LibLink: Nick Clegg and Danny Alexander on the Budget

Writing in The Observer Danny Alexander says,

Labour’s approach of denial and complacency would bring higher interest rates, fewer jobs, less growth, more debt. It exposes us to much greater risks of financial irresponsibility – being forced by others to cut harder, with less care and control. That is the position of some European countries – it must never be Britain’s. There is nothing progressive about the consequences of denial and delay.

The coalition has chosen responsibility. We are restoring order to the nation’s finances, credibility to our position internationally, and confidence in our economy that is essential for growth. Having chosen responsibility, the question is how to deliver the unavoidably tough measures required. Our answer is: fairly. Fairness is a key coalition principle and has been applied in the most difficult budget for 60 years. We have ensured the measures’ impact is progressive. Whether as a share of income or spending, the best off will pay most. In protecting the least well off, we have focused efforts on child poverty and pensioners. The budget lifts 880,000 low-income workers out of tax altogether, substantially raises child tax credit to help the most vulnerable and uprates the basic state pension in line with earnings immediately – with a “triple lock” to protect pensioners in years where earnings are low.

You can read his full piece here.

Over in the Independent on Sunday it’s Nick Clegg’s turn, saying,

Without a concerted attempt to bring sense to our public finances, interest rates will rise so tipping the economy into a double-dip recession, confidence will evaporate leading to higher job losses, and our children and grandchildren will be condemned to spending billions serving this generation’s debts at the cost of investment in their own schools and hospitals.

It would have been a moral betrayal to have chosen the easy route, ducking the difficult decisions today at the cost of jobs and prosperity tomorrow. That is why the reaction of Labour MPs was so striking. After 13 years in government, they slipped into the worst form of opposition politics – in denial about their responsibility for the mess they created, in denial about the true state of the economy, in denial about the difficult choices we face…

The coalition government is trying to grapple with biggest challenge of all: how to balance the books but do so as fairly as possible. In the past, every time budgets have had to be cut, the poorest have suffered the most. This time, the richest are paying the most, not just in cash terms but as a proportion of their income. This is completely different from the budgets of the past; this was a coalition Budget.

Look at the proposals in detail and you will see how we have tried to get the balance right. First: we have reduced taxes on earnings for those on lower wages, by increasing the income tax threshold by a full £1,000. That has freed nearly 900,000 low earners from paying income tax altogether and put money back in the pay cheques of millions more. That is a vital first step to achieving the Liberal Democrat ambition that the first £10,000 you earn should be tax free. While Labour took money from the poorest and demanded they fill in forms to get some of it back, we have enabled people to keep more of the money they earn and make their own choices about how to spend it.

Second: we have increased taxes on unearned income by putting up the rate of capital gains tax for higher earners by a full 10 percentage points. No longer will a banker or a hedge fund manager be able to pay less tax on their capital gains than their cleaner does on their income, as they could under Labour.

You can read his full piece here. The newspaper also reports:

Four Lib Dem MPs have put their names to an amendment to the Finance Bill, addressing concerns over the fairness of the VAT increase by demanding “an assessment of the impact of the increases it proposes upon business, charities and households across the income and age groups”…

Andrew George, the Lib Dem MP for St Ives, who tabled the Budget amendment, has stressed to colleagues that he is not seeking to trigger “nuclear war” in the party, but believes the issue of fairness should be addressed. But his action conflicts with his party’s attempts to hold the line in favour of the Budget.

Lib Dem MPs have resisted the temptation to make any official protests against the Budget – refusing to sign Labour motions opposing the VAT increase, for example – despite their deputy leader, Simon Hughes, suggesting in the Commons that the party could “come forward with amendments” to make the Budget fairer.

But Mr George’s amendment could lead to more widespread dissent. Six Lib Dem MPs are understood to be unofficially met Labour counterparts late last week to discuss co-ordinating their opposition to contested Budget proposals. Two early day motions protesting about the rise have attracted the support of almost 70 Labour MPs.

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9 Comments

  • Clegg’s defence of the VAT rise is rubbish. Really, just awful rubbish:

    “…when it comes to a choice between taxing what people choose to buy and taxing work, it is liberal to come down on the side of consumption rather than payroll taxes. It has been part of a long liberal tradition, from John Stuart Mill to Jo Grimond, to encourage work and tax unearned wealth and consumption instead.”

    I particularly liked this comment on the Indie article:

    “Like just about every other Lib Dem voter at the last election, I feel like a right chump. For your sake, Nick, I hope the Tories have a space for you in their party because your one’s finished at the next one. “

  • These lib dem budget justifications are getting really desperate.

  • One of Dany Alexanders comments is subtle but downrigfht scary .

