Nick Clegg’s speech to conference: “A fair, free and open society”

Much of the pre-speech briefing was about how Nick Clegg’s conference speech would major on how the party is becoming one of government. This is not a message aimed at the party itself really, as the debate in Brighton has been over what to do in government, not whether or not to be in government. Much more, the message was aimed at the media who love to attack the party for pushing policies they disagree with, dressing up disagreement with them as meaning the party can’t be serious about government or taking tough decisions.

Instead, Clegg argued that the party is up to the task of rebuilding the British economy, and in so doing make the country fairer and more liberal:

So to those who ask, incredulously, what we – the Liberal Democrats – are doing cutting public spending, I simply say this: Who suffers most when governments go bust? When they can no longer pay salaries, benefits and pensions? Not the bankers and the hedge fund managers, that’s for sure. No, it would be the poor, the old, the infirm; those with the least to fall back on.

Clegg also emphasised that getting the deficit under control does not mean introducing some extreme right-wing small state:

Even at the end of this parliament, will see public spending account for 42 per cent of GDP – higher than at any point between 1995 and 2008 when the banks collapsed. [We are creating] a Business Bank, provide billions of pounds of infrastructure and house building guarantees and an £80 billion Funding for Lending scheme – the biggest of its kind anywhere in the world …

Let me make one thing clear. Now that we have brought the top rate of tax down to 45p – a level, let’s not forget, that is still higher than throughout Labour’s 13 years in office – there can be no question of reducing it further in this Parliament. All future cuts in personal taxation must pass one clear test: do they help people on low and middle incomes get by and get on? It’s as simple as that.

A heavy emphasis on green policies and education ran through Nick Clegg’s speech:

The green economy in Britain is growing strongly right now, bringing in billions of pounds and creating thousands of jobs – in wind, solar and tidal energy; the technologies that will power our economy in the decades to come. Going green means going for growth. But more than that, it means going for more energy that we produce ourselves and which never runs out; it means going for clear air and clean water and a planet we can proudly hand over to our children. Going green means going forward…

As we plot our path from austerity to prosperity, we need to remember that nothing we do will make a decisive difference if we don’t make the most important investment of all: in the education and training of our young people. For we will only fulfil our collective economic potential, if we fulfil our individual human potential. Yet the legacy of educational inequality in Britain is an economy operating at half power, with far too many young people never getting the qualifications they could get, never doing the jobs they could do, never earning the wages they could earn…

That’s why we’re providing more money so the poorest two-year-olds, as well as every three and four-year-old, can now benefit from pre-school education. Delivering our Pupil Premium – £900 per child next year – so the most disadvantaged children get the more intensive, more personalised support they need. And why, when they leave school, we’re providing scholarships, bursaries, grants, loans, apprenticeships and wage subsidies, to help them go on learning or start earning…

I can announce that from this year, we will provide a new ‘catch-up premium’ – an additional £500 for every child who leaves primary school below the expected level in English or maths. If you’re a parent whose child has fallen behind; who fears they might get lost in that daunting leap from primary to secondary school; and who is worried by talk about making exams tougher, let me reassure you. We will do whatever it takes to make sure your child is not left behind. A place in a summer school; catch-up classes; one-to-one tuition; we are providing the help they need. So yes, we’re raising the bar. But we’re ensuring every child can clear it too.

Overall then, it was a repetition of similar themes: being in government was and is the right choice; Labour left the economy in a huge mess; and sorting out the economy must be done in a way that is both fair and financially competent. In other words, a recovery that makes the country more liberal – and so a recovery that brings political benefits not only to the Conservatives but also to the Liberal Democrats:

I see generations of Liberals marching towards the sound of gunfire. And yes, I see them going back to their constituencies to prepare for government. It took us a while but we got there in the end. These are the people on whose shoulders we stand. They never flinched, and nor should we. We owe it to them to seize the opportunity they gave us, but which they never had. Taking on the vested interests. Refusing to be bullied. Refusing to give up. Always overturning the odds. Fighting for what we believe in, because we know that nothing worthwhile can be won without a battle. A fair, free and open society. That’s the prize. It’s within our grasp. So let’s go for it.

Here is the full official text (i.e. excluding ad-libs) of Nick Clegg’s speech:

This summer, as we cheered our athletes to gold after gold after gold, Britain remembered how it feels to win again. But more importantly, we remembered what it takes to win again. Whether from Jess Ennis or Mo Farah, Sarah Storey or David Weir, the message was the same: we may be the ones on the podium, but behind each of us stands a coach. And behind the coach, a team. And behind the team, the organisers, the volunteers, the supporters. And behind them, a whole city, an entire country, the UK nations united behind one goal.

What a contrast from a year ago when England’s cities burned in a week of riots. When the images beamed to the world were not of athletes running for the finishing line, but the mob, running at police lines. When the flames climbed, not from the Olympic torch in east London, but a furniture shop in south London. A 140 year-old family-run business, which had survived two world wars and countless recessions, razed to the ground. Of course, even then, amid the smoke and embers, we saw our country’s true character when residents came out onto the streets to clear up the mess.

And we saw it again this summer when the Reeves furniture shop in Croydon re-opened in new premises, the walls decked with photos of young people holding up messages of hope. And who put those pictures up? Young volunteers from Croydon and an 81 year-old man called Maurice Reeves, who, like three generations before him, ran the shop before handing it over to his son. Maurice, your example should inspire a generation.

You see, what Maurice has shown – what our Olympians and Paralympians have reminded us of – is that, for most people, success doesn’t come easy or quick. That’s what our culture of instant celebrity obscures: that real achievement in the real world takes time, effort, perseverance, resilience. The war veteran: a victim of a roadside bomb in Afghanistan, competing at the Paralympics. The businessman: a victim of an arson attack in south London, serving his customers again. The millions of people up and down the country, who, no matter how heroic or mundane their battles, keep going, keep trying, keep working, whatever life throws at them.

These are the qualities that will see our country through these tough times. And these are the qualities that will guide our party through tough times too. So let us take our example from the British people as together we embark on the journey ahead. Our party: from the comforts of opposition to the hard realities of government. Our country: from the sacrifices of austerity to the rewards of shared prosperity. Two journeys linked; the success of each depending on the success of the other. Neither will be easy and neither will be quick, but it will be worth it. And be in no doubt. If we secure our country’s future, we will secure our own.

We live at a time of profound change, almost revolutionary in its pace and scale. Here in Britain, we are faced with the gargantuan task of building a new economy from the rubble of the old. And of doing so at a time when our main export market – the Eurozone – is facing its biggest crisis since it was formed. And while the European economy has stalled, countries like Indonesia, Malaysia, India and China continue to grow, and at a phenomenal rate.

The potential consequences of this shift in power, should we in the West fail to respond, cannot be overstated. Our influence in the world, our standard of living, our ability to fund our public services and maintain our culture of openness and tolerance – all are in the balance. For power would move not only away from the liberal and democratic world, but within it too; from moderates to hard liners, from internationalists to isolationists, from those committed to the politics of cooperation to those hell-bent on confrontation. If history has taught us anything, it is that extremists thrive in tough times.

So yes, if we fail to deal with our debts and tackle the weaknesses in our economy, our country will pay a heavy political price. But the human cost would be higher still. Not only would we fall behind internationally, we would leave a trail of victims at home too.

So to those who ask, incredulously, what we – the Liberal Democrats – are doing cutting public spending, I simply say this: Who suffers most when governments go bust? When they can no longer pay salaries, benefits and pensions? Not the bankers and the hedge fund managers, that’s for sure. No, it would be the poor, the old, the infirm; those with the least to fall back on.

Labour may have thought it was funny, after crashing the economy and racking up record debts, to leave a note on David Laws’ desk saying: “there’s no money left”. But it’s no joke for the most vulnerable in our society; the people Labour claim to represent but let down the most. So let’s take no more lectures about betrayal. It was Labour who plunged us into austerity and it is we, the Liberal Democrats, who will get us out.

It’s easy to forget sometimes that the debate we’re having in this country is playing out across our continent. It’s a debate between those who understand how much the world has changed, and those who do not. And between those who understand the need to adapt to those changes, and those who baulk at the size of the challenge. And the fate of every European country – ours included – will depend on the outcome.

In the coming years, some countries will get their own house in order. But some will not. Those that do will continue to write their own budgets, set their own priorities and shape their own futures. But those that do not will find their right to self-determination withdrawn by the markets, and new rules imposed by their creditors, without warning or clemency. That that will never happen to us is often just blithely assumed; the comparisons with Greece, breezily dismissed. Yet it is the decisions we take – as a government, as a party – that will determine whether we succeed or fail. For the first time, the future is ours to make.

Our journey from austerity to prosperity starts, of course, with economic rescue; dealing with our debts and delivering growth. If you listen to Labour, you could be forgiven for thinking that austerity is a choice; that the sacrifices it involves can be avoided; that if we only enacted Ed Balls’ latest press release we’d be instantly transported to that fantasy world where there is no “boom and bust” and the money never runs out.

