Opinion: Cuts, minority partnership, and the continuing importance of constructive criticism

Simon Hughes caused quite a stir by setting out his priorities for how Lib Dem MPs should behave if they are not in the government.

Clearly there is a balance to be struck between supporting our party’s attempt to deliver strong-yet-compromise government in a time of national, and indeed global, emergency, and living our principle that dissent is not weakness. The push-and-pull of coalition government is not the time for hiding our values in the name of unanimity, but voicing them louder than ever to strengthen Nick’s negotiating stance and affecting change that we want to see.

Despite our leader’s claim that he and Cameron were using different words to mean the same thing, there are fundamental differences between how liberals and conservatives should react to the decisions that now confront us.

We agree with the Tories that we need to reduce the deficit substantially – Labour’s talk of savage cuts rings hollow when they merely contended that these same savage cuts should start in a year’s time rather than not at all – and Danny Alexander will have quite some power in deciding from which budgets cuts should be taken; we agree that Labour has tried to pull far too many levers from Whitehall without affecting the change they desired and that power should be radically decentralised; and we seem to have come to an agreement on quite radical political reform.

However, where liberals disagree with conservatives is on the political economy of who should bear the brunt of the cuts. Sure, a percentage of cuts can be decided on technical or empirical grounds on cutting what does not seem to be working, but there are also normative and moral questions about the political economy of the consequences of cuts and which parts of the state should be cut back. If we all thought that there was not even a cigarette paper between the two governing parties on the balance between spending cuts and tax rises, on the mix of direct and indirect taxation, and the progressiveness of who should bear the brunt of both spending cuts and tax rises, we would not have been in separate parties to begin with.

It has been in Labour’s interests to denounce us all as ‘Yellow Tories’, and subject us all to detail-bereft ululations on the heartlessness of the ‘Orange Book’ tendency that lurks within all Lib Dems, so it is a happy coincidence of being both necessary and good politics for our party to play its part in laying down a very different marker on how we envision the post-cuts state looking.

Dissent from enforced collective responsibility of the Cabinet is loyalty in providing both Nick with a bargaining chip (‘my party won’t let me do that’) and in being the focal point of liberal-infused ideas on how to reshape our society in the austerity age. After all, Danny Alexander can determine the overall pot for each department, but the secretaries of state for each of the big-spending departments are Tories. The Lib Dems will have some say in the size of different government departments, but it will be Tories who decide how those budgets get carved up within each department. It won’t be a surprise if our priorities diverge.

You see, unlike the Tories who treat the market as some divinely-given baseline, liberals know that merit is not synonymous with value, and that freedom is not just non-interference but the promotion of capabilities and ‘positive freedoms’. The Tories look to Hayek and Friedman, but we look to Hobhouse, Hobson, Rawls and Dworkin (and, indeed, John Stuart Mill).

While we agree with the Tories in living within our means and cutting the central state, we agree with liberals in the Labour Party in government action (albeit normally in a decentralised state) to promote a more substantive idea of freedom than exists in some Thatcherite wonderland. We have a philosophical position on spreading power and opportunity to those that lack it and we devise a state that delivers it, we do not reify the market as always being the best outcome in delivering that promise.

Danny Finkelstein wrote recently at his surprise at our surprise at going into coalition with the Tories. To him it seemed like the most natural thing in a ‘centre-right country’, and put any equivocation down to ‘historical’ and ‘emotional’ ties with the Left. Just as Labour Party politicians are now so eager to denounce our apostasy in abandoning the Left, it seems that Danny and the Cameroons are quite happy to now term us Macmillanite Tories rather than the ‘loony Left’ so characterised before the general election.

But his evocation of the term ‘centre-right’ betrays both a fixed view of where the centre lays (it is a constant Gramscian ‘war of position’ to assert what centrist means) and his denial of our philosophical links to social liberals who still reside in the Labour Party. The hollowing out of the Thatcherite Tory party of its liberals meant that abandoning ‘equidistance’ was only an honest admission of the changed terms of trade. The Tories’ poor result last month is testament to how those liberals still feel more comfortable outside the Tory fold.

