Danny Alexander writes… our plan to fix the economy

For months now, families across the country have felt the pinch as fuel and food prices have spiralled out of control.

They have watched as financial institutions hit the rocks and have seen the great lengths the Governments has been prepared to go to in order to bail them out.

As they read of the billions of pounds of their money that Gordon Brown and Alistair Darling have been prepared to pump into the banking system, it is understandable that they should ask what is being done to help them.

The Liberal Democrats are the only party to set out clearly what should be done to help put money back into the pockets of struggling families and put the country back on the road to economic recovery. There are four big changes Britain needs.

One. As Nick Clegg has said, it is essential that taxes are cut for struggling families so that they have more money in their pockets.

The Liberal Democrats will cut taxes for people on low and middle incomes, raising them for the richest so the tax cuts are affordable.

Two. Energy bills must be lowered so that people can afford to heat their homes this winter.
The cost of oil and gas are falling, but energy companies have not passed their savings on to customers that desperately need help. Against this backdrop it is a scandal that millions of people face a winter unable to heat their homes, with four out of five single pensioners facing fuel poverty this winter.

Three. We must act to remove the fear of repossessions and keep people in their homes.
We will instruct the courts to make sure banks don’t repossess unless they’ve already offered free independent financial advice, and pursued all alternatives like renegotiating the terms of the mortgage and offering a shared equity agreement.

Four. People and businesses need help paying off their mortgages and loans, so we need substantially lower interest rates.

The Bank of England must remain independent, but at this time of emergency its remit must be changed to make interest rates fall dramatically and swiftly. This should be part of international action to cut rates across all major economies.

The Labour Government has demonstrated time and time again that while it will do all it can to prop up the banks, it simply can’t take the measures needed to help the families and pensioners that are hurting the most.

The Conservatives simply won’t. David Cameron and George Osborne have shown themselves to be completely bereft of ideas. They may be comfortable on the yachts of billionaires, but they are completely out of touch with the struggles of ordinary people.

The Liberal Democrats are the only party with the vision and the understanding to do what is necessary to get the country back on track and to help the people who are being hit hardest in these difficult times.

* Danny Alexander MP is Chair of the party’s Manifesto Group.

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19 Comments

  • a bit tired of navel gazing 23rd Oct '08 - 12:24pm

    Sigh

    The narrative is tax cuts for people to help them through hard times.

    Policy as currently formulated is to close loopholes and other things so that the rich pay more.

    Spending cuts in some areas will fund spending on our priority policies such as HE/FE.

    If there is scope to reduced the overall tax burden we will.

    I say again – the narative is clearly tax cuts for people who need them to get them through the hard times.

    spread the word.

  • Alix Mortimer 23rd Oct '08 - 12:35pm

    “Policy as currently formulated is to close loopholes and other things so that the rich pay more.

    Spending cuts in some areas will fund spending on our priority policies such as HE/FE.

    If there is scope to reduced the overall tax burden we will.”

    Right. But that’s not what Clegg said in the Indy on 9th October. He said:

    “Tax cuts are affordable without additional borrowing if we trim spending and raise taxes for the wealthiest, as we propose.”

    He bundled the spending cuts with the tax-neutral package, made them sound immediately necessary. Your version of the narrative separates out the tax-neutral package from a long-term goal to cut spending. And Danny Alexander’s article doesn’t mention spending cuts at all. The reason I make a fuss is that Labour have made tax cuts toxic and anyone proposing them has to be absolutely straight and consistent in how they talk about them, or there’s just too many places to drive a wedge in. FWIW I’d rather we stuck to your version.

