There’s no getting away from the fact that the Scottish election results are heartbreaking and disappointing. Some very dear friends of mine, excellent, hard working Councillors, have lost. I’ve had a few very big sighs of relief as others managed to hold on. We now have just 70 councillors left. It’s not as bad as last year’s Scottish Parliament elections where we lost more than two thirds of our seats, but don’t let anyone tell you that there is anything remotely pleasant about it.
In East Lothian, North Ayrshire, Stirling, Midlothian and Clackmannanshire we were wiped out completely. Large groups in Fife, Perth and Kinross, Aberdeen and Aberdeenshire sustained significant losses.
Here are some brief initial observations before I head out to drown my sorrows.
The scale of the losses
The papers will report that we went from 166 to 70. In fact, we only had 152 councillors, after by-election losses and defections. We did not defend all of those seats – in 14 wards where we had two councillors, we only stood one candidate this time.
The SNP stood more candidates this time
In 2007, there were some areas of the country, notably Aberdeenshire, where the SNP simply didn’t stand enough candidates under the STV system. If they’d stood two candidates then, they would have won at our expense. This is not offered up as an excuse, but it is worth mentioning that some of the losses would have happened anyway.
Edinburgh
The Liberal Democrat group in Edinburgh was decimated. We had been the largest party with 16 seats and we’ve gone to fifth largest behind the Greens who now have six seats. The big issue was the massively over budget, delayed, curtailed new trams project. The group inherited a contractual minefield and with SNP coalition partners who were initially opposed to the trams, the challenges almost proved unsurmountable. The Liberal Democrats were the only party to show consistent leadership on the trams, but residents had had enough of disruption, uncertainty and huge great big holes in the road.
And before you own up for me, I have to mention the fact that in one non target ward, we received fewer first preferences than Prof Pongoo, a candidate dressed in a penguin suit. I am getting heartily sick of seeing him on the television, but it’s not the first time a novelty candidate has polled well. There will come a time when we start winning again and we’ll be able to laugh about it.
Silver Linings
There are some things to take a little comfort from. The 3 seats we retained in Edinburgh were all in Mike Crockart MP’s Edinburgh West constituency, the only seat we hold in the capital. Similarly, the three wards where we stood two candidates and held them both were in held Westminster seats. Two were in Ming Campbell’s North East Fife and one in Danny Alexander’s. Our Highland Council group suffered comparatively few losses – which is positive given that we hold 3 Westminster seats in the authority area.
The shine has come off the SNP
The governing party of Scotland did not have the success it wanted, particularly in the West of Scotland. They won majority control in Dundee and Angus, and have the largest number of councillors as they did in 2007, but they failed to capture their prize, control of Scotland’s biggest city, Glasgow. While they made gains, they expected to capitalise from Labour splits and to be in the position to form an administration. Labour retained majority control. It’s a sign that the shine is coming off them after they won a majority in Holyrood last year.
Rennie: This is a distressing day
Leader Willie Rennie offered his sympathy to losing candidates in a heartfelt statement this evening:
This is a very distressing day. We have lost many, many strong community activists who have stuck up for their area for many long years.
My message to them is this: I am sorry that you have lost out despite your tremendous efforts for the Liberal Democrats and for your communities.
These results should dispel any myth that the Liberal Democrats are only in the coalition for ourselves. We never were. It has always been about doing the right thing for the fortunes of the country.
Over this campaign I have helped fifty campaigns and met thousands of people. I have been listening and learning. I detected a change in the mood with people prepared to listen and consider us again. It wasn’t enough this time but I will be working to regain that trust and support.
We still have many strong Liberal Democrat Councillors who will join the rebuilding process for the party.
Scotland still needs strong liberal voices and we will continue to speak up for our strong liberal values.
* Caron Lindsay is Editor of Liberal Democrat Voice and blogs at Caron's Musings
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55 Comments
The trouble is, Mr Rennie, it is becoming quite clear that the Coalition’s economic policies are not ‘the right thing for the fortunes of the country’. The perception that ideologically driven cuts – and the threat of cuts – in the public services that ordinary hardworking people most value (like education and health, which lib Dems have championed for decades) have helped to suck the lifeblood out of a recovery that had begun in 2010.
It’s time for the Scottish LibDems to have their own declaration of independence – that is the only thing that can save the party in Scotland in the long-term. Have an alliance by all means with the the England and Wales LibDems, but it’s time for the Scottish party to breakaway and forge its own identity.
Willie, you have led the party well in very difficult times. Just keep going. For me there are two main points:- 1. Nick Clegg should apologise for signing the pledge against raising tuition fees. Until he does this, people will never believe anything else we say
2. Now is not the time to give up on cutting the deficit. There may be chances to trim at the margins, but the main thrust must be stuck with. Remember only one third of the electorate voted and in the UK as a whole nearly half of THEM voted for parties in the coalition. On the one hand the US is heading for a ‘fiscal cliff’ in November and on the other, the Euro is still deep in the mire. In the West, the UK looks like an oasis of calm amongst the storm (see Bloomberg News – Surveillence Midday). We must not let that go.
Willie, Caron
As an erstwhile LD voter, who lived in Scotland for a number of years (and worked with Janet!) I have always been impressed with your approach to politics and am sad to see you having to pick up the pieces of a situation over which you have little control.
I firmly believe that the LD can still be a force for good in the UK as a whole (once the yoke of Coalition with the appalling Cameron-led Tory party is broken) and I would expect the Scottish Party can strongly influence this.