Richard Reeves and Phil Collins have spent the past couple of years trying to convince Labour of the need to listen to the liberals within their midst and adapt themselves accordingly. It would be a shame if a marriage of necessity with the Conservative Party stopped us from both joining that debate and pointing out our own liberal vision for how the post-bubble society should look.

We can oppose the decisions of the coalition without opposing the principle of its continuing need. What’s good for Simon Hughes and our MPs outside of government is vitally important for the party at the grassroots. It isn’t for the panjandrums of the newspaper opinion sections to tell us where on the political spectrum we belong. We are liberals, and we should act, think and speak out accordingly.

Simon Radford was the Lib Dem candidate for Enfield North in 2005 and is currently a Provost Fellow at the University of Southern California.

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23 Comments

  • a warning sign from a non-affiliated voter: the credibility of lib dems is sky high at the moment, but shouldn’t be taken for granted. it is based on the sensible, pragmatic decisions being taken at the moment. criticism from simon hughes is healthy but a backbench war with the tories would not be. if a divisive lib dem party goes beyond the fine line, then they will not be trusted in power again. it will be seen as the libdem 2 years and they didn’t have the realism or ability to govern. this may be contrasted badly against tories making compromises in the interests of the nation.

    as can be seen by fall in election support, lib party not in the strong position it may sometimes feel. good luck

  • Paul McKeown 11th Jun '10 - 11:54am

    “yellow Tory” is not half as bad as “yellow belly”
    🙁

  • Umm, if you allow Simon Hughes who IS indeed one of the ‘loony left'(and viewed as such by the people not in the Party) to become the public face of your Party, you will be in a world of hurt. He and his are WHY you remain a marginal electoral force. I refer you to a poll which one one of your fellow bloggers has kindly made mention of just today .

    Essentially the bottom line —– Your Policies are viewed to be UN-SERIOUS by the voters who matter. There’s a reason for that.
    Imao anyway but you know what they say about opinions. 🙂

    http://neilstockley.blogspot.com/2010/06/polling-ipsos-mori-helps-to-explain.html

  • Anthony Aloysius St 11th Jun '10 - 12:56pm

    “I refer you to a poll which one one of your fellow bloggers has kindly made mention of just today .”

    I don’t see anything whatsoever in the article you linked to that supports your claims. But feel free to point it out if it’s there and I missed it.

  • Matthew Huntbach 13th Jun '10 - 12:08am

    Dougf, I have looked at Neil Stockley’s article to which you refer, but as with Anthony Aloysius St, I cannot find anything in it which supports your claim. Your claim is that Simon Hughes is a “loony left” figure who is scaring away potential Liberal Democrat voters. Now, one thing I have never heard from any voter on the doorstep is “Well, I would vote for your party, but I’m put odf by Simon Hughes”.

    Indeed, one of the things the poll reveals is that our party did well amongst wealthy voters but did poorly amongst poor voters. That would suggest to me that its problem is that it is not left-wing enough. It suggests to me we need MORE of the likes of Simon Hughes who has managed to win working class votes in a deprived part of inner city London.

    In general, it would seem to me the poll suggests our national campaign was not that good, and we were fooled by “Cleggmania” which gave a false impression of stronger support for our party than really was the case. We should have spent more time promoting our policies rather than the Clegg personality, and in particular made sure our national campaign was better integrated with our local campaign i.e. we should have run a national image that was about us being decent people working locally with local people, and not about the Clegg personality as if this was a separate thing from the “vote for your lcoal LibDem candidate s/he’s a decent person who hasa good feel for the locality and works hard for it” lieratureour activistswere putting through the letterboxes.

