Opinion: Agreeing with Nick

I agree with Nick. Following the result of the General Election we had to enter a coalition with the Conservatives.

I go further than him, though.

Especially for those who have supported the party for decades, it was the decisive point for which we had long battled.

Every Focus written, every door knocked, every pound raised, every campaign fought led us to that moment, that decision, that responsibility which, thanks to our hard earned votes in the House of Commons, we had been able to seize.

It was always going to be the case that when our moment came it would be in the most critical of times. Though others thought I was exaggerating when I wrote it then; this country was in the most dangerous position it had been in since the Second World War.

Our destiny was and remains to face a once-in-a-century global economic blizzard, to meet it with the wisdom and perspective of Liberals and to do so in a theatre of power dominated by the prejudices of a Conservative Party (that has more seats and more offices in the Coalition than us) and in an age when the overwhelming orthodoxy is as neoliberal, as classical, as non-interventionist as it was in the 1920s and ’30s, when, that is, non-Liberals think ‘history has ended’.

If we are to succeed, we have to get history started again. No small job.

I agree with Nick that our decisions have to be made in the national interest, not by doing the easy thing, but in doing the right thing.

But in fact the Party’s contribution to economic decisions over the last 17 months has been to take the easy option. Borrowing one of Nick’s descriptions for a Liberal, it was not ‘awkward’ to agree with the dominant economic meme of our age and to bow to the orthodoxy of accelerated deficit reduction. That was actually the easier road to take, the comfortable Whitehall clubby compliance of the ‘not a fag paper between us’ kind of over-confident and optimistic action.

But optimism can make us insensitive to defeat until it really happens. That is why a Liberal instinctively questions when she or he finds herself agreeing with neo-liberalism.

I suspect those that went along with that orthodoxy never appreciated how bad things were and how ruinous the policy was in the extreme circumstances that existed. Surely the scales are falling from their eyes even if they dare not admit it in public this week.

I agree with Nick that a Liberal doesn’t play politics at a time of national crisis, doesn’t play politics with the economy, doesn’t play politics with people’s jobs.

But going along with accelerated deficit reduction is idealistic action based on the conviction that deficit reduction leads to spontaneous recovery as the private sector steps into the gaps created by government expenditure cuts.

There is no evidence that this has ever been the case. It is a theory without proof. It is an act of political ideology. It is playing politics with the economy … with people’s jobs, and also for that matter with their life chances, their health and their happiness.

And, a year and a half on, the evidence is that the theory is utterly mistaken. Nick says that it is wrong and unfair to saddle out children with debt. What is wrong is to saddle everyone, including our children, with an economy which is already 12% below what it would have been – a gap that is set to increase by a further 2% this year – and to keep on applying the toxic medicine.

I agree with Nick that we should not trust Labour. If the situation was not so dire it might be amusing to note the irony that, over the last 100 years, the country especially can’t afford a Labour Government in a time of plenty and certainly can’t afford a Conservative Government in a time of paucity – the one is too heavy on the accelerator and the other too heavy on the brake until … until an election looms.

Edward Heath did his U-turn a couple of years before the first 1974 election. The Conservatives will drop all this nonsense about fiscal restraint in the 2013 budget.

Our duty by the nation – our destiny I believe – is to drop the neo-liberal nonsense now and to advocate with all our zeal a Liberal economics, especially a Liberal monetary policy.

Our task should be to build a national consensus behind a budget as right, as effective, as radical and as liberating as Lloyd Georges’ was 105 years ago. And to do so before any more damage is done to the jobs, life chances, health and happiness of the British people, including their children.

As the lights burn late into the night in the Bank of England and probably even somewhere in that bastion of reaction, the Treasury, as the full horror of what is happening sinks in and the ‘war analogy’ becomes common currency; in this truly dark hour, it is the duty of those with responsibility in our Party to do the really hard thing, that is, to change now, or, as was said to Chamberlain the last time Britain was in such danger, “For God’s sake go!”