    “Our changes support poor children and pensioners (but) increase work incentives because work is the best route out of poverty.”

    The but in the middle of the sentance seems to indicate that Danny is referring to the cutting of benafits rather than any incentives to work that there is in the budget . If he was referring to any incentives the normal word to be used would be ‘and’.

    Now if this is a simple gramatical mistake I hate pedantory discussions so no promlems at all . If the apparent implications of the sentance are correct however this means that a senior Liberal Democrat believes that the main way to incentivise the unemployed has to be to cut their benefits from the current very low level that they are. It could indicate that some in the Lib Dems actually believe in this agenda as a matter of principal rather than financial necessity. (Thats the Tory agenda that the unemployed are somehow a major cause rather than a symptom of the problem).

    I would find it very distasteful if senior people in the party did hold these views . Perhaps I am misreading this …perhaps not . I would value your opinions.

  • Tony Greaves 27th Jun '10 - 1:07pm

    Does anyone really believe this rubbish that they are peddling?

    If so, why were we saying quite different (and often opposite) things during the election campaign? (The stuff about Greece just does not wash frankly).

    Tony Greaves

  • John Fraser 27th Jun '10 - 5:39pm

    @Tony

    Genuine question to Tony Greaves .

    I understood that you had spoken in favour of the Coalition at the merger conference .??

    I was ill and could not attend but would have voted against . I understand I would have been in a small minority. Curious as to whether your opinion is still the same ? We are a party that should be willing to enter into coalitions , but the workability of coalitions depends on the two parties having somthing significant in common . Whlist the Conservative party remians probibly the most right wing mainstream party in Western Europe , are we not just going to be faced with defending the indefensible again and again .

  • Does anyone really believe this coalition will last?

    For the sake of the many poor who will suffer because of this budget please get out of this coalition. Then at least it looks like we were not in cohoots with the tories and we still remember our policies!
    I watched Vince Cable on the politics show this morning. I am ashamed.

  • Ruth Bright 27th Jun '10 - 9:07pm

    At least Nick Clegg had the decency to look uncomfortable when Osborne announced the abolition of the Health in Pregnancy Grant – Danny Alexander could hardly contain his enthusiasm.

    We have a frontbench of rich males lecturing single mums on how they should go back to work but without any strategy to help them do so.

  • I have been a Labour voter many years I was at Uni during the horrendous Thatcher years. I am the opposite of some of your members who are thinking of defecting to the Labour Party. Personally I feel let down by Labour and am considering the Liberal Democrats. I am sure there must be other Labour voters too who feel the same as I do. Labour have done many good things eg rebuilding many schools that had been left to rot by the Conservatives, minimum wage etc but they appeared to lose their way and become irresponsible/complacent. They did not tackle the benefit fraudsters which causes a lot of resentment amongst ordinary working families – they got it badly wrong in making people better off on welfare than working . Of course the poor members of our Society should be helped and without taking away their dignoity. How you take care of your poor and compassion are the sign of a civilised society not necessarily a wealthy one and always should be. I can only imagine how it must feel to be constantly worrying about paying your bills and seeing the country around you enjoying wealth whilst you are unable to feel a part of society.

    I believe too that you have potentially a very good leader in Nick Clegg, that his intentions are actually good and that he may just be a honest politician. I have listened to a lot of what he has said and watched him perform at PMQ and Face the audience and thought he performed very well and with confidence and has a different idea o to Cameron of what constities fairness. It was clear to me that he also wants to tackle the Bankers more than Cameron (who looks very uncomfortable over the issue). I understand the dangers of doing it unilaterally however on principle I am not sure where Cameron stands. I believe the Lib Dems are in a very difficult position – what do you have to give way on for now to achieve electoral reform? This may be your best chance for many many years to achieve electoral reform. The fact is that you came third in the election, probably undeservedly and unrepresentative of how the electorate actually felt. I believe more people like myself would have voted for you if they felt it actually counted I and changed my mind in the final seconds and remained with Labour. The LibDems do not have a strong mandate to negotiate with the Tories though clearly you have had an effect on the Budget. Apparently it has been received favourably by the Country ( for the moment) which will make Cameron/Osborne feel more confident perhaps about pushing through their own agenda. I strongly believe for a fair Britain we need electoral reform and wish Clegg well in achieving this. I think he is genuinely a Liberal – if he had wanted to join the Tory party he has had ample opportunity and I believe the offer of a Tory safe seat which he has turned down. The right wing media and Labour will of course try to drive a wedge between Clegg and his Party – clearly they have their own agenda. The Lib Dems would do well to resist it. One last note – I do think Danny Alexander appears smug and a little sychpophantic over Cameron – he appears to be enjoying the power – perhaps he might defect to the Tories?

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