But the truth is this: there is no silver bullet that will instantly solve all our economic problems. Some of our problems are structural, others international. All will take time to overcome. We are dealing with an on-going surge in global energy, food and commodity prices. An existential crisis in the Eurozone. And a banking collapse which, more than four years on, is still blocking the arteries of our entire economic system.

Ranged against these forces, the idea that if government just deregulated a bit more as Liam Fox proposes, or borrowed and spent a bit more as Ed Balls proposes, we would, at a stroke, achieve strong and lasting growth, is just not credible. In my experience, if you’re being attacked by Liam Fox from one side, and Ed Balls from the other, you’re in the right place.

You see, what is needed – and what we’re delivering – is a plan that is tough enough to keep the bond markets off our backs, yet flexible enough to support demand. A plan that allowed us, when the forecast worsened last year, to reject calls for further spending cuts or tax rises and balance the budget over a longer timescale. A plan that, even at the end of this parliament, will see public spending account for 42 per cent of GDP – higher than at any point between 1995 and 2008 when the banks collapsed. And a plan that, because it commands the confidence of the markets, has given us the room to create a Business Bank, provide billions of pounds of infrastructure and house building guarantees and an £80 billion Funding for Lending scheme – the biggest of its kind anywhere in the world.

Of course so much of this is about perception. People keep telling me we should be doing what Barack Obama did with his fiscal stimulus. What they don’t tell you is that much of what the President had to legislate for, we are already doing automatically. So let’s not allow the caricature of what we are doing go unchallenged. If Plan A really was as rigid and dogmatic as our critics claim, I’d be demanding a Plan B, and getting Danny and Vince to design it. But it isn’t. Which is why you were right, earlier this week, to overwhelmingly reject the call for us to change our economic course. We have taken big and bold steps to support demand and boost growth. And we stand ready to do so again and again and again until self-sustaining growth returns.

Of course, arguments about economic theory are of no interest to the millions of people just struggling to get by right now. The home-help whose earnings barely cover the cost of childcare. The builder who knows the company will be laying people off, but doesn’t yet know if he’ll be one of them. The couple who want to buy their first home but can’t raise the money for a deposit. To them and to all the other hard working families just trying to stay afloat, I say this: the Liberal Democrats are on your side. You are the ones we are in government to serve. Not with empty rhetoric but real practical help. That is why we promised to cut your income tax bills by raising the personal allowance to £10,000. So you can keep more of the money you have worked for. So your effort will be properly rewarded. So the task of making ends meet is made that little bit easier.

At the last budget, we made two big announcements: that we were spending three thousand million pounds increasing the tax-free allowance, and just fifty million pounds reducing the top rate of tax while recouping five times that amount in additional taxes on the wealthiest. I insisted on the first. I conceded the second. But I stand by the package as a whole. Why? Because as liberals, we want to see the tax on work reduced, the tax on unearned wealth increased, and the system as a whole tilted in favour of those on low and middle incomes. The budget delivered all three.

But let me make one thing clear. Now that we have brought the top rate of tax down to 45p – a level, let’s not forget, that is still higher than throughout Labour’s 13 years in office – there can be no question of reducing it further in this Parliament. All future cuts in personal taxation must pass one clear test: do they help people on low and middle incomes get by and get on? It’s as simple as that.

At the next election, all parties will have to acknowledge the need for further belt tightening. That much is inescapable. But the key question we will all have to answer is who will have to tighten their belts the most? Our position is clear. If we have to ask people to take less out or pay more in, we’ll start with the richest and work our way down, not the other way around. We won’t waver in our determination to deal with our debts. But we will do it in our own way, according to our own plans, based on our own values. So we will not tether ourselves to detailed spending plans with the Conservatives through the next Parliament.

Colleagues, we should be proud of the fact we have delivered fairer taxes in tough times. We should be proud of the fact that we’re taking 2m people out of income tax altogether and delivering a £700 tax cut for more than 20m others, and should never miss an opportunity to tell people about it. But as we do so, remember this: our tax cuts, like our extra support for childcare, for schools, for pensioners – these are not stand-alone consumer offers. They are part of a broader agenda of economic and social reform to reward work, enhance social mobility and secure Britain’s position in a fast changing world. In short, national renewal. That is our mission. Our policies either serve that purpose, or they serve none at all.

One of the things about governing is it forces you to confront the inconvenient truths oppositions choose to ignore. Like the fact that, over the last 50 years, our economy has grown threefold, but our welfare spending is up sevenfold. Or the fact that, to sustain our spending, we are still borrowing a billion pounds every three days. Or that, as a result of that borrowing, we now spend more servicing the national debt than we do on our schools. In combination, these three facts present us with a fundamental challenge: to not only regain control of public spending, but to completely redirect it so that it promotes, rather than undermines, prosperity.

How we do that – how we reshape the British state for the economic challenges of the 21st century – is a debate I want our party to lead. For there are only two ways of doing politics: by following opinion, to get yourself on the populist side of each issue, or by leading opinion, and standing on the future side of each issue. The first brings short-term rewards, of course it does. But the big prizes are for those with the courage and vision to get out in front, set the agenda and point the way.

So let us take the lead in building a new economy for the new century. An open, outward looking economy in the world’s biggest single market. A strong, balanced economy built on productive investment, not debt-fuelled consumption. An innovative, inventive economy driven by advances in science and research. And yes, a clean, green economy too, powered by the new low-carbon technologies. Britain leading the world.

But I have to tell you, we will not succeed in this last task unless we can see off that most short-sighted of arguments: that we have to choose between going green and going for growth. Decarbonising our economy isn’t just the right thing to do; it’s a fantastic economic opportunity. The green economy in Britain is growing strongly right now, bringing in billions of pounds and creating thousands of jobs – in wind, solar and tidal energy; the technologies that will power our economy in the decades to come. Going green means going for growth. But more than that, it means going for more energy that we produce ourselves and which never runs out; it means going for clear air and clean water and a planet we can proudly hand over to our children. Going green means going forward.

So let the Conservatives be in no doubt. We will hold them to their promises on the environment. Of course, there was a time when it looked like they got it. It seems a long time ago now. When the Tories were going through their naturalist phase. The windmills gently turning; the sun shining in. As a PR exercise, it was actually quite brilliant. Until, at last year’s party conference, they went and ruined it all, admitting that you can’t in fact “vote blue and go green”. Well of course you can’t. To make blue go green you have to add yellow, and that’s exactly what we’re doing.

As we plot our path from austerity to prosperity, we need to remember that nothing we do will make a decisive difference if we don’t make the most important investment of all: in the education and training of our young people. For we will only fulfil our collective economic potential, if we fulfil our individual human potential. Yet the legacy of educational inequality in Britain is an economy operating at half power, with far too many young people never getting the qualifications they could get, never doing the jobs they could do, never earning the wages they could earn.

The true cost of this cannot be counted in pounds and pence. Yes it’s a huge drag on our economy, but more than that, it is an affront to natural justice and to everything we Liberal Democrats stand for. Because if you strip away all the outer layers to expose this party’s philosophical core, what do you find? An unshakeable belief in freedom. Not the tinny sound of the Libertarian’s freedom – still less the dead thud of the Socialist’s – but the rich sound of Liberal freedom, amplified and sustained by the thing that gives it real meaning: opportunity. The freedom to be who you are. The opportunity to be who you could be. That, in essence, is the Liberal promise.

And that is why this party has always been – and must always be – the party of education. Because just as there can be no real freedom without opportunity, so there can be no real opportunity without education.

Every parent knows how it feels when you leave your child on their first day at school. That last look they give you before the door closes behind them. The instinct to go with them, to protect them, to help them every step of the way. That’s how we should feel about every child. That’s the responsibility we have to every parent. To support them at every stage: from nursery to primary, from primary to secondary and from secondary to college, university or work.

That’s why we’re providing more money so the poorest two-year-olds, as well as every three and four-year-old, can now benefit from pre-school education. Delivering our Pupil Premium – £900 per child next year – so the most disadvantaged children get the more intensive, more personalised support they need. And why, when they leave school, we’re providing scholarships, bursaries, grants, loans, apprenticeships and wage subsidies, to help them go on learning or start earning.

But extra resources won’t make a difference unless matched by greater ambition. Which is why money must be accompanied by reform. Reform to ensure all children can read and write. To make schools focus on the performance of every child. To turn around failing schools, and put more pressure on coasting schools. And yes, reform to replace GCSEs, not with an O Level, but with a new more rigorous qualification that virtually every child will be able to take, and every well taught child will be able to pass.

And to ensure they do, I can announce that from this year, we will provide a new ‘catch-up premium’ – an additional £500 for every child who leaves primary school below the expected level in English or maths. If you’re a parent whose child has fallen behind; who fears they might get lost in that daunting leap from primary to secondary school; and who is worried by talk about making exams tougher, let me reassure you. We will do whatever it takes to make sure your child is not left behind. A place in a summer school; catch-up classes; one-to-one tuition; we are providing the help they need. So yes, we’re raising the bar. But we’re ensuring every child can clear it too.

