LibLink: Are the Lib Dems Giving Up More Than the Tories in Government?

Louise Phillips, a former Lib Dem staffer, asks this question in the UK version of The Huffington Post.

There have been a lot of sacrifices from the Liberal Democrats in the past two years. Tuition fees (obviously); mansion tax; free schools. But, and this is the argument I make in the pub whenever someone finds out I used to work for the party, the Tories are giving up more. They have sacrificed long held beliefs on taxation to allow the Lib Dems to raise the tax threshold to £10,000, putting money back into the pocket of most working people in the country. This is no small matter. This is putting money back into the pockets of ordinary people – and it comes at the cost of not letting the Tories scrap the 50p tax rate for the richest, or cutting inheritance tax for millionaires or giving married couples tax breaks. Making the Conservatives give up their tax priorities for Liberal Democrat ones is no small thing.

You can read the article in full here.

* Mary Reid is a contributing editor on Lib Dem Voice. She was a councillor in Kingston upon Thames, where she is still very active with the local party, and is the Hon President of Kingston Lib Dems.

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51 Comments

  • 800 councillors; ,000s of members and activists; any chance of being in government for another generation?

  • David Evans – it was worth it.

  • “They have sacrificed long held beliefs on taxation to allow the Lib Dems to raise the tax threshold to £10,000, putting money back into the pocket of most working people in the country. ”

    Obolx! This is a policy of which David Cameron said “it’s a great idea. I’d love to do it”. Delivering on this will be a significant achievement but lets not pretend that we had to drag the Tories kicking and screaming to deliver it.

  • The Tory leadership was desperate to backpedal on inheritance tax. What looked like a tactical masterstroke in 2007 was a political liability by the time we got to 2010 and the age of austerity. If Osborne’s first budget had contained tax cuts for millionaires it would have been a huge political gift to Labour. Similarly with the 50p tax rate. Osborne may not be much cop at economics but he is a cunning political strategist. While I welcome the policy (which we must always remember hasn’t actually happened yet) it really isn’t that hard to persuade a Tory to cut taxes.

  • Or, “Tories Forced to Boast About Tax Cut Shock!”

  • Geoffrey Payne – I’m not sure you quite realise it, but you’ve got right to the nub of it. Tories don’t share – but they’ve had to, and that dwarfs everything, far more than any concessions we’ve made. Coalition negate their raison d’etre, it is the antithesis of everything they believe in. We have won.

  • @tabman

    So let me get this right… you believe the overriding reason for staying in the coalition regardless of any policy concessions that the party has made, is that we made the Tories share something?

  • Tony Dawson 22nd Feb '12 - 7:51am

    @Tabman :

    “800 councillors; ‘000s of members and activists; any chance of being in government for another generation?”

    – it was worth it.

    The issue is not the coalition (which was worth it to save the economy, the issue is how it has been conducted by the Lib Dems. Those losses are possibly three times what they needed to have been.

  • Grammar Police 22nd Feb '12 - 8:17am

    I think @Tabman’s point is that the main Tory argument against us was always how terrible for the country coalition would be (actually Labour the same). This has proved them wrong. On top of that we have had a number of our policies implemented – surely, what politics is about at the end of the day; our ministers are making hundreds of more liberal decisions every day; the economy hasn’t collapsed.
    Make no mistake, this is a bad time to be in government, cuts are foul whatever party you’re from.

  • Matthew Huntbach 22nd Feb '12 - 10:08am

    jedibeeftrix

    The aim of the Liberals should not be to create a more equal society by punitively taxing the rich

    So you would prefer to tax the poor punitively?

    The argument here is that the amount someone gains in terms of how it can increase their liberty is much more when it is the tax no longer paid when the tax threshold is raised to £10,000 than when it is a reduction of taxation levels at the higher end.

    Your real argument is that it’s easier to tax the poor than tax the rich. The poor can’t easily run off to another country, can’t afford to hire an accountant to find ways out of it, don’t have multiple asset holdings they can shuffle around to avoid tax, don’t have sufficient income coming in that they can afford to say “I won’t work today because if I did I’d pay too much tax on it”.

  • Peebee – beyond the narrow concerns of this parliament, the fact of the coalition is game-changing in strategic terms. I would still believe that even were no Lib Dem MPs returned at the next election.

