Tomorrow Parliament debates the Fiscal Charter, this debate being a political wheeze designed to test and expose Labour’s position on public borrowing, that appears to be working beyond George Osborne’s wildest reasonable expectations.
The charter demands
3.2 In normal times, once a headline surplus has been achieved, the Treasury’s mandate for
fiscal policy is:
- a target for a surplus on public sector net borrowing in each subsequent year.
3.3 For the period outside normal times from 2015-16, the Treasury’s mandate for fiscal policy
is:
- a target for a surplus on public sector net borrowing by the end of 2019-20.
3.4 For this period until 2019-20, the Treasury’s mandate for fiscal policy is supplemented by:
- a target for public sector net debt as a percentage of GDP to be falling in each year.
3.5 These targets apply unless and until the Office for Budget Responsibility (OBR) assess, as part of their economic and fiscal forecast, that there is a significant negative shock to the UK. A significant negative shock is defined as real GDP growth of less than 1% on a rolling 4 quarter-on-4 quarter basis.
The idea of a charter of budgetary responsibility is not new; under the coalition it looked like this
3.2 The Treasury’s mandate for fiscal policy is:
- a forward-looking aim to achieve cyclically-adjusted current balance by the end of the third year of the rolling, 5-year forecast period.
3.3 The Treasury’s mandate for fiscal policy is supplemented by:
- an aim for public sector net debt as a percentage of GDP to be falling in 2016-17.
The shift from current balance to PSNB means that capital spending is no longer excluded – that borrowing to invest is no longer an option.
Planning for normal times, however, is very reasonable and running a surplus in normal times so that you can borrow during recession was precisely the point of Gordon Brown’s Golden Rule, which demanded that over the economic cycle, the Government will borrow only to invest and not to fund current spending.
The Golden Rule was undermined in 2005 when the reference frame was moved to allow around £20bn more borrowing, and became hysterically irrelevant after the crash of 2008.
Today’s Labour Party is not the party of Gordon Brown’s Golden Rule – it is hard sometimes to see how anybody could be a member of both. So it is surprising that there was every any doubt over Labour’s opposition to the Fiscal Charter.
And yet Labour surprised us all by initially supporting the fiscal charter and only backing down yesterday when it became clear that even Blairites weren’t in favour. The New Statesman reports on this with a little less sober detachment than the BBC.
Clearly there is a battle to be fought over reputations for economic competence, and the Fiscal Charter – specifically the idea of writing it into law – is a trap intended for all other parties, not just Labour. And yet there is a danger here of fighting the 2010 election in 2020.
John McDonnell says
We will underline our position as an anti-austerity party by voting against the charter on Wednesday.
but austerity wasn’t even the determining issue in 2015 never mind 2020. Anti-austerity rhetoric is enormously seductive to the left because it enables you to talk about higher spending without talking about higher taxes. That, surely, will no longer be an option in 2020.
Vince Cable, writes in After the Storm:
In fact (as opposed to the rhetoric and as opposed to the intention of the policy) structural fiscal consolidation in the UK has been less than in any other major economy, and significantly less than in the USA – 1.5% of GDP in 2012 and 2013 as opposed to 3% in the USA.
Perhaps this is why anti-austerity didn’t resonate as a political message. My sense is that if you don’t accept the level of tax revenues as a limit to your spending ambitions, you need some plausible and strong other limit, or you will frighten the voters who will end up paying for it – which is most of them. This is what Fiscal Charters and Golden Rules are all about.
* Joe Otten was the candidate for Sheffield Heeley in June 2017 and Doncaster North in December 2019 and is a councillor in Sheffield.
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49 Comments
I think you’ll find that all chancellors tend to make up their own rules and then try and confound their opponents. That’s politics. But the rules come and go. That’s why the article only goes back to 2005 and debates Brown vs Osborne. I see many economists support borrowing to invest when interest rates are low. I guess that’s how most of us manage to buy our house. There are divisions in all parties as to striking the right balance. The Coalition’s stance (not sure if it is still the LibDem’s) on balancing the books is a little less impressive given that they suspended their commitment by pushing this balancing off by a few years. Do I detect a bit of glee that Labour has differences of opinion as to striking the right balance? Oh for the expert economic stewardship and expertise of Clegg who said in 2011 speech in terms of justifying these such fiscal rules;
“Our first big decision was to clear the structural deficit this parliament. To wipe the slate clean by 2015. This has meant painful cuts. Agonisingly difficult decisions. Not easy, but right.”
