Corbyn is right about inequality

Corbyn is clearly right to highlight the ‘grotesque inequality’ in our society. Wage growth has stagnated. Continued cuts are hitting the poorest hardest. And this generation is on set to be the first on living memory to be poorer than their parents.

Even if you try and ignore the unfairness, the evidence shows it harms productivity and creates the sort of ‘asset bubbles’ that caused the 2008 financial crisis.

But I have one question. Where are Labour’s answers?

At first glance the most radical is renationalisation. But this is nothing more than a recycled plan from the 1970s. It just tinkers at the edges of inequality, and carries significant risks for our future economic and energy security.

Next comes Labour’s big ticket spending item. Abolishing tuition fees. Our higher education system is far from perfect, but how many better ways could we spend £7.5 billion a year? What amounts to a tax cut for the middle classes does absolutely nothing to tackle inequality.

Most significantly, we have some Labour economic doublespeak –  ‘borrowing to invest’ in public services. While the NHS, for example, clearly does needs to be better funded, ‘invest’ falsely suggests that we get an economic return on borrowing for public services. That it will all be fine.

And this, maybe even more than Brexit, is the big danger of a Labour government. The government is already, as the Prime Minister admitted last week, spending more on paying interest alone than the entire schools’ budget. Labour’s borrowing plan would mean future generations would have to pay higher taxes and spend even less on public services.

We demand better. The Liberal Democrats have a genuine, radical plan to combat inequality.

Taxing wealth the same as work, giving workers the skills for a changing economy and creating a sovereign wealth fund to safeguard our economic future. Tackling the housing crisis, properly funding public services and creating a fairer economy.

Our challenge for the future is to get the message out. Only we have the plan necessary to tackle economic inequality. Not New Old Labour’s recycled ideas, but radical solutions for the 21st Century.

* A Liberal in Leeds is the pseudonym for a Lib Dem member. His identity is known to the LDV team.

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  • William Fowler 12th Oct '18 - 10:47am

    Our sovereign wealth fund is heading towards two trillion pounds worth of debt, basically caused by Gordon Brown setting up a welfare system that the economy could not sustain (Brown it should be recalled was the chap who said the boom and bust cycle no longer existed, just before 2008). If Brexit had not happened Cameron/Osborne would now be opening the champagne and celebrating a budget surplus and riding hight on promises of tax cuts to come. The question then becomes how do we get out of the mess of 20 years worth of political mismanagement?

  • Richard Easter 12th Oct '18 - 11:19am

    Much of what Corbyn plans to nationalise is either held by foreign governments – including the communist Chinese, or taking back contracts of the likes of G4S. I fail to see the issues with taking these back. I don’t agree that foreign governments should own or run essential infrastructure or public services, and G4S / Capita and friends aren’t fit to run a bath.

    People seem more concerned about Corbyn renationalising William Hill or McDonalds than of the rest of the political class privatising what little we have left….

  • Richard Easter 12th Oct '18 - 11:26am

    Further more water, rail, national grid and mail (in the universal coverage sense) are all essential natural monopolies. They cannot be allowed to go bust. Genuine competition is impossible.

    Private monopolies – increasinly owned by foreign governments are of no benefit to the taxpayer / fare payer or service user. Why should we subsidise foreign governments?

  • Peter Martin 12th Oct '18 - 11:39am

    @ Thomas,

    There’s quite a lot to be said in favour of the Liberal radical plan you’ve linked to above. And you are right, if you want to reduce inequality you’re going to have to tax wealth. Which means taking on a very well politically organised older generation who don’t want their wealth taxed. Good luck with that. You’ll need it.

    But LibDems still don’t quite get how it all works as statements like “revenues from higher wealth taxation to be allocated to a combination of……” show. ‘Revenues’ from higher wealth taxation will simply be treated like all other taxation ‘revenues’ and get put into the digital shredder.

    It’s an important point to understand if you are talking about taxation. Richard Murphy is a relatively recent convert to this way of looking at the flow of money in the economy.

    For example he’s started to say things like “We don’t need tax to fund the NHS, but we may increase taxes because we do”. Which is the right way of looking at the problem. The spending comes first then Govt raise taxes, if they need to, to prevent inflation.

