Stephen Tall recently asked us here on Lib Dem Voice to consider whether Nick Clegg’s call for “big, permanent and fair” tax cuts, combined with £12.5 billion of green public investment would “strike a chord, appear flawed, or be ignored”.
Well, people might just find a flaw in our argument that tax cutting should be top priority, but so should increased public spending. It looks two-faced. It suggests we can’t agree amongst ourselves. Facing enormous government debts, our policy seems to be to increase them in all directions – by taxing less, and by spending more. Come election time, the commentators may well find it easy to dismiss us as the pie-in-the-sky party.
This is a pity. Labour’s VAT cut was a mistake, and Brown’s pretence to superior competence is wearing thin. The Tory “do-nothing-and-just-blame-Gordon” approach is equally unhelpful. We ought to be trouncing our opponents.
Those opponents have, however, each done one thing right. They have each adopted a brutally simple and clear position, and repeated it endlessly. For many voters, that is what is wanted. Evasive complexity, which is what we now offer, appeals to few.
By contrast, US President-elect Obama’s plans to create green jobs appeal both to reason and moral principles. It is right to take action to preserve livelihoods. It is also right to turn away from excessive debt-propelled consumer spending on luxuries – which is partly what caused the problem in the first place – and toward green infrastructure spending on genuine needs.
Why can’t the Lib Dems make an equally effective moral appeal? Because we are still saddled with the parallel commitment to big tax cuts. So, as our recipe for financial hangover, we offer the “hair of the dog”. “Skint after that shopping binge? Well hey, take some free cashback from Government, and get yourself back out on the High Street!”
True, Labour also rely on tax cuts. At least theirs are temporary. Gordon does concede that one day, he will have to pay off those big debts he built up. Nick, with his “permanent” tax cuts, just seems content to let debt go on climbing. All the independent commentators say that tax rises will soon be unavoidable. We don’t seem to be listening.
Why have we not, by now, dropped the tax cut policy altogether?
Well, when the idea surfaced in the Lib Dems’ Make It Happen policy document, it was clearly linked to the aim of shrinking the State and reducing public spending. Then the banking crisis hit us, and after some prevarication, Clegg accepted that it didn’t make sense to cut public spending during a recession. However, the fundamentalist form of economic “liberalism” that gave us the Orange Book – sponsored by the financial industry – has not disappeared. In the immortal words of Gerry Adams, “They haven’t gone away, you know.”
And so it is that Clegg clings to “big tax cuts”, while simultaneously responding to activist demand with his contradictory appeal for green public investment. And so it is that Clegg shrilly denounces “relentless state activism”, and explicitly repudiates the thought that recent events might make a case for the view that the State can sometimes do something useful.
It speaks volumes that Clegg has said nothing when prominent commentators have suggested a Lib-Con alliance. Previous leaders always jumped to scotch any such suggestions.
We can only fear that Clegg’s real long term policy aim is to move much further to the right, and that proposals such as the “green road out of recession” are just temporary sops to the activists, thrown out in an attempt to avoid defections. If the Tories win, will Clegg be seen as their critical friend, who will work with the Tory right to press for sharper radical policies? (While, of course, balancing his remarks with pinkish incantations about the poor and the environment, which Cameron will happily ignore?)
Will we eventually see for-profit free schools that select on the ability to pay? Or a revival of David Laws’ plan to replace the NHS with social insurance? I don’t know, but what I do know is that once an Orange Book bandwagon is rolling, yesterday’s “never” suddenly becomes today’s “must be done”. Tony Blair led an ‘Orange’ bandwagon. Then, for example, “Our air is not for sale!” soon turned into “We will privatise air traffic control!” Do we want to follow the same pathway?
Time to write a letter. Dear Nick, Are my fears overstated? If so, isn’t it about time that you took the necessary action to prove it? Beginning with the statement that, now we have identified the overriding need for green public spending, we must abandon tax cuts?
* David Allen was until recently chairman of Rushcliffe Liberal Democrat Local Party and has been a member for 27 years.
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88 Comments
As far as I’m aware, our proposed tax cuts are mostly to be paid for by raising taxes in other areas, making them close to revenue-neutral (seriously, it’s impossible to forecast these things with any accuracy, so anyone making policy proposals will have to live with the fact that they’re probably a few billion pounds out either way). One might argue that we are being disingenuous here, because we would not be cutting the overall amount of tax but would instead be changing the distribution of tax sources, but the important point is that it really doesn’t have any effect on the available budget for spending.
I think that you’re approaching this in the wrong way, by assuming that policy and message are the same thing. Obama’s policy in the US is actually quite complicated (check out what any of the American economics bloggers have to say about it) but his message was extremely simple. You are arguing that it’s not possible to have a complex policy and a simple message, which is, in my opinion, untrue. The policy can be complex and involve balancing multiple concerns (e.g. the need to redistribute the tax burden away from the poor and on to the wealthiest, the need to stimulate the economy, the need to invest in green technology, and so forth) whilst retaining a simple, clear message. There’s no need to throw the baby of good policy out with the bathwater of mediocre message.
Also, wasn’t the pledge to cut £20 billion of wasteful public spending (ID cards, the giant database, DBERR, the NHS computer system etc) anyway? Surely some of the future burden will diminish if we cut that spending, whilst keeping the good things?
David’s artcile highlights, albeit in dramatic and colourful language, a very genuine policy debate that will need to be had in due course. The party will need to consider the juxtaposition of two events.
1. The fully funded nature of “Green Road” has a shelf life. Labours VAT cut is costing just shy of a billion quid a month. By the time of Euro polling day just under half the £12.5bn borrowing will have been “spent” and no longer available for reallocation to Green Road. In the run up to a May 2010 GE then all the money will have gone.
It would be simple and reasonable to simply drop the policy and down grade it to a worthy ” I told you so” line. However if the economy still needs stimulus we’ll need to fund it afresh.
2. At some point before the GE we will eventual get the final list of £20bn of spending savings the Treasury team is working on. That will be tallied up with spending commitments and is there is any gap then according to Make it Happen that will go on tax cuts.
One question then is this. Is it really credible to imagine us have a spare X Billion quid for tax cuts but to leave Green Road unfunded or abandoned in the middle of recession ?
If the anser to this is No then why not say so now rather than marching our troops to the top of the rhetorical hill called tax cuts before having to march them down again ?
David’s article also highlights a particular viewpoint that he has, which is that Nick Clegg is leading the party to the right.
Everything that he can argue to support this view is championed as proof beyond doubt; everything that contradicts his viewpoint is judged a mere “sop”.
The proof he demands (abandoning tax cuts for the less well off) is impossible to give because *it’s not a right wing policy*.
What will make you happy David? There is, and probably will be, a debate to be had between the more market liberal-inclined Lib Dems and the social liberal-inclined members (and I count myself amongst the latter) but that needs to be a proper debate, not just people talking past each other, and believing the worst.
I’m sure David believes he’s one of the minority that sees through the Emperor’s new clothes.
To be honest though, David, mate, I’m just getting tired of you shouting “HE’S NAKED!”.
Rob Knight
“There’s no need to throw the baby of good policy out with the bathwater of mediocre message.”
I think what you’re implying is that the message of “big permanent tax cuts” is just a rather empty piece of rhetoric, and that the real policy is much more balanced. Well, that’s arguable.
It has certainly sometimes been said that we might perhaps end up reallocating all the £20bn of cuts in wasteful spending towards different spending priorities of our own, leaving no room for net tax cuts. And it has also at other times been said that the vast bulk of the £20bn would go to tax cuts. Now, if you want to be nice to Nick, and give him the benefit of the doubt, you might try to take the average of all these contradictory and ambiguous remarks, and come to the conclusion that we shall probably just have some fairly small net tax cuts. When we rule the world, that is.
There is then the awkward fact that our rhetoric is badly out of step with this interpretation of our policy. DCF says that given this ambiguity, it is wrong for me to “believe the worst”.
The trouble is that Nick is the creator of the ambiguity. And when someone offers you a deal which involves an ambiguity that the dealer has created, do you decide not to “believe the worst”? When the man in the pub says he can sell you a great car for half the book price, and it’s all perfectly legit but unfortunately the log book has got lost, do you decide not to believe the worst?
Don’t you say that you need the log book, or else it’s no deal?
“I think what you’re implying is that the message of “big permanent tax cuts” is just a rather empty piece of rhetoric, and that the real policy is much more balanced.”
Well, no, because the tax-neutral package DOES deliver tax cuts for 90% of the population, as we all know. You don’t even need the promise of the *extra* tax cuts for that line still to be sound. Honestly, we’ve been over this a thousand times.
This strikes me as an odd paragraph:
“Then the banking crisis hit us, and after some prevarication, Clegg accepted that it didn’t make sense to cut public spending during a recession. However, the fundamentalist form of economic “liberalism” that gave us the Orange Book – sponsored by the financial industry – has not disappeared. In the immortal words of Gerry Adams, “They haven’t gone away, you know.””
So… let me get this right. You’re saying that Clegg conceded after the banking crisis that our planned spending cuts would not be immediately viable. And we do, indeed, seem to have heard substantially less about them since the crisis broke, and will have to at some point, as David Morton says, clarify exactly what we’re keeping of those plans.