  • Dear Danny,
    thank you for your thoughts on how to help the struggling millions. I am one of them, me and my PC, which is why I’m not yet quite at the bottom of the pile, but near enough it to know that what you propose are mere stop-gap measures.
    Are you (and your party) merely doing what every politician does when they want to get elected?
    God knows we need a new voice, and though the LibDems have at times gone far out, at times gone very low key, they present a model of difference in an otherwise uniformly depressing political tableau –
    they who rule scrabble to preserve a crumbling status quo perhaps because they lack the imagination to make a difference – and though LibDems have not been ‘in power’ as such, their casting vote can make the difference. Thus far my limited political wisdom, so why do I write? Because I do put some faith in you as being necessary and effective in the political arena.
    But, if your statement above is any indication of your parties policy, you’re not looking nearly far enough.
    Is it too scary to really look at what is happening in the world, and draw the conclusion that a little (or a big) tax relief is going to change anything? Who orchestrated the fuel crisis and for what reasons?
    The Fact is, we’re not going to be able to run this household on the same basis we’ve been happily-go-luckily pursuing since the second world war, when economic boom soothed the people of Britain over the fundamental betrayal by the Labor party of their promises of reform.
    There is more than one way of skining a cat (no offence) and being a member of a party who is trying to do something for the people you surely must know that.
    I’m not a member of any party, because I’m not a partisan kind of person. Governing in our culture is something that has to be done, ideally by people who are capable and wise. Though I do my best to vote for whosoever appears to bear a light in these dark times, I cannot say I see it in the current powers, nor the conservatives. To say that they are blinded by self-interest is an understatement.
    So I’m wondering are there any among you who are trying to work out a real solution other than committing mass suicide when things are getting really sticky?
    Be delighted to discuss them with you.
    What do you think of the ‘transition town’ happening?
    Otherwise, I enjoyed reading your post, as it sounds willing to be helpful.
    Best regards,

    Eilidh

  • Clegg's Candid Friend 23rd Oct '08 - 1:09pm

    Alix:
    “So we’re back to the tax neutral package, then? Because Clegg was still talking about spending cuts to fund tax cuts in his Indy article on about 9th October. Who is in charge of this narrative?”

    Not only that, but the funding for old 4p cut in the basic rate of income tax didn’t just come from “raising [taxes]for the richest”, but also from a switch from direct to indirect “green” taxation.

    Has that been dropped as well, or is it just deemed prudent not to mention it in the same breath as calling for lower energy bills?

  • a bit tired of navel gazing 23rd Oct '08 - 1:57pm

    Hi Alix,

    I agree with the appearance of discrepencies you have raised

    What I was trying to point out was the actually narrative is tax cuts for those who need it most.

    Not how those tax cuts are paid for.

    Pedantic I know – and you can argue you that ‘how you afford’ is actually part of the narrative as it is where we become vulnerable to our opponents or to voter disbelief.

    But I would argue that the narrative is clear ie Tax cuts that is what you say on the doorstep.

    If then you are asked how? or greeted with disbelief the explanations should then be watertight (which perhaps it isn’t) but that is second order detail to the narrative.

    I also think the leadership have realised that ‘redistribution’ as part of a narrative is more powerful in ‘hard times’ (and when the excess of rich bankers is causing consternation) than it was say 6 months ago ‘in times of plenty’ when ‘wasteful spending’ was more powerful.

    Agree to disagree?

  • Alix Mortimer 23rd Oct '08 - 3:28pm

    Ok, I agree the narrative in outline is clear, but I think that the recession has promoted the funding explanation from being second order detail to being (hehehe) fundamental. How to “get out of” the recession is a great big fat thing for people to have an opinion on. People who can tolerate the idea of a tax cut at all will divide into:

    A. people who just want a tax cut promised to them and don’t care how it’s done
    B. people who think income tax cuts are best funded from increasing other taxes, because they don’t want public spending cut
    C. people who think tax cuts are best funded through cuts in public spending, because they think govts should cut spending in a recession
    D. the odd person who thinks tax cuts are best funded through extra borrowing, because they’re the curveball
    E. people who are confused about B, C and D and have therefore decided (with a bit of help from our opponents) that tax cuts, however they’re funded, must be impossible and/or unwise in a time of recession. Any equivocation on our part will only convince them further.

    At the moment, we’ve grabbed group A. I appreciate that making a choice between B, C and D is not appealing, and I also appreciate that it isn’t a “real” choice, but I suggest we have to unless we want the whole lot of them to slide into group E.

  • Nigel,
    it’s a turn of phrase which is less neutral without trying to be more unsympathetic, give the boy a chance!

  • Clegg's Candid Friend 23rd Oct '08 - 6:29pm

    “When challenged by Duncan Brack to produce the costings so that we know where the cuts are going to made, we were told it was unrealistic to do so, so far ahead of time.”

    But I thought everyone was already meant to be busy identifying these cuts. It was reported in early February that Jeremy Browne had been asked to identify them. And Clegg said before the conference that he and Vince Cable had spent the Summer working on it.

    And on top of that, Julia Goldsworthy had been asked to identify essentially the same cuts (adjusted for growth) in 2006 (!) (except that then all the savings were meant to be going to our spending priorities, not to tax cuts).

    I don’t think anyone really believes these tax cuts are feasible now. But the longer time goes on without the £20 billion savings they are predicated on even being identified, the more cynical the whole manoeuvre looks.

