Clegg signals Coalition to emphasise growth over cuts in coming years

Today’s Financial Times carries an interview with Nick Clegg in which he signals the Coalition is shifting its attention towards promoting growth after the last eight months’ focus on cuts:

The deputy prime minister admitted the 0.5 per cent fall in economic output at the end of last year was “very disappointing” but said that rebuilding the public finances was an essential plank of restoring growth.

Speaking to the Financial Times, Mr Clegg said he would tell world financial leaders at Davos that the coalition would not be deflected by increasingly strong Labour attacks on its economic policy. “We will maintain our fiscal stance,” he insisted. The Liberal Democrat leader claims that an incoming Labour government would have begun a sharp fiscal tightening in April, but that its unwillingness to take really tough decisions would have undermined Britain’s credit rating.

“The chilling psychological effect of the cuts would have been there under Labour’s plans anyway,” he said. “So you would have had these choppy growth figures while having a sovereign debt problem, too.”

Mr Clegg and David Cameron will argue that Labour’s criticisms of the cuts will end up costing Britain more through higher debt repayments, along with the risk of higher long-term interest rates.

However, Mr Clegg admitted that cutting the deficit was a “necessary but not sufficient” element in promoting growth and conceded the coalition had struggled to get a growth message across.

“I totally accept that the shrill level of controversy around the comprehensive spending review crowded everything out,” he said.

But Mr Clegg insisted policies for growth were being drawn up, including efforts to push the banks to lend more to small businesses, maintaining infrastructure spending and regional growth funding. He admitted Sir Richard Lambert, outgoing head of the CBI, had a point in saying he wanted to hear more about growth from the government. “There is work under construction,” he said.

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  • I just can’t believe it – Cable on telly defending a massive attack on the rights of workers – Previously if they were employed for a year they could take an unfair dismissal case to an Employment Tribunal if sacked unfairly. Now they can’t do it unless they have been employed for 2 years.

    This is a charter for unscrupulous employers who can now sack employees for no reason and face no legal sanction unless the worker has been employed for more than 2 years.

    So this is what LibDems believe in. At a time when workers are already under enormous pressure here we have another turn of the Tory screw.

    And how does Cable justidy it – it’s to help growth he says. Employers will take on more people if they can sack them easily.

    He was prattling away on TV talking about judges and Employment Tribunals – there ain’t any judges – a tribunal consists of a chairman – usually a lawyer and two lay members. He hasn’t a clue about the system and talking about huge increases in cases.

    Well, the number of cases always goes up sharply in bad economic times because people lose their jobs. And the numbers ain’t what they seem because when a factory shuts you technically could have 2,000 employment tribunal cases and that’s how it appears on the figures but only one ‘test’ case is heard and the rest are sisted until a determination is made in the test case which is then applied to the rest.

    He also says that ACAS will get more involved – ACAS has been more involved for at least 5 years so I find it difficult to see how that will make much of a difference.

    The Liberals used to be the only supporters of the working class once upon a time and now the LibDems have swallowed the Tory ideology hook, line and sinker and are attacking workers with a vengeance.

  • I thought the Coalition wasn’t for turning?

    They’re making it up as they go along – clearly.

    Mark Pack – still no further comment regarding my forecasting skills. On Jan 22nd you said:

    Cuse: Ah, if I’d known you were a betting person, I should have taken a bet with you last August about your economic predictions (do you remember how, in between often making very personal comment about what you thought of other people’s economic views, you several times said you were sure the economy would either show no growth or shrink in the third quarter of last year because of the government’s economic policy?) 🙂

    Care to comment?

  • @ EcoJon

    I haven’t seen the interview with Cable, but *IF* you are right this is absolutely the first time I have agreed with you on anything at all.

    There is no possible justification in not giving workers protection for two years. While there are areas where employment legislation is tying employers in knots – e.g. maternity leave – any relaxation of the rules here would be utterly scandalous.

    If anything, there should be a tightening of rules on employment rights. One thing I would really like to see is employers being forced to include salary ranges in job advertisements, not just rubbish like “£ competitive”. It should also be illegal to ask people what their current salary is. This puts new employees at a massive disadvantage in applying for jobs.

  • Hi Andrew. Or is it Mark? Glad that you feel the need to defend each other.