I am proud of the resolve we Liberal Democrats have shown over the last two and a half years. We’ve had some real disappointments: tough election results, a bruising referendum. But through it all, we have remained focused, determined, disciplined. It hasn’t always been easy, and, when we’ve made mistakes, we’ve put our hands up. But we’ve stuck to our task – and to the Coalition Agreement – even as others have wavered. The received wisdom, prior to the election, was that we wouldn’t be capable of making the transition from opposition to government. The choices would be too sharp, the decisions too hard.

The Liberal Democrats, it was said, are a party of protest, not power. Well two years on, the critics have been confounded. Our mettle has been tested in the toughest of circumstances, and we haven’t been found wanting. We have taken the difficult decisions to reduce the deficit by a quarter and have laid the foundations for a stronger, more balanced economy capable of delivering real and lasting growth. But conference, our task is far from complete, our party’s journey far from over.

I know that there are some in the party – some in this hall even – who, faced with several more years of spending restraint, would rather turn back than press on. Break our deal with the Conservatives, give up on the Coalition, and present ourselves to the electorate in 2015 as a party unchanged. It’s an alluring prospect in some ways. Gone would be the difficult choices, the hard decisions, the necessary compromises. And gone too would be the vitriol and abuse, from Right and Left, as we work every day to keep this Government anchored in the centre ground.

But conference, I tell you this. The choice between the party we were, and the party we are becoming, is a false one. The past is gone and it isn’t coming back. If voters want a party of opposition – a “stop the world I want to get off” party – they’ve got plenty of options, but we are not one of them. There’s a better, more meaningful future waiting for us. Not as the third party, but as one of three parties of government.

There’s been a lot of discussion on the fringe of this conference about our party’s next steps; about our relationship with the other parties; and about what we should do in the event of another hung parliament. It’s the sort of discussion politicians love – full of speculation and rumour. But I have to tell you, it is all based on a false, and deeply illiberal, assumption: that it is we, rather than the people, who get to decide. In a democracy, politicians take their orders from the voters.

So let’s forget all the Westminster gossip and focus on what really matters: not our relationship with the other parties, but our relationship with the British people. Imagine yourself standing on the doorstep in 2015 talking to someone who hasn’t decided who to vote for. This is what you’ll be able to say: we cut taxes for ordinary families and made sure the wealthiest paid their fair share. We put more money into schools to give every child a chance. We did everything possible to get people into work – millions of new jobs and more apprenticeships than ever before. And we did the right thing by our older people too – the biggest ever cash rise in the state pension. But most importantly, we brought our country back from the brink and put it on the right path.

Then ask them: are you ready to trust Labour with your money again? And do you really think the Tories will make Britain fairer? Because the truth is, only the Liberal Democrats can be trusted on the economy and relied upon to deliver a fairer society too. And to help get that message out there, I can announce today that Paddy Ashdown has agreed to front up our campaign as chair of the 2015 General Election team. I must admit, I’m not quite sure I’m ready for all those urgent e-mails and 5am phone calls. But I can’t think of anyone I’d rather have by my side. Paddy, it’s great to have you back.

Fifty, sixty years ago, before I was born, small groups of Liberal activists would meet up to talk politics and plan their campaigns. Stubborn and principled, they ignored the cynics who mocked them. They simply refused to give up on their dreams. They refused to accept that Liberals would never again be in government. And they refused to accept that Liberalism, that most decent, enlightened and British of creeds, which did so much to shape our past, would not shape our future. We think we’ve got it tough now. But it was much, much tougher in their day. It was only their resolve, their resilience and their unwavering determination that kept the flickering flame of Liberalism alive through our party’s darkest days.

At our last conference in Gateshead, I urged you to stop looking in the rear view mirror as we journey from the party of opposition that we were, to the party of government we are becoming. But before we head off on the next stage of our journey, I want you to take one last look in that mirror to see how far we’ve come. I tell you what I see.

I see generations of Liberals marching towards the sound of gunfire. And yes, I see them going back to their constituencies to prepare for government. It took us a while but we got there in the end. These are the people on whose shoulders we stand. They never flinched, and nor should we. We owe it to them to seize the opportunity they gave us, but which they never had. Taking on the vested interests. Refusing to be bullied. Refusing to give up. Always overturning the odds. Fighting for what we believe in, because we know that nothing worthwhile can be won without a battle. A fair, free and open society. That’s the prize. It’s within our grasp. So let’s go for it.

* Mark Pack is Party President and Co-leader of the party. He is editor of Liberal Democrat Newswire.

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76 Comments

  • Am I missing something or was there no mention of the NHS.

    Considering the NHS is one of our countries most loved Institutions and ranks high on the list of voters priorities it does seem fairly odd that in a 40 min speech it fails to get a mention by clegg and his vision for it for the future.

  • Kevin Colwill 26th Sep '12 - 4:49pm

    If you’re a Tory on economic policy you’re a Tory full stop. When the cuts really bite and public services, including the NHS, start a wholesale retreat no one will care about why “Liberalism” matters.
    After the last election and a lifetime of voting Lib Dem I said the party had lost my vote. I’m still sad that it has and sadder still that it doesn’t give a toss about it.

  • Life long Tory supporter here but, having listened to Mr Clegg’s keynote speech and being of the opinion that he is a very honest politician, I will probably vote for you at the next elections – as I do at local elections anyway.
    Keep your heads up.

  • Matt – true, it appears that he considers education more important at the moment. I don’t know why. Incidentally, it is “…our country’s most loved institutions…” or, arguably, “…our countries’ most loved institutions…”

  • paul barker 26th Sep '12 - 8:30pm

    Clegg pointed out the importance of education to the long-term development of the economy & the economy will be what the next election is about.

  • Ostrich

    Head

    Sand

    The Lib Dems are a busted flush and will not recover for a generation. The party has thrown away principle in a rush to the right. It is looking more and more likely that I will not be rejoining it.

  • Cheers Mike O.

  • Bill le Breton 27th Sep '12 - 7:42am

    A country that issues its own currency cannot, repeat cannot, go bust. That therefore is a political statement and not an economic one. It is the root of our problems and the country’s.

    There is room for both monetary and fiscal stimulus. Spurning growth and going for a long haul of self-perpetuating austerity is incompetent, ineffective and ultimately the opposite of fairness. It also entails trashing our past achievements.

    It is also a genuinely distinct policy from both Labour and Conservatives. It is the one we should be campaigning for.

  • Michael Seymour 27th Sep '12 - 9:47am

    I think that Cabinet Ministers and Members of Parliament, should no longer have pensions from the government, and like the rest of us rely on the State Pension, and any personal pensions they have managed to put together. That would be a good start.

  • Richard Dean 27th Sep '12 - 4:51pm

    @Bill le Breton. The Prime Minister of Iceland would like to hear from you!

  • Liberal Eye,

    as both you and Bill note, a country that issues its own currency cannot technically go bust. However, that currency can become virtually worthless overseas as has been seen many times in economic crises such as Zimbabwe, Argentina even Russia.

    When the UK arranged an IMF loan in 1976 this was principally to support the value of sterling, that was collapsing in the face of a trade deficit that could not be financed by recourse to printing money. One of the factors that enabled or facilitated that loan was the considerable oil and gas reserves under development in the North Sea. Those reserves have now been largely depleted.

    We remain as a country, heavily dependent on imported energy and food as well as a great array of consumer products. A policy of sound money, based on domestic financing of the PSBR, coupled with the efficient utilisation of our productibe capacity maintains the international purchasing power of the currency. The alternative to this prudent approach is a currency and internal devaluation that squeezes living standards in an effort to restore international competitiveness principally by reducing unit labour costs.

  • Bill le Breton 27th Sep '12 - 4:55pm

    Liberal Eye makes things clear as usual.

    Five days in Brighton have seen the Lib Dems destroy their bridge to the past. All our history has been discredited. Every previous campaign labelled a fraud by ourselves. It is now a new party with no history.

    And like a unit with its retreat now impossible the colonel then burns its rations, so that it is glory or extinction. It is austerity or nothing.

    Anyone who suggests an alternative is labelled insane. It is catch 22, Clegg style.

    But you can advocate an alternative without actually ‘saying stop the world I want to yet off’.

    The Governor of the Bank of England last Friday said we can reduce pace of deficit reduction. I.E. if we do so he won’t tighten monetary policy.

    Inside the Treasury they are coming to believe we must increase ngdp . I.E. they will sanction more spending.

    Why is the leadership deaf to these changes. A death wish. Heroic failure. A bunker mentality.

    Pity the poor infantry.

  • Bill le Breton 27th Sep '12 - 5:10pm

    This is not Iceland 2008, Richard. Nor Zim, nor Greece. The world and our own pension funds are happy to lend to us for ten years at (is it still) 2.6% ? Inflation forecast for 2014 is 1.5%.

    I say again, even Mervyn King says we can safely ease the rate of fiscal consolidation. We must raise ngdp. We can now do that with a combination of fiscal and monetary easing.

    Vicki Pryce is right, the Boys Club is wrong.

    You may not believe this Richard but I did once advise the foreign secretary of Iceland _ when that post was occupied by a Liberal.