    If we’re not winning the votes of the DEs, who actually would do well out of our policies and who have been SO badly served by New Labour and were never served well at all by the Tories, we are doing something MASSIVELY wrong. Now the dust has settled from the election, we should be honest and admit that and ask why. If we cary on fooling ourselves and won’t let it be said we didn’t run a particularly good campaign we’re doing long-term what let us down short-term in the campaign. The ability to be self-critical is crucial for real success here as in many other endeavours. And being self-critical means more that the right-wing of the party, or Tories pretending to be LibDems, saying “kick the lefties out, then we’ll do fine”.

  • I’ve just posted a comment pointing out that I don’t believe a word of what you say and I’ve been told it is spammy!

    I included some links to back up my point – so freedom of speech doesn’t seem to be permitted! by the LibDems.
    That wasn’t my point. It is however, now added to my list.
    LibDem Voice doesn’t permit free speech!
    LibDem Voice doesn’t permit free speech!
    LibDem Voice doesn’t permit free speech!

  • Bollocks, bollocks, bollocks.

    “However, where liberals disagree with conservatives is on the political economy of who should bear the brunt of the cuts”

    By the measures announced, you are as bad as the Tories for targeting the poor to please the middle.

    “We agree with the Tories that we need to reduce the deficit substantially – Labour’s talk of savage cuts rings hollow when they merely contended that these same savage cuts should start in a year’s time rather than not at all

    How can you not understand this point when it was a point your party supposedly shared just over a month ago? Hurt the economy while it’s still vulnerable and we will pay a greater cost. Plus the fact that your cuts are set to be deeper than Labour’s. It’s idiotic to sneer at Labour talking about “savage cuts” when that is a quote from your own dear leader.

  • Matthew Huntbach 14th Jun '10 - 12:16pm

    Red

    By the measures announced, you are as bad as the Tories for targeting the poor to please the middle.

    So, what should we have done? Sit on our hands and let the Tories alone do worse? That is what the most plausible alternative to coalition – supply and confidence to a Tory minority government – would have meant.

    In the current system, some things have to be let go to allow others. If those outside the coalition REALLY wanted to see a better balance, they’d be throwing the lines which the LibDems could be using to strengthen their negotiating position.

    The classic example here is CGT. To me, the case for CGT at the same level as income tax is so obvious that anyone arguing otherwise should be shown up for who they are – rich people demanding special privileges which the poor have to suffer for. Imagine a powerful Labour campaign now against keeping CGT low, “Tax the working man more on his income than you tax the idle rich for earning the same? What an INSULT to those who work hard”. The shame that could have been put on the Tory right for arguing otherwise could have made it easier for the LibDems to get that one through so they could turn to defending others.

    But we’re getting nothing constructive from Labour, while the Amalgamated Union of Very Rich People are being allowed to get away with their Spanish practices thanks to controlling most of the press which is full of preposterous arguments for them.

  • Matthew Huntbach 14th Jun '10 - 12:32pm

    Of course, it doesn’t help that Labour, now substantially funded by the AUVRP, was the one that introduced the special low rates on income from sitting on your arse while being rich anyway. There was a property boom about to go bust, and Labour’s reaction was stoke up even further useless borrowing to encourage this to be how people invest rather than anything which has socially useful consequences? “Oh, but we’re providing housing for those who can’t afford it” say the AUVRP. Er, yes, by stoking up the inflation through buying it up for let, meaning those who really need it can’t afford it, but get it only rented not bought, rent paid to AUVRP members guaranteed from the tax-payer through Housing Benefit, and they want special cheap tax rates on the additional profit made when they sell it.

    If we had decent politics in this country, we could fight this. We don’t and so we do what we can, but it’s bloody hard work.

  • Simon Radford 14th Jun '10 - 10:47pm

    First of all, thank you all for your comment. It is good of you to have taken the time.

    Kehaar- The point isn’t that they are from the party. The point is that people outside of our party are doing their very best to erode our distinctiveness by lumping us in with the Tories. Empirically, junior coalition partners have done badly in the subsequent election. It is in our interests to carry on being distinctive. In the article I tried to make clear that this was both good politics and a philosophically natural position to take. One doesn’t need to oppose the coalition- I don’t- to say that we should stand up for liberal values.