But anyway, having said that Clegg has conceded this much, that state spending cuts can no longer be certain, you then say “Ahhh! But he still believes in them really! So there!” and use that assertion of yours as the evidence for your next line, that Clegg is still “clinging to tax cuts”, and thus must be condemned.
And you’ve decided to view the Green Road as a bribe to, er, you.
So basically, there’s absolutely nothing he can do to please you. Everything he does is suspect and duplicitous. His plans are, in fact, to be (and I’m using your word here) feared.
Isn’t all this getting just a teensy bit paranoid?
As David Morton says, there is a valid critique to be made of our economic policy. I wish you’d get on and make it. This is not a serious piece. The responses of Rob and David above *are* serious, and you’re not taking them seriously. Why not?
David talks about “ambiguity”. I think he is expecting the wrong thing. There are one? two? budgets before the general election. Possibly another public spending round. Who knows what growth/shrinkage will be in economy / taxes in meantime. What will be exact benefits figures as unemployment goes up?
I think problem is not “ambiguity”. Problem is someone thinking that despite all that we should have exact figures for everything. That is not realistic. Sorry David.
“I think problem is not “ambiguity”. Problem is someone thinking that despite all that we should have exact figures for everything.”
But of course the Thatcherites are happy to give exact figures when it suits them – 4p cut in the basic rate of income tax, funded down to the last fraction of a billion; £20bn in spending cuts, vast bulk to go into tax cuts for the middle classes, and so forth.
It’s just when people ask awkward questions that they start humming and harring and saying they can’t possibly quantify anything so far ahead of the next election …
“Thatcherites”? What complete rubbish. Why not swap the word for “Satanists” and be done with it? After all, there’s more evidence on the record that they’re not Thatcherites…
I found my eyes glazing over in David’s original article above when he prayed to Saint-elect Obama that Nick could be more like him, despite Nick being rather less imprecise that Barack.
I know that it’s fashionable for people to project whatever they want to see onto the President-Elect, but it really takes the biscuit to say, ‘My leader’s evil because he really wants tax cuts for lower-and-middle earners, but pretends he wants spending on green jobs! He should stick to Obama’s simple message, which was spending on green jobs and none of those evil tax cuts!’ Except for, er, all the tax cuts for lower-and-middle earners that were the centre of Obama’s election campaign.
So, David, you didn’t spot that your entire argument was based on your not having paid any attention to the US elections and not having a clue what you were talking about, then?
I think the other thing to reassure David Allen should be the FPC decsion on the fees policy. Susan Kramers Child care proposals are currently unfunded though I have heard Nick say that they will be by the time of the election. Now that one is no longer available to pay for the other its another item to be tallied against the £20bn of savings.
As has been pointed out ID cards has already been hypothocated against extra police officers. That doesn’t stop it appearing in a list of £20bn savings but it can’t be used to fund net spending cuts.
And we have yet to grapple with an extra million (at least) unemployed. Income Tax Cuts only help if you have an income to tax. The party’s policy and rhetoric will have to adapt to the fact a group of a million marginalised and stressed people have appeared in society since the tax cuts narrative was first developed.
I saw figures the other day suggesting that Global GDP would contract this year by a few tenths of a percentage point. the first fall globally since 1947. Thats bound to throw up more starvation,civil unrest and perhaps even a few small wars.
CNN makes that a domestic spending pressure as well.
And then you have the simply remarkable shift ( look at what LD MP’s were saying in the commons on PBR day) on the Green Road.
The party is currently actively campaigning against a £12.5bn government tax cut in favour of extra centralised state spending.
Basically the chances of any signifigant Make it Happen tax cuts let alone a Thatcherite coup are now Nil.
Dispite the shrill tone of some of the comments, noone seems to be enthusiastic about cutting public spending as envisioned in Make it Happen.
In September one of the arguments was the need to help people struggling to pay fuel bills. However from March or April fuel bills will come down, and as faar as inflation is concerned the worry now is that it would drop too much. Might be worth increasing VAT simply to stop that from happening?
I wonder about the economics of switching from “tax and spend” to “borrow and spend”. However you raise money is going to be unattractive, but so is cutting spending, particularly at a time when you want to create jobs and demand in the economy, and improve the infrastructure.
What annoyed me about Make it Happen was that we were specific about the spending cuts on existing budgets; £20Billion, and not specific about where the cuts will be made. During the debate it was mentioned that you don’t do that until a general election is called. Well you could just as well say the same about the £20Billion.
I have no doubt there is some waste that can be cut. I work in IT and you may be interested to know that there is a lot of waste in the private sector in IT as well. The solution appears to be not to go ahead with these IT projects in the first place, which seems rather short sighted to me as once this projects go live they are also likely to improve efficiency as well.
In any case I doubt that efficiency saving would make up a large percentage of the £20Billion cuts we need to find. That is why some in the party want to change our policy on student finance. The party has baulked at that, but surely those who supported Make It Happen unamended must accept that they will have to support some painful cuts in public spending?
“In any case I doubt that efficiency saving would make up a large percentage of the £20Billion cuts we need to find. That is why some in the party want to change our policy on student finance. The party has baulked at that, but surely those who supported Make It Happen unamended must accept that they will have to support some painful cuts in public spending?”
Do you really think these cuts are ever going to be identified in any but the vaguest terms?
Government should be spending money into circulation for job-creating infrastructure investment and major capital projects NOW – bypassing the commercial banks and avoiding any return to interest-bearing public borrowing of our own currency! A controlled and debt-free expansion of the money supply would avoid the inflationary straw man that blindly accepted banking baloney puts up as a reason not to adopt this thoroughly Keynesian approach.
In any event, it is NOT the managed expansion of money supply that is the prime cause of inflation (and most of our other woes), but the creation of new debt-money, at interest, by the private banks. In a tight-money situation or at any other time, the only way we have of ever paying off bank interest is to borrow more privately created public currency – at yet more interest! Talk about unsustainable economics!
As Keynes also recognised, an increase in money supply does not necessarily mean more cash chasing the same goods and services, as the supply of these would also increase – at least in a supposedly advanced economy like our own. That’s one reason why comparisons with Mugabe’s runaway cash-printing exercise in Zimbabwe are spurious and silly.
Once we acknowledge the fundamental fact that the creation of the nation’s currency is a vital and legitimate function of government, and NOT of private banks, we will be able to have our full public spending cake and eat right through all those job-destroying income-based taxes too.
Thomas, on the £20bn of waste:
ID cards: Yes, we know the cost of a single unified identity card system is supposed to be £10bn. Now what is it going to cost if instead, every separate Government department, health, police etc have to build, maintain and update their own (very necessary) identity register? Betcha it will cost more, not less. Should we stil oppose ID cards? Yes, on liberties grounds. Will it save money? Doubt it.
The NHS computer: This is spilt milk. The geeks have goofed. The money has been spent and wasted already. Now the geeks have to put the goofs right. Have we anything intelligent to say about how they do it? Nope. Could we really make any savings? Only by forcing the medical profession back onto pen and paper – which would probably cost more lives than sacking doctors would.
Why do we persist in this basically dishonest, ex-Tory line of argument about our magic abilities to cut (unspecified or poorly specified) waste? What are we really going to cut?
There’s something mind-blowing in the idea that Liberal Democrats shriek that fellow Liberal Democrats are unquestionably Thatcherites because they want to change in some way 3% of what the Labour Government does.
Whereas my view is that if you think this Labour Government’s got it more than 97% right… You’re not just a Labourite, but probably certifiable.
It is a basically dishonest, ex-planet Earth line of argument that we can’t be 3% better.
(Oh, and I notice you’ve skated over Barack Obama’s main election pledge again, Mr Allen. Is he not a Tory too?)
David: our 2005 general election manifesto included cutting 3% of Labour’s spending plans and allocating that money instead to our own priorities.
3% of the current spending totals is £20 billion, so if you think that figure is dishonest or Conservative, can I ask if you thought the same of our 2005 general election manifesto?
Or why would it be that 3% was credible in 2005 but not now?
“noone seems to be enthusiastic about cutting public spending as envisioned in Make it Happen”
Au contraire, I will be disappointed if we drop the idea permanently. But I don’t think we will. And for now I must accept that Keynsianism is too prevalent in the political atmosphere – not least from Nick – to dismiss. I also genuinely don’t know enough about economics to say whether or not it’ll work over the short term, although anyone can see there are problems in getting government expenditure to add up to efficient economic activity.
One thing I would point out though is that we should remember what MIH actually said. It said that WHEN we had met all our spending commitments, IF there was money left over, it was most appropriately spent on reducing the tax burden.
That’s still basically my idea of a good end-goal, recession or no recession. But it was *only ever* an end goal. It was the frenzied insistence of the social democratic element that it constituted some sort of imminent slash-and-burn disaster that prompted so many of us to defend it.
Still, Geoffrey is certainly correct in saying there are some shrill elements on this thread. I don’t think you can get much more shrill than bandying the term “Thatcherite” about.
Alix, Alex,
I take the point that you are very angry. Otherwise you would not have written such vituperative long rants. I would only suggest that if my arguments were really as threadbare as you pretend, you wouldn’t have got so angry. You would have found it easy to laugh it all off.