  • Peter Martin 12th Oct '18 - 11:57am

    “The government is already, as the Prime Minister admitted last week, spending more on paying interest alone than the entire schools’ budget.”

    This is as the Australians would say, is a bit of a ‘Furphy’. The amount of interest Govt wants to pay out is entirely down to them. And it doesn’t come out of taxation. If they want interest rates at 0% they can have 0%. If they want 10% they can have that too. Interest rates aren’t market driven. Left to their own devices interest rates would tend to zero. But to prevent that happening the monetary committee of the BoE decide to pay some interest. They recently decided to pay 0.75% rather than 0.5%.

    The BoE is supposedly independent but no-one really believes that. Whether or not that was the correct thing to have done, it was a political decision like any other.

  • Hi Peter Martin

    The Bank of England has control over the rate at which it lends to banks.

    The interest the government pays is on government bonds the interest rate on these is set by the market: what it needs to be for any country to get people to buy the bonds. (Currently that’s 1.65% for the UK, 0.52% for Germany , 3.54% for Italy…)

  • Richard Easter: Railways have never been a monopoly, natural or otherwise. Until they were nationalised on 1st January 1948 they were the dominant mode of transport but they quickly lost that status to private cars and road haulage because they were mismanaged and now they are a peripheral form of transport outside London. Useful but not essential and more likely to remain useful if run by professionals not retired civil servants,politicians etc as will happen under nationalisation because it has already started under Mr Grayling and the D f T. Strikes every Saturday on a route which depends on tourists and holiday makers seem to indicate a death wish.

  • Peter Martin 12th Oct '18 - 12:57pm

    @ Tony Lloyd,

    1.65% is the rate for 10 year bonds. It higher for longer terms bonds and lower for shorter term bonds.

    But, again, the rates are what the Government wants them to be. If the Government wants them higher they will instruct our supposedly independent central bank to enter the market as a seller of their existing bond stock. This will depress the market price of the bonds and so the yield will rise. If the Govt wants them lower they instruct the BoE to buy more bonds and so force the price up.

    Italy can’t do this because it doesn’t have its own currency. Its at the mercy of the ECB to set whatever level of interest rates for Italian bonds it feels is appropriate.

  • @Peter Martin

    That there is some element of influence (at a cost) does not imply control.

    Governments borrow money through bonds. As Greece found out, governments cannot force people to lend to them at rates and conditions that the government wishes. As the UK found out in 1976 , governments cannot force people to lend to them at rates and conditions that the government wishes.

    Italy is in the Euro and has a bond yield of 3.54%, Germany is in the Euro and has a bond yield of 0.52%, Iceland isn’t in the Euro and has a bond yield of 5.9%. These numbers are consistent with markets determining yields and the idea that the government of Brazil, for example, just fancy a 16.82% yield is fanciful.

  • Peter Martin 12th Oct '18 - 2:04pm

    @ Joseph Burke,

    You must be getting confused again. Tony Lloyd hasn’t mentioned any about ‘open market operations’.

    @ Tony Burke,

    The Government of Brazil want 16.82% yield on their bonds. That’s their decision. Yes, they could lower rates, if they wanted to, but that would put downward pressure on the Real which in turn could cause upward pressure on inflation.

    I’m not saying they are right or wrong to want such high interest rates. I’m simply pointing out that Governments aren’t quite as much at the mercy of the markets as some would have us believe.

    Except of course, if like Italy, they use someone else’s currency. Then they are!

  • Peter Martin 12th Oct '18 - 2:24pm

    Sorry I meant, of course, Tony Lloyd in my last comment. My turn to get confused! 🙂

  • What about raising taxes instead of higher borrowing? It is a sad situation when life expectancy is falling in some areas due to health inequalities, there are not enough police on the streets, prison officers are at risk because of a lack in their numbers, local government is falling apart because of cuts in funding from central government with knock on effects on youth clubs and libraries. I would pay 5p more in tax. If all working people earning over a certain threshold did that, what would that raise? £30b? On tuition fees, they could be lowered to £3,000 again – £9,000 is too much for the value of the teaching delivered to many students.

    I think the Lib Dems must also address the question of public services – that is not about aping Labour’s policies, but about doing the right thing in a modern economy and society.

  • Thank heavens LibDems weren’t around in post WW2 Britain if the article is indicative of the party’s thinking.