  • David Allen 23rd Oct '08 - 6:40pm

    Alix,

    “Who is in charge of this narrative?”

    Well, I rather fear that Danny Alexander isn’t. What he has said sounds rather like a tax neutral package, which many of us will find encouraging. But it doesn’t explicitly rule out spending cuts, so it doesn’t specifically contradict Clegg’s latest version of the narrative.

    It is indeed a fundamental issue, and that’s not only because there is a recession going on at the moment. It’s fundamental because it defines what sort of party we are and what the voters can really expect us to do if they give us the chance.

    You talk about “people who can tolerate the idea of a tax cut at all”. Well, I think there will be very few people who believe that taxes should never ever be reduced. I like your idea of dividing people into neat little boxes, but I will offer a different series of boxes, as follows:

    1 – People who think it is perfectly fair game to shift the burden of taxes around, and thereby cut taxes for the less well off by raising taxes on the rich, or raising green taxes, or both.

    2 – People who think that there are times when taxes should rise and times when they should fall, and that now is a good time for taxes to fall.

    3 – People who believe that Gordon Brown is a mad spendaholic, that all the propaganda thrown at him by his opponents is 200% true, and that therefore, the party that called for a penny on income tax can now call for taking tuppence off again (i.e. that’s in excess of the 4p for the Green Tax Switch) without making itself look totally ridiculous.

    4 – People who think Keynesian economics is the way out of recession.

    5 – Raving right-wing ideologues who believe that tax must be cut and the State must severely shrink, irrespective of the economic circumstances, as a policy that is valid for all time.

    Box 1 (and your box B) would appear to contain you and me. To those favouring Box 2, I would comment that you can’t then also favour an “Apollo programme” of spending a mint of money on vital works to produce transport and energy infrastructure that will enable us to survive climate change and peak oil. To those favouring Box 3, I would comment that you should never believe too much of your own propaganda, and that even if we can indeed cut some genuine NuLabour waste, see previous comments on the Apollo project. Then, reflect on whether we really want to be famous for restoring public services to the state John Major left them in.

    Box 4 contains some of those brave souls who think they have mastered the financial universe, and didn’t get their comeuppance in the most recent bonfire of the vanities. Ordinary mortals like me must comment with trepidation, but, what Keynes thought would work was tax cuts and/or INCREASED state spending. Box 4 therefore appeals to tech guys rather than political ideologists. (An intrinsically more decent bunch of people, in other words, but, tech guys can also get things wrong, of course!)

    That leaves Box 5. Sadly, this seems to be occupied for the duration by M**g*r*t Th*****r and N**k Cl**g. It is really this iron determination to cut £20bn of state spending, never mind how, that spooks me more than anything else.

  • Clegg's Candid Friend 23rd Oct '08 - 6:57pm

    And now, the Lib Dem economic secret weapon ………….

    A “Buy British” campaign!

    I kid you not:
    http://www.libdems.org.uk/home/clegg-proud-to-buy-british-32550988;show

  • Clegg's Candid Friend 23rd Oct '08 - 7:05pm

    Down Memory Lane Department:
    http://www.jamd.com/image/g/52763125

  • David Heigham 23rd Oct '08 - 7:40pm

    Friends, the immediate economic programme hangs together – as the fuller versions explain pretty clearly. In addition it is clearer and better than anything Tories or Labour have yet offered. Let’s not get in a twist about pinning down every adjective, hypothetical sum and comma in every statement about it. Remember, events always mean that you cannot do exactly what you planned – even if you have a landslide majority. The important thing is to get both the direction we want to go in and our priorities right. The programme does that.

    In presenting our programme the vital thing is to get accross that our team are the most competent on economic policy, and that our direction and priorities make sense. That means simplifying and clarifying for the great majority who are not going to spend much time on it, but who are by no means stupid.

    Before the election, we will also have to put accross that the economic policies which make a lasting difference to people’s lives need consistency and effort over more than one Parliament. That is a key part of the economic case for voting LibDem – we are in the business of politics for real change, not quick fixes and crash (they do) iniciatives.

  • Clegg's Candid Friend 24th Oct '08 - 10:41am

    This is just to prove that anybody can be Clegg’s Candid Friend if they want to be. Don’t you just love blog posting. You can spend all day doing it, be anyone you want, and achieve…..absolutely nothing.

  • Clegg's Candid Friend 24th Oct '08 - 10:49am

    That last post wasn’t by me. (Or was it?)

  • Clegg's Candid Friend 24th Oct '08 - 11:01am

    I’m just messing wid yr heed

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