    Conservatism* exists to provide “strong government”; “it’s my way or the highway”. Forced compromise and political pluralism in such an explicit fashion is the most powerful weapon at chipping away at this forced dichotomy that there is. The longer it goes on, the more this pluralism becomes a fact and can’t be argued away as an abberation – and that is why I so fundamentally disagree with all the coalition nay-sayers who want it ended (step forward Liberal Left and their supporters).

    * and Socialism/Labourism

  • Matthew Huntbach – the tax system is currently weighted in favour of those with unearned wealth and income* and against those who suffer PAYE which is in place because it is easy, not because it is right.

    * – and this includes Schedule D as well as dividends

  • Jedibeeftrix – I wouldn’t disagree, but its still essentially a top-down philosophy.

  • LondonLiberal 22nd Feb '12 - 12:01pm

    @ Louise Phillips

    “They have sacrificed long held beliefs on taxation to allow the Lib Dems to raise the tax threshold to £10,000, putting money back into the pocket of most working people in the country.”

    errrr, no. Just yesterday i was reading on Conservtaive Home that the 10k threshold policy was advocated by Tory MPs years ago, and they were annoyed that we were getting the credit. Compared to us losing our credibility, a huge numbe rof councillors, activists, members and support in the country, the Tories have had to give up remarkably little, mainly because the Clegg quartet accepted the (notably un-keynesian) Osbourne economic plan from which all else has followed.

  • Tabman,

    You have something of a point. Most Tories believe they were born to rule. When their right-wingers on ConHome complain so bitterly about Cameron making “huge” sacrifices in Coalition, it is the mere fact of nominally sharing power that offends them so mightily, rather than any real policy concessions that might possibly have been made.

    That does not mean that either we, or the public at large, need to accept as valid this rather bizarre outlook on life. The reality of the bargaining position is that Cameron could not have effectively governed without us, and that our share of power should therefore have been roughly in line with our share of the vote, 23% to their 36%. The Tories have psyched us out of getting anything like the amount of power and influence that we ought to have achieved within a coalition. Yes, the toffs have made us doff the cap.

    (Or, at least, that’s part of the explanation. Stuffing our mouths with gold and Ministerial limousines is another part of the explanation, one that was more or less explicitly contained in George Osborne’s remark about “paying the top price for the Turkish carpet”. Finding a compliant Lib Dem leader who was delighted to join the Greater Conservative Movement is, in my view, the third part of the explanation for a very sorry state of affairs.)

  • London Liberal – you may not be aware of this, but Keynes’ advocation of supply side spending in a recession is predicated on building up a surplus in the boom. Messrs Balls and Brown continues to run up a deficit.

  • Richard Dean 22nd Feb '12 - 1:00pm

    Tabman – that is very interesting, I hadn’t realised it, many thanks. Could you possibly help another issue too?

    If I am in debt, I work harder to pay it off. So if a country is in debt, surely its population must work harder – which surely means that employment should go up, not down? So why is it going up?

    And other parts of Europe are far worse – 25% unemployment in Spain, and 50% for young people there. It morally offensive, and it’s surely the wrong response to the crisis?

  • Richard Dean – “If I am in debt, I work harder to pay it off”

    Don’t confuse debt and deficit.

    A deficit is when your outgoings are bigger than your incomings. Debt is the total value of your borrowings. When you continue in deficit, your total debt grows bigger and the ammount of interest you need to pay grows bigger. And that’s before you even start to pay off the stock of debt you’ve accumulated.

    Our debt keeps growing becaue we have a deficit – the amount of interest we have to pay to service that debt is also growing giving us less to spend on health, welfare, education etc etc which really is morally offensive.

    To go back to your person analogy, if I have a deficit and a debt I have several options:

    1) I can “work harder” – either spend more time doing the same thing or get a better paid job. But your working capacity is limited and sooner or later you will hit your limit
    2) I can also reduce my outgoings, thereby matching my earnings to my level of expenditure
    3) I can look to restructure my debt, to pay it off over a longer time or to cease capital repayments. But if the lender thinks I’m doing nothing to match my outgoings to my incomings he will charge me more interest (because I’m a greater risk) or eventually just stop lending to me.

    As a country we need to do all three of the above.

  • David Allen – “That does not mean that either we, or the public at large, need to accept as valid this rather bizarre outlook on life. The reality of the bargaining position is that Cameron could not have effectively governed without us, and that our share of power should therefore have been roughly in line with our share of the vote, 23% to their 36%. The Tories have psyched us out of getting anything like the amount of power and influence that we ought to have achieved within a coalition. Yes, the toffs have made us doff the cap.”