  • Tony Greaves 27th Sep '12 - 5:17pm

    Clegg’s speech was one of the worst leader’s speeches I have heard in around 50 of listening to these t hings. (Only one or two of Thorpe’s might have been even worse).

    Clegg has cast our future as being a party like the FDP in Germany, right-wing, often in government and almost always irrelevant. But his TINA declaration on economic policy is an advance announcement of his own political demise, An astonishing political death wish (and a repudiation of what people like Cable and Farron have been trying to do). The problem is that he is obviously intent on dragging our party down with him.

    Before this conference I did not think the leadership issue was the main issue facing the party. After the disaster of the past week I have changed my mind. He will have to go: the only question is when.

    I hear that much of the speech was the work of Julian Astle. Another right-wing cuckoo in the nest.

    Tony Greaves

  • Richard Dean 27th Sep '12 - 5:25pm

    I believe you Bill. I can see Iceland.

  • Richard Dean 27th Sep '12 - 5:34pm

    The TINA declaration, and the general impression that austerity will last much longer than has been expected, suggest to me one or both of the following

    > economists don’t actually know why things are happening, including VC and VP, and/or
    > things have been and are far worse than has been admitted so far.

    Either way we seem to be up the provebial creek.

  • Bill le Breton 27th Sep '12 - 5:54pm

    Richard and many others, Vicki Pryce is a practicing economist. Nick Clegg is not. Nor is David Laws, who was something in the city during the Thatcher years. And dear Danny Alexander?

    Austerity is a political trip for these boys. Their destiny. Our Party. Their future sustained by trashing our past. They dreamt up this narrative that we were only oppositionists before they came along is an insult to every councillor, Welsh assembly member, msp, peer and candidate who ever campaigned for us and managed a budget who who tabled a budget amendment in the face of a finance officer who cd and wd type it unlawful if it didn’t balance.

    Just try getting an unbalanced amendment past a city or a county or a district ‘Treasure’.

  • Richard Dean 27th Sep '12 - 6:07pm
  • Richard Dean 27th Sep '12 - 6:08pm

    @Bill le Breton. The powers that be are stopping me from replying.

  • Bill le Breton 27th Sep '12 - 6:16pm

    Richard, paranoia ill becomes you 😉

    Apologies to anyone more perplexed than usual by my syntax. I am struggling with predictive text on this phone.

  • Richard Dean 27th Sep '12 - 6:22pm

    In don’t like it either, Bill, but I replied to your comment and my reply has not been displayed. My comment referred to another comment on another thread which was also not displayed.

  • Peter Watson 27th Sep '12 - 6:27pm

    @Liberal Eye “Is Clegg positioning the LDs as the ‘none-of-the-above’ choice for the next election?”
    I fear so. Pretty much summed up by his line “if you’re being attacked by Liam Fox from one side, and Ed Balls from the other, you’re in the right place”.
    Electorally though, perhaps he is right to do so. The party might retain more of its vote share and MPs by not alienating the anti-tory and the anti-labour voters in the different types of seats it contests. There is still a risk of e.g. UKIP taking our anti-labour seats, and the Greens or independents (E.g. “Save the NHS”) taking our anti-tory seats. Obviously though, this leaves a big debate to be had about principle versus pragmatism.

  • Tony Greaves,

    “Clegg’s speech was one of the worst leader’s speeches I have heard in around 50 of listening to these t hings. (Only one or two of Thorpe’s might have been even worse).”

    That’s a bit harsh. I thought the speech was workmanlike and appropriate given where we are in the electoral cycle. The stance on economic policy could not have been radically different given the outcome of the debate on the paper ‘Generating Growth and Jobs in a Time of Austerity.’ Particularly so having regard to the defeat of the not unreasonable and rational amendment proposed by Ed Randall amd Linda Jack. The strong emphasis on green growth builds on amendment 2 to this paper, passed by conference. The emphasis on flexibility with respect to the fiscal mandate and a renewed committment to housing and green infrastructure investment is as much as could be expected at this juncture.

    When we signed up to the programme for government under the coalition policy, we committed to an economic policy based around public spending restraint over the life of this parliament and now beyond. I think that programme needs to be continued for current government spending but should in no way restrict necessary capital investment in economic infrastructure and social housing, as Mervyn King has implied. If this is the outcome of the budget negotiations, I will be satified we are moving in the right direction.

  • Bill le Breton 27th Sep '12 - 6:48pm

    Iceland PM has sent me this link to Reuters’ piece making same point about being a currency issuer. Regard the performance. Richard please try tofollow this link which my phone can’t paste.

    http://mobile.reuters.com/article/idUSBRE85B12020120612?irpc (sorry you have type equal sign here followed by 932) blast phone.

    Peter, I hardly ever disagree with your remarks here but pragmatism won’t serve. We have to campaign on distinct economic policy. Not one that defends 2010 decisions and decision makers, but one that injects demand.

  • Tony Greaves,
    ‘cuckoo’ is certainly an apt word to spring from your keyboard.

  • Richard Dean 27th Sep '12 - 7:04pm

    Bill, I tried the link and with =932 but it didn’tget anywhere. Perhaps you could re-post it when you get to a better instrument?

    I agree with Liberal Ey on the need for a national business plan, and on the need for LDs to be part of its development. How would it start? Maybe we could set up a group? And how would it relative to a Spending Review?

  • Bill le Breton 27th Sep '12 - 8:59pm

    Richard, fascinating ‘saga’ from Iceland. Quarter 1 2012 analysed growth of 4.5 per cent . Deficit reduction yes, but welfare spending fully protected to ensure ‘the people’ are carried through the necessary structural reforms.

    in UK supply side reform is necessary but should be a ‘deal’ based on stimulus in exchange for reform . monetary stimulus gains medium term improvement during which time supply side reforms take effect. Let’s call it the People’s Pact.
    austerity will only produce further decreases in tax revenue.

  • Peter Watson 27th Sep '12 - 9:42pm

    @Bill le Breton “pragmatism won’t serve”
    I agree entirely – I hate the idea of deliberately and cynically positioning ourselves as anti-tory in some seats and anti-labour in others, without having a distinct positon. Otherwise in a hung parliament we would simply be a makeweight in any coalition (though the current situation suggests that having principles is pointless if they are too easily given up).
    However, despite my disappointment with Clegg et al, in an election I would still vote for the Lib Dem candidate if she/he were most likely to displace my conservative MP. It’s just that now I’d be doing it with gritted teeth and crossed fingers.

  • I listened to the replay of Nick Clegg’s speech on the Parliament channel this meaning, and I share Joe Bourke’s view of it rather than that expressed by Tony Greaves. The speech had obvious omissions – nothing on foreign affairs, defence, the NHS or civil liberties – but it had the advantage over the normal multi-topic leaders’ speeches that it concentrated on the economic issues which are so central to British politics at the moment, and although Tony evidently does not agree with the solutions to our economic difficulties which Nick and Danny and Vince are all in their different ways promoting, I do think that he ought to give Nick proper credit for the serious tone of his speech and for those parts of it in which he very clearly differentiated our LD position from that of our Coalition partners.

  • Matthew Huntbach 28th Sep '12 - 12:39am

    One has to look for the nuances in these things, but Clegg is echoing here what was made far more clear by his outgoing Director of Strategy in his article in the New Statesman. That article made it quite clear the aim of those who Clegg has chosen as his closest advisors IS to destroy the Liberal Democrats. Reeves essentially dismissed anyone who did not sign up to Clegg’s endorsement of Tory economic policy and the philosophy behind it (more Ayn Rand than true liberalism) as a “social democrat” who should leave and join the Labour Party. He was blasé about the loss of votes, claiming most of the votes we have were “borrowed from Labour” (a typical Westminster bubble dismissal of the reality of decades of hard work at local level building up our vote), and there might be a few Tory votes that would come our way to replace them (anyone seen them? Not me, and I didn’t join the party anyway to become a soft Tory),

    Clegg’s portrayal of our current position as a very junior partner in a coalition which involves in the senior party some pretty repulsive figures with some pretty repulsive policy ideas as if it we have reached the promised land, what we have been working for all these years, shows a lack of ambition on the best interpretation of it. It is not the promised land, it is something that has been a possibility since it became clear in the 1974 elections that the Liberal Party was not going to die out, it is a fairly random thing, nothing to do with Clegg that it happened to become the case in 2010. It’s a difficult situation, those of us who have thought about it always thought it would be, but Clegg seems to be doing everything he can to make it worse.

    Right from the start he was warned that the tactic of making out the Liberal Democrats had almost equal influence in the coalition to the Conservatives – or as some have even more damagingly put it, 75% influence (or words which the public interpreted as that) – would backfire, as it has. It was just signing up to take the blame for policies which under the circumstances would be very much more towards what the Tories want than the Liberal Democrat ideal. He should have been honest about the situation meaning we have only a little influence, making it clear that if you want Liberal Democrats polices you need to vote Liberal Democrat. Instead, in seeming to boast about having great power and influence, when the casual observer could see he had little, he gave the impression that himself and a few of his closest friends having government offices was all he really wanted, and if the cost of that was signing up to Tory policy, that was fine by him.On the best interpretation his is just naïvety, supposing votes would come flooding to us just through seeing him standing up at the despatch box. However, Richard Reeves’ article forces one to wonder whether the worse interpretation has to be considered rather than dismissed as conspiracy theory (and I had wanted to dismiss it as that until I read that article).