    I admit – I was out by one quarter. But I was right in the end on the GDP figures. Has the Liberal party sunk so low as to care more about what quarter GDP shrinks in than the GDP shrinkage itself?

    If you care so much about forecasting accuracy – why does your party place so much emphasis on Mervyn King agreeing with them? I mean – last year he said by now “inflation would be under 1%”.

  • @Robert C

    Robert – everyone said there was no hope for you – but I always believed that there was a little glimmer there 🙂

  • @David Pollard
    “The coalition has enough slack to increase spending if a downturn requires it to do so.”

    If a “downturn” occurs, the “coalition” should cease to exist. It has no right to continue.

  • Has there ever been a bigger political sell-out than dear old Vincent?

    My stomach churns everytime I see his face in the media; at what point will the Lib Dem activists/members on this site decide that enough is enough or is battle between staying in Government against retaining ones Liberalism just too strong?

  • Could this be the beginning of the end? I mean, the beginning of an end to that titanic, bogus struggle we have all been watching spellbound over the last nine months, the struggle between the mad axemen of the ConDems, versus the crazy denialists of Labour?

    Let’s try to put tribalism aside, and take the wise words of George Soros as our guide:

    For the newly elected government to scream blue murder about the deficit, and signal a major change in policy towards cuts and toughness, was in fact a smart move (and yes, I am to some extent eating my past words here). Labour would probably have announced much the same policy reversal had they won the election. It impressed the markets, and that’s what it needed to do.

    However, to go ahead and really implement draconian cuts, without a growth strategy, was not a smart move. To some extent, Osborne did back off a little. (Ken Clarke was discreetly prodding him to back off a lot more. Cable may have been doing likewise. Clegg, a true zealot, was – as far as I can see – not doing likewise.)

    Now, sense is dawning, the CBI wake-up call is being listened to, and a more balanced approach seems to be in the offing. Much closer, in fact, to what Labour have been proposing.

    Well, let’s offer two cheers. Let’s hope we can now get back to a more sensible, consensual approach to economic politics.

    Just one problem. The Cleggites argued that we just had to throw in our lot with a doctrinaire right-wing party which planned the overthrow of public services, because the dire economic situation and the need for extreme measures left us with no alternative. Now that we recognise that we do not need the extreme economic measures, what is the justification for continuing to prop up the Right?

  • @ EcoJon

    So my little olive branch is met with your patronising comments. Really, the more I hear from the Labour crew, the more I detest them.

    Frankly, as far as you are concerned I see NO hope whatsoever. You are just posting here in order to be annoying.

  • Leviticus18_23 27th Jan '11 - 12:43pm

    Let’s just hope the Americans don’t decide to invade Iran… because if they do, you can guarenteed that the LibDems would be falling over themselves to support it.

    It’s really sad that the LibDems are rolling over for the Conservatives. Really really sad…

  • I will be forced to change my view of Vince Cable if he actually backs this. Lib Dems should not be in the business of taking away people’s rights in the workplace. Making sure they are exercised with responsibility is one thing, but staging an all out attack on them is quite another. How this is supposed to create jobs is completely beyond me.

  • David Allen asks:

    what is the justification for continuing to prop up the Right?

    There is none.

    The problem is is that little Nicky and his crew genuinely believe that they are doing no such thing. The Coalition Cult on sites like LDV and elsewhere in the Lib Dem blogosphere genuinely believe they are doing no such thing, blinded by the glittering lights of little Nicky’s title, the promise of Coalition politics guaranteeing Liberal ministers ad nauseam and wins like the re-branding of Control Orders.

    I believed (and still do) that going into Coalition was the right thing to do in May. Since then, it has been a unmitigated disaster – due to the ineptitude of little Nicky and his Coalition acolytes and their sheer incompetence in failing to negotiate an effective Coalition agreement.

  • David Allen 27th Jan '11 - 1:57pm

    Robert C

    Here’s your evidence, I’m sorry to say:

    Well, we knew Cameron was going to find some extra punishment for Vince, in exchange for letting him keep his job after the Telegraph affair. Perhaps this is it?

  • Chris Riley 27th Jan '11 - 2:03pm

    @David Allen

    This has been part of Vince’s remit all along. I think it was first detailed in the Emergency Budget – certainly he’s had this task since the outset of the job. He hasn’t just been landed with it.