If the national party, however, maintains a drift to the right and becomes, in England, just a party of the South for disaffected Tories then you may need to consider a more radical approach if you want to continue in any meaningful form in Scotland
It is clear that Scotland is firmly left of centre and Scots see the Lib Dems as helping the Tories implement right-wing policies in London, with relish.
The Lib Dem leadership in Westminster are out of touch with ordinary peoples’ priorities, it appears. Further, they are straying beyond the Coalition Agreement in an effort to appear ‘reforming’, but it is having a devastating effect on our vote. The kind of ‘reform’ they offer seems to have a default setting of free markets and privatisation .
This is not the instinctive Liberal Democrat way and it’s not the Scottish way – hence the meltdown.
I am struck by the fact that while we won 431 seats across Britain, the SNP won 424 in Scotland alone, even though it was widely perceived that the SNP did less well than expected.
David Pollard is right: until Clegg makes a believable apology about the tuition fees pledge he, and therefore to a significant extent the party, is the subject of a single narrative – untrustworthy. Why he and his advisors cannot see that baffles me. Is he too proud, to stupid, doesn’t think it’s important? It doesn’t matter if the new system is infinitely better than the old (which it may or may not be): what matters is that the electorate now believe that you can’t trust Nick Clegg and the Liberal Democrats.
I think it is too late for him to apologise for that (tuition fees).
However his successor should apologise at the first opportunity.
I think there are 2 fundamental problems the party faces. The economic strategy is failing, but the party leadership seems unable to countenance changing it. And secondly we are not being perceived as making a difference in government. We should be preventing Tory extremism, but we are not. The electorate cannot tell us apart. The Coalition may not in truth be a cosy one, but it is perceived as though it is. Caving in on NHS reforms and on the mansion tax was disappointing because public opinion wanted us to succeed, only to feel let down when we didn’t. The Tories take us for granted because they think we have nowhere else to go. The leadership shows no interest in making overtures to Labour which only demonstrates that the Tories are right to think that. The party leaderhip is leading us into a hole, and they should stop digging.
Lord Owen lost out to the raving Loonies too, it’s bad reminder of what happens when the public at large start to think a party isn’t just irrelevent but less important than some guy in a penguin suit.
“heartbreaking and disappointing”
That’s euphemistic.
For those who want to change the economic strategy, how do we borrow more and spend more without turning into Greece or Spain or Ireland?
Obama tried fiscal stimulus and it hasn’t worked that well over there either.
There is no question of trying to dissociate ourselves from the Coalition. Two Scottish Lib Dem MPs are in the Cabinet for a start. We tried that last year and the results were even worse and even if we tried to do it more formally, do you really think our opponents would let us away with it. It would be cowardly, counter productive and wrong.
We’re not in an easy situation and we have a hard fight on our hands which we have to win – because a future without liberal ideas is not one I’m prepared to let happen.
I did come on here to gloat – but changed my mind. I know it’s heartbreaking when you do everything possible in a campaign and suffer loss after loss of good and hardworking councillors. I’m Labour and enjoy competing against the Lib Dems but it’s too easy to slip into us v them thinking and forget that you are all people who care enough to get out and work for your communities, you’re not evil even if you seem to do the wrong things.
So to Caron and everyone else reading this, keep at it, remain caring for your communities and you will have good election nights again.
Caron
If that is your view then fine but then expect to follow a path to irrelevance
These trite comments regarding Ireland, Spain and Greece are economically illiterate as we are in no way comparable. The US is in a much better condition than we are – it is the UK that is doing badly and that is due a complete absence of a growth strategy.
In terms of cowardice – I think it is the leadership that is showing cowardice in not standing up to the Tories – a number of the most unpopular things done are not in the Coalition Agreement but you have gone ahead and supported them anyway without barely a murmur.
Please can you tell me what your strategy is to get back your ex-voters such as me. At least I am prepared to listen. Most of my friends (late 30s university-educated liberal people with an interest in current affairs who voted LD since Iraq) talk about your party with contempt. Are you now not talking to us but our equivalent on the right – I can tell you that you will find this a hard nut to crack
Your continued reluctance to engage with the left-leaning ex-voter is sad and destructive. remember you were at 16% in 97 and that is where you are heading back down to – probably lower.
Look, the Conservatives need the Lib Dems to govern, and they have been on the receiving end of a battering which might lead many to doubt their ability to win the next General Election. Time to put across some good LD ideas forcefully, take no prisoners. Already, you can hear the wailing from the Tombstone, errr, Cornerstone brigade that the Tories need to be more like UKIP. Well fine, let them. But not on Nick Clegg’s watch. Push back hard. They can always try to govern as a minority if they prefer. I believe that the LDs can still achieve a great deal in this Coalition, but it would be fatal to start to feel comfortable with it.
@Caron. Your question on economics is very relevant – buit so difficult to address – and the same for coalition!
Jumping out of coalition now would finish LibDems for ever. No sane party would want us as partners again, and every voter would see that we break our promises and don’t care if the consquence is the collapse of the country’s government. Somehow we need to forge a distinct identity to create a viable challenge in 2015, while remaining in coalition up to that time.
what have this bn’s of pounds of QE been if not a fiscal stimulus – albeit one that has not seemed to work apart from destroying pensions! I am not saying it was the wrong thing to do but you cannot have it both ways
Also, it is not completely necessary to bring down the Coalition – although it would please me greatly – but be more robust within it. The impression given by the leadership is that not upsetting the Tories (especially Cameron and Osborne) is more important that upsetting your voters. I worry when I hear that there are no tensions between the quartet – why bloody not – surely they do not agree on everything?