    Stephen W- You say that my article is terrible, but then subsequently misrepresent what I wrote and admit to not understanding the central thrust. Perhaps you could go over it again more carefully. ‘Merit is different to value’ is exactly what it says. Liberal ends are increasing the human capabilities, control over their environment, and creative environment of individuals. Even when markets are a good bet for devolving power to an individual level, markets by themselves are not good at distributing wealth in a way that is conducive in maximizing aggregate choices and maximizing freedom. This is the basic insight of Hobhouse, Beveridge, Keynes, Rawls, Dworkin and any number of 20th century liberals. Gladstone et al. used markets to redistribute power from the landed interests to workers (and capital). Later liberals suggested extending the underlying aim by using other methods- hence pensions, healthcare etc will all dammed and brooked markets to achieve liberal ends. This has historically been with Tory opposition. We are not a libertarian party or a conservative party. Anyone with a more nuanced view of liberalism than ‘Gladstone used markets, ergo liberals are libertarians and love markets all the time’ understands this.

    Keehar and Stephen- no one is saying we should just hook up with the Labour party either. I share your concerns with their record. Not every argument should be condensed to ‘Tory or Labour?’. It makes sense both to critique Labour are insufficiently liberal by joining the debate within their leadership contest (remember the consternation of Cameron’s ‘liberal conservative’ thing?) and alsp to promote liberal thinking within all parties and none. If our aim is to serve as a gathering point for liberals, we should acknowledge that there are still members of the liberal diaspora in the other parties. Our rise since 1997 has seen us snag what was the liberal wing of the Tory party (as seen by relative defections, which seats we’ve gained etc), and we have more ground to make up in winning the liberals still in the Labour fold (mainly, I would guess, because we have not been consistent in how our economic policies would have social liberal consequences).

    Geoff- I largely agree with you, but I would be cautious about overegging the timing issue. £6bn is a piffling amount of cuts which wouldn’t be enough in and of itself to cause a double-dip. A credit crisis with the bond markets not taking deficit reduction seriously, mounting interest payments etc all effect growth. No party was honest about deficit reduction during the election.

    Red- this is the debate that we should be having with Labour. Part of the problem is being conflated with the Tories, as you have done. Indeed your comment rather makes my Op-Ed’s point for me. Otherwise Labour’s plan for deficit reduction is not a relevant datapoint. They were vague about how they would cut the deficit, splurged at the end without being honest about the consequences and were happily spending money on locking up the kids of asylum seekers and ID cards. The office for Budget Responsibility will also bring some of the figure-fiddling of the Labour years into the light.

    Matthew- I will let your thoughts stand, as they were responding to points outwith my original post. However, I thank you for making them because they show the different values that underpin liberal and conservative politics. Something- within coalition- worth fighting for.