Well that worked or did he and Osborne bend the rules they have the cheek to lecture us on. You have to laugh.
Much about Labour, here, but no information about how our party (the party of Keynes himself!) currently sees this, apart from a quote from an ex (if respected) MP. Could do better. Austerity may not have been the determining issue for you ,Joe, but for hundreds of thousands of nurses, teachers and other public sector workers, I think it may well have been key, even if they don’t answer questionnaires in precisely those terms.
Agree with Terry Gilbert. I come to LDV to find out what Lib Dems are up to. This article tells me nothing about that.
Tried to find out what the Lib Dem position is. All I turned up was a statement from the Lib Dems this afternoon lambasting both the Tories and Labour but not saying clearly what their own position is.
Thanks to LDV I know that Tim Farron drives a Volvo but I don’t know how he’s going to vote on this important issue.
Clearly our party has a debate to have on economic policy, and this is a small contribution to that – emphasising the political importance of clear fiscal rules, while criticising the fiscal charter for its lack of room for investment.
So the coalition position, for me, is about right.
Tim Farron takes a similar position today here I think
Autocaptions on that video read:
it
0:11seems to me that this is a key issue at all over the papers today which is about
0:17the Labor Party’s
0:19flopping on fiscal Monday what is the typical Monday why does it matter what
0:26the Conservative Party trying to do is try by putting a straight jacket on the
0:30government government and we never apply anyway to make government in any given
0:35year to bring a surplus in the budget as a stupid thing to force yourself to do
0:40when you go historic low interest rate we believe that liberal democrats
0:44believe that live within our means we need to be physically and make sure we
0:49have a credible economic policy that credible economic policy he better get
0:54capital infrastructure in rail in housing in green industries in bra and
1:00now is not the time to force himself as George Osborne into being on ambitious
1:06that would undermine our economy going forward and let the situation appears to
1:10be that the party high command decided that was the best thing to do was to go
1:19along with the conservatives on this to make sure it all into political truck
1:23now they changed their mind could just as well be by the time this thing goes
1:27online we are clear
1:29is that the one part in British politics at Lisa’s social justice and economic
1:34credibility and it will be the Liberal Democrats and we will continue to be
Is there a clear statement from the LibDems explaining their position ahead of the vote? Are they in support of Osborne (Coalition rules) or not? Yes or No. Will they vote for or against his rules assuming they turn up
I remember this time during the last Parliament when Cleggy lambasted Labour for having no policies and a “clean sheet of paper” when tuition fees were trebled. Short memories hey LD’s?? Where are your policies on this?
It seems perfectly fair to talk about Labour when they are The Official Opposition, in the News & talking about themselves. The proposed charter is largely symbolic & primarily intended to set a trap for Labour. That said, if The British Government ran a surplus we could lend it out & make money on it – it seems like common sense.
It seems to me that the reason for Labours shift is that Corbyn & his team have realised how weak the position of their opponents is – The PLP are a Paper Tiger.
A surplus is fine if it goes towards reducing debt, but to what level does Osborne want to reduce it to? It can’t just go on forever.
There’s big risks in forcing surplus’s when the economy is not ready. I need to see more details of the policy.
Sorry, but as a member of the party of Keynes and Beveridge it’s not good enough for Lib Dems not to mention the issue of the £12 billion (and growing) NHS finance gap (to be met by so-called ‘efficiencies’), and the other gap between cutting working family tax credit and eventually catching up through some long distant living wage. How blowing a further £ 20 billion on Trident next year is going to help goodness knows.
Sorry again, Councillor Otten, but the coalition position is not ‘about right’.,,,, and Osborne is a nasty piece of work. The gap between rich and poor is widening and if our party is to have (or deserve to have) a futureat all these issues have got to be addressed.
Perhaps John McDonnell should use these words.
“We are also told that the law will require net debt to be falling by the end of five years. Saying these things, and putting them into statute, will not actually make them happen, however.
Every Budget and pre-Budget report produced by this Chancellor….has promised falling net debt at the end of a five-year horizon, and every one of those borrowing forecasts has been wrong.
So why would anyone believe his latest forecast, just because he writes it into the clause of a Bill instead of publishing it in the Budget Red Book? Does the fact that it is printed on green paper, given a solemn title and passed through Parliament after being looked at by a Committee of the House make it any more likely to happen, or any more real, than when he stood at the Dispatch Box on Budget day and told us that these things were going to happen?