Alex, yes, St Obama’s plans include tax cuts. So do Gordon’s. Clearly Gordon is not what you would call an ideological Thatcherite tax-cutter, and nor in my view is St Obama. Nick is quite a different kettle of fish. (PS by the way, Anonymous is not me.)
David Morton has usefully provided additional reasoning to explain why net tax cuts as per Make It Happen should now be quite impossible. What neither he nor I can explain for sure is why, in that case, Nick keeps up the high-volume pitch for big permanent tax cuts. David Morton seems to think it is just that the penny has not dropped yet (and if he’s right, that doesn’t say much for Nick’s grasp of economics!) But I suspect Geoffrey Payne is nearer the mark: that those who still support MIH are happy to support large cuts in public spending.
Rob, Alix, all of you who believe our tax policy is mainly just redistribution from rich to poor: If that’s correct, then why the hayek does Nick not just say so?
Denis Healey could have helpfully advised Nick that if redistribution is what you are into, then you shouldn’t talk about tax cuts. Everybody knows that taxes have to rise and fall with economic circumstance, so, promising tax cuts is not credible as a consistent policy for all time, unless it goes hand in hand with public spending cuts. Promising to be redistributive is much more credible, because you can always meet that promise, irrespective of the state of the economy.
Mind you, Denis, “Help the Poor” might have been better than “Soak the Rich”, mightn’t it? But that’s by the by!
Mark Pack: I guess the honest answer is that even in 2005, the manifesto had to be taken with a certain pinch of salt. The £20bn figure was plucked out of the air, albeit as a reasonable aim. Nobody really knew whether it was achievable. However, you have to make some sort of assumptions, otherwise you can’t plan at all. We were being pretty much as open and honest as it is possible to be when you are not in government. Had we won the election, we’d have struggled to implement everything in the manifesto, though no more than either of our opponents. We might well have ended up paying for our cherished priorities by making cuts elsewhere that we hadn’t envisaged.
But that’s how it goes when you are offering changes that are genuinely revenue-neutral. It goes without saying that you might find in practice that the spending switch amounts to £10bn, or £30bn, rather than £20bn. As long as you have made a decent fist with your estimate of £20bn, it should be accepted by independent commentators and auditors that you are playing reasonably fair.
All that changes if you are arguing, in 2009, that the £20bn savings are cast in concrete (yet can’t be properly specified), that you have a long list of new spending like child care that you want funded, and yet you can promise net savings and free dosh for the voters! That is a much larger claim. Expect much larger problems from the auditors!
David: you say “in 2005, the manifesto had to be taken with a certain pinch of salt” but actually the manifesto was fully-costed and those costings survived detailed scrutiny by the media, opponents and experts such as the Institute for Fiscal Studies.
Why do you therefore conclude that “nobody really knew whether it was achievable”? What, for example, do you think was wrong with those costings which the IFS didn’t?
Similary, you say criticise our plans this time round – “yet can’t be properly specified” – but at this point in the previous Parliamentary cycle not all the details had been published either. Again, I’m not sure why you’re expecting a different standard this time from last (more detail at this point than we’ve published at similar points, in fact not just last time but as far as I can recall ever)?
Alix,
“I don’t think you can get much more shrill than bandying the term “Thatcherite” about.”
Well, in the past I have used the term “quasi-Thatcherite”, to pick up on the similarities between the Thatcher era “Greed is good” and the Clegg era “billions of / vast bulk of / big permanent tax cuts”. On reflection, the term is probably more confusing than helpful. The Right has moved on since Thatcher’s day.
I see that you share Nick’s ambitions in the longer term to shrink the state and cut public spending. I take it this goes beyond just “cutting waste”. Where do you see the opportunities for us to make big permanent spending cuts?
Mark Pack:
“David: our 2005 general election manifesto included cutting 3% of Labour’s spending plans and allocating that money instead to our own priorities.”
I’ve spent quite a long time looking for this in the manifesto and I can’t find it.
Are you sure it’s there? If so, can you tell us where exactly?
Anonymous: if I recall correctly, we didn’t publish this headline figure in the manifesto. But if you tot up the finances of manifesto (including the costings document), that’s what you get.
Ah, how daft of me. I hadn’t realised that comparing your party leader to Gerry Adams and Tony Blair, and saying that although he has exactly the same proposals as Barack Obama, you laud him but excoriate Nick because… Because… Because you just do, is the soul of reasonableness, but my questioning that with, y’know, facts, is “vituperative”. My bad.
And, obviously, my comments are “long rants” at 177 and 95 words, positively bloated compared with your succinct 777, 289, 175, 332 and 252 zingers.
Oh, dear, David. It’s not just with taxes that you can’t count, is it?
David, you’ve said this before about how angry we all are, and how it must mean you’re right. I’m really not sure I agree with your outline reasoning – laughing you off would not have been at all polite, would it? You’ve gone to the trouble of writing an article, so we’ve gone to the trouble of responding. Go us, I’d have thought.
Anyway, insofar as your point is simply, “My side needs to be listened to” then yes, I completely agree. It would be totally inappropriate, in fact, to laugh you off. I’d be the very first to agree that we have a twin ideological tradition in the party that requires constant tending, which is why I’m always happy to respond to proponents of the opposite ideology to mine.
I’ve said all this in other threads and I’ve written a whole post on my blog saying it. That you see this willingness of mine to engage with you as evidence that I’m angry so you must be right is really quite a disappointing way to approach debate.
Howsoever, it’s true that I do have an emotion attached to this and it’s disenchantment (from having originally been a great respecter of your input) with your lack of ability to formulate a proper argument in a cause that I actually do care about. It matters to me that we haave a robust economic policy. I do indeed want it tested and pulled inside out by candid friends.
But if you’re not even going to listen to points and respond to them then really what’s the point of you? You’d be much better off stopping seeing us all as “enemies” and trying to be a sort of gentle conscience. And step one would be responding reasonably to arguments we make.
Take this thread as an example.
You suggested (interpreting what Rob had written) that “big, permanent, fair tax cuts” was just empty rhetoric.
I pointed out in my first comment that, no, even without the *extra* tax cuts we still had the tax-neutral package which delivers tax cuts for 90% of the population. It was therefore still a reasonable line to use, it represents a literal truth for most of the population.
And what do you say in your next comment?
“David Morton has usefully provided additional reasoning to explain why net tax cuts as per Make It Happen should now be quite impossible. What neither he nor I can explain for sure is why, in that case, Nick keeps up the high-volume pitch for big permanent tax cuts.”
You just repeat your initial point, without acknowledging my response to it. You didn’t even read my post, did you.
So I suppose my feeling on this is that, well, if you want my attention (taking me as representative of the pro-MIH side) then you’ve got it. But you’re going to have to actually come up with a reasonable argument at some point. Continuously alleging that I am angry (face it, you have no idea how anyone on the other end of the internet feels about anything anyway) and this proves your point ain’t gonna cut it.
Turn off the rhetorical FX, turn off the perpetual paranoia, turn on the rationalism, and respond.
Mark, as I recall the IFS heavily qualified their audit report on our 2005 costings. That is not to say that I don’t think it was a reasonable attempt, merely that it wasn’t total perfection and nor should it have been expected to be.
I don’t expect more detail at this stage on the savings side. What I do think is that we are in no position to promise NET savings to fund “big permanent tax cuts”, and get that much larger claim past the IFS!
Alix,
“I pointed out in my first comment that, no, even without the *extra* tax cuts we still had the tax-neutral package which delivers tax cuts for 90% of the population. It was therefore still a reasonable line to use, it represents a literal truth for most of the population.”
My response to that was paragraphs 4 to 6 of my post at 5.44pm. Now I dare say you don’t think it was a strong response, in your eyes. But please don’t accuse me of not reading your post. Perhaps you could (re)-read mine, and tell me what you think of it.
Mark:
“Anonymous: if I recall correctly, we didn’t publish this headline figure in the manifesto. But if you tot up the finances of manifesto (including the costings document), that’s what you get.”
Frankly, I don’t believe a word of this.
I am looking at the section headed “Costings” on page 5. It says that around £5bn will be switched from low-priority government programmes to fund key Lib Dem proposals. And then it goes on to discuss a further £4.9bn to be raised from the 50% tax rate, which will be spent on three specific policies.
There is nothing in the manifesto remotely resembling your claim of a proposal to cut planned spending by 3%.
David A: I understand your sense of frustration but I’m not sure that you realise that the war you are fight has already been won with little blood shed and few casulties. If we can name the elephant in the room you are talking about the ” vast bulk” comments which ment that we would be cutting £15bn plus or 2% of GDP from public spending. Its been clear from within days of that telegraph interview that that is not actually party policy, won’t be and since the then the recession has sunk it completely.
If as I’m confident it will be , £20bn of crap is being deleted from the national budget and £20bn of goodies is being added then whats the problem ? We have both been councillors so know that its actually much harder to switch 3% of a budget than it is to say but hay hum.
As for the “Big, Permanent, Fair ” tax cuts thats a longer standing revenue neutral package from redistibution and green switch. It has no public spending implications at all.
Is this the most wise strap line when we are propose equally big and permanent tax increases else where ? well thats another debate.
