What factors Lib Dem members think are MOST to blame for UK economy remaining in recession

Lib Dem Voice polled our members-only forum recently to discover what Lib Dem members think of various political issues, the Coalition, and the performance of key party figures. Some 500 party members have responded, and we’re publishing the full results.

A mix of factors, but global / Eurozone crisis blamed most for UK recession

LDV asked: Which of the following do you think is MOST to blame for Britain’s economy remaining in recession?

    19% – The deficit left by the Labour government
    29% – Global factors and the debt crisis in the Eurozone
    7% – The Coalition’s economic policies and austerity programme
    6% – Banks not lending out money to businesses which need it
    33% – All the above pretty much equally
    6% – Something else
    0% – Don’t know / No opinion

A range of answers to this question, with a plurality (33%) of our sample of Lib Dem members saying the first four factors are all pretty much equally to blame for the British economy remaining in recession. The next most popular answer is the current global situation and the Eurozone crisis (29%), with one-in-five laying the blame squarely at the door of the last Labour government’s over-spending. Of those opting for ‘something else’, most respondents chose a specific combination of these factors. Incidentally, I think this may be the first question ever posed in a LibDemVoice survey which has produced zero ‘Don’t Knows’!

This question was asked by YouGov in early July, though I added the option to choose ‘pretty much all equally’. Voters as a whole ranked the factors in the same way as Lib Dem members, blaming in the following order: the global situation, Labour’s deficit, the Coalition’s policies and lack of bank lending.

Here’s a selection of your comments:

Our previous peak was based on an unsustainable debt bubble. Labour are guilty of committing to spend as if it would never burst.

The government should be candid: yes, part of the problem lay with global factors, but some lay in their control.

The GDP level (corrected for inflation and seasonal affects) has settled down to more or less where it was in 2005/2006. Compared to this GDP in the 2007/2008 period represented a “bubble” which has now burst. I believe that whatever we do GDP will stay roughly where it is for some time, and this is due to global factors and things like the banking crisis.

The previous Gvt’s policies were to blame but not uniquely so – the same policies were being carried out in many western economies including the US

Harping on about Labour being responsible for all our woes makes the coalition look as if it has a simplistic understanding of the problems our economy now faces.

The main problem is a lack of confidence in the economy – businesses need to be persuaded to invest.

Austerity isn’t working blaming the previous government isn’t washing with the public. I have never supported these public spending cuts and the welfare cuts…very against my social liberal philosophy

I see the dead hand of the Treasury and George Osborne cutting capital plans for easy savings and delaying badly needed investment. The fiscal programme of revenue cuts and tax increases is basically fine.

  • Over 1,200 Lib Dem paid-up party members are registered with LibDemVoice.org. Some 500 responded to the latest survey, which was conducted between 3rd and 6th August.
  • Please note: we make no claims that the survey is fully representative of the Lib Dem membership as a whole. However, LibDemVoice.org’s surveys are the largest independent samples of the views of Lib Dem members across the country, and have in the past accurately predicted the winners of the contest for Party President, and the result of the conference decision to approve the Coalition agreement.
  • The full archive of our members’ surveys can be viewed at www.libdemvoice.org/category/ldv-members-poll
  • * Stephen was Editor (and Co-Editor) of Liberal Democrat Voice from 2007 to 2015, and writes at The Collected Stephen Tall.

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    18 Comments

    • jenny barnes 9th Aug '12 - 10:08am

      I wasn’t asked. However, the continuing slump is due to economic illiteracy on the part of the government. We’ve known how to deal with a demand failure depression since the 1930s. So why aren’t we doing it? And don’t talk about maxing out credit cards. We have our very own fiat currency; we’re not in the Euro (thanks to Mr. Brown) .

    • Beyond noting that traditional economists were very skeptical the of the Coalition’s deficit reduction and growth strategy,, there’s not that much to say.

    • I’d be interested to know why the rest of the world is growing if the cause for britain is the global situation. I mean yes if the global situation was better we’d be fine, but everyone else is doing okish (or at least, less badly) and it seems that to answer the question meaningfully you have to explain this difference.

    • Richard Dean 9th Aug '12 - 11:33am

      It looks as if, like many economists, the general public don’t really know. Maybe things are a lot worse than we are being told. Or else it’s different from the 1930’s.

    • Jenny Barnes writes: “We’ve known how to deal with a demand failure depression since the 1930s” – but surely only up to a point.

      What Jenny is probably thinking of is borrowing, but this recession has been caused by large scale private borrowing (and banks lending) in the USA, the UK, Ireland, Spain and doubtless a few others. Unfortunately the quick fix has been huge government borrowing (to bail out banks) already. The UK could respond by more massive borrowing (it is increasing as it is), but this requires someone to lend and choose the rate of interest. I am not sure how not being in the Euro really helps. If Jenny thinks we can devalue that will only push up interest rates a lot more. In any case, unless carefully directed, a boost in spending could largely go on imports (good for other countries).

      Unfortunately the only answer is to try to maintain a fine balancing act and try to work in concert with other countries(particularly EU countries, as that is where a lot of our trade is and where there is a developed mechanism for working together ).