Who is to be on the receiving end of this great order that will descend from on high, from Her Majesty’s Treasury, to use the full authority of Parliament to impose a duty to secure sound public finances?
Which public body will be quivering in fear, wondering whether it is to be the Treasury’s chosen victim? Well, it turns out that that public body is the Treasury itself…. The Treasury will have the power to make an order that imposes a duty on the Treasury. That will make it sit up and take notice, will it not?”
Those words were spoken by one G Osborne when Labour were introducing a similarly pointless law.
Having listened to Farron’s video it seems that he is dead set against supporting this fiscal straightjacket. Ok fair point in a little jibe at McDonell needlessly committing to this at conference. But now it seems Farron, Corbyn agree it’s ok not to be constrained in this way and to borrow to invest. That’s great. Certainly makes sense to me. But not sure how that squares with Orange bookers on her who have derided Corbyn accusing him of being economically reckless. Sounds like LibDems and Labour much more on the same page.
‘Perhaps this is why anti-austerity didn’t resonate as a political message. My sense is that if you don’t accept the level of tax revenues as a limit to your spending ambitions, you need some plausible and strong other limit, or you will frighten the voters who will end up paying for it – which is most of them. This is what Fiscal Charters and Golden Rules are all about.’
Interesting point this.
McDonnell is right in his arguments that things in the global economy can change. As such there is an entirely reasonable argument against setting rules for the future as if you understood every possibility and setting it in law – which is what Osborne seems to be doing
That said, it was only two weeks ago that McDonnell appeared to buy into the “family-budget” theory of economics, and the Charter, and no one on either wing of the Labour Party seemed to have much to say on the matter. Presumably McDonnell must have had advice that backing the charter at a minimum was uneasy next to anti-austerity politics and economics.
Instead of vague justifications for opposing a government policy that can quite reasonably be seen as a bad idea we should be told what convinced McDonnell to agree with it in the first place. That’s the more interesting question here. I don’t particularly want to be unkind but at the moment Labour policy on the deficit comes across as ‘we believe in running a surplus and would really like one – only we have found lots of reasons not to.’ Arguably this is basically the Conservative/Coalition position, which is something of an irony here. Osborne just presents it rather better.
Corbyn and McDonnell do have time on their side – at least for the moment. But criticism of them over this seems reasonable to me. As the article says nothing is stopping Corbyn/McDonnell wanting to spend 60% of GDP, just you have to raise taxes to match that, rather than rely on borrowing. At some point they are going to have to confront this in a more meaningful way.
I think there is still confusion within the party if we support economic liberalism, or something closer to Corbynite social democracy.
I am strongly against any form of nationalisation and support pretty much everything being privatised, but at the same time we need strong regulation to ensure that our private partners pay decent wages, and the culture of zero hour contracts and job instability is buried.
I think we need to decide whether the party supports 1) everything is privatised / outsourced but with appropriate intervention to ensure corporations don’t mistreat staff or 2 ) a social democracy where essential monopoly public services are state owned, or 3) basically 1) but introducing competition where we can – e.g. open access rail operators.
I think until we have fully decided where we stand on these issues, it is difficult to attack Corbyn. So far he has proposed only the railways, utilities and Royal Mail be in state hands, which are all very popular with the electorate.
If we take rail, personally I want the lot private (including Network Rail), but it makes little sense to support the whole part private monopoly / part state owned / part foreign state owned position we have now, it is a nonsensical mish mash, which leads to bureaucracy, and unnecessary duplication.
@Dave Orbison
“Is there a clear statement from the LibDems explaining their position ahead of the vote?”
Well according to Joe Otten’s helpful quoting of the Lib Dem video’s “autocaptions”, “now they changed their mind could just as well be by the time this thing goes online we are clear is that the one part in British politics at Lisa’s social justice and economic credibility and it will be the Liberal Democrats and we will continue to be”
Is that clear enough for you?
Stuart
I’m still wondering where “in bra” fits in, and whether it has anything to do with Steohen Tall.
David Raw,
I don’t mean to be obtuse. I read your argument as saying that more needs to be spent on the NHS and welfare and therefore the coalition’s fiscal rule was wrong.
I think this is missing the point. Fiscal rules don’t stop you taxing and spending – they do limit borrowing to spend. They are an attempt to answer the question: how much of this spending can be prudently met by borrowing?