In conclusion I suspect ( we have never met) that we have very similar views on this but I’m much, much more relaxed about this situation. Green Road, the recession and the FPC vote on Fees means that the “vast Bulk” idea is for the birds.
Anyway I think the article was worth while as the site is about debate and thank you for writing it. I have one in my head called “What will the Lib Dems do for Woolworths Workers ?” high lighting the fact that Income tax cuts don’y help if you have no income to tax. But I’ll never get round to it because I never do.
So we should all be greatful for those that do write articles.
David M: I wish I could share your optimism. Why, in your view, does Nick keep banging on about big permanent tax cuts?
I’m not sure why people object so strongly to the term “Thatcherite”.
When someone sets tax cuts above all other priorities, when someone wants the state to have a minimal role in providing even services like health and education, and when someone is proposing state funding for private schools (provided they are not “selective”, except that they are obviously going to be allowed to be selective in 101 ways, many of which will be ideal as surrogates for pure academic selection) – when someone says all that, what else is he but a faithful follower in Thatcher’s footsteps – and in some respects a fool rushing in where even Thatcher didn’t dare to tread?
I have read David Allen’s article carefully, and the responses to it, and I don’t think the responses really engage with the points that David is making. Those against him seem to be continuing in the factional abuse which they accuse him of.
It’s not just David who is making up lines about Clegg pulling the party to the economic right. That’s been the spin of the media coverage of his one-year into leadership. It follow from the leadership contest in which minor differences between the two contenders were over-emphasised, with the media spin being that Huhne was appealing to “left wing activists” and Clegg was appealing to a presumed wider audience of more right-wing people who would be attracted to our party if only it got rid of those “left-wing activists”.
To a large extent I feel this press line comes from lazy journalists and commentators who can’t be bothered with real research and analysis, so are just trying to fit our party into the pattern of the left-right divisions in the Labour Party from the 1970s to the 1990s out of which “New Labour” emerged. One could argue that Clegg is just using this to get good coverage in normally pro-Tory outlets where otherwise we’d be rubbished.
However, one only has to look at the LibDem blogosphere to see that an enthusiasm for right-wing economic policies has grown in our party and is strongly present amongst its younger members. This wasn’t the case in the past when younger members of the party tended to be more to its left, and there was hardly anyone who held the sort of extreme pro-market views which now seem reasonably commonplace. Those of us who are longer established members of the party seem continually be be forced on the defensive. I think it may be possible to over-emphasise what is happening here. I don’t think the blogosphere is necessarily representative of wider opinion, and I have noticed over many years that enthusiasm for extreme free market politics often seems to coincide with enthusiasm for internet discussion.
David, like myself, is a long-term member of the party, who has seen past disputes and how they have worked with unattributed comments and media spin being used by the leadership to push it in a particular direction. Someone who has been an active member of the party for over a quarter of a century is hardly going to want to destroy it in a fit of pique, rather our position is one of anxiety – we have invested a big chunk of our lives into this, there are things which are making us unhappy about it, we do want reassurance that the party will remain one we are happy not just to support but to put our time and money into. It would be very hard emotionally after all this time for us just to pull out, so the message really is we want that reassurance, we’re not just attacking our leader for the sake of it.
A big part of the concern of those of us who were worried about pro-market economic policies of the governments since 1979 has now been answered. We were worried that the market had lost touch with real reward for real effort, that it was building in a frothy over-dependence on itself, and that a big crash would happen with hugely damaging effects. No need, of course, to worry about the possibility of that happening.
However, we have also been concerned that extreme pro-market policies widen the gap between rich and poor, and we regard that as a bad thing. We were not wrong that, the gap has widened greatly since the Thatcher government took us down that way, and the argument that it didn’t matter because the wealth being created would benefit all looks somewhat weaker after recent economic events.
Nick Clegg has been pushing the line “big tax cuts” very hard, and the response to that from the intelligent floating voter is surely going to be “how are you going to pay for it?”. So why is it so wrong for members of the party also to ask this? If we’re going to go out and campaign for it, we want the answers to be able to respond to that question. If it’s by big tax rises elsewhere (as some have suggested), it may be a more difficult message to sell, but it is at least sound. If it’s “hmm, har, something will turn up”, it’s a matter of concern, and there is a fear it will have to be met by big cuts in public services. We saw that with the Thatcher government. We came of age politically fighting against that. So are we not entitled to ask of our leader whether he is taking us down that road when he seems to be using, or letting others use it on his behalf, much the same language which was used by Mrs Thatcher and her supporters in those days?
David asks of Nick Clegg “Are my fears overstated?”. That is a warning, not an attack. We very much want the answer to be “yes”, but we want it to be a convincing “yes”. So it will have to be a “yes” which is backed up by argument, not by accusations of factionalism or that we are those nasty “activists” whom the party would be better rid of anyway.
I can’t speak for David, but in my case, warnings like this come with a sense of urgency. If the party really is being dragged in a direction which makes it unappealing to me, what am I to do?
“I can’t speak for David, but in my case, warnings like this come with a sense of urgency. If the party really is being dragged in a direction which makes it unappealing to me, what am I to do?”
The use of the word “dragged” is highly emotive, Matthew. You could easily have used the word “taken”, or “the party is going”.
Nick won an election to become leader. The policies passed so far have been passed by a majority of conference delegates. That is deomcracy. If you don’t agree with it, argue your case for change. If you can’t accept the democratic will of the party, then leave and join one that suits your views better.
Those of us who disagreed with the more socialist aspects of party policy in the past had to make the same judgements.
“Nick won an election to become leader. The policies passed so far have been passed by a majority of conference delegates. That is deomcracy. If you don’t agree with it, argue your case for change. If you can’t accept the democratic will of the party, then leave and join one that suits your views better.”
Oh, come off it!
Clegg won the election by keeping deathly quiet about his Thatcherite leanings during the leadership election campaign. There is no doubt that Huhne would have won if Clegg had shown a shred of honesty about his true intentions.
“If you can’t accept the democratic will of the party, then leave and join one that suits your views better.”
Oh, don’t worry – people are leaving in droves – 400 a month since Clegg was elected.
There was quite a strong focus in the election campaign on Nick bring identified with those who wanted the party to be pushed rightwards economically, so I can’t agree it was completely hidden. But I also know there were plenty who didn’t particularly agree with that line but who voted for him for other reasons.
Regarding “dragged”, well, it often does work this way – the leader puts out proposals, or gets other to put out proposals, it’s spun in the press as this is the way the party is going, then opposition to it within the party is denounced as damaging and factional. The policies get through the democratic mechanisms only in part for their merit but also in part because there’s a centre ground in the part which swallows any sense of unease and votes for them because they don’t want to be seen as damaging the party by opposing its leader.
I have argued my case to the extent that I can. But I think I’m at what I think was David Allen’s point, I want to know if I am over-reacting, and if Nick values the support of people like me he might consider saying something which would show that.
I don’t think Nick’s policy slant, if it really is to shift to the economic right, is going to bring us in more support than it will lose. I don’t think Nick has proved particularly the great communicator or charismatic leader either he was promised to be, which was a big part in why many people voted for him in the leadership campaign. I said this at the time of that election, then I kept quiet for a year or so to see how it would turn out, and it has turned out as I suspected – party slowly dwindling in the polls, signs of a drift to the right at the top, slow dropping out of activists not balanced by picking up new ones.
Of course I accept the leader must have a big influence in how the party develops, and new recruits have a right to try and change it through its internal mechanisms as well. So “Tabman”, sure, if the point is reached where the party is no longer one I feel like being even a passive member of, I will drop out. It’s a judgment I have to make, as you say. I’d be sorry if it reached that point because it’s been a big part of my entire adult life, and I don’t see any other party which attracts me to becoming an active member.
It does concern me that having made this point for quite a while in this forum I’ve had very little reassurance from its contributors and quite a lot of what I interpret as “get out, you’re not wanted anyway”. I do feel it would be far better for the party to reassure those who have contributed to it in the past and to get us all working actively together rather than have an atmosphere where some of us have a growing sense of unease and a feeling we’re not wanted.
Martin – I will apologise if my response came out as a little OTT, but I guess it wasn’t really directed at you personally. I’m just fed up with so much of the “Oooh Nick’s a Thatcherite baddie, scary!!!” carping we are being subjected to.
The point I was really trying to make is that there is far more that unites us than divides us, as Liberals all, but sometimes we have less of our wishlist in play than we would like. This has applied to all of us at some time or another, and is part and parcel of party politics.
On the few occasions that I’ve met Nick or heard him speak I have no doubt that he is a committed Liberal, as is Chris Huhne, David Laws, or even Paul Holmes. The charges that David Allen makes about a “push to the right” in his article are simply unfounded.
Please would it be possible for Mark Pack to acknowledge that he was wrong about 3% spending cuts being in the 2005 manifesto?
It wasn’t the first time I had heard him make the claim. I guess he may be thinking of a policy that Ming Campbell came up with in 2006. Whatever the cause of the confusion, it would be nice if he could acknowledge he got it wrong.
David, I have (re)-read. You’re quite right, I had read that paragraph as “more of the same”.