I have said before that this idea of collective responsibility does not work with a Coalition (and neither does FPTP but that is another story)
@bazzasc
“Please can you tell me what your strategy is to get back your ex-voters such as me. At least I am prepared to listen. Most of my friends (late 30s university-educated liberal people with an interest in current affairs who voted LD since Iraq) talk about your party with contempt.”
That is because they clearly don’t understand that having 8% of the seats in parliament plus a massively hostile press to contend with means influence within a Coalition is by necessity going to have its limits.
Just how educated can these people be if they don’t understand the issues behind university funding and the other sticks that have been used to beat the Lib Dems with? I think they’re making their minds up just like a whole load of other voters – instinctually rather than looking at the facts.
The problem we have is that all the leafletting is done at local level and on local issues and there is no sustained communication whatsoever – Zero – giving our point of view on national matters. At a national level, all people hear is what they read in the press, which is overwhelmingly hostile to the party. That is why we had ended up the scapegoats for the cuts.
@bazzasc
“what have this bn’s of pounds of QE been if not a fiscal stimulus”
You are clearly confused. Quantitative easing is MONETARY policy. Government spending is FISCAL policy. They are two different things.
@Richard Dean
“Jumping out of coalition now would finish LibDems for ever.”
Being unable to contemplate it would also be fatal, as you are then negotiating with no clothes on.
I think the perception that the Coalition has neutered the LibDems is widely held and has been reflected in a second year of predictably poor recent election results. It’s easy to sound negative at a time like this but I think the Party should be exercising caution over the return of David Laws if it is simply to pursue the austerity programme in tandem with Danny Alexander.
With the potential change of presidency in France signalling a change of direction for more than one of the economies of Europe and, perhaps worryingly for Osborne& Co., indications that a policy of stimulus in the States is leading to improved growth in their economy, what is the point of having Vince Cable – someone who is at least open to such ideas – serving as the Coalition’s Business Secretary if nobody seems to be listening to him?
On another note, I think the Greens did so well in the London mayoral election because they seemed to be standing up for transparency when Jenny Jones asked for the main contenders to publish their tax returns.
Contrast this with Mark Littlewood’s strong on-air support for Rupert Murdoch just after the recent release of emails potentially compromising Jeremy Hunt’s neutrality in the BSkyB bid. Liberal Voice of the Year he may be, but I don’t think it helped that he was introduced as a leading Liberal Democrat in the context of of a discussion on lobbying and transparency.
Some thoughts on this from someone still carrying the bruises of last year…
Firstly, though I don’t necessarily agree with doing it, I don’t think that pulling out of the coalition now would be as disastrous as it might have been last year. The main reason is that the Tories are in a much worse place in the opinion polls now than they were then, and Labour look like they’ve got some idea of how to win again (even against the SNP.) If we were to pull out, I don’t think the Tories could realistically call a General Election of their own accord, and if the Labour Party were to try to pull off a No Confidence motion they’d still need our support to do it along with the DUP so it would be very difficult to do. It may now be an option for us to consider a “confidence and supply” arrangement though – I wonder whether we’d actually have more success in getting our policies through?
On the Scottish local elections, let’s deal with the penguin first. It turns out this guy is someone who is known locally and actually is a regular visitor to local groups and primary schools talking about environmental issues. The media are trying to portray him in the vein of a student prank, but he’s actually a more serious candidate than that so it’s actually more akin to being beaten by an Independent – I suspect though that he’s had more coverage because of the penguin story from Australia earlier this week.
@bazzasc – I agree with you on Iraq, but I’ve been a party member (as has Caron) for long before that. I think what happened is when that became the key political driver for people they saw us as the only party which was taking a stand and supported us on that basis. For those of us who are in the party, though, it was an important policy but only one of many which we wanted to support. Remember, we still support the same stance on Iraq – Nick Clegg called it “illegal” at the dispatch box early on, a slip maybe but one which I think shows his own views on it. Many – probably most – of us in the party are still “left-leaning”, but it’s the leadership which is less so.
The way back ? I think the best advice comes from @DM Andy. We have to keep plugging away and keep fighting for our communities locally. It’s much easier to do this – and there are seats which we lost where we still have a strong enough base to work with for the next five years. Hard work, lots of Focuses and press releases, doorknocking, street letters, and steering well clear of anything which looks like a tram and we’ll get there.
@Sean – as I understood it Mark Littlewood had to resign his party membership when he took up his current post – can someone correct me if that’s not true?
RC
Thankyou for your polite response!
QE is uncoventional monetary policy so in principle you are right but it will probably have fiscal consequences if we have to withdraw that money at a later date if interest rates start to rise. We may be mortgaging the future
am still of the view that this is less about the coalition than about the 3 great errors of recent times: 1 the refusal to work with the first SNP administration, a minority one, in order to prevent a referendum on selfdetermination in Scotland – a view that was as inept as it was illiberal; 2 betraying the pledge on fees, which broke the hearts of much of the party’s base, and for which sorry will not be enough, and not even now a start; appearing to support in govt policies which are illiberal and undemocratic ( web surveillance; ‘liberal’ Lords wanting to keep the Lords ….)
with the membership on strike, and the hard- gained activist base broken, who now will speak up for liberal Britain meaningfully? my own view, and that of my friends, is that the Lib Dem brand is too contaminated to be worth retaining – and, frankly, MPs who oted for £9k fees when there was no requirement in the coaliion agreement for them to do so should examine both their positions and their consciences.
RC
This seems to be a tendency on this site from LD to be abusive to other posters
My friends are well-educated for your information but, as a number of them work in the NHS they are seeing the effect of your changes. Also they are not happy with your volte-face on the economic policy (and don’t come back with the Greece or Spain argument please). On education they are more worried about the cuts to FE and also to the university teaching grant.