    NHS, Council Homes, National insurance, etc. would never of happened. Of course, we’d have praised the aspirations but condemned the decisions need to implement them.

    I won’t waste time pointing out that abolishing tuition fees was our ‘flagship fully costed’ promise in 2010 (when the UK’s finances were at in a far more perilous state).

    As for ‘Affordability’ and ‘future generations would have to pay higher taxes and spend even less on public services?

    In 1947 government debt, as a % of GDP, was three times our current level and interest payment twice that of now; amazingly the UK survived and, as someone who has lived through the 40s,50s, etc I’ve rather enjoyed my life.

  • Phil Beesley 12th Oct '18 - 6:03pm

    @Thomas Shakespeare: “And this generation is on set to be the first on living memory to be poorer than their parents.”

    Is that right? Were young people in the 1930s richer than their parents? Were people in the 1980s richer than their parents? Who did you ask? How did you measure?

    “This generation”, whatever it means.

    “Most significantly, we have some Labour economic doublespeak – ” — it is normal speak for politicians — and I think it is wrong.

  • Peter Martin 12th Oct '18 - 6:34pm

    @ Judy Abel,

    As Richard Murphy points out in the link I posted earlier the Government should only raise taxes to control inflation. Borrowing is really misnomer for a Government using its own currency. The £ is essentially an IOU of Govt. If I borrow a 1kg bag of sugar from you, I can give you an IOU for the sugar. If I want to borrow another bag I can give you another IOU. I can’t borrow back my own IOU. That makes no sense at all.

    Look, I know many people think this sort of stuff can be quite turgid but it’s important to get it right. We can all have our hearts in the right place and want to support the NHS, better education services, better social services etc but if we try to do it by putting up taxes when we shouldn’t be, we just end up depressing the economy and worsening the already poor condition the economy is in. We aren’t talking about only the taxes paid by the wealthy. It’s putting up the standard rates of income tax and VAT which is paid by nearly everyone that have very predictable deflationary effects on the economy.

    @ Joseph.

    You’re simply wrong about Govt not being able to control longer term interest rates. After the GFC when the Government borrowing requirement touched 11% of GDP it might be imagined that longer interest rates would rise as Govt were in competition with the private sector for the same funds. They fell. Why? because the Govt engineered lower longer term interest rates.

    You might not like how they made them fall but that’s not the point! They did it because they can!

  • Peter Martin 12th Oct '18 - 6:52pm

    I don’t know if you remember this but I remember a very disingenuous George Osborne telling everyone that it was 100 years since the start of the First World War and he’d come to the decision that it was high time the Government ‘paid off’ its WW1 debts.

    Nonsense. The economy wasn’t in particularly good shape in 2014, so why do it then? The answer is that the yield on the bonds was simply much higher than the going rate, after interest rates had been deliberately lowered, and there was simply no need to pay 3.5% on the bonds. That’s all there was to it.

  • There was a time when Lib Dems abhorred tuition fees and campaigned against them.
    How times have changed. Now Lib Dems no longer talk about getting rid of tuition fees but have a go at other parties who do wish to abolish them. The Lib Dems are losing their way and are turning off voters.

  • Katharine Pindar 12th Oct '18 - 9:35pm

    Well said, Thomas. I was delighted to see your article focusing on the radical motion we passed at Brighton, which is as I agree with you more to the point than Labour’s in potentially reducing inequality. Good to see Joe Bourke now restating it here as well,, rather than letting the thread turn into another Joe-and-Peter show. These policies are relevant and progressive ones we should promote and campaign on now, both on the doorsteps and nationally.

  • The policy motion sets out five area for reform to reduce wealth inequality as listed by Joseph Bourke above.

    The first four are about tax and are fair enough as far as they go. The last is a rather muddled attempt to allocate the extra tax receipts, mainly to the ‘usual suspects’ for well-meaning economic intervention, namely infrastructure and education.

    But that’s shutting the stable door after the horse has fled.

    It’s not that tax changes aren’t necessary but that they are only half the story. We have a high cost economy because the structure of the economy makes it so. That’s a whole range of issues including monopolies/oligopolies with the market power to raise prices and banks that over-lend putting up property prices (and hence business and living costs).

    If we are really serious about reducing inequality we must tackle its causes. Sadly, that remains largely unexplored territory.