    No. Our power and influence is directly proportionate to the seats we have in parliament, and the sensitivity of those seats to being lost in any general election. I suggest you go and add up the size of our majorities. I think we can lose about half our seats if as little as 50,000 votes change hands. Our leaders know this; they also knew that we had no money to fight a second election. One that would have been very easy for Cameron to say “Look at the Libs, can’t be trusted to take responsibility to govern, duck out at the first whiff of grapeshot. Give us the tools to do the job.”

    And he didn’t need to persuade many people.

  • Matthew Huntbach 22nd Feb '12 - 2:10pm

    Tabman

    Matthew Huntbach – the tax system is currently weighted in favour of those with unearned wealth and income* and against those who suffer PAYE which is in place because it is easy, not because it is right.

    Yes, I am very much aware of this, and would very much like it to be shifted towards unearned wealth and income.

    The fact that whenever we suggest this we get howls of anger about it from Tories and Tory supporters in the media shows where REAL Tory priorities lie. They may CLAIM to be all about fostering enterprise through lower tax, but when it comes to it they’d rather tax be kept on earned income than shifted away from it. They’ll usually concoct some sort of argument where a tax on wealth and unearned income is anti-enterprise because it’s an attack on those who have worked hard to be in a position to have wealth and unearned income, but really, I fail to see why keeping some trustafarian in the lifestyle s/he’s accustomed to is more pro-enterprise than letting for someone who’s working their guts out to afford a house keep a little more of their income.

  • Richard Dean 22nd Feb '12 - 2:23pm

    Tabman – Many thanks, that helps, but I am still puzzled. If I am a family with a debt and a deficit and my partner who I support is not working, isn’t it a good strategy for my partner to work? Her income will help us reduce both our debt and our deficit. In this analogy, I thnk of family as the same as country, and brother the same as fellow citizen. I therefore come to the same conclusion – high unemployment is a bad way to solve the problem. Am I wrong in this thinking, and if so, where?

  • I wouldn’t disagree with that, but there is a ubtle point about earned and unearned wealth.

    Take, for example. a comparison between Richard Branson and “Fred the shred”. The latter was essentially a very highly paid employee who had not personally taken risks. The former created a large company and brand from scratch.

    Similarly Branson vs the Duke of Westminster. I have more of an issue with taxing wealth creators than wealth inheritors, but the distinctions are subtle and not easy to legislate for.

  • Matthew Huntbach 22nd Feb '12 - 2:33pm

    David Allen

    The reality of the bargaining position is that Cameron could not have effectively governed without us, and that our share of power should therefore have been roughly in line with our share of the vote, 23% to their 36%.

    The howls against us in the right-wing press (the Les Ebdon case the latest) show why this is not so. We may think we ought to have a 23:36 share of the power, most of the country is too innumerate to understand this argument. The Tories aren’t going to make it, and Labour aren’t going to make it, and their supporters in the press aren’t going to make it, and when we do it on our own, they come back and say it’s just us whingeing.

    If Cameron had not been able to govern effectively without us, he’d have governed ineffectively without us and blamed us for it. A minority Tory government would have been on a winner either way – if the economy did ok they’d be saying it’s thanks to us but give us a majority so we can do it properly, if it did badly they’d say it’s all due to the uncertainty caused by there not being a majority government, so get rid of the cause of that (Liberal Democrat MPs) and it would all go much better.

    Tabman is right in this one – all the local parties I know threw everything they had into the last general election, and were in no position to mount a serious fight should there have been another one coming along soon afterwards. What we NEEDED to be able to push harder was mass support in the country saying “we are with you – if you pull out of the coalition because the Tories won’t give enough, we’ll back you with our votes”, and a friendly Labour Party saying “if you pull out, we’ll offer generous terms for an alternative coalition”. And large amounts of flying pigs, obviously.

    Having recognised this early on, since mid-May last year I’ve been engaged in a largely fruitless task of trying to persuade all those “I’ll never vote for you again” people that their attitude is exactly what Cameron requires if he is to keep the current government going till the end of its term. Clegg’s handling it badly, of course (I did warn, here in LDV more than anyone else at the time of the leadership election) – but if the reaction to those of us gearing up for a fight with him within the party is “I still won’t ever vote for you again”, it does rather make us think “why bother?”.