In a sense I still think that. I entirely accept that redistribution is probably a more technically accurate way of talking about the package. And I’d be just as happy with a tagline that used the word redistribution. I’m happy with the “tax cuts” line for reasons stated, because it accurately describes the practical reality of what would happen on most people’s wage slips. As a copywriter, I’d choose “tax cuts” over “redistribution”, regardless of the history. It’s direct and visceral where “redistribution” is lofty and doesn’t seem to involve individuals.
(Interesting point: it took quite a long time for you and others to stop talking about “spending cuts” when what was actually being proposed was “spending redirects”. I’d suggest that for the purposes of technical discussion, we go for consistency. If we’re going to say “redistribution” amongst ourselves, all well and good, but then we’d better have “redirects” as well.)
So no (surprise!) I can’t see that the tax cuts tagline is evidence by itself that any immediate (re)development in policy is about to take place. It describes what’s already there. It’s true that we already know Nick would like to cut the burden if possible. That’s been shown through MIH. It’s not a secret.
I suppose you’re right in implying that the *same* line could also be used if, at some indefinable future point, the party adhered more strongly to the MIH line once more. If so, well, that’s good consistent messaging.
But then I guess we’re going over old ground here really. If the idea of a reduced tax burden horrifies you to the point that you’re unhappy even if Nick uses language that could be interpreted as alluding to it then… you’re not very happy.
🙂 Sorry, not very helpful.
As for cuts, I’m no expert, but apart from the usual LD wishlist I’d like to set Tim Leunig on the Regional Development Agencies (c.£2.5bn pa). They’re currently being cut anyway, of course, but I gather whatever’s left could be much more usefully channelled through the local authority. Which dovetails nicely with liberal devolution principles.
I’d also have to do SOMEthing about Tax Credits, which make me furious. I’ve seen too many people get screwed over. For a start (though I don’t have a costing) we should cap the recipients’ threshold so that people with a household income of £66k don’t get a few hundred quid a year bunged their way.
“Interesting point: it took quite a long time for you and others to stop talking about “spending cuts” when what was actually being proposed was “spending redirects”.”
If you’re talking about the £20bn, that wasn’t what was being proposed at all. The money saved from the cuts was partly to be redirected, and partly to go into tax cuts.
It has to tell us something that some people round here are so keen to rewrite history!
Alix, Tabman,
Your latest line seems to me to be, broadly, “Yes, we have our divisions and differences, but they’re nothing much to get too worked up about. OK, some of us would like to trim a bit off boring little things like the Regional Development Agency, maybe others would disagree, but really, we’re all one big happy family, we can resolve these minor differences in democratic debate, and we can all be friends. (Oh and by the way, if you don’t see it like that, I’m going to shower you with abuse and tell you to get out of the Party.)
It feels like trying to debate with a blancmange. And the blancmange defence is, once again, a basically dishonest one. We now know from Anonymous that the 2005 manifesto did NOT include the £20bn of cuts claimed for it. We now know that Clegg only won the leadership by being quite dishonest about his real goals. We have pointed out that Clegg has had ample opportunity to clarify the massive ambiguities caused by the disjunct between his rhetoric and his policy statements. And the clarification still fails to emerge.
You have painted big spending cuts as being a long term goal that might be reached “at some indefinable future point”. Well, Helmut Kohl could tell you what a long term goal is. For years, he said that German reunification was a distant dream. Then the Berlin Wall fell, and he jumped straight in there. We can probably all sympathise with Kohl and understand his actions. But it does illuminate what politicians really mean by a long term goal. They mean “This is my big ambition, and just as soon as the current barriers stopping it are lifted, I’ll do it like a shot!”
You also want to tell us that it is detailed policy that matters, while rhetoric doesn’t. The Owen period shows us that the opposite is true. Owen signed up to a host of Alliance joint policy positions, which of course had a limited shelf life, as all policy does (because circumstances change). But his rhetoric was all about the crucial need for his SDP to keep its independence. It was the rhetoric which told the truth. As Owen became ever more overtly quasi-Thatcherite (am I allowed to say that about Owen, pray?), it finally became clear why that independence was so precious to him.
In 1983-86, the blancmange won the internal arguments within the Alliance, and we tackled an election with the suicidal “we’re-all-together-and-we’re-also-all-apart” message. It bombed, of course. Belatedly we realised what we had to do. It was a painful merger-and-split, but people like Finkelstein (ex-SDP) belonged in the Tory party, and to recover ourselves, we had to persuade them to go there.
The three years of struggle (1987-89) produced recovery. The three years of blancmange, semi-peaceful coexistence, unresolved and unsatisfactory compromise (1983-86) was of course a much more civilised period of our history. It was also a total waste of time, and ultimately, it did more to harm our cause than an earlier split would have done.
Why did Owen, with all his ability, end up as the loser? Basically, I think, because he could not really offer anything distinctive from the Tories. He and the Tories were chasing the same right-wing voters. Ashdown’s Lib Dems were the only party chasing centrist and non-socialist left voters. There is much that has not changed.
I suspect we may now be condemned to repeat this history. I quail at the lesson it seems to teach me, which is that evasive incoherence loses votes, and the sooner we have the necessary conflict, the sooner we will regain clarity and recover.
I am not going to get drummed out of the party by people who joined it yesterday, thank you. I am going to carry on working for its renewal, and I know that there are many who will do the same.
David,
I may go into greater detail later, but now I just want to say that we’ve won a hard-fought reputation for economic competence which nobody has any interest in throwing away.
The fact that this debate is shifting so wildly is in my view because the current downturn has the potential to be much worse than anything seen in living memory. Many economic analysts are panicking while others are coldly calculating the personal advantage they can gain – what’s worse is that it is impossible to tell them apart on first or second glance.
Vince Cable can be held up as a shining example because he has used his political platform to greater effect and has shown and told often enough – and been proven correct often enough – to build up widespread public trust in the arguments he uses.
While I think it is fair to be sceptical of all analyses of the seriousness of the current situation and of the ends to which various policy prescriptions are designed, I think we can justifiably offer Vince more credit (though naturally keeping a close eye on the business fundamentals…)
“Please would it be possible for Mark Pack to acknowledge that he was wrong about 3% spending cuts being in the 2005 manifesto?”
Evidently not. I shall be taking Mark Pack’s various claims with an even bigger dose of salt in the future.
David,
You ask
“Why did Owen, with all his ability, end up as the loser?”
I don’t think it was so much that he was seen as of the right and rejected for that, but rather that the merger between the Liberals and the SDP simply wasn’t as the press painted it. Ordinary people were barely aware of the differences between the parties so made little distinction between the two.
My recollection is that the merger actually went remarkably smoothly at local level. There were a few people who grumbled a bit, but mostly the activists got together and got the merged party going. There was very little interest in setting up an anti-merger Liberal Party (the one that was set up didn’t happen until some time later). Those of us who voted against merger mostly accepted we’d lost the vote and went on with it. The SDP people who went with Owen were well, difficult not to be rude, but mostly people we weren’t sorry to lose and not for their politics.
At ground level the work was mainly being done by Liberals anyway, and the SDP members who were of practical use were the ones who were keenest on merger. So the reality is that Owen’s SDP had almost no-one working it at local level.
Had the press reported what happened correctly – merger went smoothly, Owen and a few of his closest colleagues sulking but no real support for them at grassroots, things would have gone very differently. But the press had massively over-estimated the extent to which the SDP was contributing to the Alliance, so the little band of nutters who remained with Owen were painted as if they were a significant political party – they weren’t. The impression was given that the Alliance had split into roughly equal sized warring factions rather than joined with little significant dissent at local level.
It didn’t help that one of the by-elections soon after the merger (Richmond, Yorkshire – brought William Hague into the House) was in one of the few constituencies where there was a significant Owen-SDP. We in the (Social and) Liberal Democrats had to plough on in the face of the press telling the people we’d disintegrated, knowing that it wouldn’t be that long before Owen was made to look stupid because the party he thought he was leading hardly existed, and it was our bloody effort on the ground that had brought in the votes, not his mug in Westminster. The point was eventually driven home when the Owen-SDP fell behind the Monster Raving Loony Party in a later by-election.
The significance of recalling this now in this debate is, I hope, clear. A fancy mug in Westminster with a right-wing press singing his praises (but still saying “vote Tory” when the crunch comes) is no substitute for activists working the patch at ground level.
Anonymous: sorry, but I was rather busy after your comment this afternoon, which is why in the few hours between your last two comments, I hadn’t had the chance to dig out the original source of my comments (as opposed to other examples of people saying the same thing).
If I’ve got something wrong, I’m happy to acknowledge that, as you’ll see from my blog posts (though I do my best to forget *that* one about the disappearing local election candidates who, er…, hadn’t disappeared).
By the way, although I’m part-German, I’m quite happy for the informality of you addressing your comments directly to me rather than this third person, “Will Mark Pack…” stuff 🙂
“Alix, Alex,
I take the point that you are very angry. Otherwise you would not have written such vituperative long rants.”
As regards Alex these are definately not long.
When comments from party members begin, “What I think our policy is, is…..” that tells its own story of our problem in this area. Once you get below the slogan “Tax cuts for those on low and middle incomes” it is incredibly confusing and on a first read contradictory.