  • Gordon,

    that’s a very good point concerning tax reform being only half the story. The structural changes your refer to are equally important. I would concur with your conclusion “If we are really serious about reducing inequality we must tackle its causes.”

  • There is some good stuff in the policy, and I agree that higher rate tax relief on pensions and inheritance tax need to be tackled.

    But I am dead against the idea of a Sovereign Wealth Fund. As William Fowler pointed out earlier, we are currently paying interest on a huge national debt, so where is the sense in trying to invest in a wealth fund? Where will we get sufficient capital from in order to earn a return that is greater than the debt interest payments?

    Also the policy says the wealth fund would be “independent” and “professionally managed”. This would presumably be a golden opportunity for a merchant bank like Goldman Sachs to leach huge management fees out of British taxpayers. That will be really popular……..

  • @Peter Martin. I am not so sure about that. Upper band tax rates in Scandinavia, for example, are much higher at over 50%. Also income tax has been falling in the UK as the FT graph below reveals. The basic rate of tax used to be 25%. No wonder public services are creaking.

  • William Fowler 13th Oct '18 - 8:36am

    Attacking both inheritance tax and residential property are a quick way to lose votes (other than from Labour’s welfare class who aint going to vote LibDem anyway). Generally, the govn is moving in the right direction in upping the cost of second homes whilst leaving the main residence tax free except for the dreaded council tax (which as I keep saying could be a huge vote winner if phased out). An additional sales tax on all property (collected simply at the same time as the stamp duty) might work if set low enough not to cause an uproar and would only affect people who have mostly already made a “profit” out off their home. Inverted commas because if you add up all the associated costs of owning a property, including the tax and NI paid on the money used to pay the mortgage, the profits might not be so high as a quick glance indicates.

    As for inheritance tax, the fair way is to treat all funds simply as earned income at the point where they are received and subject to the normal tax rates (so the poor will pay little and the rich 45 percent) but this would probably cause lots of voters to look elsewhere… so a levy on all inherited wealth plus the current system might be acceptable, collected during the probate process.

    Alas, with Brexit and falling govn revenues plus increased debt servicing costs even with all this tax raising we will be lucky if we end up standing still.

    I am old enough to recall that unearned income used to be taxed at a much higher rate than money resulting from actual work and Dennis Healey going on about squeezing the rich until the pips squeaked (or something along those lines) and the results weren’t very pretty.

  • Peter Martin 13th Oct '18 - 9:22am


    It’s not 25% when Nat Insurance is included 🙂 Yes it is possible that taxes will have to be increased after (but not before) we start to fund the NHS properly, and everything else that needs funding properly, but we should do that because the economy is starting to overheat and we need to remove some spending power to cool it down again.

    Possibly the situation in London and the South East is already like that. But may not be for much longer if we have a property price collapse! However it does mean that Govt should be just as careful about where it spends extra money as how much it spends. Extra spending in already prosperous regions will likely run up against the constraints of what is possible and end up merely resulting in higher prices all round. On the other hand if we spend more in the less affluent regions we will see real benefits without the danger of higher inflation.

    Besides being good economics it is an ideal way of maintaining the political integrity of the United Kingdom.

  • Thanks Peter. I cannot claim to be much of an economist!

  • Peter Martin 13th Oct '18 - 11:38am

    @ Judy,

    No problem. I’d hope that what I was saying would chime with LibDem values too. There is always going to be some inequality in our society and we’ve all been arguing for a long time about how to reduce the levels without making very much progress. But at least we can act to eliminate the inequalities that arise from geographic location.

    There is no reason why life chances should be less advantageous for those born in Middlesbrough than in Maidenhead for example.

    It’s a lesson the EU needs to learn too. The levels of, particularly youth, unemployment we see in the peripheral regions should not be tolerated.

  • Thomas Shakespeare 12th Oct ’18 – 9:15pm…………………This is all really interesting. I believe Labour’s answers on inequality are too simplistic, failing to understand the dangers of very high taxation in a globalised economy. Massive, forced structural reforms to businesses is a sure way of encouraging them to relocate. By contrast, our developing policies are focused on the crux of the issue – pragmatic solutions to growing economic and wealth inequality………………..