  • Simon Radford 15th Jun '10 - 1:50pm

    Stephen,
    Thanks again for your response. I will try and deal with each of your points in turn, but fee free to point out if I have missed anything.
    Merit/Value. Quite simply that the price of something isn’t always equal to the value of it. There has been plenty of research into how markets can run against the maximization of aggregate welfare (and, thus, freedom, as greater welfare can increase life choices). There is Justin Fox on the follies of the efficient market hypothesis, Caldini on cognitive shortcuts which fail us, Nudge on defaults, many economists show how the market will underinvest in things like R&D, renewable energy. High cost-to-serve pupils from poor families will miss out on education. Assymetries of information make healthcare markets (and, famously, second-hand car markets!) difficult. Keynes showed how ‘animal spirits’ can lead to depressions (and recoveries). There is also a long line of liberal thinking about the nexus of freedom and control. ‘Small is beautiful’, the NEF’s work etc. We have old-age pensions because we know that freedom is enhanced by security in retirement and that Barro’s life-cycle savings hypothesis is more than a little idealistic. Essentially, the more markets=more freedom duality is horribly reductive and denies all that is interesting and challenging about how we now think about liberty and freedom.
    Your point about liberals/conservatives and their approach to cuts does deserve further explanation, I suppose. I figured that the difference was well understood. The old Tory party used to have quite a few Burkeans in the Tory Reform Group and on the one-nation, moderate Tory wing (now defunct). Since the late 70s the Tories have become a neoliberal party. In favour of small government for its own sake, a commitment to markets. Occasionally a fealty to certain vested interests gets in the way (immigration being a notable one, tax breaks for families). Therefore, if you are going to cut away the state, Tories would advocate for the distribution inherent in a market devoid of government (although in actuality this is impossible, markets are an artifice as much as government is, but that’s another story…). But, as liberals, we know that government intervention can increase freedom if designed correctly, just as some protections for business that Tory vested interests might oppose should be removed for the same reason. The tax breaks for the poorest, and the pupil premium on the one hand, inheritance tax cuts for the Tories. The Tories would also generally oppose tax rises to close the deficit, whereas we would have no such qualms as liberals as long as the tax rises where progressive and increased aggregate freedom for those that lack it most. Abolishing inheritance tax would be closer to market norms, but increasing it and raising the tax threshold would redistribute wealth in a way that would barely decrease choices for those who lose out and radically increase choices for those to whom the money would flow.
    As for ‘savage cuts’- indeed it was Clegg. The deficit is HUGE. Not only will cuts be ‘savage’, but tax rises will be ‘whopping’, no doubt. The question is not whether we do it, but what values will we use when assessing the combination of cuts, tax rises (indirect vs direct) to close the fiscal black hole.
    “Thatcherite wonderland” is surely not that controversial for liberals? She was no liberal and we opposed her. She also had a very different philosophy to us. If I denounced another party’s vision of a “Bennite wonderland”, would you accuse me of being a Thatcherite? I oppose people and parties that are not liberals. What do you do?
    Lastly, I wouldn’t advocate the Lib Dems in Cabinet rocking the boat. But the backbenchers and the grassroots can and should make their views known. James Graham’s letter to Clegg and Alexander is a great example of what I would advocate. Just as you seem to think that opposing Thatcherite cuts means that I must want to make love to the labour party, you seem to think that establishing a bargaining position within a coalition and maintaining some distinctiveness (empirically a junior coalition party’s biggest fear) is going to be like Major’s civil war of the 90s. This is why I am concerned that in your rush to create straw mans, you are rather misrepresenting my views. I hope my two replies has helped to dispel some of these myths.

    Geoffrey- thanks for your comment. £6bn is triffling and we’ll need much more in the years to come. The problem is retrenchment and beggar my neighbor contractions from countries that don’t need to. Germany has led a low-demand, export-oriented economy for some time and refuses to allow greater imports and higher consumption. China continues to manipulate its currency. The danger is that while we lower demand and try to foster our private sector to start hiring again (tricky, as we have high personal and corporate debt as well as govt. debt), other countries will not pick up the demand slack. Krugman has been good on this.

  • Stephen- looks like a good debate here. Thanks for your continuing thoughts.