You may only have 8% of the seats but you have 23% of the vote
I suggest you read Keith Legg’s excellent post which sets things out well though I don’t totally agree with him
Good up sum Caron.
An unmitigated disaster but you have put it in perspective well.
For us politics has been re-booted. Now we move forward. Time to get out and form local Focus action groups and hold the SNP and Greens accountable – who nicked our voters.
@Paul McKeown
Let’s be realistic! The alternative of oblivion that you recommend is not likely to be effective in achieving LibDem policy objectives. No-one really hs clothes anyway.
There seems to be a rather worrying arrogance in some comments – to the effect that voters are to be criticized for being ignorant and stupid. That view is also inaccurate, unhelpful, and oblivion-bound. The truth is that the UK electorate is incredibly sophisticated. In these local elections, they have managed to really turn the screw on political parties – creating tensions that can only be resolved by finding solutions that voters will accept. It would be ignorant and stupid to ignore their power.
The Coalition’s fiscal and deficit policies are a disaster – all the things they said would happen, all the growth that was supposed to spring up, has failed to materialise. And there is not a hint of a sign of a change in direction, therefore the Coalition must be stopped. This party must force Clegg out and install a new leader, then renegotiate the terms of the coalition agreement – and if Cameron wont do it, then pull the plug. Staying the course with Clegg at the helm will lead us straight into catastrophic meltdown, so almost any other course of action would be preferable to the destruction of civil society (which is what the full panoply of Coalition cuts will mean) and the destruction of the party.
The outspoken few of us who were skeptical of the Coalition almost from day one warned the party repeatedly that a full-blown coalition for a 5-year term was a recipe for disaster, and LO! for that disaster has arrived. And if the Clegg leadership ignores the reality of its unpopularity and its record as an enabler of Tory cruelty (which is all that will be spoken of), then there will be bitter recrimination and infighting when 2015 brings it cargo of failure and collapse. So the party’s senior figures and MPs have a choice – wait 3 years then indulge in a struggle for the battered remains of the party, or make a stand NOW, eject the Clegg leadership and extricate us from the Coalition agreement as it stands. The choices are stark, because (to be TV topical about it) a political winter is coming. For us.
@Caron Lindsay
“For those who want to change the economic strategy, how do we borrow more and spend more without turning into Greece or Spain or Ireland?
Obama tried fiscal stimulus and it hasn’t worked that well over there either.”
There isn’t a simple dichotomy between adjusting the government’s current strategy and ‘turning into Greece or Spain or Ireland”. Aside from anything else the state and structure of our economy to begin with is much more comparable to that of France and Germany than any of the countries you mention. Clearly the coalition’s current strategy is simply not working. All other comparable economies including the US, Germany, France have been able to sustain growth, whilst we are alone in now being in a second recession. When the government took over from Labour the economy was growing at above 1% p.a.- a stable if not overwhelming rate of recovery. Now that is lost and the most feasible explanation is that the coalition’s strategy doesn’t put enough emphasis on growth and how to bring it about, with Osbourne hoping for export-led growth to materialise out of nowhere. It’s also worth pointing out that a prolonged second recession would likely cause the deficit to rise faster than eschewing or redirecting some of the cuts would.
@ mike cobley
“The Coalition’s fiscal and deficit policies are a disaster – all the things they said would happen, all the growth that was supposed to spring up, has failed to materialise.”
This argument, yet again. No, I’m sorry but you are wrong.
Mike, the lack of growth is not due to fiscal policy, which despite what Labour says is the course they would have followed anyway, give or take £6bn here or there, which is peanuts in the context of an economy the size of the UK (trillions of pounds a year).
You are failing to take into account high oil and commodity prices (tens of billions of pounds a year sucked out of the economy unexpectedly, with consumers being particularly hard hit), a higher savings ration (tens of billions of consumer spending being held back), the Euro crisis (billions of pounds of investment held back by business due to worries about financial stability) and lower net exports (tens of billions there too as well). It is these factors, not fiscal policy, that are determining the direction of the economy. These are all unforecast factors that are derailing growth. If you look at the Office of Budget Responsibility reports, all the figures are there. You can see all the growth projections and actual outcomes.
@ Rob
“Aside from anything else the state and structure of our economy to begin with is much more comparable to that of France and Germany”
How is the structure of our economy remotely comparable to that of Germany?
@ Rob
“When the government took over from Labour the economy was growing at above 1% p.a.- a stable if not overwhelming rate of recovery.”
No. Let’s just knock this one on the head right now. The economy was on massive fiscal steroids when Gordon Brown left office with a deficit of 11.4% and rising. This was not a sustainable recovery in any way, shape or form. He was pump priming the economy with all sorts of spending programmes in a desperate attempt to get re-elected whatever the cost. The taps were on full blast and the reservoir was emptying fast. Go and look at the deficit figures on the Office of National Statistics site and you’ll see what I mean.
@bazzasc
I’m not being abusive at all, merely replying clearly and strongly to your points.
“You may only have 8% of the seats but you have 23% of the vote”
And how exactly does that help when you’re in parliament voting, eh? It is numbers of MPs that count, not votes, when it comes to wielding power.
In fact, it compounds the problem. I think the reality gap between how much support we had in 2010 and how much power we are actually given under FPTP is the main reason why people are so disappointed. They just don’t understand how badly they have been swindled under FPTP.
RC plus Brown was busting a gut to get that paltry growth by increasing debt levels ahead of the election.
Part of me wishes he’d Hung on so he’d have been the one covered in his own mess. But only a very small part.
Rc
It helps you because the Tories do not have a majority so will probably not be able to carry things without your support!
I also come back to the question on where your support in 2015 will come from?