    Occam’s razor is the principle that the simplest solution tends to be the right one….However, let’s go with a typical ‘LibDem pragmatic approach’; except, for ‘pragmatic’, read ‘vacillatory’…

    Whatever happened to the radical party of my youth? Without significant increased taxation and restructuring there will be NO CHANGE; those who benefit from an ever increasing disparity in wealth will always oppose any increase in their contribution, no matter what. As for continuing as we are (with modest tweaks), a 2015 paper by researchers for the International Monetary Fund argued that there is no ‘trickle-down’ effect as the rich just get richer ( the income share of the top 20 percent (the rich) increases, then GDP growth actually declines over the medium term, suggesting that the benefits do not trickle down. In contrast, an increase in the income share of the bottom 20 percent (the poor) is associated with higher GDP growth.

    This country, and the world at large, face a crisis in homelessness, poverty, health, least on the scale of that post WW2 era (with the added burden of seen, and unseen, pollution, global warming and diminishing resources not even considered in the 1940s). A major rethink is required.

    I sometimes think that if/when the ‘four horsemen’ ride the current party will be opposing them with slogans demanding ‘Consultation not Compulsion’, that they be called the ‘four horsepersons’ and suggesting that they should better represent a wider gender and ethnic mix…

  • Peter Martin 13th Oct '18 - 5:22pm

    The concept of fiscal equalisation isn’t inconsistent with the Lib Dem desire to have a greater degree of regional devolution.

    There is no need for the North East and Northern Ireland, for example, to have significantly higher levels of unemployment and significantly lower living standards than the SE of England. If we want to accept Northern Ireland as part of the United Kingdom then the people who live there shouldn’t be asked to accept a worse outcome than anywhere else. But devolution alone won’t make it happen. We should already know that from the history of that province. There still needs to be a strong central Government enacting policies that make it happen. We also know from history just how high a price we’ll all have to pay if we allow social conditions to fall below an acceptable level.

    So what about the “North Kensington – South Kensington” phenomena that we see? Relatively poor people living in living in close proximity to Royalty and multi-millionaires. Creating a less unequal regional and national structure in the UK doesn’t have to mean we ignore social problems in the currently more affluent areas..

  • Thomas Shakespeare 14th Oct '18 - 11:48pm

    I agree a major rethink is required, and we need radical policies, but that doesn’t mean any answer is the right answer. The forced mutualisation plan would lead to even more businesses and investment leaving UK, especially for tax purposes. Unilever is already considering it. That would cut tax revenues, endangering public services, achieving the exact opposite of what Labour set out to do.

  • Thomas Shakespeare 14th Oct '18 - 11:49pm

    Greater regional devolution and regional investment is also a great idea, which several people have mentioned. Should help reduce regional inequality. As I understand it though Labour want this investment to be centrally distributed rather than regionally.

  • @ expats. I hereby nominate you as our next Leader outside parliament – assuming the very reverend Sir Vincent gets his way at an expensive futile navel gazing conference.

    If only the party would campaign on the issues you have just outlined instead of diddling about in its own self absorption. No wonder nobody’s listening if there’s nowt being said.

  • David Raw 15th Oct ’18 – 7:28am…[email protected] expats. I hereby nominate you as our next Leader outside parliament – assuming the very reverend Sir Vincent gets his way at an expensive futile navel gazing conference…..

    Sorry, David, but I have already put YOUR name forward.

    Your comments*, on the description of a 3.3% fall as ‘impressive’, deserve a further ‘airing’.
    It is so very, very sad that radical policies (of the kind we would have once espoused) are now described as ‘Corbynist’. If, and when, such policies are enacted we have already given future history books a title.

    * Unfortunately the party has changed over the years – for the worse since 2010. One of the outcomes has been much immature knee jerk stuff echoing the right wing tabloids….. coupled with self deluding optimism and pale blue policies which we would have laughed at in 1972.
    There’s no alternative to radical policies tackling injustice and inequality which affect ordinary families, hard grafting work and especially honesty if the party is ever likely to be respected and taken seriously again. Until that becomes the norm …………. ????

  • Peter Watson 15th Oct '18 - 12:45pm

    @expats and @David Raw
    I often find myself cheering for you (and several others on this this site) from the sidelines, so I think I would much prefer a supporters scheme for Lib Dems rather than one for the Lib Dems! 🙂

  • jayne mansfield 15th Oct '18 - 2:14pm

    @ David Raw and expats,

    Would you consider a job share?

