Nick Clegg’s Letter from the Leader: “Behind the Budget – economic analysis, confidential briefings and cottage pie”

Nick Clegg’s latest letter to supporters focuses on this week’s Budget taking us behind-the-scenes of how it was developed, and highlighting the Lib Dem successes alongside the challenges still facing the UK.

libdem letter from nick clegg

Agreeing the Budget is a long and painstaking process.

It started at the beginning of the year, with a presentation by the Chancellor to the Quad (that’s me, him, the PM and Danny Alexander). The information is confidential enough that everyone in the room – even the PM – has to give back the print outs at the end of the meeting for them to be locked away in the Treasury again.

And the discussions on the fine details of our policy plans went right up to the last minute with a succession of emails and phone calls between our offices agreeing changes to the small print.

The series of meetings in between were, as ever, all absorbing, as we traded proposal and counter-proposal and, slowly, a consensus emerged. The one that sticks in my mind most of all was held on a Sunday evening, in an otherwise deserted 10 Downing Street, right after our Spring Conference.

It being a Sunday evening, when most of us would have given anything to be at home with our families, someone laid on dinner. We all had cottage pie as we pored over the figures and agreed the plans.

And at the end of all that economic analysis, confidential briefings and cottage pie, I think we put together a Budget Liberal Democrats can be really proud of.

We cut taxes for people on low and middle incomes: ensuring that from next April no-one will pay tax on the first £10,000 they earn – a total £700 tax cut for millions of working people.

We stopped a planned rise in fuel duty, helping people with one of the biggest worries they face: how to afford to fill up the tank to get to work.

And we’re backing people who want to buy a home with a new scheme called Help to Buy which effectively makes the “bank of mum and dad” many first time buyers have had to rely on available to everyone: an equity loan, on favourable terms, to make your deposit money go further and help you get a mortgage.

This Budget has Lib Dem credentials all through it. Bringing forward the date for Steve Webb’s flat rate pension and the cap on care costs for the elderly put forward by Paul Burstow and Norman Lamb. And the cut in beer duty my Yorkshire colleague Greg Mulholland has fought so valiantly for in his campaign to save the local pub!

Of course the Budget wasn’t all good news. The economy is still struggling to emerge from the massive shock it suffered. That’s why we sensibly decided to let the debt target slip another year – sticking to our overall plan, but not dogmatically so. As I said at our Spring Conference, we’ve got to be unflinching but not unthinking in our approach.

That’s why we are doing everything possible to get the economy moving, and balance the books. Even in these difficult times, more will be spent on infrastructure in this decade than Labour managed in the last – even though they spent money hand over fist on almost everything else. This budget announced investment in the construction of social and private rented homes, a new £2000 employee allowance to cut the cost of National Insurance when businesses take on staff, and an industrial strategy that has already put £1bn into Britain’s world-beating aviation industry.

This Budget does exactly what I hoped: it delivers on our core objective to build a stronger economy in a fairer society, enabling everyone to get on in life.


PS A big congratulations to our two newest councillors, Cllr Richard Arnold in North Dorset and Cllr Ron Tindall in Dacorum, elected on Thursday night in local council by-elections, proving once again that where we work, we can win.

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* 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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  • Tony Greaves 24th Mar '13 - 8:29pm

    “This Budget has Lib Dem credentials all through it. ”

    Very sad if that is the case since it’s wrong on most counts and very wrong on the lack of action to promote growth.

    Tony Greaves

  • Andrew Suffield 25th Mar '13 - 12:06am

    Oh come on Tony, you know full well that there’s an extra £3bn being spent on promoting growth. By all means complain that you want it to be larger, but don’t pretend it doesn’t exist.

  • Andrew… this govt has talked austerity til the cows came home. While spending more. Confidence wise it might have beej better had they done the reverse.

  • Matthew Huntbach 25th Mar '13 - 11:18am

    Andrew Suffield

    Oh come on Tony, you know full well that there’s an extra £3bn being spent on promoting growth. By all means complain that you want it to be larger, but don’t pretend it doesn’t exist.

    This gets to what has been the core of the problem with the coalition.

    We are in a position where we can have only a minor influence on government policy. We can stop the worst of things, policies which are so bad that there’s even a lot of doubt about them at the sensible end of the Conservative Party. We can put in a few details that we like so long as they are not in direct conflict with what the Conservative Party wants. And that’s about it. As I keep saying, if people wanted us to do more they should have voted for us, and indicated they wanted it by not supporting an electoral system whose supporters claim its best feature is the way it distorts representation in favour of the largest party (currently the Conservatives) and against third parties (currently us).

    However, our leadership persists in sending out a message to the public which grossly exaggerates what we can and have achieved in this coalition. As a result it makes it look as if we support with enthusiasm a government which, being five-sixths Conservative, naturally has very different guiding principles and priorities to our own. I accept that in order to get a few initiatives through we must stay quiet on a whole load of stuff we don’t really like, in order to be able to put our foot down on a few things we absolutely won’t accept we have to let through a whole load of things which on our own we would never have agreed to. I don’t accept this as the fulfillment of our dreams, as if we have the Liberal Democrat government we always wanted, or at least one with such a strong Liberal Democrat influence it is almost that. It isn’t. Claiming that it is, or using language which suggests we see it that way is enormously damaging to us, because it makes it look as if we have dropped what we used to stand for and become a sort of liberal Conservative. The public are concluding from this that either we were much more right-wing than they supposed, or that all we really wanted was government posts for a few of our leaders, and anything we said that led up to this wasn’t really meant seriously, we just said whatever we thought would win votes. That is, we are just another bunch of “politicians” who tell lies to get elected, who just want the money and power that comes from being in politics (actually there’s not that much of either, but the public see it that way). This comes particularly badly after a general election campaign where the focus was on us being more honest than the others.

    The use of language like “This Budget has Lib Dem credentials all through it ” is a good example of this damaging exaggeration. It suggests we were able to influence it far more than was really the case, it makes it seem as if we are wholeheartedly in support of a budget which is very much a Conservative budget. Clegg didn’t have to put it that way. He could have put it in a much more modest way, mentioning that we have had an influence, but not claiming it to be such a big one. I appreciate he cannot come out straight and attack the Conservative politicians he works with in government, but it would really help our party’s case if he didn’t always seem so enthusiastic about what they are doing.

    Of course, if he really is enthusiastic about this government and its policies, really does think they are mostly in line with what he personally would like to see, he ought not to be our leader because it means his personal position is just to far removed from general consensus in the party.

  • @Matthew Huntbach
    Well done ! Last paragraph says it all.

  • Bill le Breton 25th Mar '13 - 4:38pm

    As I wrote on Budget Day the Quad has bet everything on monetary stimulus:

    The budget was fiscally neutral. (I think if Andrew S read the small print he wd see that even the infrastructure spending doesn’t get into the figures until 2015/16) BUT the change in the Bank of England regime is hugely significant as even Andrew Rawnsley can see and posssibly hugely stumulative (as most people including Rawnsely can’t see) here:

    Of course ‘plan c – carney’ is actually plan c – cable, which I predicted prior to the budget here:

    So … this letter from the leader which I have scanned a couple of times does appear to mention the key part of the Quad’s thinking, which proves to me not just that he doesn’t understand economics but that he can eat cottage pie (is that part of a country supper?) and still not understand what his budget is all about.

  • Bill le Breton 25th Mar '13 - 4:40pm

    Of course that should read DOESN’T appear to mention the key part of the Budget

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