So reports The Observer, writing up its interview with Nick Clegg:
In an interview with the Observer, he launched a withering attack on the economic policies of Margaret Thatcher and promised instead to look to the examples of Sweden, Canada and the US to deliver “progressive” cuts.
“It is important that people understand that fiscal retrenchment does not mean a repeat of the 1980s. We’re going to do this differently,” said Clegg, in a move that risks angering MPs on the Conservative right, many of whom admire their former leader. The deputy prime minister said he would use his authority “ruthlessly” to make sure coalition commitments were met …
Clegg argued that some of the biggest cuts programmes across the world in recent decades had been carried out by “centre-left governments”, including “the social democrats in Sweden, the Clinton administration [in the US] and the Liberals in Canada”.
He promised that while his party was part of the coalition there would be protection for the country’s poorest areas, including his own constituency in south Yorkshire. “We’re not going to allow a great north-south divide to reappear,” he said …
He argued that failing to deal with the deficit would not be progressive because it would hit confidence and that would have an impact on jobs while interest rates would spike, hitting people who depended on low rates for their “livelihoods”.
“I say this with such urgency because I think what’s happening, bluntly, among the kind of centre-left community is a huge mistake – in thinking that even tackling the fiscal crisis is somehow an unprogressive thing to do. Not tackling it would be a greater betrayal of our progressive ideals.”
You can read the full report here.
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17 Comments
How can he promise no return to Thatcher, when his PM and boss Cameron on the same day says ” years of serious pain…You have to address public sector pay bills….We want expenditure to bear the burden of what needs to be done”. Something tells me they are not singing from the same hymn sheet.
As if we can believe a word that Nick Clegg says!
#{1, 2}: Yawn
Let’s not forget that Alistair Darling himself said the cuts would be more painful than Thatcher’s. Oh, what, you have forgotten that already? Wow, fancy… Labour supporters forgetting that their party would have had to make cuts too – who’d have thunk it.
Sorry you have to tackle the interest on the debt if the progressive left can have the choices to support those that can’t help themselves.
How can we trust Labour trolls like Red Rag whose Government left us with all the shit to shovel in the first place.
Ordinary people want a prudent government that raises tax thresholds, grows the private sector to fund investments in the future and protects those that can’t help themselves.
Labour’s Social Democratic project is dead – killed by its own party on the structural deficit after 13 years of Government. There is a view that Britain can follow the Swedish model – but ONLY after the public finances have been sorted and if Labour espouses higher taxes for even the low paid, very strict personal lending regulations and an even more authoritarian state than before.
In the meantime we are struggling to cope with the debt so that it’s full steam ahead towards a more German model – it’ll be a struggle to get there but it looks like the will of the majority of the British people.
Raising the tax threshold benefits everyone and is not targeted at the poor – so is it a good policy. Can any one tell me what a kind cut is as opposed to an unkind cut? is there a criteria?
“for the country’s poorest areas, including his own constituency in south Yorkshire” – this is of course rubbish. The last time I looked Sheffield Hallam had the highest income of any constituency in the Yorkshire and Humberside region – if his the constituency is to be the barometer by which pain is to be measured heaven help us.
John – it is clearly the case that the LibDems Social Democratice Programme ended a long time ago. I wonder who was the last person to come up with this there is no alternative rubbish. There is more than one way in which structural deficits can be addressed. Perhaps you should notre that most of Europe had structural deficits after WW2 and they were not all addressed in the same way. And anyway was dear old Vince a Keynesian until a few weeks ago when he sold his soul – he used to write books in favour of it you know.
Words are fine but the test will be if Nick Clegg can deliver on them. As Andrew Rawnsley correctly points out elsewhere in the Observer, cuts in spending generally tend to fall disproportionately on the poor, since it is they who are the most reliant on state services.
Politica pundits and the right-wing newspaper commentariat are all for “tough medicine” but that’s easy to say when your comfortable lifestyle is unlikely to be much affected by the cuts – others will bear the burden. In this context, it’s iteresting to note the Tory backlash against rises in CGT – so much for “we’re all in this together”!
tory boys we’re not talking about after the 2nd world war – we’re talking about now. All parties need to find out who the key groups of voters are that either voted or flirted with them in May. To my reckoning a key group are the private sector workers struggling to make ends meet (hairdressers, admin staff, secretaries) who were fed up with the excesses in the public sector when they had to cut back on their own spending.
I don’t see any other way than cutting back the deficit – unless you’re espousing just spend as if there’s no tomorrow which is the kind of infantile arguments used by Labour who wanted to be all things to all men and oh `keep on voting Labour, that’s a good little person`. Trouble is Labour don’t come up with any solutions and I’ll look forward to their budget on the 22nd – not enough for Labour to bleat about cuts they would have done the same aka Alistair Darling’s `cuts worse than Thatcher` – Labour have got to say what THEIR choices would be.
Time for REALITY methinks – the point is it’s not enough for Clegg to be liked he has to be respected by sticking to his guns and helping to sort out the mess.
John
The reference to the WW2 was just to show that that there are plenty of ways of getting out of structural deficits than the cut now and cut hard programme that the Condem thatcherites are likley to come up with. There are plenty of alternatives with regard to what is cut, the pace of cuts, who bears the burden of cuts, the ratio of cuts to tax rises (there is a specific view on this in the Tory manifesto by the way – which does not appear to have been modified by the coalition agreement), the type of tax rises, who bears the burden of those tax rises – to say nothing about how growth is ecouraged in the economy. Of course you believe you have a monoply of the truth and that the Government’s proposals will be the only way forward – and social democracy and Keynesianism have no role to play.
Of course the last times we heard this there is no alternative rubbish was of course in the Great Depression and when Thatcher came to power – and it is interesting to note that in both cases the result was an increase not a reduction in the debt burden.