    I can think of at least one disillusioned, but politically re-energised, old woman who would return to the fold.

  • Lorenzo Cherin 15th Oct '18 - 3:09pm

    expats, as with other comments made on the leadership reform idea, what is the point of constant harsh criticism on here, of good people with real ideas, many who say they are radical, all you do is add to the woes, either join another party or engage with those in this one, I think you regular mention of your youth is why these notions get us to no place, this is not the nineteen seventies?!

    The country cries out for mainstream policies, it is not more radical ones it needs, it is more that unite and link.

    Harold Mackmillan seems left wing and common sense today, yet I mention my admiration for Gaitskell, and some old lag from the young liberals circa 1963 says, no, he wasn’t radical!

  • Thomas Shakespear – I actually support re-nationalization from the likes of G4S and Co or Communist China, especially the latter. The rate of Chinese investment is alarming in the last 2 years, since their investments also aim to exert their political influence and steal technology and industrial practices. France and Germany, especially France under Mr. Macron already have plans to limit Chinese investments not only in their countries but also in Eurozone as a whole.
    The recent Bloomberg article about Chinese spy chips should be a dire warning regarding Communist China.

    Regarding criticism of Labour’s plan to abolish tuition fees, I remember there was a time it was the main purpose of our party, right?

    We all know that one root cause of our economic problem is underinvestment. We can make a central theme of boosting total investment as percentage of GDP to 22-23%, which will be above OECD average. Our current level of investment is considerably less than 20% and well below OECD average level.

    Peter Martin – Agree that public investments should go to poorer regions, it will give the highest multiplier. Also, it should begin with repairing, maintaining or upgrading existing infrastructures, which will be carried out faster and also deliver returns much faster than new projects.

  • I repeat:
    The recent Bloomberg article about Chinese spy chips should be a dire warning regarding Communist China

    Re-nationalization and foreign investment restrictions must be carried out on Communist China.

  • Lorenzo Cherin 15th Oct ’18 – 3:09pm……………..expats, as with other comments made on the leadership reform idea, what is the point of constant harsh criticism on here, of good people with real ideas, many who say they are radical, all you do is add to the woes, either join another party or engage with those in this one, I think you regular mention of your youth is why these notions get us to no place, this is not the nineteen seventies?!……..

    Leave seems to be your first, knee jerk answer to those of us who don’t like what the party has turned into.
    My values on social dignity, poverty, equality, etc. have not changed since the early 1960s (let alone the 1970s) it seems, from your comments, that this party’s have. The party of my youth would never have supported the attacks on the NHS, on benefits and disability, supported the bedroom tax, secret courts, introduced ‘Universal Credit’, etc.; still, as you say, “This is not the 1970s”.

    Sadly, at least to my mind, since 2010 this party has tracked right to a ‘don’t frighten the horses’ centre; following the Tory party’s shift in the same direction.
    BTW, It has nothing to do with Corbyn; after all, Clegg, Laws, Alexander, et al, couldn’t abide the ‘leftie’ opposition led by Milliband, Cooper, Eagle, Burnham, etc.

    I don’t imagine Aneurin Bevan and Margaret Thatcher agreed on much but, on one thing, at least, they agreed; “… people who stay in the middle of the road…. get run down.”

    As an aside, I continued to argue my values through the coalition years in the hope that, afterwards, “Things could only get better”. However, like the 1997 promise of the same, they haven’t.
    Maybe, I should just shut up or take your advice and go elsewhere.

  • Peter Hirst 15th Oct '18 - 6:00pm

    Though tackling income inequality is important, it is also important to ensure everyone has access to good quality public services that are free so that everyone can get by on a surprisingly low income. As we move to a zero carbon society, it should be easier for a more level playing field as we all will need to consume the same amount of carbon.

  • A Liberal in Leeds (Comment 13/10 @ 2:45pm)

    Apologies for not replying to your question earlier – it’s been a busy weekend.

    The counterpart of oligopolies/monopolies is that their excess power disempowers 99% of the people. If, as Liberals, we claim to aim to empower etc (see preamble to the Constitution), but then stick only to fiddling about with tax and never challenge power, then what is the point of the party? (Voters say, “Not much”).