Yesterday you received 16% of the vote which is a disaster in terms of council elections. In a national poll you are probably 2-3% below this.
In 1997 when Labour was at its highest you received 16% as well. From then on both you and the Tories have taken votes from Labour to arrive at the current 23%.
What party members have done since then is criticize these voters and call them all sorts of names – okay that is your right but if you want to have a future of a party you need voters and insulting the demography that has taken you to the mid-20s percent is not the way to do it.
You criticized my friends before – they are people who previously voted Labour (despite my pointing out that the LD were closer to their views) but didn’t move over until Iraq proved the catalyst. Since then in 2005 and 2010 they have voted LD with enthusiasm. Now they are back with Labour. You may not like it, and it may not be the type of voters you want but that is tough.
I disagree with your views on the economy and so will not be voting for the party in any election until they change. Your party has also tied itself to the Coalition economic policy until 2017 which takes you past the next election. In this there is no difference from the Tories
Your party is becoming an irrelevance outside certain areas in the south – you are going the same way as the Tories in the metropolitan areas – areas that until recently you used to hold. In Scotland and London you are doing especially poorly.
Good luck for the future, because if you are typical of the LD nowadays you are going to need it
@ bazzasc
Sorry for posting views based on facts about the economy rather than agreeing with Labourite memes about:
(1) Labour isn’t to blame for anything that happened in the financial crisis, it just spontaneously occurred;
(2) The economy was in great shape when they left power;
(3) Anything that has happened to the economy since 2010 is entirely due to government policy and no other outside factors have played any part whatsoever in the UK’s economic performance.
Our support will come back when the economy recovers and when voters realise that many of the things being done by the Liberal Democrats were right after all despite all the Labour scare mongering and muckspreading. It will also happen when they take a long hard look and realise Labour is not fit to take power again because it does not have a coherent or achievable programme of what to do in government.
Just one other thought about the economy, without going on one side or t’other of the argument. We have a tendency within the Coalition to keep going on about high-level economic policy, and why borrowing this much or spending that much is fine or is unacceptable. Most of these arguments are rehearsed above. While all this may be important, and there may well be great theory accompanying both sides of the argument, to the average voter it simply doesn’t make any sense at all. What he sees is not the increased amount in his pay slip because of the increase in personal allowances, but instead the rising prices at the fuel pumps when he fills up his car and the spiraling cost of his shop when he visits Tesco. He doesn’t really care about the fact that we’ve abolished ID cards or will reform the House of Lords, he cares about the fact that he might not get on holiday this year because the airport duty’s gone up, or he cares about the whether he can afford to carry on driving to work each day.
For all her many, many faults, getting a message across in simple terms was actually something Thatcher was very good at (remember the shopping baskets in the 1970s?) As a party, we have to show that we’re thinking just as much in the same way as the average voter as we are thinking like economic experts.
I really winced listening to the results from Edinburgh, I lived there for a year in the early 90s. That was a strange experience, I felt far more of a foreigner than I did when I lived in Milan. For the 1st & only time in my life I had some sense of what being an immigrant might be like.
The point is that Scots culture is shot-through with low level prejudice against the English & the Libdems are part of “The London Government”.
For the the Scottish Libdems to declare independence would do no good unless you also pulled your Ministers out of the coalition.
I wish I could offer some hope for the next 4 years but in all honesty I cant.
In the long run I sincerely believe that Labour are dying & the Scotland will need an opposition to the SNP. The Libdems will be well placed to become that opposition but that is looking ahead 4 or 5 years at least.
Sorry for not agreeing with your Tory view of the economy. It is a waste of time arguing on this. I refer you to Messrs Krugman and Stiglitz. You can argue with them
As to you reason why voters will return to you – we’ll good luck with that complacent approach. We will see in 2015.
@ Keith
I totally agree about bread and butter issues. The Lib Dems need to put far more emphasis on them in order to be relevant. I think one of the things we need to do is to look further at the whole equation of what it means to work versus being on benefits. We need to find ways of making work at the more modest end of the spectrum i.e. in more routine occupations actually attractive rather than a complete nightmare with things like zero hour contracts. Companies have increasingly treated people like dirt in order to increase their profits and government hasn’t really helped either. The large personal allowance is a first step, but other measures need to be brought in as well.
Monitoring the new health and education system arrangements like hawks with proper research and local campaigns to avoid the undesirable consequences from Tory inspired policies would also be a positive move. The real impact of these policies will come in the implementation stage, and we have to make sure that the best elements (e.g. local accountability) are not outweighed by the worst (possible involvement of big corporations and private control and ownership).
@Bazzasc
Why are you saying that RC is espousing a “Tory view of the economy”? To me it just sounds silly: my perception is that most Labour MPs don’t even believe what they are currently parroting, it just sounds nice and might even chime with what some folk might want to think is possible. In government they would be just as bound by the iron laws of the bond markets as any other government around the world. A stereotypical Tory view of the economy would be to dramatically lower taxation and cut out vast swathes of government intervention, in the simple-minded belief that “markets look after themselves”. That is hardly what is currently happening, and it is winding up a lot of conservatives. The truth is that this government’s fiscal policy is closer to that of the Labour Party’s General Election 2010 manifesto than that of the Conservative Party’s.
A more general note for LDs is to pay attention to what Conservative backbenchers are saying. See http://conservativehome.blogs.com/parliament/2012/05/conservatives-mps-react-to-the-local-election-results.html, for instance. When Gary Streeter and Eleanor Laing, hardly the blowhardiest of Tory blowhards, are demanding beating up Lib Dems, you just know that it’s going to get rough.
NOT AN INCH.