I also note your approving reference to the German model. Is this the same German economy that has now gone into a double dip recession, largely as a result of the Government cutting its expenditure too quickly, particularly that in relation to the car scappage scheme which led to an 18% reduction in vehicle production?? Labour made it patently clear that it would not cut £6bn this year – they did not say spend as there is no tomorrow, so I don’t have to defend your ridiculous straw man.
When VAT goes up to 20% – I look forward to your arguments as to why it is fair that the less well off should bear the burden of the tax increases.
The reality, without shouting, is that all you providing in terms of arguments is that there is no alternative to whatever the Condems come up with because that is who you support. Please present an argument as to why this is the case or at least outline a few principles regarding the role of the government in managing the economy.
The last comment was of course addressed to lower case john – upper case John is obviously a rather more substantial character.
Spending increased under Thatcher. Spending was last cut under Labour in the 1970s.
Paul Krugman in his most recent Conscience of a Liberal blog for the NY Times makes some interesting comments about the rise of the ‘deficit hawks’ in Europe. His view is that it is absurb and risks killing off the recovery.
The experience of Greece and the prescription of significant public spending reductions, even if it makes sense for Greece, carries no necessary inplications for how other countries should respond because their underlying economic position and fiscal strength can be significantly different. Krugman notes that if you look at how the markets are pricing risk around government debt then the UK isn’t miles away from the US or Japan, rather than the European ‘crisis’ countries. The implication is that the UK agenda is being driven by a political narrative around fears of ‘the market’ having a negative response to the situation, rather than any actual evidence that that is way the market is behaving.
Of course current premiums could be taken to have priced in the government’s commitment to cut budgets.
But , of course, cutting frontline public services will have a much more modest impact on budgets in the short term than the headline figures suggest, if it simply transfers people from relatively low wage public sector employment on to out of work benefits: it’s just reverse Keynesianism. The only way to mitigate that would be to get much tougher on the generosity of those benefits, but then we’re in true tory territory. Nick Clegg’s promises of ‘progressive’ cuts would begin to look not just dubious but distinctly empty.
Equally worrying for a progressive agenda is the re-emergence of talk of using VAT to address the government’s funding shortfall. Commentators are already describing it as inevitable. Presumably that would be because serious consideration is being given to watering down the CGT changes. It is hard to think of a more regressive switch.
It is important that people understand that fiscal retrenchment does not mean a repeat of the 1980s. We’re going to do this differently
That is true, in a sense: the cuts will be far more severe than in the 1980s. He may regret giving the impression that they will be less severe.
The only thing I know for sure about the Liberal Democrats is that their leader is trying to mislead me. My opinion of the Party is not going up.
We need to consider that money is just an artificial device to get people to work together co-operatively.
Let us consider that big thing people are talking about, and rightly so, how we shall fund pensions in the future when there will be many more elderly people than now as a share of the population. The experts tell us it will be impossible to levy enough tax to pay decent pensions, so instead people should invest more. This is a bit silly, because that investment is not actually saving up all those real things needed to carry on living comfortably after retirement, although it is often spoken of as if it is.
Underneath, however we do it, we need to have all those retired people living happy and comfortable lives, and other people happily working to keep society going and let those retired people have their share of what is needed to live happy and comfortable lives. One mechanism is to have money and a tax system, another is to have money and rents and share dividends, it still means underneath that some work while others don’t. There has to be a bit of mumbo-jumbo to convince those who are working that it’s all fair and good, mostly to accept that if things stay stay as they are, they too will benefit when they get older and retire. In more primitive systems, the mumbo-jumbo is a bit more direct, it’s called “religion” and, for example, may have “Honour your father and mother” as a commandment.
If we can step back and see money in this way as just a device, we can think more clearly about how to handle the current situation. There is somehow a weirdness in that we have jobs that need doing, people willing to do them, yet we cannot match them up. I mean all those little caring jobs, social and environmental, that don’t require huge ability. The recession means there will be people on the dole who’d love to do those jobs, it would really be to their long-term benefit and to society’s if they did, yet we are told there is no “money” to pay for them.
I’m not an economist, so I don’t have instant answers here, but it strikes me that something has gone wrong in the mechanics, and maybe we should look more deeply into how we could re-engineer those mechanics to fix it.
“I’m not an economist, so I don’t have instant answers here”
It strikes me that many of that small minority of economists who saw the crunch coming, and spotted what now seems blindingly obvious, were “fringe” characters. For example, they were economists who had a day job outside economics, such as Cable (politician) or Larry Elliott (journalist). Having that wider perspective seems to have encouraged the “fringe” economists to think outside the box, and not get bamboozled by the weight of conventional wisdom.
Your instant answers will be as good as anyone’s if you stick with plain old rational thinking, Matthew!
“There is somehow a weirdness in that we have jobs that need doing, people willing to do them, yet we cannot match them up. I mean all those little caring jobs, social and environmental, that don’t require huge ability. The recession means there will be people on the dole who’d love to do those jobs, it would really be to their long-term benefit and to society’s if they did, yet we are told there is no “money” to pay for them. ”
I’m not an economist either, and this is an interesting problem.
I think the issue boils down to the fact that money is a means of mediating exchange. And that is the problem with what you’ve highlighted above. Put simply – if I am a carpenter and you are a farmer, I can trade my wood-working skills for your food surplus. But if I require care, what do I trade in return for it?
Ultimately “wider society” has to pick up the tab for it – in that either it is a service offered for nothing in exchange, or else those with the means of exchange have to offer part of their surplus with no concommitent recompense.
Which brings us back to the ultimate debate here, how altruistic is society prepared to be?
Well, Liberals, this makes very interesting reading now, doesn’t it? Is your leader a liar or just a turncoat?