    De facto all-party policy has, for many decades, been one of managed decline. The day of reckoning was deferred for a time by the lucky chance of North Sea oil. As revenues from that started to reduce so successive governments have resorted to wildly unsustainable borrowing – not of course on the government’s balance sheet (so they could pretend virtue) but privatised (which is at least consistent!) in the form of mortgages secured on soaring property prices. With that vein almost worked out, credit growth (still privatised of course!) has ben switched to tuition fees. The numbers are huge; continued long enough tuition will roughly double the national debt (which is why it can’t continue).

    Meanwhile, investment in industry has been sluggish. That’s partly because the property Ponzi offered easier, juicer returns; partly because the deregulated City could turn to asset stripping industry rather than investing in it but mainly because the national cost base is simply too high. Investment homes in on profit opportunities with laser-like precision but high costs preclude profit.

    Costs are too high for several reasons; too many are skimming off the top while adding little, skills training is poor but, above all, because the country is being badly run.

    How to put all this right is far too long a story for this comment except to say that it would involve a degree of political cunning allied with better policies and improved messaging.

  • Katharine Pindar 15th Oct '18 - 8:19pm

    Thomas S., I read a lot of discouraging comments here about the dire state of the British economy (even before Brexit!) and the need for radical restructuring, which obviously we Lib Dems aren’t in any position to start planning. Please continue to press as you are doing for practical steps we have agreed to reform taxation to reduce inequalities! One other policy I’d like to see was mentioned by William Fowler, reform of our regressive Council Tax. It’s increases in Council Tax, though necessary at present to maintain our depleted Council services, that ordinary people tend to suffer from, along with energy and food cost increases. Though worst off of all are our citizens on frozen benefits, or further impoverished by the callous imposition of Universal Credit, whom we have to continue to try to help.

  • Lorenzo Cherin 15th Oct '18 - 8:25pm


    I did not say what you characterise at all, I offered that I was once in the very party you now think is not the divide and in despair party it is, for very many ashamed of the crisis you do not see there, for Jewish people and moderates all.

    I did not agree with those coalition policies. I cannot go back in time , if I could it would be do do more than you on the coalition or John Macdonell, the latter who said in one of his horrible unfunny comments, if he could it would be to assasinate Thatcher!

    I say to people, stop denigrating those of us who are not far left or left , we are not in the middle of a road anymore than the leaders mention, or JFK or Sir Henry C-B, or any not of the trendy left radicalism which is not nor ever was liberalism or Liberal Democracy. We can be and are a mix, as all parties, of centre left right wings and most like me who just want to be able to both love our country , neighbour and own loved ones, and not moan all day even though some of us have, in very difficult personal and professional, let alone political circumstances, a lot to moan about !!!

  • nvelope2003 15th Oct '18 - 9:17pm

    expats: Please explain how you will force the very rich to pay their full share of the taxes ?
    Not even the USSR managed to do that except by expropriating their wealth and killing them. Is that want you want to do ? I agree with your hopes but no government is likely to fulfill them except by the sort of draconian measures that will kill the goose that laid the golden eggs. Maybe those you criticise found that out when they got into government. Reality can be quite a shock. It is not like a TV comedy or even a documentary.

  • Gordon – “Meanwhile, investment in industry has been sluggish. That’s partly because the property Ponzi offered easier, juicer returns; partly because the deregulated City could turn to asset stripping industry rather than investing in it but mainly because the national cost base is simply too high. Investment homes in on profit opportunities with laser-like precision but high costs preclude profit” – Countries like Germany have banks like KfW which specialize in lending to SMEs, exporters and other manufacturing firms. Plus short-termism in corporate governance, part of the problem is the nature of market-based financial systems (firms in countries where banks play a bigger role in corporate financing tend to have longer-term vision than maximizing shareholder value).

    “Costs are too high for several reasons; too many are skimming off the top while adding little, skills training is poor but, above all, because the country is being badly run” – There is a reason why Germany has a corporate tax of 29% but businesses there seem to do much better than British counterparts, well… except for the likes of Goldman Sachs, or as you say, asset stripping industry.

  • A Liberal in Leeds 16th Oct '18 - 12:30am

    Thanks @Katharine Pindar, that looks like an interesting idea and goes hand in hand with our commitment to devolution. I fully intend to continue!

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