The article was about the political merits of a fiscal rule – that they give some confidence to voters that a would-be government knows its limits. But there is also a policy merit: that governments tend to (but not always) borrow too much due to the salience of immediate demands, and knowing that they won’t still be around when most of the payments fall due. There isn’t really a consistent difference between Labour and the Conservatives on this point.
The self-imposed restraint of a fiscal rule is pretty weak, as Simon says, but it is better than nothing.
And as I say, Keynes’ name has given cover for politicians – on all sides – to talk about spending without talking about taxing. That cover will be gone by 2020 – so this money that welfare and the NHS need will have to be found from taxes or other spending. No fiscal rule will spare you that.
Here’s a fiscal mandate we cd get behind:
A target for annual gross public investment of not less than [5] per cent of GDP by 2019-20, to include [xx] new publicly funded affordable dwellings to be built by the end of that year
A target to increase current annual revenue from taxation in respect of avoidance and evasion progressively, and by at least [£50 billion] by the end of 2019/20; and through well-paid employment, increased economic activity and a fair, progressive and balanced overall taxation system to annually increase the level of tax revenue to help close the current budget gap.
To take necessary further steps towards achieving a target for public sector net debt as a percentage of GDP significantly below the 2015-16 level at a fixed date of 2019-20, ensuring the public finances are restored to a sustainable path
To set a forward-looking target for the achievement of a *current budget balance* by the end of the rolling, five-year forecast period, provided that targets to be approved by Parliament for levels of employment, inflation and development of GDP – are achieved.
Like it? Wish it was my work but it isn’t. I’ve shamelessly borrowed it from http://www.primeeconomics.org/articles/j2yorrwlk079fqt4q9fw8e4102k3h4 where you can also get a good set of Treasury objectives in relation to fiscal policy and the national debt. If Corbyn doesn’t want these, then, let us table them as the amendments to the Treasury motion.
Stimpson
“I think there is still confusion within the party if we support economic liberalism, or something closer to Corbynite social democracy”
Mr. Corbyn is a democratic socialist.
The position of the Liberal Democrats is that it isn’t an either or choice. The aim is a sound economy that can support social funding.
This law changes little.
The reality is a profligate Chancellor would soon find him or herself facing a massive run on sterling.
I think there’s a middle line here. The fiscal charter is just a political elephant trap intended to cause the Labour Party problems. I bet Osborne didn’t think Labour would handle it quite so badly though. If you treat it as economic policy then it makes no sense, so there’s no reason why we should consider voting for it.
Having said that, a significant minority of party members seem to be calling for a vastly increased amount of deficit spending. Our current deficit is around 6% which is probably going to be about as high as we get in this economic cycle. That means the average deficit could well be 10-15% over the cycle which is utterly unsustainable. For people who want much greater deficit spending – how much? Are we talking an average of 20-30%? If we’re now in a position of extreme austerity cutting off growth what does deficit spending look like?
The fiscal charter is bonkers.
We are in a global deflationary depression and Osborne is talking of a budget surplus.
The Lib Dem approach has been defective because we have bought into the idea that we in an economic recovery. Well, the price of oil, copper, iron and other vital commodities tells a different story.
@Dave Orbison
” Sounds like LibDems and Labour much more on the same page.”
You couldn’t be more wrong. This is about saying one thing one moment and then doing a complete U-turn. And that’s something Lib Dems need to steer well clear of.
Much as it clearly embarrasses you, based on what they say, Corbyn and McDonnell are clearly “economically reckless”.
The sacked former Labour Shadow Chancellor got it spot on yesterday when he said:
“To go from one extreme to the other is wrong in economic terms, but also it sends the wrong message”.
and when he added:
“But it’s incredibly important that he’s clear and consistent and explains fully, not just what Labour’s position is, but why he backed George Osborne’s surplus a couple of weeks ago and is now against it apparently.”
Another senior Labour MP said this yesterday morning:
“There is now no collective Shadow cabinet responsibility in our Party, no clarity on economic policy and no credible leadership.”
As you perceptively said in your first post: “You have to laugh.”
Peter, I have always thought that, at the top of the cycle, the UK should run a deficit of 2%. A ‘real’ balanced budget or a surplus is associated soon afterwards with recessions. That is not a coincidence. It also perhaps explains why there have been only 5 years of surplus in the last 40 and that Conservative Governments have run more deficits than those run by Labour Governments. The economy needs an annual growth in the monetary base to to grow. The optimum is to ensure this monetary growth is steady and predictable.