  • toryboysnevergrowup 27th Jan '11 - 2:06pm

    So Clegg is to emphasis growth over cuts – so what is he actually going to do to achieve it. He says there is work under construction – unfortunately the piece on cuts is not actually under construction but now firmly planned. I’m afraid this might be yet another area where the Government makes a political pronouncement without having thought through what is required in terms of implementation – which is becoming something of a habit I’m afraid e.g. quangos, health service reorganisation and now growth strategy.

  • Simon McGrath 27th Jan '11 - 2:07pm

    @Matt “Not only do they cut workers rights to bring an Employment Tribunal for “unfair” dismissal from 1 year to 2 years. They are also axing legal aid for Employment Law”
    There is no legal aid for employment tribunals .. therefore even Vince can’t axe it.

    There is little dount that greater emplpyment protection leads to lower unemplpyment. France , Italy and Spain for example have much greater levels of protection than us which is why their unemployment levels have been much higher, and why there are no many young French, Italians and Spainards working in the UK.
    The question is what trade off do we want to have? Personally I would have chnaged the rules for small firms but not large ones as I suspect they are much more affected by this.

  • Bless you Andrew. Believe it or not – trying to impress you matters not a jot to me.

    But you do admit that, in Mark’s words, my prediction that growth would decrease to nothing at best or reverse into a contraction at worst was right? Revisionist? I said, today “I got the quarter wrong”. But I got the result correct. Frankly – I couldn’t care less if I got the quarter wrong. The economy is shrinking – why not comment on that?

    David laws has allowed me the luxury to be wrong by claiming a) It’s really, really hard to forecast economic stuff (even though he then said the Coalition will make it all better in 2011); b) Norman Lamb told us all “We fixed the economy” – and yet no-one seems to want to even slightly query this on LDV; and c) if Mervyn King can make wild and baseless economic forecasts that are laughably wrong yet still be quoted and lauded by Clegg and the rest of the Orange-book Tory human shield, then I’m damn sure I can.

    Why does it matter? The Coalition Cult on this site is living in a twilight zone where this seems not to be happening. Mark decided to rib me because I made the prediction. Fine. He did that 3 days before the Q4 figures were released. Rather ironic what the GDP figures were considering Mark’s comments, but fine never-the-less.

    What I find incredible is that instead of having a “blimey – wrong quarter, right prediction – what does this mean for Coalition economic strategy if so many people can see this coming but we can’t” type-discussion, you have decided that needless and baseless quasi-intellectual insults are more appropriate.

    The Coalition Cult is strong with this one…

  • @Robert C

    methinks you need a humour transplant Robert otherwise there really is no hope for you and I have got it wrong.

  • @Leviticus18_23

    Don’t worry I’ve already arranged they can be in the first wave so they can bring civil liberties to the people of Iran 🙂

  • toryboysnevergrowup 27th Jan '11 - 2:28pm

    As for Vince who would have thought that he was destined for a role of “useful idiot” within the Coalition. My advice to Vince would be to resign now while a shred of political credibility remains, and then the t”rue believer” Laws rehabilitation could be completed.

  • @Simon McGrath who said: ‘There is no legal aid for employment tribunals .. therefore even Vince can’t axe it.’

    Wrong Simon – there is legal aid for tribunals at the moment for the investigation and preparation of a case although none for legal attendance at the actual hearing. There is also currently legal aid for cases to the Employment Appeals Tribunal.

    This has been pointed out ad-nauseum on this site when LibDems have previously trotted-out the no legal aid nonsense. It appears that from the top to the bottom of the LibDems that everone has their eyes and ears firmly shut when it comes to either truth or checking facts.

  • @Andrew

    Your grandiose and somewhat amusing statement brought Gary Barlow to mind.

    It’s just a fraction of time,
    Until we move into reverse

    Sometimes, my OCD tick of recalling the lyrics to bad songs is really, really cathartic.

  • @Torieboys

    As for Vince who would have thought that he was destined for a role of “useful idiot” within the Coalition

    More people than you think.

    He first wanted Northern Rock to fail…then wanted to Nationalise it. He thinks the Pupil Premium should be spent in Private Schools.

    Vince’s pre-Coalition image as the Sage of Twickenham was as misinformed as Gordon Brown becoming Prime Minister…

  • toryboysnevergrowup 27th Jan '11 - 6:24pm


    You mean you don”t recognise that under our progressive Coalition that everything yesterday was already better than it will be tomorrow – you cynic.