  • Richard Dean – yes, its good for your partner to work, but if you’re paying her to work all you’re doing is increasing your own stock of debt and giving yourself a bigger deficit. If your partner goes to work for someone else then you don’t have a problem.

    To go back to countries – using the Government to employ people means either raising taxes or borrowing more to pay for it. Only by producing things that we can seel to other countries will we not be “paying our partner”.

  • Oranjepan – “I agree with Tabman that there is a strategic win for LibDems in having coalition, but also with David Allen and Matthew Huntbach that this must be weighed against the practical achievements made in our name.”

    Typical Lib Dem fence-sitter 🙂

  • LondonLiberal 22nd Feb '12 - 3:12pm

    Tabman – yes, i knew that about Keynes, thanks . We obviously didn’t build up a surplus during the boom, which was a mistake. But we have great borrowing capacity. Borrowing to build desperately needed new housing would add to our deficit in the very short term but would bring it down much quicker in the short to medium term thanks to economic and social multipliers. David Laws himself explicitly recognised this when he allocated £500m of his initial £6bn of savings during his short cabinet career to kickstarting stalled housing schemes.

    Sadly Conservative policies of retrenching the state in such a dramtic fashion are having the effect of sucking so much demand out of the economy that we will have much lower and much worse economic growth than necessary, which we are seeing now. Naturally, one will wonder how this will look to the world markets but they are worried about sustainable economic growth as away of paying off debts. Current Tory policy will itself for this reason cause poorer ratings from Moodys et al (although frankly i doubt their competence and deplore their power and, as long as we have a growth strategy, i think we should ignore them as they rated Lehamn Brother very highly until the day they collapsed).

  • London Liberal – demand is being sucked out of the economy by retrenchment in the Eurozone; that of course also being caused by unsustainable deficits and borrowing.

  • LondonLiberal 22nd Feb '12 - 3:29pm

    Tabman – that is certainly adding to it but it is not the sole reason. You are in danger of swallowing the Tory line…

  • LL – if you’re going to tackle the growing deficit you’ve got to reduce spending and/or raise taxation income and/or grow. Raising taxes takes demand out of the economy too. Gorwth is always going to be dificult in a worldwide recession. Refusing to tackle spending would lead to increased interest rates reducing the capabilities of business to expand.

  • Malcolm Todd 22nd Feb '12 - 4:04pm

    There are many things “sucking demand” out of the economy: government austerity is undoubtedly one, so is Eurozone retrenchment; so is the collapse in asset values, which is essentially reality coming back to kick us all after 20 years of illusory boom. I suspect one fundamental problem (there’s never just one) is that Western economies have passed the point where they can grow real production at 3% and more a year, but the tendency for wealth and income to accrete to those who already have the most remains as strong as when that growth was possible. It was continuous growth that enabled the rest of us to more or less keep up with the growing prosperity of the most successful occupiers of wealth. As growth vanishes and the centripetal action of money continues, those at the bottom of the pile start to get shaken off.
    Impressionistic stuff — I’m no economist, after all. But multiple degrees in economics seem to bear no relation to chances of getting the analysis demonstrably right…

  • Malcolm Todd 22nd Feb '12 - 4:10pm

    @Tabman – there are other options, actually: printing money to meet the gap, and reneging on existing debt. (Might as well do both together, of course, as if you default on the debt you’ll have no other way to close the deficit.)
    I doubt they’d work. (Well, in the short term they might — but then what?) Not sure any of the other options are working either, though.
    Or to put it another way…

  • LondonLiberal 22nd Feb '12 - 4:21pm

    Tabman – thanks for the economics lesson. It’s not news to me that to close the gap between income and expenditure you either increase income, reduce expenditure, or both. I think we’re a little beyond that level of debate – i was talking about how we do that. And, to re-state, if we borrow a little more in the very short term, we create jobs (real jobs in construction, not adding to civil service payrolls), add to our nation’s infrastructure and asset base, and reduce the social costs of poor and insufficient housing (where it is needed). To give one example – if we could house more people in social housing at social rents, we would reduce the costs to the state of housing people in the private rented sector, which would reduce demand in that sector, which would alleviate pressure on rising rents, making life easier for the 14% of people who rent privately (22% in London where rents are highest). We would also reduce the impact on poor health, poor education and labour market immobility caused by poor / insufficient housing. The economic case is overwhelming, but sadly we have allied ourselves with a party ideologically opposed to building homes that poor working people can afford to live in.