      Naturally lots of people believe in simplistic solutions, which is why Lib Dems will take a lot of flack for an intractable problem.

    • David Allen 9th Aug '12 - 12:54pm

      Good post Martin, except that the answer to your comment:

      “Naturally lots of people believe in simplistic solutions, which is why Lib Dems will take a lot of flack for an intractable problem.”

      is:

      Osborne, backed by the Lib Dems, believed in a simplistic solution. He said that “expansionary fiscal contraction” would bring down the deficit and get the economy moving again. It didn’t, and for that reason, Lib Dems will take a lot of flack.

    • David Allen: I am not sure exactly what Osborne has and has not said, nor can I make much sense of “expansionary fiscal contraction”, but in practice, Osborne has not done much different to anything Alistair Darling (or Balls for that matter) would have done. As Simon McGrath intimates, the government are already borrowing close to what it dare borrow.

      All politicians tend to subscribe to simplistic solutions. Vince Cable has earned plaudits for being somewhat less simplistic. Nevertheless, whatever the cause governments who oversee a recession are unpopular. As others have commented, 2010 was a good election to lose. In terms of tactics (as opposed to wider interests) Lib Dems would have been more self serving if they had not agreed to full term coalition, but engineered a follow up repeat election in the following October.

    • Jenny may answer, but I assumed her comment about not being in the Euro (thanks to Mr Brown) was ironic. She mentioned our own fiat currency, which is taking a potshot at sterling, I thought.

      Incidentally why are so many on here using the US spelling “skeptical”, rather than pour own “sceptical”?

    • Sorry, pedantry Round 2 – ‘flak’, not ‘flack’.

    • jenny barnes 9th Aug '12 - 4:02pm

      “What Jenny is probably thinking of is borrowing”
      No. We don’t need to borrow, we can print it.
      And I agree that we need to run the planet more economically, but what’s happening in Britain is just economic illiteracy.
      Construction workers are idle when we need more social housing, and a large part of the £120bn deficit (if that’s the right number) is going into automatic stabilisers ( unemployment pay for the idle construction workers) and housing benefiit for people paying too much rent because there aren’t enough places to live. And all because we’ve been bamboozled into thinking we can’t make any more of those electronic marks than mean money.

      So, no, I don’t think the £120 bn is either large enough or sensible; I want to see targetted deficit spending. The economy is effectively still below where it was in 2008. Now maybe that was unsustainable (not that any of the mainstream said so at the time) but since then we should have had around 8 – 10% growth. There was growth till shortly after the emergency budget after the election, and since then nothing. How long are you prepared to wait till you realise that expansionary fiscal contraction is nonsense?

    • Well I don’t think we need to print money,
      But I think Osbornomics and neoliberalism in general have been weighed and measured. Spin this whatever way you want,. Fact is the coalition was formed to strengthen the economy. It stalled a tentative recovery in the first few months, sent it into a double dip two years later and by all accounts may lead it to a triple dip. Np electoral reform, no house of lords reform a tail spinning economic record, Not Good,
      Maybe the best thing for the economy would be for the Lib Dems insist on Cable for chancellor and use the inevitable rebuttal as an excuse to walk. Coz frankly, I don’t the Tories are up to the job. They’ve spent so long demanding a smaller state, cuts to red tape and various other orthodox right-wing hobby horses that they have no where to U-Turn.
      Sorry for the American skeptical, it slips in without me noticing..

    • andrew purches 10th Aug '12 - 10:02am

      There are almost certainly many interlinked causes for our economic problems, and these can be summarised in the realisation that growth is not the required aim for a good life. We have woken up to the fact,at long last, that,along with pretty well all aspects of the “market”, retail is a cancer in our midst which is robbing everybody: Supermarkets cut their suppliers margins to the bone, their customers have been forcefed on a diet of doubtful bargains, clothing is expensive if quality is sought,or rubbish if not, the cost of transport and travel is outrageous, along with the supply of energy and, worst of all, the” retail” activities of Banks is making the ownership of good affordable housing out of the question for an ever growing number of people. Add VAT at 20% on to all this,where applicable, and is it any wonder that the majority now believe that the high street and the retail parks are places to be avoided along with the stuff on offer. Perhaps price maintenance, introduced in the thirties and only got rid of in the early sixties is something to reconsider. It certainly made for a fairer society for most.

    • Regarding monetisation of Govt spending, can someone link to the Financial Times leader on Sunday, reported in the Grauniad this morning?

      Sorry, Jenny, I got your meaning wrong previously.

    • Helen Dudden 15th Aug '12 - 10:16am

      The cost of travel is not going to help the situation at all. In the last few weeks I have travelled to Paddington on two occasions having to stand all the way, for over an hour and half, train was late again, and another cancelled.We must have the new homes and as one comment said, the building trade could do with a helping hand. I also, have made comments on the subject of housing benefit. If the price of renting was not so steep, this could be reduced. I think that the subject of the Euro is not helping and it makes the market a little jumpy. Vince Cable is known for being a positive, honest element within the Government, I think he would do well in the position of Chancellor.

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