And that 2%, by my back of an envelope calculation is around the figure for public investment that we would wish and fund among otherthings our housing ambitions. So aiming for a current budget balance by the end of the Parliament (see my comment above) would be prudent. And I think that this was our position eventually became in the 2015 election.
We should worry less about what Labour is doing and set out in detail what ‘our’ Charter would be. Again, see above for a suggested line on this. If we did that and also campaigned openly for a change in the target given to the Bank of England to a NGDP level target (which I have campaigned here for over many years), we should have an economic policy that promoted the conditions for growth based on stability and therefore predictability.
@ Joe Otten “I think this is missing the point. Fiscal rules don’t stop you taxing and spending – they do limit borrowing to spend. They are an attempt to answer the question: how much of this spending can be prudently met by borrowing?” Joe, as a former cabinet member of a Scottish local authority I well know the difference between revenue, capital and borrowing.
So far as Osborne is concerned the fiscal rule is a political gimmick. He has yet to demonstrate how he is going to fund the issues I raised (NHS deficits, Trident replacement and welfare) – especially given the deflationary effect of his welfare cuts and it’s indirect consequences to tax revenue. As to the so-called northern powerhouse how is that to be funded and what democratic consequences will there be ? I’m sure the people of Redcar would love to know.
My own guess is that we’re going to have a rash of outsourcing with even more public dosh heading in the direction of the top 1% and there offshore chums.
I also still await a clear Liberal Democrat position on tax, spend and borrowing.
Simon – “I couldn’t be more wrong’
Just for a moment let’s say we focus on the LibDems approach to the proposed Fiscal Mandate rather than the Labour Party. I admit to being totally confused by the LibDem’s position as you describe it. I thought we had Clegg, Alexander and Laws preach for five solid years that we need to balance the books and hence the need for austerity. The Fiscal Mandate is an attempt to enshrine the austerity approach which is a direct consequence of the Fiscal Mandate. Is that not correct?
The issue as to whether Osborne is doing this is for political reasons (of course he is) is neither here nor there.
In the video from Farron he rejects the Fiscal Mandate which he describes as ‘stupid’? I agree with him. Presumably you do accept that in doing so you agree that this is a significant change in position for the LibDems?
If not, can you explain why not, preferably by reference to past and current LibDem statements on managing the economy/budget?
If you accept that it is a change of LibDem policy, then if Corbyn is against the Fiscal Mandate and Farron is against the Fiscal Mandate, surely by definition, they are indeed on the same page. The fact that you quote disgruntled Labour MP’s is no more relevant than going back to Alexander boasting about the need for pain and austerity as if it were some kind of triumph.
Bill, 2% doesn’t sound too crazy, though I personally don’t think there’s a rule or “charter” here. Being pedantic, deficits don’t actually matter by themselves – what matters is the size of the debt. If our debt was only 20-30% of GDP we could probably run larger deficits for a while. We’re now at 80% and we know it’s difficult to get that down in he current environment without the economy, so for now I’d probably aspire for something resembling economic growth in rea terms.
The implication is that we are way beyond our means at the moment though, which isn’t what I would have expected from you.
Bill le Breton
“A target for annual gross public investment of not less than [5] per cent of GDP by 2019-20”
I would suggest a more flexible target which looks to target an average over a longer period to allow for the fluctuations that will be inevitable, one of the drivers of poor spending behaviour in the public sector is the “use it or lose it” system. Not helped by politicians complaining of “underspend” (as the LibDems did under the early days of the Labour government). And some have done here complaining that some academies have “underspent” and have “reserves” when you actually need to see what the cause is and what the plan is. You see similar screams with NHS trusts that have differences.
Any investment target nationally needs to improve the way in which measures are produced so as to avoid an increased budget simply driving worse procurement due to the reporting and budgeting.
I would consider this particularly important when dealing with house building as the challenge of getting numbers up will be difficult (not impossible) due to the long terms low construction numbers causing the supply chain to lack capacity and the availability skills to pose problems.
“So it is surprising that there was every any doubt over Labour’s opposition to the Fiscal Charter.
And yet Labour surprised us all by initially supporting the fiscal charter and only backing down yesterday when it became clear that even Blairites weren’t in favour.”