    I think most of us who have worked long term for the party had more ambition for it than it being a perpetual very junior coalition partner, as Tony Greaves put it, like the German FDP. Having myself been an active member for 34 years, I am one of those “generations of Liberals” Clegg mentions in his last paragraph, but he takes my name in vain. I am insulted by that paragraph, I wish to disassociate myself from it, what we have now is NOT what I put all that time and money in it for. Clegg owes me and many others an apology for that.

    I have always been a realist which is why even now – EVEN NOW – I am defending the compromises the party has had to make in this government. So please don’t insult me further all you Cleggies by accusing me of being “other worldy” and “shying away from responsibility” and all that. What I want is an acceptance that what we have now is not the end, it’s a very unfortunate position that circumstances have forced us into, it does NOT mean a permanent shift to the right in the party (would the Richard Reeves of this world have advocated a permanent shift to the left had circumstances forced us into a coalition with an extreme left Labour Party?), and we plan to carry on and achieve much greater things with the Tories as our enemies, not our friends. I also want a return to the idea that political parties are about representation, taking power from the bottom up, and not about leaders seeking government positions. That is, I want us to be a Liberal Party and not a Social Democratic party.

  • Alex Sabine 28th Sep '12 - 1:44am

    Regarding terminology, Vince Cable is evidently quite happy to adopt the ‘social democratic’ tag, and since his policy leanings seem to find more favour with the members than those of (say) David Laws or indeed Nick Clegg, I don’t think that label is an inaccurate description of a major strand of opinion within the party.

    I’d argue that the policy agenda advocated by self-described social liberals (by which I mean those who go by that label to distinguish themselves from ‘economic’ or ‘classical’ liberals, not those who see social liberalism as an ingredient alongside the economic, personal and political elements as in the ‘four-cornered’ Orange Book formulation) is one that would more commonly be recognised as ‘social democracy’ outside of Lib Dem circles and indeed in most Western democracies.

    Social liberals often protest that they arrive at those policies by a different route, with a different motivation, claiming to put a greater emphasis on the individual than in social democracy. But, in one sense, all major political philosophies in liberal democracies like the UK claim that their motivation is the empowerment and primacy of the individual, even when they are acting in the most paternalistic or collectivist fashion.

    I remember Michael Foot used to argue that to be a libertarian was to be a socialist, because he believed that only Clause 4 socialism and public ownership would put ‘true’ freedom in the hands of individuals.

    And from the old social-democratic right of the Labour party Roy Hattersley wrote a semi-philosophical tome entitled ‘Choose Freedom’ in the mid-1980s which claimed (implausibly in my view, but that’s not my point here) that “socialism is the promise that the generality of men and women will be given the economic strength which gives meaning to the choices of a free society. It is a commitment to organise society in a way which ensures the greatest sum of freedom, the highest amount of real choice and, in consequence, the most human happiness… Liberty is our aim and equality is the way in which it is achieved.” [my italics]

    So I’m not sure I really buy that social liberals place a distinctive emphasis on individual freedom in comparison to social democrats, or that there is much substantive difference between them. Both tend to advocate the expansion of state activity and use ‘positive liberty’ arguments to insist that their mission is a liberating one.

  • Bill le Breton 28th Sep '12 - 7:46am

    Hugh p, the significance of the speech is not indicated by its omissions. As I wrote somewhere above and as Matthew suggests, to see its meaning and intention I suggest our have to read the Reeve new statesman piece.

    The central notion is that those who disagree with the 2010 economic policy of the leadership (not the manifesto) are both those who want to say, ‘stop the world, I want to get off’ and lost sheep in the liberal field who need to return to the labour fold.

    I.e.you social liberals are actually social democrats and now should leave us to get on with the policy of austerity. A policy which is now possibly more neoliberal than the conservatives.

    As part of that argument he calls in aid the alleged ‘opportunism and oppositionalism’ of the party before these ‘true Liberals’ began to rescue the pure representation of the party.

    This necessarily trashes the record of liberal democrats and pre-merger liberals characterizing them as preferring endless opposition to the responsibilities of power.

    It says to the voters who believed in these campaigns, sorry but our predecessors hoodwinked you for your vote. That is very dangerous. In fact I wd say it was reckless. Of course it explains the tuition pledge conveniently and at first I though that this was the explanation for the ‘tactic’, but now I think, given the Reeve analysis that it is strategic: ‘from here forth this party is for true pilgrims, if you are not of the faith, then you true home is Labour; be off with you.

    This is why our economic policy is so important. The leadership is now saying, ‘Faith in austerity is the outward sign of the pure liberal.’ There is no room for defiance.

    You will now sense that if I am right what is being advocated by Reeve and pursued by the leadership is the very opposite of liberalism. It defines itself by exclusion and intolerance.

    I believe that the mover and seconder of the amendment on economic policy were described by one speaker as mad. If so, that would confirm my fears.

    The speech and the strategy behind it is sinister, fundamentally illiberal and deeply worrying for those who not only favour a different economic policy, but who welcome and cherish unconformity.

    The little reed warblers keep feeding the cuckoo long after their young have been expelled from the nest. Are we so bound by inherited behaviour.

  • Paul in Twickenham 28th Sep '12 - 8:17am

    No constitutional reform. No electoral reform. Demanding secret courts. Throwing away Keynesianism. Wittering on about fairness while ramping VAT and cutting income tax on the rich. What is a Liberal to do?

  • PiT – Brown threw away Keynes when he failed to reduce debt during the boom years.

  • Ed Shepherd 28th Sep '12 - 9:57am

    This concept of a “free” society is an interesting one. Someone who is unemployed is not “free”. Someone facing imminent redundancy is not “free”. Someone working in a tedious or dangerous job is not “free”. Someone struggling to pay bills and feed the kids is not “free”. Someone who cannot afford an education or medical care is not “free”. That’s a lack of “freedom” that I suspect our current political leaders do not understand. They grew up surrounded by great wealth knowing that they will one day be wealthy with no effort needed on their part. To them work is a hobby not a necessity. To them being “free” is something to do with not having to have an ID card or being able to build a hideous extension without planning permission or being able to drive a fast car without getting flashed by a speed camera. They cannot understand that a person who has to sell his/her labour in the marketplace in order not to die in poverty is not “free”. To be “free” in modern society a person needs to be guaranteed a sufficient income to meet their needs. I seem to recall a time in the past when some “liberals” used to be aware of this. They talked of ideas such as “citizen’s income” or “property for all” that might have helped people to achieve some limited “freedom”. One rarely hears such talk now apart from when the occasional intellectual character on an internet forum mentions it. One never hears of such ideas from the leaders of the three (or should I now say four) leaders of the main political parties England & Wales who have all embraced the doctrine of the primacy of the market-place.

  • Richard Dean 28th Sep '12 - 10:51am

    A Google search on “Whst is freedom?” returns this as its first answer:

    1.The power or right to act, speak, or think as one wants without hindrance or restraint
    2.Absence of subjection to foreign domination or despotic government

    So a person who is unemployed or struggling or threatened with redundancy can still be free in the UK – free to act, speak, or think without restraint other than that which comes from repect for others.

    Here are some more random (=free?) thoughts …

    You do not need to be guaranteed an income to be free – quite the reverse, since guarantees almost always come with restrictive conditions. Nor do you need to be alone, you can freely choose to have a family and still be free. Communication and community are hard-wired into us as humans, and their absence that reduces freedom just as much as their excess can.

    Maybe rich kids think that economic freedom is the same as being rich. Another view is that it’s the right or ability to work. Some might prefer to think of freedom as the right to be, others as the right to change. Both views are acceptable in a free society.

  • Alex,

    I am surprised that we still have these discussions. J.A. Hobson, T.H. Green and L.T. Hobhouse laid down the philosophical foundations of modern liberalism. They recognised that the then prevailing doctrine of laissez-faire liberalism was ill-equipped to deal with the challenges of alleviating poverty, poor housing and health, working conditions and education.

    Hobson advocated a greater role for the state than laissez-faire liberals, yet smaller than socialists. He criticised both classic liberals and socialists for the hard-and-fast lines drawn by them between individualism and collectivism. While rejecting an atomistic view of society, and advocating public property in addition to individual property, he nevertheless also opposed socialist blueprints of a central-planned economy. He thought of human nature as combining collectivist and individualist characteristics, and on this basis he aimed to intertwine individualism with collectivism in society.

    These men established the intellectual framework for Keynes ‘good society’ and Beveridge’s welfare state.

    Adam Posen on retiring from the MPC recently said “All the things that Keynes told you: that interest rates will stay low when there is a lack of private sector demand, that governments are not going to be held under threat by bond markets when they are just as much worried about growth and they are fearful of what to do with their money. When you withdraw or add fiscal stimulus, it has a multiplier greater than one. All those things were proven to be right by Keynes and by recent experience in the United Kingdom and all those things were proven to be right when I did work on Japan in the 1990s. You know… I do not know why we still debate these things, well people have ideologies.”