  • LL – “thanks for the economics lesson” – my pleasure 😀

  • Richard Dean 22nd Feb '12 - 6:47pm

    Tabman –

    I have to say that I am highly skeptical of Tabman Economics. The financial crisis is said to be global. If I expand the analogy to make me a country and my partner another one, the exports argument falls away, and the answer really is for me to help my partner find work.

    Investors won’t invest in creating jobs if they can get higher profits investing elsewhere. What they seem to have found is that investment in the financial markets can bring huge profits – providing everyone colludes to convince themselves that government debt is risky and so governments must pay more to borrow.

    The slump of the 1930’s was not really solved until the Second World War started. The law altered the outlook for proifts, providing higher profuts for thiose who emploted people to support the war effort, and providing the threat of foreign invasion and loss of future profits to invaders.

    So I suppose the answer is to alter the profits game in some way – prisoners dilemma approach. Thoughts?

  • Richard Dean – unsustainable profits lead to crashes, as you may have noticed. Insulation from loss is the issue. In the 1930s banks were allowed to fail. Now they are too big to fail.

  • Tabman, Matthew Huntbach,

    Sure, it would have been a bit scary to have driven a harder bargain with Cameron, given our lack of money for a second election should Cameron have refused to deal. Sure, if Cameron had walked off in a huff, he might possibly have nevertheless managed to fix the blame on the Lib Dems for the resulting instability. Possibly.

    Now, take a deep breath and look at the tactical balance from the other side. Cameron had led the Tories in oppositiion for four long years. Finally he got the chance to fight the most unpopular prime minister for a very long time, and he failed to beat him outright. Had he failed again in making a coalition deal, his colleagues would have been sharpening their knives. He was desperate to make the deal, he had much more to lose than we did, and he must have been scared rigid. Eton taught him not to show it.

    We blew it.

  • David Allen – as sure as you don’t like Nick Clegg, if there had been no deal we would have got the blame. Cameron made the biggest advance of any Tory leader since the war in a system rigged against him (albeit not as much as its rigged against us). His party were not going to ditch him as many would have been itching to go to the country again for “one more push”. If anything he’s far more vulnerable due to the constant stream of concessions he’s having to make to us.

    Your viewpoint is wishful thinking designed to prop up your antipathy to our leader.

  • “If there had been no deal we would have got the blame”

    What, absolutely irrespective of the circumstances, Tabman? Would we have got the blame, for example, if we had insisted there be no top-down reorganisation of the NHS, and Cameron had refused to maintain his pre-election promise on that issue and broken off talks with us?

    Your viewpoint is wishful thinking designed to prop up our discredited coalition and our leader.

  • The reality is that perception is everything. Conservative allies in the press would have painted us as “unreasonable” and “tail wagging the dog”.

  • LondonLiberal 23rd Feb '12 - 11:04am

    Orangepan – I don’t think i was arguing the party’s case at all! i’m a little confused by that statement to be honest. i was arguing for what we should be doing, not what we are doing. I work in housing and planning in local government and seeing what we are allowing to happen in those policy areas, either through neglecting to notice, or because we agree with it, or because we are losing battles inside government but not telling anyone about it, is making me despair. i know there’s a bigger game, but at some point you have to say enough is enough, as sarah teather (valiantly) tried to do by being away for key welfare refom bill votes. Everyone has their own idea of what is acceptable to compromise on. the problem is that our Ministers seem to actually believe the rubbish that they are pushing forward in the Tories’ name. There’s collective responsibility and then there’s utterly losing your values, and i fear that too many of our lots are doing the latter in the name of the former.

  • The main thing that the Lib Dems have given up is trust. This massively outweighs anything the Tories have conceded. In the next election in every Con/Lib Dem marginal the Tories will be saying – you can’t trust the Lib Dems, look how they broke their pledge on tuition fees. It’ll work, too.

  • LondonLiberal 27th Feb '12 - 1:43pm

    jedi – the only conclusion that you can draw from the referendum is that the country thinks that FPTP is better than AV . Making the leap to then say that, because of the AV vote, most people in the UK think that the LibDems should get a share of power in the Coalition government proportionate to their seats in parliament rather than their share of the vote, is way beyond what you can justifiably extrapolate from the result last May, and it’s mischieveous if not downright dishonest to make those claims.

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