Labour’s initial support and recent change of heart isn’t surprising at all. When the Fiscal Charter was first mentioned, it made sense, even Labour understood that their financial mismanagement meant the UK was more exposed than it needed to be to the 2008 financial crash; if they had followed the proposed Fiscal Charter rule. However, now we have the second/third iteration of refinements to the Fiscal Charter and we are now able to better reflect on matters and take a longer-term view than we were in 2010. It is this which has enabled us to question and find the new details wanting.
Peter slight ambiguity here so I can’t grasp your meaning Peter, “The implication is that we are way beyond our means at the moment though, which isn’t what I would have expected from you.”.
A) we need to reduce the deficit, B) as a monetarist, I believe in the ability of Mon Pol to offset fiscal retrenchment eg how the US coped with their fiscal cliff by using monetary stimulus and of course I don’t think Mon Pol is exhausted, C) this best done by having a nominal target and not a real one or an inflation target. If everyone knew that during the elimination of (most) of the deficit the B of E will hold NGDP growth at 4-5% (I’d say 5) then investors will not be frightened by the scale of the retrenchment (or any other shocks to agg demand). It was this ‘fear’ and caution that underpinned continuing deleveraging and poor investment levels in 2010 following the emergency budget. D) I don’t trust the MPC to give sufficient monetary slack during this process because they may not be committed to maintaining the present seemingly stable NGDP growth of 4%.
PSI – that amendment is political rather than technical. Why? Because we are politicians. In this climate their is aneed for a Charter – Brown and then Osborne vreated that political requirement. So we need one. It won’t get carried but it will be on the recordfor when Osborne fails to meet the deficit demands and the investment demands.
@ Roland. “even Labour understood that their financial mismanagement meant the UK was more exposed than it needed to be to the 2008 financial crash; if they had followed the proposed Fiscal Charter”
As I understand it Labour had no responsibility for the Lehman brothers bankruptcy crash…… the crash had more to do with the (lack of) economic policies pursued by the conservative free market George Bush. It clearly suited Messrs, Clegg, Alexander, Laws, Osborne and Cameron to deny the Lehmann issue at the time………… a stance which caused many of us to shake our heads in disbelief at the time, and for which we paid the price last May..
@Dave Orbison
>i>”Just for a moment let’s say we focus on the LibDems approach to the proposed Fiscal Mandate rather than the Labour Party. I admit to being totally confused by the LibDem’s position as you describe it.”
As I haven’t described it in any way at all, it’s rather strange that you think I have totally confused you.
Could I ask you something: When you said earlier: “Is there a clear statement from the LibDems explaining their position ahead of the vote? Are they in support of Osborne (Coalition rules) or not? Yes or No. Will they vote for or against his rules assuming they turn up?”, don’t you think that was rather silly?
Why couldn’t you simply wait 24 hours and see what the Lib Dem MPs say and do? I know that to do so would mean that you were prevented from making your snide comments, to try and divert attention from Labour’s omnishambles, but surely even you would accept that waiting is a more sensible approach.
@David Raw
“As I understand it Labour had no responsibility for the Lehman brothers bankruptcy crash…… the crash had more to do with the (lack of) economic policies pursued by the conservative free market George Bush. It clearly suited Messrs, Clegg, Alexander, Laws, Osborne and Cameron to deny the Lehmann issue at the time”
Is that what you think? Perhaps you could amplify on that. (Incidentally, I wasn’t aware that anyone thought that Labour DID have responsibility for the Lehman brothers collapse.)
Personally I think Bill Clinton carries a lot of the blame for the Lehman Brothers collapse, rooted as it was in the subprime mortgage crisis. His (perfectly understandable) aim of increasing mortgage lending to low income neighbourhoods, I would suggest, carried a major responsibility for the whole subprime mortgage crisis and the consequent global financial collapse.
See. for example: http://content.time.com/time/specials/packages/article/0,28804,1877351_1877350_1877322,00.html
@Simon Shaw
So how would you like Lib Dems to vote?
As far as I’m aware, Tim Farron still hasn’t said anything about his intentions – but Nick Clegg has just tweeted that he’s voting with Corbyn and McDonnell. Shouldn’t your current leader be taking the initiative here rather than a former one?
Here’s that actual tweet
https://twitter.com/nick_clegg/status/654338568215773184
No sign that Corbyn etc haven’t changed their minds again.
@Stuart
“Simon Shaw: So how would you like Lib Dems to vote?”