  • There have been accusations before about the coalition making changes too quickly and not thinking it through, and here we are with a whopping example, the pace of cuts should have been slower as Labour and The Lib Dems were saying pre-election, the only main party not calling for slower cuts were the Tories.

    Talking of growth policies now is wrong headed, they should have been first on the agenda, for the Tory policy to work it’s dependent upon growth, growth is the key ingredient, they were talking of a record number of private jobs being created to balance out the public sector job losses, growth should have been agenda item number one.

    As for Vince, it’s extremely sad to see him humilated in this fashion, he really should step down.

  • I see no Iceberg 27th Jan '11 - 7:43pm

    So Nick is going to try and spin growth when the very cuts he now doesn’t like talking about actually start to take place.
    Nick’s Media and public relations skills are fast becoming legendary.

    I too am watching Vince trying to spin making it easier to sack workers as some wonderful progressive move. If only he had made it easier to sack bankers instead of making it easier to give them huge bonuses.

  • What gets me, is that Clegg thinks anyone is still listening to him.

    “I totally accept that the shrill level of controversy around the comprehensive spending review crowded everything out,” he said.

    So…GDP plummets and Nicky claims it’s nothing to do with a lack of growth plans…because they do exist…just they’re being drowned out by opposition shrillness?

    The man is truly and catastrophically lost.

  • “The Liberal Democrat leader claims that an incoming Labour government would have begun a sharp fiscal tightening in April, but that its unwillingness to take really tough decisions would have undermined Britain’s credit rating.”

    Isn’t this sentence contradictory – Labour unwilling to take tough decisions but would have begun sharp fiscal tightening. Clegg is desperate and will say anything to back the Tories so that they will take him into their fold. He knows after this Coalition ends his party will reject him and Chris Huhne will take over

  • Matthew Huntbach 27th Jan '11 - 10:27pm


    I just can’t believe it – Cable on telly defending a massive attack on the rights of workers – Previously if they were employed for a year they could take an unfair dismissal case to an Employment Tribunal if sacked unfairly. Now they can’t do it unless they have been employed for 2 years.
    This is a charter for unscrupulous employers who can now sack employees for no reason and face no legal sanction unless the worker has been employed for more than 2 years.
    So this is what LibDems believe in. At a time when workers are already under enormous pressure here we have another turn of the Tory screw.

    No, this is not what “LibDems believe in”, if by that you mean all LibDems. We are not Leninists/Fascists, we do not go along with something silly or with which we previously disagreed just because our leader tells us or it’s the party line this week.

    I agree with your sentiments on this, Vince Cable should be DEEPLY ASHAMED of giving his support to it. I have personal experience very close to me of seeing how the “no rights in your first year of employment” law works. Essentially, there’s all sorts of equal opps and fairness policies for recruitment – but all that is just thrown away once you’re in the job for the first year. You can be just thrown out on a whim because the your manager doesn’t like you or doesn’t like the colour of your face and there’s not a thing you can do about it. I asked when this happened to someone close to me, and I was told essentially “It’s in the first year of employment, they can do what the hell they like, you have no rights”. I felt so disgusted by what I observed that I was wondering whether to write to someone like Vince Cable about it asking that the law be changed to protect people from this. I am disgusted with the man, absolutely and sickeningly disgusted with him, that he’s done the opposite.

    Far from encouraging labour mobility, it does the opposite. Who would dare change their job in the current market, try to go for something a bit higher, when doing so means throwing all your employment protection away for two years, basically sticking a label on your bum reading “Managers – kick me”? Does Mr Vince Cable know what it’s like when a manager bullies you out of a job within a year, and you have NO RIGHTS to any protection from them doing that? ‘Does Mr Cable know what it’s like when that means your CV is marked so if you go for another job they look at it and think “Hmm, kicked out after less than a year, don’t bother with this one”? No he’s another clueless millionaire and I wish we could KICK OUT ALL THE CLUELESS MILLIONAIRES RUNNING THIS COUNTRY. They are making mistake after mistake because they haven’t a clue, they just don’t know what life is like for people who, unlike them, don’t have their millions and their fancy contacts and all that to fall back on.

  • @BB Was watching Chris Huhne on Question Time and some of his answers were – well let’s say extravagant – so that I might save the site from legal action – although veitas is an absolute defence 🙂 So I reckon he would be exposed very quickly once the spotlight was actually turned on him.