    I think that Thatcherism + public spending is not far off the mark for today’s debate. Obviously, we have a new 50% top rate, which is hardly punitive. Indeed, I am not sure at what level marginal tax rates for those in the top 1%, 0.5% etc become punitive. I would probably take these things on their merits and see both how much revenue it would raise, what we should do with it (would be waste the money or spend it on something that could increase the freedoms of the worse off? etc). Certainly I have no theological position in terms of higher tax or lower tax. I do think that social mobility, educational opportunity and good health outcomes are better in, for example, the Scandanavian countries than in the U.S. or other low tax countries. There is also an interesting debate that, given the 80s and 90s saw the continuing decrease in Britain’s industrial base (and the rise of the City in London saw capital inflows which exacerbated manufacturing’s uncompetitiveness), how do we foster a sense of social mobility where the jobs that used to provide a route to the managerial level for school leavers are gone. One of the reason that we are seeing an increasing lack of social mobility is because we have a donut hole of political economy- a private sector skewed towards the South-East, the City of London on the one hand, and low-level services on the other (economic anxiety is heightened also by cheap labour from the EU versus a points-based system for the well-to-do), and a public sector that serves as a job creation exercise for large parts of the country. Our private sector is massively monopolised- we are the most monopolised in Europe- we lose lots of managerial talent for Great Britain plc to the City. The question isn’t just private versus public, but what kind of private versus what kind of public. I think we need to be more imaginative about both. And our instincts for decentralisation and ‘small is beautiful’ is probably a good starting point.
    Anyway, that was wonderfully off-topic, back to what you were talking about! Yes, the Thatcherism plus tinkering is where the debate is, but it shouldn’t be where it is. And you are right that it shouldn’t be a ‘Back to the Future’ to price controls and nationalisation (‘a better yesterday’ etc), but the debate should be so much richer. When you see liberty as not just fealty to markets. But using markets and government to liberal ends: fostering broad prosperity to maximise life choices, viable local communities to restore a sense of control, more ‘human-size’ institutions to make them more navigable and personal etc. That’s a debate worth having. We have entered a post-industrial age and the Thatcherite toolbox is ill-equipped for dealing with its challenges. Old-style, Whitehall-led targets and directives have been found wanting too- this is, again, no crie de coeur for the Labour Party. Also, you seem to be more generous in your view of today’s conservative party than perhaps I am. I don’t think Cameron and co. are as blue in tooth and claw as the Thatcherite social conservative headbangers of yesteryear. More I am worried that they embody pragmatism with no purpose. The Tories used to exist to oppose socialism and to be a strict nanny for society’s delinquents. Their purpose has gone with Labour’s. The Tories won the economic argument of the 80s, and Labour won the social argument. They’re at sea without a compass, even if they are no longer doctrinaire free marketeers (even when it isn’t optimal) or socially rebarbative. Certainly a segment of the party remain committed to the latter two traits. If we were in coalition with Labour, I am sure I would be penning a similar article about their shortcomings. My gut feeling, however, is that there are more liberals left in Labour than the Tories. Which is not to say that they are not in a distinct minority in both. If we were in a coalition with Labour, I would hope that our right-wing were given some leeway to remind the coalition about the importance not to centralise in Whitehall, the bluntness of targets, the need for a user-focused approach to health and education etc.
    Your personal reflections on where you stand are interesting. I guess it is a sense of where you orient yourself in the hypothetical liberal diaspora. I have no doubt that I am near the centre or centre-left of a coalition of liberals from all parties, and you seem to be further to the right. That’s fine. As has been shown, we can have a civil conversation about it in a language which we can both understand. Both positions are decidedly liberal, just with different emphases. The question is while we pursue liberal ideals from within the coalition, how do we still attract the large numbers of liberals who are without its grouping? That’s a tactical and political decision, as long as we accept its necessity. I would advocate backbench warnings to the coalition not to go too far away from liberal principles and grassroots appeals to our values, not civil war or frivolous toys-out-of-pram gesture politics. Simon Hughes can easily work as a conduit from the grassroots to the leadership.
    Lastly, overegging. I obviously don’t think I am. I am a Rawlsian, Dworkian, Millite liberal who looks at individual freedom as a homo politicus (what power does an individual have over his surroundings and life chances?) rather than a homo economicus (how unregulated is the market in which he is interacting, presuming that it will settle at a liberty-maximising equilibrium?). I think that we have agreed a coalition agreement with the conservatives that was right and, on balance, advances these ideas. But there are areas not covered by the agreement- where to cut within departments, events dear boy events etc- that isn’t covered by it. A coalition agreement can’t cover everything, but we should be as firm in our negotiating position on things outside the agreement as we were in settling what was inside it. That’s not too much to ask, is it?

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