I’ve no idea and no particular interest in it. In fact the most interesting thing about it is the Labour omnishambles – truly “embarrassing” as they’ve admitted themselves.
So the Lib Dems voted against, and here is Tom Brake’s comment taken from Hansard:
The Liberal Democrats will not support the charter tonight. Whatever the machinations in the Labour party, our reasons for opposing it are clear: the charter is just as much about fantasy economics as was Labour’s magic money tree. We remain committed to abolishing the structural deficit by 2017-18, and to seeing debt fall as a percentage of GDP in the following years. We will not, however, abandon the critical need for continued investment in infrastructure, and we will ensure that our economy remains competitive in the medium and long term. We are for sound and stable economic policy—something that sadly has been abandoned first by the official Opposition and now by the Government.
The charter is a trap set for the Labour party into which it has fallen headlong, and I suggest that it is also a trap for the Government over which they risk tying themselves in knots. What will happen if the Chancellor discovers that the Government are on course to miss their surplus target but growth is just ahead of 1%? Which of his rules will he break? Economic credibility means that markets, businesses and other investors have confidence that the Government will do what they say, and the charter manifestly fails that test. We will vote no tonight because the charter will simply not work. Its purpose is purely political, and parliamentary time should not be abused in this way.
Stuart,
Tim made his intentions clear on his “Tim talk” yesterday, which you can find on here if you try..
Probably he also made it clear to the Press but they were not very interested. As you can now see we voted against
Stuart – agreed
Simon – no interest? Really? So for 5 years we endured Clegg and co preaching of the need for austerity. I thought you agreed with this in order to balance the books. Tonight a LibDem flip-flop. But rather than address this you prefer to focus solely on Labour’s 2 week difficulty. Speaks volumes. McDonnell made a mistake in agreeing to this in his Conference speech but at least he has corrected it and not inflicted misery over five years as per the Coalition. Someone asked me to name one good thing about the Coalition. Easy, it’s finished.
@Dave Orbison
“But rather than address this you prefer to focus solely on Labour’s 2 week difficulty. Speaks volumes.”
Absolutely correct. But lets not talk about me. Would I assume, from what you say, that you are as embarrassed about Labour’s U-turn on this issue (as on so many others over the last 4 weeks) as the so-called Labour “Leadership” is?
But I’m keen that Corbyn and McDonnell should stay where they are as long as possible. You may well be hoping the opposite.
Simon – no I’m not at all embarrassed. I think McDdonnell made a mistake at conference yes, but I don’t expect him, Corbyn, Farron, me or you to be infallible. Do you? If you do then prepare to live a life of perpetual disappointment. When a mistake is made, I’d hope the person is honest enough to recognise this, be open and honest and to correct it as soon as possible. McDonnell did all of that and it is to his credit. By contrast, no apology from Farron for the Coalitin. A think that is a big mistake. As for some Blairites hyping up the issue, they are mischief making and wouldn’t be happy with Corbyn if he walked on water. I simply do not think a LibDem recovery will take place by attacking Lab//Tory in equal measure as Farron seems to be doing without dealing with the elephant in the room.
The word “omnishambles” was first used to describe one of Osborne’s early Budgets where he came up with the Caravan tax and the Charities Tax if I recall correctly. To be fair, people new to their jobs do make mistakes, especially if they were propelled into post suddenly and against all expectations. Osborne had the previous five years to prepare but could not have anticipated life in Coalition but McDonnell did not have even that time. Give the man a break. It’s better to the right thing even belatedly than stubbornly carry on (Nick Clegg take note) . As for the ‘Rebels’ – shame on them for putting personal animosity of the leadership ahead of fighting the real enemy.
@David Raw – I suggest you re-read my comment. I didn’t say Labour caused the US sub-prime mortgage crisis that subsequently spread through the international banking system and the subsequent crash of Lehman Brothers, only that their actions (and inactions) meant the UK (and Treasury specifically) had a far greater exposure to the banking crisis than it would of, if Gordon Brown had adhered to his original rules and not become overly dependent upon tax receipts from the financial services industry to fund loan repayments on long-term spending commitments… – something they had been warned about back in the 90’s – if memory is correct Alistair Darling wrote about it in his book “1000 days…”
Thus I’m saying that as a result, many in Labour saw the need for a Fiscal Charter, only like all things the devil is in the detail. A lesson from recent history, is that by all means have ‘rules’ but don’t etch them in stone.