That has to be the LD motto for the second half of this Parliament, otherwise the party will suffer much worse than it has so far.
@ Bazzasc
I am not a Tory, nor will I ever be, and nor will my viewpoint on the economy (based on an economics degree from Cambridge and my own professional career since then) ever coincide with theirs. If this were a Tory government, spending cuts would have been much larger and faster and you really might have a point. But, sadly, you don’t.
I am not complacent at all. I am deeply concerned about the UK economy, which I believe has been grossly mismanaged for decades under both Tories and New Labour. The last administration managed to plunge it into such a tailspin that it was only by using massive resources that it was able to pull out of it. The fact that it has only levelled out since then is a measure of dreadful structural problems this 30 year period has left behind.
Gosh, RC, you really are a most amusing fellow. Rather than agreeing with ‘Labourite memes’ you joyfully fling about a few market-faith-based ones yourself. “Our support will come back when the economy recovers…” – really? On what planet – Bizarroworld? Demand is flatlining after just 30% of the planned cuts and growth is non-existent – what do you imagine will be the state of things when the cuts bite deeper to 50%, or 75%? Do you perhaps harbour a touching belief in the confidence fairy, that actually ordinary folks are sitting on pots on money which they just dont have the confidence to go out and spend? Or should we sit back in our hovels (still paying council tax but getting vestigial local services) and wait for the magical market pixie dust to take affect?
And please, spare me any comparisons with what Labour was doing or was going to do; I have as much regard for the economic policies of Blair/Brown as I do for those of Osborne/Alexander, simply because it appears that the same industrialists/financiers/bankers who were advising Brown are also now advising Osborne. So it is not remotely conceivable that the Coalition’s policies are going to produce what they claim they are meant to produce. However, from the objective record we can see that Coalition reform of the benefits system is creating harm and spreading avoidable suffering wider and deeper – what kind of record is that for our party to be proud of? And as for the Lansley reforms of the NHS, the rebuttal is fairly straightforward – they have inserted marketisation into the funding, commissioning and provision of mainline and frontline health services, which means that revenue streams are leaving the the NHS budget in the form of bonuses, exec salaries and corporate profits, which means that structural privatisation has taken place. The mantra of ‘Free at the point of use’ is nothing but an insulting fig-leaf.
And sadly for us, the public knows all of this, some clearly, some instinctively. We’re not being punished at the polls on the basis of some whim, or some misread tabloid headline – people are suffering and angry, and they are right to be angry at us for allowing this to happen. And as long as Clegg is in charge, and the Coalition grinds on its appalling course, the land of milk-and-honey will not arrive and that support wont come back. And as long as the financial sector (and the wealth it appropriated from the rest of us) are allowed to strut and preen through the avenues of power, we will continue on our downward path to social decrepitude and political stagnancy.
@mike cobley
“bizarroworld”?
You sound grumpy, but you don’t seem to propose a means to alleviate your condition.
Paul Barker, you clearly live in a different world from most! I’m originally from Edinburgh, born and raised in Leith, and I assure you Edinburgh is remarkably welcoming of the English, not least my own parents who settled there.
Caron, what did for the Lib Dems was a basic issue of competence, especially with regard to decision making, one way or the other, on trams, it’s why Jenny Dawe is no longer a councillor. Throughout wider Scotland, it is because of the Coalition. Scotland does not want it and those who suggest the Scottish Lib Dems set up their own party should be listened to if the coalition is to continue. Otherwise you will be wiped out completely, and will no longer be a national party, just an english one.
Thanks for such a thorough round-up of the Scottish results, Caron.
Terry: Given their provenance, I’m pretty sceptical about claims that it is the “threat of cuts” as you put it that has choked off growth.
This is an argument that Ed Balls has taken to using when confronted with the fact that there has been only a very modest reduction in real-terms spending so far, of the order of 0.9% in total public spending or 0.4% of GDP. If it isn’t the cuts themselves, it must be the prospect of them that has caused consumers to hunker down and stop spending – because they expect to be poorer in the future and decide to stop spending and pay down debt accordingly.
This idea that highly rational, calculating consumers and businesses ‘price in’ the effects of future policy changes in this way when making their present-day decisions is an interesting one, although the empirical evidence to support it is patchy at best.
It is based on David Ricardo’s theory (developed by the American economist Robert Barro in the 1970s) that private economic actors ‘internalise’ the government’s budget constraint, and respond only to policy changes that they believe will be permanent rather than temporary.
So, for example, in response to a temporary, deficit-financed tax cut (like the VAT cut Balls is advocating) or higher benefits, they recognise that borrowing now will necessitate higher taxes and/or lower spending in the future, so they save rather than spend – thus negating any ‘multiplier effects’ by which aggregate demand in the economy might be increased.
If Ricardian equivalence is right (and I have my doubts), then it applies to stimulus as well as austerity. It implies that (1) as Balls says, consumers and businesses will start retrenching (paying down debt and reining in spending) before the government actually introduces austerity measures; but also (2) any short-term boost to demand will be self-defeating because consumers and businesses will recognise that the extra bond issue is not an increase in their net wealth but in their future tax burden.
Translating that to the current context, let’s assume Ed Balls is right that households anticipated the effects of future spending cuts on their incomes by reining-in their spending during 2010 and 2011. By his new-found Ricardian logic, if the government now announced an immediate one-year cut in VAT, or a temporary increase in benefit levels – and remember that the whole basis of Keynesian fiscal activism is that stimulus should be timely, temporary and targeted – households would not respond to this temporary reprieve by increasing their spending but by using the money saved from lower VAT to make faster progress on paying down their debts. They would focus on their ‘permanent income’ and want to strengthen their financial balance sheets ahead of the bills coming due.