    Why do we still have to debate what it means to be a liberal democrat? Economic liberalism without social liberalism is conservatism. Social liberalism without economic liberalism is socialism. Social democracy and modern liberalism are kindred spirits derived from the same philosophical school of thought.

    I agree with your statement “I’m not sure I really buy that social liberals place a distinctive emphasis on individual freedom in comparison to social democrats, or that there is much substantive difference between them. Both tend to advocate the expansion of state activity and use ‘positive liberty’ arguments to insist that their mission is a liberating one.” I would go further and apply this statement to Liberal Democrats (as defined above) generally.

  • Matthew Huntbach 28th Sep '12 - 8:07pm

    Richard Dean

    So a person who is unemployed or struggling or threatened with redundancy can still be free in the UK – free to act, speak, or think without restraint other than that which comes from repect for others

    Yes, but it states in the opening to our party’s constitution that we exist to build a society in which “No one shall be enslaved by poverty, ignorance or conformity”. I don’t know the history of the words, but they were in the Liberal Party constitution before its merger with the SDP, in fact this statement was something Liberals at the time of the merger considered extremely important to retain.

    Wherever these words came from, they seem to me to be deliberately written to counter the argument that freedom is only a matter of lack of legal constraints. Ed Shepherd says that our current leaders do not understand this, well this phrase and the devotion the old Liberal Party had to it shows it was well understood in the past. It also shows up that when people like Richard Reeves are trying to change the word “liberalism” to mean the limited version of freedom which Ed Shepherd quite rightly criticises, they are not acting in accord with what it has historically meant – in fact what they are doing by falsely claiming to be reflecting what Liberals stood for in the past is what Orwell wrote about in 1984, the sort of despicable behaviour those who want power and have no sense of liberalism tend to engage in.

  • Richard Dean 28th Sep '12 - 8:19pm

    Ed Shepherd seems to be saying that he wants to be on welfare and able to afford luxury goods. That’s enslavement for the poor sods who have to work to provide him with the money to allow him to enjoy his “freedom”

  • Richard – don’t be so ruddy conservative! He is not saying that at all. You, in this post seem to be enslaved by the Daily Mail, if no-one else.

  • Richard Dean 28th Sep '12 - 9:02pm

    So who will pay for Ed’s freedoms, and what freedoms will those payers be required to forgo?

  • Simon Titley 28th Sep '12 - 9:24pm

    Oh dear. It seems that the usual suspects (Richard Dean, Alex Sabine, et al) need a history lesson.

    First, don’t try to conflate social liberalism with social democracy. If you don’t understand what social liberalism is, read David Howarth’s essay here:
    http://socialliberal.net/2009/02/12/what-is-social-liberalism/

    Second, social liberalism was not foisted on the Liberal Democrats by the SDP. As someone who was around at the time of the merger, I can assure you that the Liberals most sceptical of the merger and the SDP came from the left of the Liberal Party, not the right.

    Third, the Liberal Party was not a laissez-faire party up to the merger. It underwent a transition to social liberalism (or what was then called ‘New Liberalism’) at the end of the nineteenth century, in response to the failure of laissez-faire economics to address various social needs. The Liberal Party always broadly supported a market economy but the sort of people we’d nowadays call ‘economic liberals’ scarcely existed in the Liberal Party in the years before the merger, and were certainly too few to have any serious influence.

    Fourth, the preamble to the Liberal Democrats’ constitution makes it clear where the party stands. It begins: “The Liberal Democrats exist to build and safeguard a fair, free and open society, in which we seek to balance the fundamental values of liberty, equality and community, and in which no one shall be enslaved by poverty, ignorance or conformity.” Furthermore, as Matthew Huntbach has explained, similar words were in the pre-merger Liberal Party’s constitution.

    Now, you may take the view that only negative freedoms (i.e. a lack of restraint) matter and that positive freedoms (i.e. freedom from poverty, ignorance or conformity) are not a legitimate form of freedom. That is your privilege. But if so, you must accept that the Liberal Democrats are not the party for you, never have been and never will be. In which case, please stop lecturing us about what liberalism is and start your own party.

  • Richard Dean 28th Sep '12 - 9:27pm

    Thank you Simon. But who will pay for Ed’s freedoms?

  • You appear serious, Richard. Ed is outlining situations in what he describes as the modern world where people, often for financial reasons, are not free to make choices. What he says, in effect, is that Liberals (and Lib Dems) over many years have championed a more equal society, with more equal rewards, as a way of developing people’s freedom. I am assuming you are looking at Ed’s post at 9.57? TBH, I cannot see where Ed speaks of “being on welfare and able to afford luxury goods”. What he is saying is that if sufficient work is not available, the benefit system should allow a person to live without being in abject poverty – the system fought for by Liberals and the labour movement earlier in the 20th Century. Ed mentions Citizen’s Income, a concept which was Lib Dem policy for a while in the 1990s, and something which may have a role again if much work is done on a voluntary or extremely low paid basis and un(der)employment is at high levels.

    You will realise that levels of inequality in this country have constantly hit new highs over the last 30 – 40 years. In order to allow people more freedom, one of our central aims as a party, we need to get back to earlier less unequal times. To achieve that, we need a radically different financial and economic framework. Until recent times, for instance, when Nick Clegg spoke of “the new politics” before the last election, but there have been many instances over the years, we have pushed radical change to reverse the direction of inequality in society. Joe Bourke describes some of the intellectual underpinning, Matthew H explains Ed’s thinking in terms of “a wider version of freedom” (in contrast to Richard Reeves ), and Bill Le Breton rails against the apparent party establishment line against those of us who believe in that wider (economic) freedom.

    Many a true word spoken in jest – the Daily Mail (the Express, The Sun….) leave no stone unturned to expose every benefit claimant who might be “living the life of Riley” at the expense of the poor ordinary taxpayer. But I would hope that most of us here understand that any system has loopholes, and people who might seek to take advantage (which, of course, we should try to stop).Our benefit systems are by and large not generous, and we should not fall into their trap of believing that we are somehow being ripped off or cheated as taxpayers.

  • They are your freedoms, too, Richard! Ed will then be paying for you, and I will too, I hope more open heartedly than clearly you do.

  • Richard Dean 28th Sep '12 - 9:49pm

    Ed will be paying for me? That’s awfully generous, thanks. But I am still concrened about Ed. Who will be paying for him?

  • Richard Dean 28th Sep '12 - 9:53pm

    Thanks to you too, Tim13. I think I will buy a yacht.

  • I am, of course, lucky, Richard – I spent some time this morning riding round on buses, paid for, perhaps, by you. I am not certain about the yacht, though – can we settle on one of those little ones, that we can take on the local pond? Before you or anyone whinges about the excessive subsidy for my bus rides, I was at the time delivering Liberal Democrat material.

  • Tim13 – “What he is saying is that if sufficient work is not available, the benefit system should allow a person to live without being in abject poverty”

    I agree, and I don’t think many would disagree.

    But if sufficient work is available and someone chooses not to take it?

    And what is abject poverty, as opposed to poverty? We think we know it when we see it, but where and how is the line drawn?

    And what if someone dips below the line through poor, but freely made choices in how to spend their money?

  • Simon Titley 28th Sep '12 - 10:27pm

    @Tabman – The answer to your question can be found in the preamble to the party’s constitution: “no one shall be enslaved…”. Someone who is poor through the exercise of free choice has not been enslaved (though probably few such people exist). But people who live in poverty due to circumstances beyond their control (which most poor people are) have been “enslaved”.

  • Simon Titley – agreed. But the devil is in the detail. I think all would agree that secure accommodation, heating, food and access to healthcare are in there. A television? Phone? Washing machine? Dishwasher? Computer? Broadband? Sky Sports? And if sufficient income is provided but the individual spends it on cigarettes?

  • In terms of how the provision of appliances has been done over the last number of years, the Social Fund is now being abolished, which certainly didn’t allow for cigarettes being purchased! Clearly a money level has to be set for what you might call current expenditure – food, rent / mortgage, heating etc. If “incomelessness” (I won’t describe it as just “workless ness”) continues for any length of time, then a solution for the issue of replacement appliances needs to be found, and something of the general type of the Social Fund would seem to be one answer. You ask what is needed – there is a need to keep people connected with the world (internet, TV, radio and landline would seem necessary here. My generational bias here, I can certainly exist without mobile, so I don’t see why others find them so essential!) But, if people wish to live without mod cons, and can live OK as such, I don’t see why we should force them to have such things.

    I write here in a contextual vacuum, without necessarily considering what happens when the total amount of money needed to pay for benefit entitlements is going up, at the same time as tax receipts are falling,largely because of personal debt levels. As you have pointed out before, Tabman, Keynes kicks in at this point of the cycle, where the public purse needs to borrow against future good times, when debts are reduced again.