Mark
I pointed out your error the day before yesterday. From your latest post, I’m still not clear whether you acknowledge it was an error. I shall await further developments patiently.
I don’t know if Mark is right about the 3% claim. However in my experience he usually is on such things as he has a tendency to keep things like that and quote page references at people.
That said it seems very difficult to find the 2005 manifesto online so I found it hard to check. Strange as you’d have thought that there would be an archive of such things somewhere.
David, you suggest in your first para that I’m saying that “really, we’re all one big happy family, etc” and impute, basically, the worst possible motives to me in terms of both my manner of argument (“your latest line seems to be…”) and my attitude towards you (“if you don’t see it like that, I’m going to shower you with abuse and tell you to get out of the Party”).
No. You’re putting words into my mouth. I was actually writing in a mood of sadness, and what I said was “[long discussion of your view and my view]…well, you’re not very happy are you.” I’m at a loss to know what to do about this, now that we’ve talked it out as much as we have. We disagree. What you do next is up to you.
I haven’t showered anyone with abuse or told anyone to get out of the party.
I haven’t said anything about the 2005 manifesto, so you’ll have to discuss that with others.
I stand by everything I’ve said above about what I think “big, permanent, fair tax cuts” means, and what I think you think it means.
Withal, it strikes me from the overall tone of your answer that you’d just rather not debate with me at all, and are always going to impute the worst motives to anything I say, so I guess I’ll leave at that, in sorrow.
Hywel
You can find a copy of the 2005 manifesto here:
http://news.bbc.co.uk/1/shared/bsp/hi/pdfs/LIBDEM_uk_manifesto.pdf
You will not find any mention of cutting 3% of public spending. As you can see, Mark Pack has already admitted this, but tried to suggest that the total proposed cuts in background documents added up to 3%.
However, the manifesto does (on page 5) put a figure on the funding to be switched “from low-priority government programmes in order to fund our key proposals”. That figure is “around £5 billion”, which I believe would amount to about 1% of total government spending – not 3% as Mark Pack claimed.
Yup, sorry I did get my figures a bit wrong. 3% was the target for identifying savings for the 2005 election, though that review wasn’t completed by the time of the manifesto (hence the manifesto figures being lower). After the election, once Ming became leader, 3% was the target again for the manifesto process for the ‘general election that wasn’t’ in 2007 (it’s a document related to that which I wrongly confused with 2005 in my comment above based on other comments and by the looks of it an accurate comment somewhere along the line about this has been picked up by others too and mangled a bit). I believe the reason he kicked off that review so promptly was in order to avoid the running out of time problem with the previous one. Nick’s £20 billion target is also around 3% once more. I think the underlying point I was trying to make still stands up however – which is that a 3% target isn’t a lurch to the right, but rather a policy we’ve had under three different leaders.
“Yup, sorry I did get my figures a bit wrong.”
Thank you.
Mark,
Let’s leave aside the question of whether your figures were dishonest or just a muddle, and try to learn from the history.
So back in 2005, when it came to the crunch, we couldn’t credibly claim 3% savings, and we had to write down £5bn. Presumably that was the figure that the IFS were prepared to accept as plausible. (As I recall, the IFS still said that we might struggle to achieve our costings. Given that paid consultants tend to tell you what you want to hear if it is at all justifiable to do so, this was not the strongest of endorsements!)
The gap between 3% and £5bn didn’t actually hurt us in 2005, for the very good reason that nobody had made a big song and dance about the 3% target. That was the right way to treat the target – as an aim, nothing more. Indeed it might have been better still to drop the quantitative, and just say “please maximise the savings you can identify, and tell me where you get to”.
I think Ming was also reasonable in his treatment of his 3% target, I don’t recall him shouting that from the rooftops.
All that changed with Nick. Suddenly £20bn became a headline figure, to be repeated at every opportunity, and to be promised. Despite the 2005 experience that it was not feasible to make the promise, at least not if based on only cutting waste or “low-priority government programmes”.
Now why do you think Nick did that, and wouldn’t you advise him to drop the promise of £20bn?
David: I’m curious why you seem so ready to to offer up me being “dishonest” as a (possible) explanation?
I ask because I think this gets to the heart of some of these exchanges; you seem to me, on occasion, very ready to impute the worst possible motives of others.
Mark,
Having read your explanation I am inclined to believe that mainly, things did just get confused together. I dare say Anonymous will call me a big softie for saying that, but, so it goes. (That was what I was trying to imply in my post above, paragraph 1).
However…. you did voluteer as “fact” something that turned out not to be fact. You didn’t have to make the assertion in the first place. If you weren’t sure, you could just have not posted.
Now I wouldn’t expect you to make a grovelling apology for the mistake. But nor do I expect you to use it as a chance to return to the attack! How about responding to my question instead?
Fair enough 🙂
In answer to your question – I think given the changing economic climate, the change in emphasis makes sense, and no, I wouldn’t advise him to change. You might have been able to guess that would be what I say!
“I dare say Anonymous will call me a big softie for saying that, but, so it goes.”
No, I’m willing to accept it was an honest mistake, though I agree just a smidgen more humility from its originator would be nice. But we mustn’t hope for miracles …
I think the interesting thing is that this is the third attempt to identify these (or equivalent) savings over a period of about five years, the first two attempts evidently having been unsuccessful.
Given that history, I think it was pretty unwise to announce the policy publicly before the savings had been identified – and of course they still haven’t been identified. Fortunately for Nick Clegg, the political journalists haven’t cottoned on to the “back-story”.
Anonymous: I’m not sure why you’re categorise the Ming attempt as being “evidently unsuccessful”? It’s true no manifesto was published, but that’s because the general election wasn’t called. What’s the part of that process that you think was unsuccessful?
Mark
The identification of the spending cuts, obviously.
And the reason you think the identification was unsuccessful is…?
Oh dear, oh dear. Mark Pack thinks (for some reason) that the economic downturn opens up new and greater opportunities for making public spending cuts. (Or switches, I must hastily add, so as to cut out the kneejerk comeback). But Alix thinks that it’s the downturn which has temporarily prevented us from making the cuts ( / switches) which we should eventually aspire to making.
Which of you has correctly called the official party line, and which of you is going to get the sack? Or is the answer that neither of you is in trouble with Nick, because when it comes to arguing the party line, any arguments that point toward cuts will do, even if they contradict each other?
David, my point was in the context of Nick’s emphasis on the tax cuts (for the vast majority of taxpayers) parts of our policy mix and saying that I thought stressing those at the moment made sense.
Accompanying that with the picture of saying that we think the very richest should pay more in tax and also that there are elements of government spending we disagree with and can therefore use for other ends seems to me quite reasonable.
Again I’m mystified for why you’ve dived into the language of getting the sack, kneejerk etc. And also picked up this habit of talking about me in the third person. Why this apparent consistent hostility to someone who disagrees with you?
Alix,
There is a genuine difficulty in debating with you on this blog. That is, you represent the party line. You do also make a lot of effort to interject your own personal views and to offer your own slant on events. This makes your posts more interesting, and gets away from being too crudely propagandist. Still, when you offer up arguments in support of the party line, it is not easy to respond to you as an individual.
For example, in your response to my question “what would you cut?”, you came up with some plausible and fairly limited cuts in unexceptionable areas. Now, one reaction I might make is “Ah, so Alix is someone who personally favours trimming excess fat, but she’s a million miles away from the Julian Astles and the Mark Littlewoods (not to mention the NCs) who would decimate public services. I need to treat her personal views with respect, I should debate Alix as an individual.” But the other reaction I might make is “No, she’s just doing a job. This is camouflage in defence of the party line. Don’t be fooled. I can see that the ultimate aim is radical state cutbacks, I understand why a strategy of concealment is being adopted, I should debate Alix as a spokesperson for that strategy.”
You’re right, I hate the rose-tinted spectacles this party too often wears. For most of my time, that has meant hating attitudes such as “Come on, let’s half-target ward B as well, we can do that and still target our key ward A quite reasonably respectably, can’t we?” Now, what I hate is “Come on, you must give Nick the benefit of all the doubt which he has himself created, or else we’ll call you an unreasonable curmudgeon.” Sorry, no thanks.
Nick, please clear up the doubt!
David,
I disagree that a tax switch is ever impossible or undesirable, and I suggest that the economic downturn actually makes a switch more necessary than before.
There is an inherent problem in talking about this, as Mark points out, the relative stresses on each part of the policy mix appear contradictory and can only be understood within the context of the full set of proposals.
What is correct is making taxation more affordable for those least able to afford it by making spending more relevant to our needs, but there is a wide latitude for difference of opinion in how best to go about doing this.
So describing our proposals as a shift in policy direction is quibbling over the perception of our stance rather than engaging with the fundamental debate on making tax fairer.
I wholeheartedly agree that “It looks two-faced. It suggests we can’t agree amongst ourselves,” but this is exactly our challenge to face this down.
Nevertheless we are articulating a stance which puts clear golden sunlight between us and both Labour and Conservative parties.
The alternatives on offer by our opponents are greater inequality and greater insecurity – both of which guarantee greater harm to portions of society in the short-term and to the whole of society in the medium-to-long term.
Mark
Are you saying the review initiated in 2006 did identify spending cuts of 3%?