    It seems that a lot of LibDem politicians appear to believe that something is true just because they say it or maybe it’s because they say it that it’s true – if you get my drift.

    But so much of it just doesn’t stand any detailed examination.

    I think putting out all these Focus Magazines has led them into believing their own propaganda and being unable to separate fact from fiction – it’s really wierd listening to them.

    And what do their MPs do every day – there are so many debates where there’s virtually no LibDem presence and even if they are there they say usually nothing seems they’re frightened to open their mouth and upset Cameron.

  • @Matthew Huntbach

    Mathew – I did reply to your long post aimed at me as I believe you totally misread what I was actually stating – as I have said before I think there is a lot we agree on. On Cable – I watched the full interview on Telly this morning and he was very ill at ease and rattled. His body language said it all – he just didn’t want to be there saying what he was saying. How can a LibDem minister be stripping employment protection from the whole of the UK workforce in this way.

    Doesn’t he understand what the Tories are all about which is creating a cowed workforce. Sadly the Tories don’t actually understand the monster they will create which will cause a helluva lot of damage to the UK social fabric.

    Funnily enough I always felt that Cable had a bit of common-sense about him but being in government seems to have sent him into orbit and he’s finished – don’t know the root cause as to whether it was arrogance or whether the job was too big for him coupled with age – I’m slightly younger than him but know how difficult it is and how mentally draining a pressure position is when you start to hit your 60s.

    One thing I’ve never really understood about the LibDems is how Clegg got where he has – even in Opposition I reckoned he was totally useless. Still no doubt Cameron will find him a PPS role in due course 🙂

  • I see the LibDems are at it again attacking poor families and yet again breaking promises. Crept into office on a tissue of untruths and false promises.

    A survey of 1,000 Sure Start Centres has has shown:
    • 250 (7%) will close or are expected to close, affecting an estimated 60,000 families
    • 2,000 (56%) will provide a reduced service
    • 3,100 (86%) will have a decreased budget
    • Staff at 1,000 centres (28%) have been issued with ‘at risk of redundancy’

    Remember what Clegg said on the eve of the GE:

    “Yes. Sure Start is a really important programme that has made a real difference to millions of parents. Difficult decisions are going to have to be made in public spending, but Sure Start is one of the best things the last government has done and I want all these centres to stay open.”

    And Cameron:

    “Yes, we back Sure Start. It’s a disgrace that Gordon Brown has been trying to frighten people about this. He’s the Prime Minister of this country but he’s been scaring people about something that really matters.”

  • @EcoJon

    Oooooooh that won’t go down well with the Coalition Cultists.

    Remember – everything is wonderful. And it’s all thanks to the Lib Dems in government!

  • Clegg may have signalled growth – he just didn’t tell you it would be in the wrong direction….

    Likewise the travesty that Vince is pulling off is another smack in the face. I felt like i’d been physically hit when I heard the words coming out of his mouth

    I’m now arround stages 5/6 in the 7 stages of grief of being a Lib-Dem voter for all my life.
    Stage 1 started when they joined the coalition.

    •Shock or Disbelief
    •Acceptance and Hope

    Suffice to say I doubt I will ever again support this party, even if there is a volte face, and they sideline those closely implicated in the coalition.

    I’m just not sure I can forgive the constant betrayals..

  • Matthew Huntbach 28th Jan '11 - 3:20pm

    One thing I’ve never really understood about the LibDems is how Clegg got where he has – even in Opposition I reckoned he was totally useless

    You will find I was saying the same thing at the time of the LibDem leadership election. Someone else can answer it, because I don’t understand either. Or if I try to understand, it involves sinister dark forces and the like (aka Murdoch press etc) and I do much prefer cock-up rather than conspiracy as the answer to questions.

  • toryboysnevergrowup 28th Jan '11 - 11:28pm


    The more I see of the LibDems – the more I think that the right thing would be for them to split into two. There are appear to be two contradictory and un reconcilaible strands of political thought – both of which have a respectable political traditon and offer something different from the Tories and the Labour Party. And each on their own would probably be more influential and able to develop coherent policies than the present mess.

  • @David Thorpe

    So. GDP didn’t shrink by 0.5% in Q4 of 2010. It was actually 0.6%.

    Still think developing a Growth strategy isn’t necessary?

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