    Like Matthew, I feel that a modern society probably needs to tax rather higher than the UK does. Our criticism of nuLab over the first 4 years was of Gordon Brown’s overemphasis on prudence and sticking to Tory spending plans. You could see 2010 – 12 as that reversed – it is now Lib Dems sticking to Tory spending plans. I see no reason to change our criticism of that strategy.

  • Tim13 – the other side of Keynes’ formula is that during a boom you use revenue surpluses to buy back debt, reducing interest payments, and buying back more debt etc etc, then you are prepared for the bust. The trouble is Gordon and Ed forgot that bit thus making matters far worse.

    But the real issue is one of fairness, another difficult one to define, but one that has to be addressed if we are to get buy in from general society for welfare payments. Namely, a situation where someone who has “done the right thing” yet is in a less well off position than someone who hasn’t. I don’t know what the answer is and I don’t envy those who have to find one.

  • Simon Titley 28th Sep '12 - 11:45pm

    @Tabman – If the state provides a poor unemployed person with a basic income necessary to get by, and the recipient decides to spend that money on cigarettes, what are you implying? I cannot believe that you, of all people, would want nanny state dictating precisely how that person’s income is spent.

  • Richard Dean 29th Sep '12 - 12:26am

    A little while ago, LibDems took a historic decision. They pledged to never again propose a policy without making sure it could be paid for. The way the decision was made was a little unusual – through a viral apology. Everyone knows that one apology shows sincerity, and that more than one destroys credibility. So we really have to keep to that pledge.

    In the spirit of this new enlightnment, I repeat my questions: Who will pay for Ed’s freedoms, and what freedoms will those people lose as a result?

  • Simon Titley – indeed, were that the case I would take no issue with it. But that would inevitably lead to such a person living in what Tim13 calls abject poverty, as her income would not be sufficient to provide both necessities and non n,ecessities. This would then be used as evidence of the cruel nature of the government by our political opponents (you get the picture)

  • Richard – I don’t think “the Lib Dems” decided that. I think it was Nick Clegg who said that, after having his fingers burnt on tuition fees. Or should I say his whole reputation shredded. Had I stood in 2010, and been elected, I would have signed up to what that pledge said, and I would have voted appropriately, as many “backbench” Lib Dem MPs did, in accordance with that pledge. I have something of a record on this, in that I have publicly disagreed with what I considered to be a silly pledge from the party during an election campaign. That was in an election where I was not in a hopeful seat, so I could easily have taken the easy way out and gone along with it. I personally agree that we should NOT be pledging things which in a majority we can’t or won’t implement. I am afraid it is what a lot of candidates and probably all parties do sometimes to try to win more votes. It is the root of the differentiation between Promise, Aspiration, Fond hope and such like!

    Your questions, as I tried to show with my flippant answers, are based on a false premise, ie that the benefit system works for some people, and against others. It also works on the assumption that some people, or their relatives are enabled by the system to take without contribution, while others don’t benefit. That is wrong, wrong, wrong. Of course there are people who try to exploit the system, and as I have said, we should try to ensure that loopholes are closed. In actual fact, of course, it is more often those on benefit who suffer from the vagaries of the system – suspension of benefits for rather trivial reasons, and difficulty, or unreasonable delay built in to restart mechanisms etc.

    Why do you suppose your freedom will not be compromised at some point by unemployment, serious illness, or disability? Who do you hope might help out in such a situation? Ed, or me? I think it was Paddy who once made the comparison of us often paying tax as our “subscription to a civilised society”, and it is certainly true to say that NI was meant to be an insurance scheme for hard times, which was why it was paid for separately from other “taxes”. Times move on, and there are obviously financial gaps in this, and that is a major issue in this debate.

    But ultimately, as a party, one of our key values is that we look at each person as an individual, not as a member of a group. We should not stereotype, and so going along with characterisations of benefit claimants originating from the Mail, the Express, the Sun, etc should not be happening. This is what the Tories do, did under Margaret Thatcher, and are doing now. It is our mission to stand up against those caricatures, and to ensure the vulnerable are properly protected. Watering down this mission, because of coalition, is IMO, unacceptable.

    Tabman raises the question “What is fairness?”. I agree, not easy to determine in all cases. But, I have to say, rich, moderately rich, and poor have diverged in income and wealth over the last 30 – 40 years, and that gap needs to be reversed. I remember people in the 50s and 60s moaning about “doing the right thing”, and others who go off and have 7 children, or “get it easy in Council houses” etc. I think you just have to exist with some of that moaning. If you view Thatcher’s victories, as in some way related to that tendency, which I do, it is clear that more explanation is necessary. Of course, some of that is down to “British guilt”, or “pride” – in that some people will not claim, even when they need / are entitled to claim.

    But I have no doubt, as Lib Dems we need to ensure the vulnerable and the less well off are kept within overall society. What has increasingly happened since Thatcher is the development of a pale version of the US underclass. We can see where that goes, and we should take steps to eradicate it. Or all of our freedoms are up the shoot.

  • Richard Dean 29th Sep '12 - 1:47pm

    As it happens, Tim13, I am personally quite familiar with bad personal situations including of the type you mention. But Ed’s freedoms go way beyond assisting people out of them. Who will pay for those extra freedoms, particularly in these bad times?

  • I have reread Ed’s post and I cannot for the life of me see these expensive freedoms you have seen, Richard. The current Government are cutting back on benefit – depriving people of things, which, up to now, in those situations they have been entitled to. I am well aware we have to share pain in hard times, but I am not really clear about how you think the pain or the freedoms should be shared. I am clear that the rich have got substantially richer over the past 30 years, and should now share their riches with those less fortunate. That has been the Liberal line, and the Lib Dem approach until very recently (even now we hear Nick Clegg’s wealth tax ideas).

  • Alex Sabine 29th Sep '12 - 6:44pm

    @ Bill: “I believe that the mover and seconder of the amendment on economic policy were described by one speaker as mad. If so, that would confirm my fears.”

    Tim Farron had a saltier expression for those urging a change of course: “flippin’ crackers”…

    I’m not sure I would go that far myself! Economic policy is always a matter of judgement, not faith; and there are plenty of dissenters from the coalition’s policies (on both right and left) who make some valid points.

    I just happen to think that, on balance, many of their alternative plans (B, C or whatever) are implausible, have even bigger disadvantages, and offer false palliatives based on a misdiagnosis of the underlying problems.

    (Nonetheless, Keynesians are right that the cuts in capital investment – inherited from Labour and slightly abated by George Osborne – have had a negative effect on the construction sector and have withdrawn demand while the economy was still weak. Right-wingers are right to point out that current public spending, including welfare, has continued to rise as a result of policy decisions and not just because of recession-induced extra costs, and that so far austerity in the UK has primarily taken the form of a tax-and-inflation induced household income squeeze.)

    Despite arguing for tough fiscal action and longer-term tax and spending reform, I’ve acknowledged from the start that the pace of deficit reduction would have to be carefully calibrated, and that there was likely to be a short-term trade-off between austerity and growth (though a loss of market confidence would make this trade-off more acute and intractable, as we have seen in the eurozone).

    Indeed, despite the coalition’s household-economics homilies I always took it as read that they realised this also: If they really believed that there was no downside to deficit reduction they would presumably have resolved to eliminate the entire deficit in a single year rather than adopting a rolling five-year timetable with various get-out clauses like the cyclically-adjusted current balance.

    However, I was and remain sceptical that another dose of fiscal stimulus – on top of the £130 billion or so of borrowing that is already being borrowed to offset private-sector retrenchment – will generate self-sustaining growth, rather than simply ‘kicking the can down the road’ towards a fiscal cliff-edge in a year or two’s time when the next stimulus is withdrawn.

    And although I think the British government’s reliance on capital spending cuts and tax rises rather than current spending reduction hasn’t been ideal, I would point out that the coalition’s programme is not nearly as drastic and pro-cyclical as the packages that countries like Spain and Greece that have lost control of their domestic fiscal autonomy.

    It’s also interesting that Francois Hollande, the great hope for a Europe-wide resurgence of Keynesianism, has just introduced an austerity budget (albeit one with a socialist flavour) that suggests that even left-wing governments in relatively rich northern European countries are for some reason rejecting Ed Balls’s advice…

    And before anyone brings up the US, Nick Clegg was right to point out that the difference between the Obama ‘stimulus’ and UK ‘austerity’ is largely rhetorical, and that misunderstandings arise because of technical differences in the way in which fiscal policy takes effect in the two countries (the use of legislative measures in the US versus the much more significant ‘automatic stabilisers’ in the UK, and the use of federal spending to mitigate cuts in state and local budgets).

    As I’ve shown in detail before, the main difference between US and UK fiscal policy has been on tax rather than spending. In particular, tax revenues have remained below pre-crisis levels in the US even though GDP has more than recovered the lost ground, whereas in the UK the opposite is true. They haven’t tried to recoup the difference through raising rates, unlike in the UK where we have had VAT, CGT, NI and income tax rises since 2010.

    In any case, while the modest GDP growth in the US looks good in comparison to us and the rest of Europe, the employment and job creation data is worse. American voters certainly don’t think their economy is performing well!