Sorry to be blunt, but I feel I have wasted enough time already searching through the manifesto for something that wasn’t there, and my appetite for further guessing games is severely limited!
Believe so, yes.
Would it be rude to ask what evidence your “belief” is based on?
Deuce – Advantage Anonymous –
Anonymous: several members of the FPC have told me that and that’s what I recall from documents at the time (though given my earlier memory error, perhaps we should place more reliance on the former 🙂 )
You’d said earlier (assuming it was the same ‘anonymous’?) that, “the first two attempts evidently having been unsuccessful”. So in reply, would it be rude to ask on what you’d based the inclusion of the Ming round in that?
If a review initiated in 2006 had successfully identified 3% in public spending cuts, why on earth would the party need to set up another review in 2008 to identify essentially the same cuts?
Why would Nick Clegg have been so completely clueless when asked in interviews where the savings were going to come from, if the savings had already been identified?
Why would Gordon Brown have been allowed to bang on for months and months about £20bn of Liberal Democrat spending cuts, if the party was in a position to rebut the charge by demonstrating that the savings could be made without damaging public services?
If the party had really identified 3% of savings in 2006-7, then the mishandling of this issue would make all Clegg’s other blunders look mild by comparison!
Anon,
identifying the same proportion/totals of cuts/savings does not mean to say they represent the same items on the balance sheet. Otherwise you are saying that any review set up in 1909 is as relevant today as it was then.
Rebuttal of charges that cuts/savings can be made without damaging public services is a circular argument predicated on entirely subjective opinion of whether the particular service in question is best funded by the taxpayer and informed by personal political preference – it is playing to the gallery rather than making an evidentially-based argument (which I accept should also be part of any party’s armoury).
Perhaps you could stop confusing the issues with your presumptions.
Oranjepan
“… you are saying that any review set up in 1909 is as relevant today as it was then.”
Of course I’m not saying (or even implying) any such thing.
I’m saying that if a review was set up by Ming Campbell in 2006 with a view to identifying 3% of public spending cuts in time for the next election (which would have be expected to take place in 2009 or 2010), and if this review was successful completed, then there would clearly be no need for another review to be initiated by Nick Clegg in 2008 to identify essentially the same spending cuts!
Anon,
please provide evidence that any cut/savings identified by the review under Clegg are ‘essentially the same’ as those identified under Ming Campbell’s review.
Your whole argument depends upon your ability to back up this assertion.
Oranjepan
I’m sorry, but at the moment I really don’t have time to waste answering your nonsensical questions. We’ve been over this ground many times. Look at the figures for yourself.
This is a sorry tale. In 2005, we aimed to find 3% of wasteful / low-priority government expenditure to cut, but we only found £5bn (1%), as declared in the GE manifesto. In 2006, Mark tells us that Ming’s review apparently did succeed in finding the magic 3% of expenditure, except that nobody thought to write anything down about it. Now in 2008, we are engaged on the same goosechase for a third time, but this time with a much more public commitment to find £20bn of spending cuts.
Yet when Paxman asked Clegg for the details (Newsnight around last year’s conference time), he got as far as £3.5bn, then said he didn’t want to reveal any more of our ideas, because if he did, our opponents would steal them! Well, nice try Nick!
To be fair, this fiasco pre-dates the Clegg era, and it isn’t directly related to his semi-hidden agenda on tax cuts (though that agenda does exacerbate the problem and magnify the risks it poses to us.) So let’s leave the Clegg era out of it. What are we doing so badly?
Part of the answer has to be simply what motivates individuals. People who want to spend more money on e.g. childcare can get passionately keen on producing detailed policy papers to do so. Nobody actually has the same enthusiasm to attack the question of saving money, even though we all want to cut waste. Nor, in reality, has anyone the tools and the information to do a Gershon type of job from outside government. So it doesn’t get done.
Now just ask yourself, if let’s say the government did a defence review and came up with £20bn of cuts, would it be remotely credible to announce “we are going to save £20bn, but we haven’t written down the details anywhere”? Is it remotely credible if we announce likewise?
There is a simple answer to all this. An end to global savings targetry. Drop the £20bn figure. Announce only specific cuttable items, such as the ID card project, as and when they arise. As to the generic question of minimising waste, we’ll do what every government does, which is to have some sort of continuing drive against inefficiencies. So apart from showing equal willing, and giving a nod to the possibility that localism might (or might not) mean cheaper, we have nothing much to say about that.
Probably the best thing we can do is to harp on about the tractor-production mentality of Brown’s Labour, which does indeed seem to encourage a rather mechanical form of wastefulness, such as the blase assumption that every school in the country must deserve rebuilding in the next twenty years. But let’s be honest. Cutting is hard to do. That wish-list of spending is almost certainly going to remain a wish-list. Britain is bankrupt. What will shortly happen (after our temporary fiscal stimulus) is tax rises, and spending cuts, whoever is in power.
David: you seem to be assuming that having and publishing full details at this point would necessarily be the right thing to do, and therefore if we haven’t we must either (a) not have a policy that adds up, or (b) be hiding something nasty?
There is an alternative, which is (c) that people think it is sensible to do otherwise (for reasons touched on in various comments above).
“There is an alternative, which is (c) that people think it is sensible to do otherwise (for reasons touched on in various comments above).”
I still can’t make any sense of this at all.
Do you mean that the savings _were_ identified by the Ming Campbell review, and the plan is to use those at the next election but keep the details secret until the last minute?
Then why did Nick Clegg say he had ordered another review last year, claim to have been working feverishly with Vince Cable on it over the summer, claim they would have the savings identified within “a few weeks” (that was months ago, mind)? Was none of that actually true – was it all just some kind of weird publicity stunt?
anon,
I think it is right that we hold ourselves to a higher standard than the other parties, but if you don’t want to be accused of making unfair criticisms you also need to make a balanced comparison between the different sides; The tories are widely held to have a better chance of forming the next government than us, but their plans are far vaguer than ours.
The standard defence against publishing full details of any taxation or spending commitments is that there is much that can change between now and when we might reasonable expect to first begin to implement them.
Furthermore announcing them now enables our opponents the opportunity to steal our ideas.
Now I’m not averse to our opponents being converted to our cause, but if that is to happen they should join us in fighting for them because time and again (such as with the welfare state or privatisation) whenever non-liberal parties have got hold of our ideas they have twisted and perverted them to their own dogmatic ideological ends and undermined their solidity which has lead to counter-argument gaining weight (just look at what’s happening to Royal Mail under Labour).
If you want a liberal and democratic legislative agenda we need Liberal Democrat politicians presenting them and ensuring sufficient checks and balances are also brought in.
Won’t do, Mark.
If it’s the “enemy will steal our best ideas” argument you want to rely on, well, surely the things we might hold back on publicising might be attractive new commitments, e.g. the childcare agenda. Not boring low-appeal stuff like trimming the budget of the Regional Development Agency. You’ll note that on those rarer occasions when we do come up with a genuine great money-saving idea, for example ID cards, we happily shout it from the rooftops!
If it’s the “future circumstances will change and so the costings will go awry” argument you want to use, well, so why does that never stop us producing new spending policies like childcare and tuition fees? Because it’s easy to deal with future change, that’s why. If you find out that what was affordable in 2005 is no longer affordable in 2009 (as some say is the case with tuition fees), you just explain those facts to the public. Nobody will pillory you for dishonesty in such circumstances. Everybody knows that events can blow you off course, it’s just a fact of life.
The truth is, overall savings targetry can’t be done, and we should stop pretending that it can. And yes Oranjepan, our opponents are often to be found floundering in the same mire, but is that any good reason to join them?
Oranjepan
Please just read what I actually wrote. Or better still, go away and do something useful.
anon,
your charm will get you everywhere!
David,
I don’t think we’re stuck in the mire like our opponents, but the course of this thread (specifically anon’s contributions) should provide ample demonstration of how easy it is for them to be dragged down to their level.
The political challenge for all sides is twofold – to rise above it by explaining why full and exact details can’t be given at this stage while staking out a substantive position with solid reasoning.
I think we have done the intellectual legwork very well, but I also think we have been less than brilliant in ensuring this strategic vision has been transmitted down the line, which is where snappy slogans and a short list of tangible key pledges form a vital plank of the communication process.
Our announcements should be designed to give an indication of what will be in our election manifesto rather than to lay it our precisely, as this is the biggest weapon opposition parties have to influence the debate before the people decide.
‘Independence for the BoE’ was a good message in ’97, but the institution of a tri-partite regulatory regime in parallel clearly wasn’t (which is why it wasn’t used and proceeded into practice without sufficient scrutiny).
If the manifesto team can do anything it can help clarify our messages.
Suggestions on a postcard…
If I’m a floating voter and I see a party saying “Big permanent tax cuts”, I AM going to think “So how are they going to pay for it?”. Isn’t this obvious?