@ Dave Orbison,
Many believe that the fiscal mandate is wrong, but the problem with McDonnell, is that his initial support for it ( probably because he knew it was an elephant trap) and his U turn, make him look incompetent in an area that Labour is already seen as weak by the electorate.
I had to listen to Tim’s talk to know what a fiscal mandate is and to realise that I agree with his second position.
Roland
“Gordon Brown had adhered to his original rules and not become overly dependent upon tax receipts from the financial services industry to fund loan repayments on long-term spending commitments… – something they had been warned about back in the 90’s”
If memory serves me correctly, GB used to talk a fairly good talk about de-monopolising the banks in the 90s but then came power, with the attractiveness of vast revenues from the sector, and that fell away. They did know it was a house of cards but simply convinced themselves that their own brilliance had solved the impossible.
@Dave Orbison
“Simon – no I’m not at all embarrassed.
Well you certainly give the impression of being so on this thread – by virtue of your attempts to deflect criticism of Labour. You know what I mean – for instance comments like: ““Is there a clear statement from the LibDems explaining their position ahead of the vote? Are they in support of Osborne (Coalition rules) or not? Yes or No. Will they vote for or against his rules assuming they turn up?”
“I think McDdonnell made a mistake at conference yes, but I don’t expect him, Corbyn, Farron, me or you to be infallible. Do you?”
But it’s not about making a mistake; it’s about the issue of general competence. It’s really a political version of the Peter Principle. Corbyn and McDonnell with 50 years on the rebellious backbenches between them, have been promoted way above their level of competence.
“By contrast, no apology from Farron for the Coalitin. A think that is a big mistake.”
That’s what I’d expect Corbyn supporters to say. What you fail to consider is that Corbyn supporters are not a key target group for the Lib Dems.
“I simply do not think a LibDem recovery will take place by attacking Lab//Tory in equal measure as Farron seems to be doing”
A strange comment. My view is that, in what is a competitive political environment, if you think your competitors are wrong then you should criticise them as appropriate. That’s whether they are the Government or Opposition. At a time when you think a lot of former Opposition party supporters may be very unhappy with the leadership and direction their party now has, it would be truly bizarre to avoid all justified criticism of that party and its leadership.
@Phyllis “Osborne had the previous five years to prepare but could not have anticipated life in Coalition but McDonnell did not have even that time.”
Funnily enough, in that five years Osborne said of quantitative easing, “Printing money is the last resort of desperate governments when all other policies have failed.” and also that “Fiscal responsibility acts are instruments of the fiscally irresponsible to con the public.”
It’s not just Labour that flip-flops, but (with help from the media and some in the Lib Dems) the Tories somehow manage to present their views as if they were consistent and competent. The Conservatives are the party that is doing damage now rather than potentially in five years time, but yet again debate on this site is more hung up about what Corbyn might do one day if he is still leader and if Labour has a majority government. I still see no sign of the Lib Dems rebuilding or finding a direction; it all seems to be about hoping that the “Labour/SNP/Conservatives can’t win here” posters can be successfully dusted off in 2020.
Simon – just to be clear I voted LibDem in 2010. Many others did too. I don’t see how the current non apology position by Farron will begin to win those lost votes back . You sneeringly refer to Corbyn supporters as if they have no free will, independent thought and a slavish devotion to defend no matter what. Insulting those you need to win back will …… Fail.
Alternatively a constructive broad left of centre may provide an alternative to the Tories. That is my humble opinion and I am entitled to it. If you want me to list Labour embarrassments it’s a long list. But I rate the Iraq war, PPI, privatisation of NHS , faith schools, attacks on civil liberties all considerably more important than Osborne’s little stunt. It just so happens regard Corbyn as being on the right side of all these issues, hence my support.
@ Peter Watson,
I have just listened to the Daily Politics Show and PMQ of yesterday and I am sorry to agree with you. I can’t see myself going back to vote Liberal Democrat, too many have failed to learn the lessons of their defeat in 2015.
I wish the party and the many very decent people on here well but I don’t see it as a party that can effectively deal with the major issues confronting society at home or in the wider world, and thanks to reading Liberal Democrat Voice, I now realise that I am more of a social democrat than a liberal.
I now feel as fired -up at seventy as I was by issues in the sixties, and I don’t feel that this is a radical party that can sort out the appalling inequalities and injustices that exist. There has to be an alternative to neo-liberalism which has failed so many, so I’m going to throw in my lot with Jeremy Corbyn.