* William le Breton is a former chair and president of the Association of Liberal Democrat Councillors.

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17 Comments

  • Dear Bill – this is great stuff! You’re doing a super job, keep it up!

    Best wishes

    Conservative Party Central Office

  • …okay, verging on extreme satire, I know…

  • I agree with this 100%! The Lib Dem’s since forming coalition have put in place many fundamental reforms that will pay dividends well into the future. Having a whinge and blaming the Government and Nick Clegg is the easy option to vent frustration at the current bleak situation in the UK. However if one takes a step back and see’s the different possibilities that could have happened if this coalition didn’t occur (i.e. an outright Conservative or Labour majority) we would be in a much worse situation. It is the Lib Dem’s that have bought some middle ground and common sense. A democracy gets the parliament they vote for – this is a reflection of the UK’s vote, and once there is another election it will all change again and reflect that. For now, Clegg isn’t doing a bad job trying to keep reform on track with no money in the bank and bring stability to the UK.

  • Matthew Huntbach 22nd Sep '11 - 1:48pm

    I think most active Liberal Democrat members understand the situation well, that is why, although the media expressed surprise at it, there was not a huge show of division and hostility towards the leadership at the conference. Many of us have been in awkward balance-of-power situations in local government, from this we know the result is generally that you get all the blame for things people don’t like and none of the credit for what works, even for what works because you’ve pushed it and had to sacrifice much else in compromise to get it in. It’s a great pity that outside party activists almost no-one seems to appreciate that the 2010 general election left us with the alternative of either a coalition with the Conservatives, or a Conservative minority government which would engineer a general election in months to get rid of us and get a majority. Given how the political right howls, backed up by most of the press, at the modest compromises we have been able to extract form the Conservatives, it is laughable to suppose, as many of our critics do, that we could somehow get much more from them had we remained outside government.

    Our party national leadership has made a series of presentational mistakes, which I believe could have been avoided had it been more willing to listen to long-standing party members and those who have actual experience fighting to win votes on the ground, and less enthralled to the financial/media/political elite, who throughout my adult lifetime have been telling it what to do and getting it wrong. The biggest example was the over-optimism about what could be achieved in coalition at the start, the insistence that it had to appear almost as if the two parties had merged, and most of all the belief that looking smug about this would mightily impress the electorate. There may have been a slow pulling away from this position since, but the damage was done. Some have tried to justify that it was needed as an initial strategy, but no, I think it was disastrously wrong from the start, and I said so at the time, as did plenty of other experienced members of the party.

    I agree that the problem with this country is the “neo-liberal” economics it has indulged in since 1979. The early Thatcher years were actually quite tentative about it, it developed as a full ideology rather than just right-wing pragmatism during the Blair/Brown years. The tragedy of 2010 was that the two-party mentality meant the nation turning to the Tories after experiencing the mess Labour made of it, even though the Tories were the originators of it and promised more of it and deeper. Labour were incredibly naive about it, looking back it is astonishing to see how much they failed to ask questions and just assumed it was a money machine. For example, we are now hearing just how much PFI is costing us in the long run. Yet I remember, during my time leading the opposition in a thoroughly New Labour council, how PFI was seen then as almost as “money for free”, and any question about how come this complicated finance mechanism with its long-term commitments could mean the better services it promised were met with a reply which was essentially that there was this magic fairy dust called “private sector know-how” you could scatter around and it would work wonders.

    Pulling out of it is not easy. The pragmatic we put forward in the general election – less brake, more accelerator – would, I believe be better than we have now, so we should be saying so, even while also saying that as the Tories won the election they have the right to pursue their economic policies, we can only provide a little steer and a little detail on top of that. However, I think a long-term more radical critique of what has now become neo-liberal orthodoxy is needed. Just as the big question in the 1960s and 1970s was why socialism so obviously had not achieved what it promised (the theory and practice of community politics was our little bit of work on that), the big question now is why “neo-liberalism” doesn’t seem to be liberal at all except for a few rich people. It really does seem to me that most people now feel less happy and less free than was the case three decades ago, despite the enthusiastic implementation of neo-liberal policies by all governments.