Our old line “1p on income tax for education” made sense because it balanced a commitment with how that commitment would be paid for. It made the point that we felt better education was a priority, it made the point that we were a party who had a sound sense of economics, and it made the point that we weren’t making a party making rash promises. I think it appealed greatly to a certain demographic which is big in those constituencies we hold – middle class people who didn’t mind paying a bit more tax in return for better state services – particularly those state services most used by middle class people. The old one-dimensional view in politics that there was a left-right spectrum, with the left getting the votes of poor people who would vote for high taxes and high state services, and the right getting the vote of wealthy people who would vote for low taxes and low state services was wrong, and we had worked out that and played to it. The reality was that tax rates had so flattened out that it was poorer people who were most anti-tax, and that state services often do offer more to wealthier people, so it was wealthier people who were more positive about having them at good standards. I remember making the point that this is just what wold happen when the flat-rate poll tax was introduced – it would lead to wealthy people wanting better council services and willing to pay the tax for them being frustrated by poor people who would vote against them because they couldn’t afford the tax rate the wealthier people were happy with.
If the “1p on income tax for education” is the source of the claim seen in places that previously we were some sort of dogmatic socialists, that’s rubbish. It was a specific and quite pragmatic response to the situation that existed then, and worked well to pick up a key chunk of the electorate who didn’t feel either of the big political parties was putting across what they wanted. I’m not saying we should return to it, because times have changed, but I am saying we should learn from why it worked. One of the reasons it worked was that it appealed to people’s cleverness, they could think “I’m clever enough to work out that taxes and state services balance, so I’ll vote for a party which seems to be doing something silly by saying out loud the ‘bad’ thing it wants to do”.
Are we being nearly so clever now and trying to appeal to a demographic that wants to support us, isn’t satisfied by the other two parties, and is big in those constituencies where we already have existing strength? Or is the “big permanent tax cuts” message just going to make us look like Tories and lose us the support of the “I’d pay more tax for better services” crowd who were such a mainstay of our support?
“Or is the “big permanent tax cuts” message just going to make us look like Tories and lose us the support of the “I’d pay more tax for better services” crowd who were such a mainstay of our support?”
Matthew, whether you agree with it or not, the current narrative is that public services have had an awful lot of money put into them, but with not much in the way of improvement.
Unsurprisingly, many people then ask themselves “If we’ve put in a lot more money and haven’t seen much benefit, then what’s gone wrong? And would putting more money in be a waste?” Consequently we have to address this narrative and scope a response.
Nick’s message is essentially this:
– low and middle (ie 2/3 of the population) should pay less, and the top 1/3 pay more. This is step one
– step two is to look at reprioritisation
– step three is to look where savings might be made
Savings can come from (i) staff or (ii) capital or non-staff expenses. David Allen assumes automatically it will be (i) and this is “bad”. But savings equally can and will come from (ii).
Tabman,
I have no quibble with a drive to cut out truly wasteful spending. As long as we understand that most of the waste cannot effectively be identified by top-down edict from the centre, or by non-specialist political people like ourselves. It has to be done at the micro level.
We have no special expertise that our opponents could not offer, though I accept that Labour may not have the motivation to do it well, and the Tories often assume that a “cutter” ideology absolves them from the hard work needed to make it happen and make it work.
What I do oppose are policies that would decimate real public services – either by design, or by circumstance, when the hope of cutting waste is replaced by a political imperative to cut anything that can get cut.
I do not assume savings will be staff cuts rather than capital cuts. Indeed I do not assume that one would be any worse than the other. My concern is not primarily to protect jobs in the public sector. It is to protect the delivery of essential public services.
Nick has not made it clear whether what he stands for is merely what you and I are talking about here – a serious efficiency drive: or, whether it may be something else again, a drive to take the State out of education, health, pensions and much else. In the current parlous financial situation, I fear that only the latter could deliver “big permanent tax cuts”.
“Nick’s message is essentially this:
– low and middle (ie 2/3 of the population) should pay less, and the top 1/3 pay more. This is step one”
I thought it was meant to be tax cuts for 90% of the population:
http://www.dailymail.co.uk/news/article-1054542/Lib-Dems-pledge-cut-taxes-slash-spending-ease-recession-pain.html
Though admittedly that was 4 months ago, back in those far-off days when Nick Clegg’s great ambition was to reduce overall public expenditure …
Tabman,
If the real policy is that tax cuts for the majority will be paid for by tax rises for a wealthy minority, then that’s a different thing. But that’s not how what Nick’s been saying recently has been spun. The message put across in the press is that he’s been converted to the “small state, low tax” message which previously was associated primarily with the Tories. If he actually intends tax rises on the rich so large that it’ll make “big permanent tax cuts” for the majority, then he’s really “squeeze the rich until the pips squeak”, and I don’t think he is, is he? After all, the “small state, low tax” message which Nick seems happy to have the press say he stands for has a history of being put forward to argue in particular for tax cuts on the rich, on the grounds that they are the most entrepreneurial people, so it’ll be better for all of us if they keep more of their money and use it to “create wealth”.
Nick has already put forward policies like more parental leave, better early years childcare, more green spending, which would cost us more – LOTS more. We might just hope there’s some “waste” elsewhere which could be cut to spend it, or these things will cause such a boom in the economy that more wealth will be created to pay for it, but unless I can see more evidence that it’s been thought through, I will just dismiss it as the sort of whistling in the wind politicians do.
There is a real answer to “If we’ve put in a lot more money and haven’t seen much benefit, then what’s gone wrong?”, but it’s not a comfortable one. There have been big changes in society which mean we must run faster to stay still. One of the biggest is the fact that lifespans have increased markedly with many more people living many more years and the last of these requiring expensive support. Another is that we live in a more complex society requiring people to have a lot more education before they become useful contributing members of society. Another is that we are making more waste, driving more cars, etc, various factors requiring more spending on services and infrastructure just to keep still. Another, which I was hinting at in the discussion on the Baby P issue recently, was that a cost of our more free society in terms of such things as breakdown of rigid rules on family and relationships is more people falling through the gaps and requiring expensive intervention to survive. I was the one – almost the only one – whose line on this was “well, the sort of intervention you really want to stop this happening completely is going to cost big time – are you really prepared to pay for it?”.
Pick up any issue of, say, the Daily Mail, and the answer to many of their “Why, oh why” rants is “because you wouldn’t pay the taxes it would need to pay for it”.
If we’re looking for radical reprioritising fine. If the line is “All these social workers expensively intervening with problem families costs too much, so get rid of them all, and if they want to batter their children, well, so let it be”, fine. Or “Why bother spending so much money on keeping sick 90 year olds living till 92, let them die”, well, ok. But are the public willing to accept this? No. If they aren’t, I’m afraid it does mean taxes going up and no visible benefits. If the line is taxes stay the same, or are cut, and we pass it down to the NHS and social services to find the “waste” we think must exist, well, actually what we’re saying means the above, only we’re not being honest enough to admit it.
Now actually, my feeling is that New Labour spent too much throwing money at expensive building projects in health and education at a time the economy was booming and labour costs were high, when they could have saved and waited till now when the bids would come in MUCH cheaper. We do have some fancy PFI funded projects as a result of this. Plus expensive long-term contracts to pay for them. But that’s another story.
Can anyone make sense of this BBC news item?
http://newsvote.bbc.co.uk/1/hi/uk_politics/7878148.stm
“Liberal Democrat leader Nick Clegg is to set out how his party would pay for its childcare and education policies.
The party is expected to find funds to scrap student tuition fees and improve childcare by trimming £7bn from government spending in other areas.
…
Last summer Nick Clegg announced he had found £20bn of savings from planned government expenditure, which would be directed to what his party saw as more important priorities, while any money left over could fund tax cuts.
BBC political correspondent Iain Watson said this approach triumphed at his party conference, against those who fiercely opposed further tax cuts.
But his internal critics will be pleased that none of the £7bn of savings to be set out later will be devoted to cutting taxes, our correspondent added.”
Is this £7bn the first instalment of the £20bn? If so, what about the other £13bn?
Actually, there are more details on the Telegraph website:
http://www.telegraph.co.uk/news/newstopics/politics/liberaldemocrats/4557734/Nick-Clegg-vows-to-scraps-tax-credits-for-high-earners-in-20-billion-austerity-cuts.html
“After a three month study Mr Clegg will today(MON) unveil how he intends to pay for the £20 billion targeted tax cuts he announced last autumn.
As the first stage he will reveal how £7 billion can be saved….”
Of course, the Telegraph has most of that completely wrong – the plan to save £20bn was announced a lot longer than 3 months ago, and the money isn’t to fund tax cuts, but (mostly) to fund other spending priorities. But at least that makes it clear that the £7bn is the first instalment of the £20bn.
The savings mentioned are:
(1) Over £3bn “by removing higher earners from tax credits altogether”
(2) £510m by scrapping the child trust fund
(3) Around £1bn by “shelving 90 per cent of the major motorway and trunk road building programme”
(4) £1bn from various savings in education, including not raising the school leaving age to 18, abolishing the National Teaching Strategy and paring down the National Curriculum.
Presumably there’s another billion and a half in smaller savings elsewhere.
Only another £13bn to go …
I can only assume the idea is to announce three sets of plans for additional spending, and a few days after each to announce the cuts in current spending that are supposed to be paying for them. Or maybe the third one will be a set of tax cuts.
I suppose it’s all been carefully thought out by the experts in Cowley Street, but (as the Telegraph article demonstrates) people are confused enough over the party’s tax and spending plans already, and I think dividing things up like this only increases the scope for confusion.