Personally I don’t find this model all that plausible: though there is doubtless some truth in it, it surely overstates the extent to which households and businesses are fixated on the long term, and understates the extent to which they respond to temporary changes in the path of their income (their cashflow if you like).
Thus, I think measures actually implemented are more significant than anticipated future measures. Given that the coalition opted to ‘front-load’ tax increases while backloading spending cuts, the rise in VAT is a more likely cause of reduced consumer spending than any spending cuts. And as I’ve pointed out elsewhere to those making exaggerated claims of the difference between UK and US policy, the striking difference has been that US tax revenues are still below pre-crisis levels while ours have grown by £56 billion. (This raises another point, which is that if the US’s supposed stimulus has been so effective, why are its tax revenues dramatically lower in real terms than they were before the crisis, while ours are higher? Isn’t the stimulus supposed to increase revenues?)
But anyway, Balls’s recent conversion to Ricardian equivalence shows that (to paraphrase Boris) he has a policy on cake which is pro-having it and pro-eating it… As the Economist argued when he first started making these arguments a year ago or so, “this is tricky ground for Mr Balls to occupy since, if one believes in Ricardian equivalence, the whole idea of a government stimulus flies out of the window”.
@Alex – a good post, but I think you’re assuming one thing – that Balls is basing his policy making on sound economic theory rather than one just of “we wouldn’t do that” and opportunistic announcements. Personally, I rather suspect it’s the latter.
My point exactly. Hence the comment about cake!
@Paul Mckeown
“You sound grumpy….”
You don’t know the half of it, matey.
“…. but you don’t seem to propose a means to alleviate your condition.”
Oooooh, I assure you that I did. The departure of Nick Clegg from the leadership would cheer me up no end. But thus far that seems unlikely – at least until the parliamentary party starts to really feel the Fear.
For what my opinion is worth, the progressive electorate see the LibDems as for the privatization (i.e. liberalization) of UK infrastructure and for the creation of a more unequal and punitive society,
Issues we could list which have lost votes:
HE / FE funding and fees
NHS
Forced privatization of the statutory state education sector under academies and free schools
Liberalization of police, mail and other national infrastructure
Failure to regulate the finance sector, encouraging bloated, fake markets, rewarding greed, penalizing small businesses and failing to solve the housing crisis
Virtual withdrawl from regional development, enterprise stimulus and career services for the young, typified by events like the Sheffield Forgemasters fiasco.
Notice I haven’t mentioned green issues, gay issues, nuclear issues, AV, PR, these are the pet interests of LibDem activists and minorities not the wider public and that’s a fact, not that the LibDems have been able to acheive much in any of these areas in office for obvious reasons.
The above agenda might sound like mana to some “Liberals” but for the public this is a cocktain of Tory libertarianism mixed with crackpot schemes like national park sell offs and toll roads.
Time to get real folks, the progressive public will never vote in numbers for extreme liberal ideology which contradicts basic progressive values like meritocracy, equality and social justice.
@Caron – Excellent analysis.
@Helen – what empirical evidence do you have to show that Scots are inherently leftward leaning? They may still loathe the Tories but I don’t think there is that much of a difference between the Scots and English. A recent study showed that Scots have become less social democratic since devolution – http://www.natcen.ac.uk/media/788216/scotcen-ssa-report.pdf
@tonyhill/Geoffrey Payne/john mc – Not sure how Clegg’s renege on tuition fees impacted on the Scottish local elections since higher education is devolved and the previous Lib-Lab administration at Holyrood abolished tuition fees.
@jim – Scottish Lib Dems decide policy independently from the federal party. Policy is already made in Edinburgh, not London.
@ Keith Legg/Sean – Mark Littlewood resigned his membership to take up his post at the IEA. It was probably the ignorance of the interviewer if he was introduced as a leading Lib Dem member.
A couple of points.
Bazzasc mentions 16%. There seem to be no complete vote share numbers available for Scotland but one figure based on about 80% of wards put the Lib Dems on 6-7% of first preferences. That is about the same as last year if you combine list and constituency votes but about 1% down compared to constituency votes only. If you project the change forward from 2007-2012 – an exercise which should have no more than comedy/shock value – the Greens could overtake the Lib Dems in 2022.
As for Caron’s conversion to economic TINAism, there are a huge variety of alternatives when you can print money, an option not open to members of the Eurozone. And even if for some reason you wouldn’t or couldn’t do that then you can still borrow. Just look at gilt yields. Or again there are things you could cut easily. Things like a war in Afghanistan that costs £1.5 billion a year on top of the defence budget, that defence budget which runs to the best part of £40 billion, and the aid budget – including subsidies for Pakistani nukes and Indian satellites – that will rise to £8 billion very soon. There are always alternatives and the problem is choosing between them,.
@Angus – the point about first preferences is interesting but I suspect (and I think you’re agreeing) that it’s not totally analogous to FPTP elections. If it does work out at around 8 – 10% then I suppose the silver lining is that at least we haven’t gone further backwards from last year.
For me, though, the real problem with “we still got 16% of the vote” (which I heard Duncan Hames talking about this morning) is still that the 16% is now in places where we don’t necessarily win and where we don’t have huge organisation. I think if we continue with this line we’re in real danger of losing our heartlands without replacing them with something else – and I’m pretty sure that there are others in Scotland and the North of England who feel somewhat abandoned by the Federal Party (though it has to be said not by the Scottish Party or by Willie who are doing a great job fighting against the tide.)