    I do believe we have to be ready to be open about this and so be able to say “this is not working” about the current government and pull out of it before its term is up. However, we can only do this if we have the backing of the people. That is, we need to see opinion polls which clearly show the people in support of this option. At the moment, I don’t see them. Right now, I suspect if there were a general election, we would get destroyed, but the Tories would be the victors. It would help if we had a decent Labour Party, willing to help build an alternative. But we don’t, we just have one which has no thinking power at all and its tactics are just to keep on kicking, kicking the Liberal Democrats the most because they are the weakest, in the hope they will win by default in 2015.

    So, my conclusion is that the ball needs to be started rolling, in our party and in the Labour Party to be able in time to offer something radically different from what has been orthodoxy since Blair accepted what we then called “Thatcherism” and now call “neo-liberalism”. It is for this reason that I find the “nah nah nah nah nah Liberal Democrats traitors, propping up the Tories” from Labour to be so sad. It does not offer a productive way forward. While it continues, I do not think I could even support an early end of the coalition, much though I would like to see it, because it indicates to me there is no alternative, not in terms of an alternative being impossible, but in terms of there being the willingness and ability in British politics to provide one.

  • Bill le Breton 22nd Sep '11 - 6:14pm

    Mike, we all enjoy satire … and a well argued point. Just ask Mark.
    Andrew, the .5% base rate isn’t loose monetary policy. That is why even the MPC is about to go for another round of QE. America’s QE1 and QE2 worked to an extent. That is why they too recognize the need for more of the same and are working up QE3.
    However, there is another way of loosening at the ‘zero bound’ and that is by using direct Domestic Credit Expansion which is more democratic and therefore more liberal than QE, but it scares the pants off central bankers which is why they won’t use it without political pressure – the pressure Liberal Democrats should be putting on them
    Boliver, do you really want to live in a poor and socially fractious but debt free country? A religious revulsion to ‘debt’ is what was tried and failed in the 1930s and tight monetary policy by a central bank unrestrained by elected politicians is what is taking Japan into its third lost decade.
    Where are where we are, that is in a hole, and continued deleveraging *and* deficit reduction combines to make the hole deeper … day after day. Neo-liberalism doesn’t work no matter how good it makes you feel to evangelize it.
    B

  • Martin Pierce 22nd Sep '11 - 8:19pm

    Oh, that didn’t end up where I expected given how it started! Generally I agree, though it’s really hard to get the balance right . The problem, as I wrote to Nick when I resigned from the Party after 29 years (Inc 8 as a Cllr) is that while we might approach it pragmatically and keep foot hovered over both brake and accelerator to try to stop falling off either precipice (overwhelming debt or 30s style depression), the Tories don’t see it that way – they believe, as a matter of principle, in a smaller state, and are now making that happen, much faster than under Thatcher, with our support. Vince showed that pragmatism in the Chancellors TV debate, but straight after the election we moved directly to a Tory position of total certainty on the subject – ‘plan A’. I cant see how we’d now persuade the Tories to change tack (tho events might yet force it) but to your last point my fear is that Nick actually AGREES with them on this. That, plus lack of trust (fatal to any politician in the end) means he’s toxic and will have to go. Btw the pedant in me can’t help pointing out that 105 years ago Asquith rather than the Welsh Wizard was Chancellor!

  • Martin Pierce 22nd Sep '11 - 8:31pm

    PS great response (article in its own right) from Matthew Huntbach – thoughtful and well argued. I’d repeat the point I hinted at in my earlier comment though – it’s going to be hard for the Party to change in any way meaningful if Clegg himself is (and I suspect he is) a neo-liberal essentially in economics. Certainly his original Chief Sec to the Treasury David Laws is, and I don’t see Danny Alexander plying a very different course…

  • Kevin Colwill 22nd Sep '11 - 10:13pm

    Guys, guys, guys…. it really is simple. To us old school Liberal voters the Orange bookers are Tories in very thin disguise.