  • Matthew Huntbach 29th Sep '12 - 11:17pm

    jedibeeftrix

    Campaigning to tax more than 40% of gdp on your worthy social objectives is volunteering to become the temperance league of the 21st century

    You have now several times avoided replying to the point I have been making to you that I feel you are making a fetish over what could be fairly minor administrative issues. In this country we have an NHS paid for from tax. I could imagine instead a system of private medicine with enough balancing safeguards that no-one need fear being sick and unable to be cured due to lack of money. That would greatly reduce the proportion of GDP going in tax, but I don’t see the huge difference in doing it that way than in doing it the way we do now in the UK that you do. We have got ourselves into a mess over tuition fees and student loans really because of the same fetish – if we called what we have now a “graduate tax”, but paid it back in exactly the same way, we LibDems could claim we kept our pledge. However, because of the fetish, it has been badged as something else so it does’t show up on the % of GDP that goes in tax. Clever, but stupid.

  • Alex Sabine 30th Sep '12 - 3:18am

    @ Simon Titley: “Oh dear. It seems that the usual suspects (Richard Dean, Alex Sabine, et al) need a history lesson.”

    Leaving aside the patronising tone, Simon, I will try to address a few of your points:

    “First, don’t try to conflate social liberalism with social democracy.”

    I wasn’t “trying to conflate” them. I was pointing out that, as a matter of observable fact, a number of leading Lib Dems are happy to call themselves social democrats (Vince Cable, Shirley Williams to name but two… I’ve heard Vince describe himself as an economic liberal and a social democrat but rarely a social liberal.)

    Perhaps this might be because they regard ‘social democracy’ as a more readily understood label outside of Lib Dem circles and among the British public as a whole? Or maybe they simply don’t see the significance of the distinction that you and others do?

    I have read David Howarth’s essay before and I agree it is illuminating, typically erudite, and an excellent exposition of the different strands within the broad church that is the British liberal tradition.

    Many of these differences are a matter of emphasis and degree rather than fundamental principle; but the question of where you put the onus of proof (for example a presumption in favour of state intervention, or a scepticism towards it, in the ‘personal’ as well as the economic sphere) can be highly significant – especially in a wider political context in which many social-liberal objectives are in practice shared by social democrats and indeed many conservatives, even if they don’t describe their aims using abstract philosophical concepts like ‘positive liberty’.

    I certainly don’t see economic liberalism and social liberalism as being irreconcilable, although there are sometimes tensions between them.

    It is absurd to regard David Laws, Paul Marshall and those associated with the Orange Book (and of course the authors included MPs often seen as being on the centre-left of the party like Chris Huhne, Vince Cable and Steve Webb) as a cabal of Ayn Rand-style laissez-faire libertarians attempting a putsch, as is often alleged by commenters on this site.

    The editors’ argument – echoed quite strongly by Cable in his chapter on economic liberalism – was a more nuanced one: that the party had come to neglect its heritage of liberal economics and personal freedom, and needed to reunite those aspects with its well-established commitment to social-liberal objectives and political/judicial/civil liberties.

    Regarding economic liberalism, they argued that this was important in its own right as part of a free society; but also that it could often provide more effective tools for achieving social-liberal objectives than the statist solutions to which the party seemed wedded at that stage.

    So, in large part, it was an argument about means rather than ends, as David Howarth recognises. But it was also a call for a cultural shift so that competition and choice would be embraced rather than tolerated or treated as unnecessary luxuries which voters didn’t care about (exemplified by motherhood-and-apple-pie platitudes like ‘parents don’t want a choice of schools, they want a good local school’ which Charles Kennedy used to say).

    “…social liberalism was not foisted on the Liberal Democrats by the SDP… I can assure you that the Liberals most sceptical of the merger and the SDP came from the left of the Liberal Party, not the right”

    Another straw man. Nowhere have I claimed that the SDP were left-wing and the Liberals right-wing. (Apart from anything else, I always hear Lib Dems objecting to the use of the crude left/right axis; nonetheless, it has a certain durability…)

    In terms of economics, I would say there was no clear pattern given the spectrum of opinion in both parties; but on defence and nuclear policy, for example, I’d agree that the SDP – reflecting the Gaitskellite/Ernest Bevin Labour heritage – was more hawkish or ‘right-wing’. This manifested itself particularly in the mutual suspicion and hostility between David Owen and the Liberals, for instance.

    “Third, the Liberal Party was not a laissez-faire party up to the merger. It underwent a transition to social liberalism (or what was then called ‘New Liberalism’) at the end of the nineteenth century, in response to the failure of laissez-faire economics to address various social needs. The Liberal Party had always supported a market economy but the sort of people we’d nowadays call ‘economic liberals’ scarcely existed in the Liberal Party in the years before the merger, and were certainly too few to have any serious influence.”

    Again, I’m familiar with the New Liberals, Hobson, Green, Hobhouse et al, and the prior and subsequent development of the Liberal Party. But again, this seems to me an insular perspective. The limitations of laissez-faire were recognised by the Liberals, yes; but neither Labour nor the Tories had ever been laissez-faire parties. The reality was that all democratic parties accepted responsibility for ensuring provision of, or access to, a wide range of social goods that extended well beyond the strict ‘public goods’ of external defence, internal law and order, etc – including health, education, transport, poverty alleviation and so on. No significant British politician of the last 100 years or more has been an advocate of laissez-faire; even Enoch Powell at his most doctrinaire supported the state’s continued responsibility in areas like health, education, infrastructure etc (although he did want it to withdraw completely from the commercial and industrial sphere).

    So railing against laissez-faire seems to me rather pointless and academic, as is invoking the spectre of Ayn Rand every time someone proposes legalising drugs, liberalising immigration or using market mechanisms rather than state monopoly.

    The more pertinent and fruitful debate to have in a liberal democracy like the UK is surely that pinpointed by Isaiah Berlin: where and how we strike the balance between the competing desirable objectives (liberty, security, equality, justice etc), which are often complementary but sometimes conflicting. As he suggested, in that process liberals ought to give great, but not absolute, weight to individual freedom.

    In terms of what balance between negative and positive freedoms that entails, I thought Nick Clegg actually put this quite well in his conference speech when he spoke of “an unshakeable belief in freedom… not the tinny sound of the libertarian’s freedom, still less the dead thud of the socialist’s; but the rich sound of Liberal freedom, amplified and sustained by the thing that gives it real meaning: opportunity. The freedom to be who you are. The opportunity to be who you could be. That is the Liberal promise.”

  • Excellent posts. Alex.

  • Peter Watson 30th Sep '12 - 8:22pm

    @Alex Marsh
    Depressing, yes, but not surprising. Tories and Lib Dems will be campaiging in the next election on the basis of a shared record. For entirely different reasons, both sides of the coalition will claim that the tories were restrained by the Lib Dems, but both will be defending what they have done. In a coalition with Labour would senior Lib Dems really want to unwind legislation with the same enthusiasm with which they introduced it (even if they had done so against the wishes of their supporters)? For me, the burning question about a potential hung parliament after the next election is, if more than one type of coalition were feasible, what would Lib Dems want to do, and do voters, activists and MPs want the same?

  • Matthew Huntbach 30th Sep '12 - 10:22pm

    Alex Sabine

    Nowhere have I claimed that the SDP were left-wing and the Liberals right-wing.

    It seems to be quite a common sort of commentary now, very many times I see our party put down as “divided because composed of two traditions – liberal and social democrat” – and by “liberal” they mean “a strong supporter of free market economics and opponent of government involvement in the economy and provision of services” while by “social democrat” they mean “someone who believes the state has an active role in providing welfare and other vital services”. Indeed, Nick Clegg’s outgoing Director of Strategy wrote a whole article in the New Statesman (21 September) using just these terms in just these ways.

    People who are too young to remember the 1980s now seem to suppose the whole Liberal-SDP thing was between a Liberal Party which was essentially what we now call “Orange Book” and and SDP which was like the opponents within the party now of its shift that way. I have very often seen younger people writing in Liberal Democrat Voice making just that assumption.

    The reality is that many of the Orange Book contributors were former SDP members, while many of the people within the Liberal Democrats most hostile to the party moving that way are former Liberal Party members – and generally former Liberal Party members who were not keen on the SDP.

  • Allan Heron 1st Oct '12 - 2:58pm

    Speaking as a member of the SDP in the 1980’s I’d like to both welcome and endorse the comments made by Matthew.

    The closest thing to Orange Bookism that I can recall was the direction that Owen led the SDP in, and which certainly contributed to me welcoming merger as it was clear to me that the Liberal Party was more left wing than the SDP had been and was ever likely to be. As noted, some of the Orange Bookers were from the SDP – many others ended up in the Tories.

    I also empathise greatly with his anger at being described as a “social democrat” which is now being used pretty much as a term of abuse for anyone not following the Clegg/Reeves line. Putting aside whether you agree/disagree with the direction that the party should be heading, this abuse of history (by people who have, at best, read about it in books) is the most disturbing. It’s clear to me that there is a continuity and consistency of line within the Liberal Party which both preceded the formation of the SDP and continued beyond the merger to form the Liberal Democrats that I’m proud to associate myself with.

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