@ Angus McLellan:
“As for Caron’s conversion to economic TINAism, there are a huge variety of alternatives when you can print money, an option not open to members of the Eurozone. And even if for some reason you wouldn’t or couldn’t do that then you can still borrow. Just look at gilt yields. Or again there are things you could cut easily. Things like a war in Afghanistan that costs £1.5 billion a year on top of the defence budget, that defence budget which runs to the best part of £40 billion, and the aid budget – including subsidies for Pakistani nukes and Indian satellites – that will rise to £8 billion very soon. There are always alternatives and the problem is choosing between them.”
Your last sentence puts it well. But politicians like to craft simple messages. Perhaps when they talk in terms of TINA it means they have considered some of the mooted alternatives and rejected them as worse.
We already are “printing money”. There has been a huge expansion in the Bank of England’s balance sheet, from about 6% of GDP in 2008 to about 18%, through its £325 billion QE asset purchase scheme. This process has entailed using new electronically created money to buy government bonds, resulting in the Bank of England becoming a major holder of gilts.
It does this indirectly through the secondary market (the government sells its bonds to private entities, and the bonds are then bought up by the central bank) to avoid the impression that the central bank is simply financing government spending; but that has been the practical effect of what it has been doing.
The distinction is that the stated aim of this policy has been to increase the money supply (or offset the contraction in it caused by private sector deleveraging) rather than to finance the deficit, and that the Bank intends to sell these gilts back into the market as and when private lending recovers. Managing the exit from QE when conditions normalise will clearly be a key challenge, but it is unlikely to start happening for quite some time.
“And even if for some reason you wouldn’t or couldn’t do that then you can still borrow. Just look at gilt yields.”
But the countries that can’t print money (eurozone member states) and which have the biggest economic and fiscal problems are not able to borrow at reasonable rates. They are facing yields on their government debt of 5-7% (or 25% in the case of Greece, which has in effect been shut out of the market), which reflects the credit risks that investors believe they pose.
In part this is attributable to their high and rising levels of government debt (even though in most cases their deficits are smaller than the UK’s), but it also reflects systemic problems with the euro and long-standing labour market and competitiveness problems, of which the currrent account imbalances between Germany and most other euro members are a symptom.
The normal short-term palliative would be a currency depreciation, but such an adjustment in relative prices obviously isn’t possible within a single currency. Thus the whole adjustment is falling on real wages, which is depressing demand. The medium- and long-term remedy is labour market reform that would tackle the underlying causes of wages rising faster than productivity growth, but whether a single monetary policy for the whole euro area can ever be appropriate remains doubtful in my view.
Bluntly, I don’t think the project is sustainable, at least not in its current form. The problem is that any break-up is likely to be disorderly and to impose heavy transitional costs, so – understandably, perhaps – European politicians prefer to kick the can down the road, hoping that a revival in world GDP growth can come to the rescue and leave structural problems to be addressed another day.
In terms of the UK position, it is difficult to judge how much leeway the British government has to borrow at the current low rates. It already needs to shift an extraordinary amount of gilts to fund its planned deficits over the next few years, which leaves UK taxpayers highly exposed to a rise in yields of even 1 or 2 percentage points.
As I’ve always said, this risk needs to be balanced against the risk of a prolonged period of stagnation itself putting pressure on the public finances. I still believe the overall fiscal stance is about right, although the composition could have been better: I would not have raised taxes so soon nor cut capital investment so much.
(Correspondingly I would have cut current spending more, by not ring-fencing the NHS and DfID and adopting an approach to the Spending Review based on zero-based budgeting, as Vince Cable advocated in late 2009. He also argued for a complete nominal freeze in overall public sector pay, rightly in my view, but the coalition decided to allow a low overall increase).
Given the current low yields and the weakness of business investment, I do think there is a case for the government stepping into the breach by topping up its capital spending plans, transferring the money from departments’ resource budgets. This would be fiscally neutral but growth-friendly both in terms of boosting demand (capital spending is usually reckoned to have higher ‘multiplier’ effects than current spending) and, if it took the form of infrastructure investment for example, improving the economy’s productive potential.
This certainly wouldn’t be a silver bullet, but it would represent a shift in emphasis towards a more rigorous focus on projects that have the highest potential economic returns, and thus should actually increase market confidence.
Despite my qualms about the composition of the fiscal tightening, assertions that it has failed on its own terms – because of lower tax revenues and higher spending on unemployment benefits – simply aren’t borne out by the facts.
The UK deficit has come down from 11.1% of GDP in 2009-10 to (a still huge) 8.3% of GDP in 2011-12. The structural deficit has come down from 8.9% of GDP to 6.4% of GDP over the same period.
As the IFS noted recently in their analysis of the most recent public finance figures, the slippage compared to forecasts made a year ago (ie, before George Osborne had to announce gloomier forecasts in the Autumn Statement) has been remarkably small given the economic headwinds: “Borrowing in 2011−12 is estimated to have been only £4 billion higher than forecast a year ago in the March 2011 Budget. This would be considered a small forecasting error even in normal times and this is therefore particularly small given current levels of uncertainty.”
The fall in debt interest bill relative to 2010 projections has been greater than the rise in the unemployment benefit bill, while tax revenues have risen more slowly than planned but have still increased from £514 billion in 2009-10 to £570 billion in 2011-12.
By contrast, in the USA tax revenues are still lower even in cash terms than they were before the crisis (£2.469 trillion in 2012 v £2.568 trillion in 2007 for federal receipts; £3.816 trillion in 2011, the most recent year for which figures are available, v £4.000 trillion in 2007 for total government receipts), even though we are told that fiscal stimuli “pay for themselves” by boosting revenues! People making these assertions really need to look at the actual figures from time to time.