solution that fits all Which is why an overarching Beveridge 2 report is required that tackles the evils that enslave so many of our fellow citizens . But such a report will need fresh ideas from social liberals both within and outside the party a safety net no citizen should fall below ,rights to help shape their own communities , a dignity and respect for the labour or tasks they undertake .We should remember these have been the key workers that have kept us all going through the pandemic rather than the muddling chattering classes who struggle to organise themselves out of a plastic bag,