    What about the grand Liberal tradition and libertarian values?? Yeah…what about them?

    I won’t use the Clinton cliche but when the chips are down how you analyse economic policy is what matters and many at the top of the Lib Dems share a free market, economic liberal vision that Maggie Thatcher would be proud of.

  • Tony Greaves 22nd Sep '11 - 10:37pm

    I agree with Bill.

    When the economy is so much in the doldrums the government has to look for ways of stimulating growth. It’s harder now that everything is so global but it is not impossible. There are really three ways the government can try to get things moving. (1) giving a lot of new money to the banks (QE). (but in present conditions they will just hoard a lot of it and give bigger salaries and bonuses to their top people – anyway it won’t go to ordinary people). (2) giving a lot of new money to ordinary people (better – I would divide up the total by the population of the UK and just hand it out on an equal basis to every man woman and child). But there are more sophisticated ways of doing it like reversing cuts in benefits or council revenue spending. (3) putting a lot of new money to capital investment. Probably the best and safest way to do it in these times of the global economy. But it takes longer to have an effect.

    Ideally whatever is done would be done across Europe, or across the western world, or across the world.

    Tony Greaves

  • Tony – I totally agree. Martin, you only really need to look at Nick Clegg’s early boss (and, I suspect, mentor – one Leon Brittan!)

  • Kevin Colwell – if you want socialism, vote for King Arthur’s mob*. Meanwhile you might expect a party with “Liberal” in its name to do what it says on the tin, and that includes its economic policy.

    * Ed doesn’t seem sure what he is.

  • Bill le Breton 23rd Sep '11 - 10:39am

    Thanks for the continuing comments.

    The present economic policy has to change, and not just in this country.

    It has to be globally co-ordinated and the evidence post Lehman Brothers is that, given a strong lead, this is possible and may be coming down the track quickly. (And what a role that could provide for an ambitious multi-linguistic Deputy Prime Minister).

    This needs to be done through a mixture of routes 2 and 3 listed by Tony.

    3 because the greater part of the expenditure needs to be investments (hard and soft) which bring the returns that in future repay the debt. 2 because 3 takes time, (though, there are plenty of schemes shovel ready – just ask any local authority Regen Director or Planner).

    3 also because it gives cash to the less well-off who both need it and who will spend most of it, rather than save/pay-off debt with it. Velocity of exchange is as much a problem as the quantity of money and deleveraging is destroying money at a faster rate than the banking system is creating it.

    Liberal Democrats in this country can only help effect this change from within the coalition (this is my only disagreement with Matthew) and in fact we should relish having the chance to do that. What a task! What a chance! What a campaign! What a narrative (for all those marketeers in the party)!

    Clegg and Alexander are obviously obstacles to us playing that role right now or they would have joined the Cable/Oakshott line which those two articulated during conference.

    Perhaps that is a problem; and here’s why: Clegg was clearly dismayed by Cable’s pre-election popularity and from the moment of the first Prime Minister’s debate has been busy sidelining him. And of course any transformation of the Clegg role would seriously weaken the power and influence of his cronies and advisers. But those difficulties are not insuperable, Tim and Kevin.

    So, I’m hopeful Martin, especially as the Tories will turn eventually by their own volition, but late and in a way which limits any credit going to us. It is a case of leading now and btw countless Lib Dems who have been in balance of power ‘coalitions’ have been able to drive from the back seat in this way.

    You are right about the present dominance of neoliberalism and the extent to which Clegg has been brought up in that cultural stream.

    Fukuyama said history has ended. By that he meant the game is won (for so-called free markets and democratic governments who favour these). But that victory has led to this global crisis and only the resumption of history will solve it. That’s our job; kick-starting history … no big thing then … for a Focus Team ;-

    B le B

  • Bill le Breton 23rd Sep '11 - 11:07am

    OK Martin 102 years ago

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