Opinion: Danny Alexander is right

As far as momentous television appearances go it was hardly Frost/Nixon, but Danny Alexander nonetheless made quite a stir on 29th November’s Newsnight. Our Chief Secretary to the Treasury confirmed that, post-Autumn Statement, the budget deficit would not be eliminated by 2015, and that further cuts would be required beyond then if this goal was to be achieved. For most of us this was stating the obvious, as well as in keeping with our manifesto policy on the deficit which called for it to reduced at a slower rate than that taken up by the Coalition, at a minimum being halved by 2013-4. Yet for a minority of our party this was instead cause for a backlash against Danny, accusing him of forgetting his roots and even, disgracefully, chundering to the press about how he is a ‘fool’!

What nonsense; a weirdly Liberal Democrat version of Tall Poppy Syndrome. Success is confused with selling out, with some copying their Tory counterparts in cutting off the party’s nose to spite its face. The very reasoning behind entering coalition was, lest we need reminding, that the economic reality left behind by Labour was even worse than had been envisaged, and a steady course of fiscal retrenchment was needed to keep market confidence. And as we exit 2011 with an even grimmer reality, our increasingly distant neighbours struggling with impending Eurogeddon, this reasoning is just as strong if not stronger. We agree that the structural deficit must be eliminated, so the choice becomes either ‘harder, deeper, faster’ cuts now – or more cuts post-2015.

Danny AlexanderNot for Danny Alexander’s critics, however, who are burying their heads in the sand by rejecting both options. They will only follow the coalition’s plan up to 2015, they say, despite this meaning that the plan is left unfinished. Nearly two years after those fateful 22 days in May, our party spokespeople are still explaining our reasons for signing up to coalition in terms of vital deficit reduction, of sticking to the plan. Our position is thus being undermined by these critics, who do not seem aware that they are threatening the very arguments that we have been making for our entry into national government.

Reality needs to strike home, and strike home soon – we have shares in both the tough decisions and the rewards, implementing cuts but also implementing over two-thirds of our manifesto. The many generations of liberals who fought so hard and so unsuccessfully for a whiff of power would be outraged at the treatment of our beloved ginger rodent!

Ultimately, no-one denies that we will discuss the detail of additional cuts as a party before they enter our 2015 manifesto. We cannot, however, forget our commitment to saving the nation’s finances by removing the structural deficit, even if it takes us beyond 2015 to achieve.

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29 Comments

  • Very odd. An entire article dedicated to deficit reduction that only mentions cuts as a means of achieving it. What about the tax rises? – VAT, etc?

    Besides, how can you justify a failure of policy as achieving policy? The coalition has already said it’s going to fail to deliver on its five year plan after only a year and a half. Many would reason that it is precisely because the deficit is being reduced too quickly that it will now take longer to eliminate the deficit, as predicted by many of the world’s leading economists.

  • Andrew Suffield 11th Dec '11 - 1:13pm

    I do have to say that whenever I hear about it taking until 2017 to clear the deficit, I think “This is exactly the schedule on which the party campaigned in 2010, and hence the party has not actually led the country into a Tory deficit reduction plan, but rather has defeated the Tory policy and delivered a purely Lib Dem schedule”.

  • It is disingenuous to suggest that taking longer to clear the deficit is in line with the manifesto. The manifesto argued for slower deficit reduction because it was pointed out that cutting too deep too soon would strangle growth. This current policy is a consequence of that very prophecy. As predicted cutting too severely would restrict recovery and lead to rising unemployment. Try standing on the doorsteps of those who voted for us in 2010 and ask them if the current policy reflects what was argued at the election.

  • @simon shaw
    1. I would argue it is a mixture of both. Considering the state of the world economy over the last few years the arguments to soften the blow of austerity were wise.
    2. It may well be the case that people in your area may not have switched allegiance but i presume they don’t claim the economic policy is reflective of arguments made at the time of the election.

  • @dave page
    An interesting graph. From June of this so not taking into account recent announcements…. Lets see how it reflects manifesto pledges by the end of the current parliament…

    As to the issue of raising the tax threshold. Good, something i wholeheartedly agree with. Having said that a) its not actually relevant to the argument of whether the cuts reflect pre election policy. B) evidently this only applies if you are in paid employment so not necessarily of any benefit to those on the rising unemployment figures no longer earning thanks to public sector cuts and lower private sector growth.

  • Those figures being taken from the IFS report – don’t they refer to the overall fiscal tightening, not cuts specifically? If you look at the ratio of tax increases to cuts, after that overall figure is broken down, Labour and Lib Dems were much closer together than the Tories on cuts (there is also the issue of the longer timeframe).

  • I’d also say that what struck me about his Newsnight appearance wasn’t that the party would be committed to more spending cuts – that’s inevitable now. It was the suggestion that all of the extra cuts will have to be agreed upon well before the next election. Obviously we can assume the Tories and Lib Dems would like to make up this extra fiscal tightening in slightly different ways, and I’m sure there will be lots of debate on that; but if it is agreed upon before the next election, won’t that mean the Lib Dems and Tories will be going to the electorate in 2015 with the exact same policies on the composition of further deficit reduction, until 2017 at least?

  • @Simon Shaw
    I’m saying those are the overall figures for total fiscal consolidation, not total departmental spending cuts. If you compare the ratios of spending cuts to tax increases that make up those total figures, then out of what any of the three parties were willing to announce before the election on deficit reduction, Lib Dems and Labour were far closer together than the Tories. There is also the issue of the different timeframes, with the Tories alone in intending to front load the cuts to such a significant extent, with Labour and the Lib Dems proposing a slower pace of reduction.

    “Differences between the parties are much more pronounced with regards to the composition of the tightening. Labour favours a 2:1 ratio of spending cuts to tax rises (£47 billion and £24 billion, respectively), the Liberal Democrats a 21⁄2:1 ratio (£51 billion and £20 billion) and the Conservatives a 4:1 ratio (£57 billion and £14 billion).”

  • Simon Bamonte 11th Dec '11 - 5:01pm

    This article and comments are interesting for the fact that the cuts talked about are spoken of in an almost abstract way, as if it is something happening far from here in another land. I’ve noticed there has not been much talk on this site lately about the actual effects the cuts are having on people across the nation, and when so, they are always countered with inadequate words such as “making tough decisions”.

    May I ask how the cuts are affecting those who are posting here? Maybe most of you are from the South where the cuts directed from Whitehall have been shown to be, on average, lower than the cuts up here in the North. Where jobs are more plentiful and people are generally more wealthy. Personally, my wife has been sacked from her job several months back (she worked for our council’s housing benefits office, helping the homeless and domestic violence victims find accommodation) and has been on JSA ever since, unable to find a new job. The ratio of jobs to jobseekers is something like 12:1 in our area. She’s now soon to be forced by the DWP to stack shelves at Tesco, or some other company, or lose her benefit entirely. This will happen next month. Our local library has shut as well as our local Sure Start Centre, but just as well we don’t have children.

    There has been so much talk on Lib Dem Voice about the economic aspects and number-crunching of the cuts, not so much about the horrible effect they are having on every day people.

    So how are the cuts affecting any of you personally? I wonder how they affect Mr. Alexander as well. One thing is sure: he will have an almighty battle on his hands when the next election arises. Though I imagine that will be the case for any Lib Dem standing north of the Watford Gap.

  • As I have posted before, the issue is not spending cuts per se (although they have hardly delivered the private sector led economic recovery we were promised last year) but their fairness – both as regards rich and poor and as regards different regions of the country. Various studies have suggested the cuts have impacted much more harshly on the less well-off and northern councils have taken a much harder hit than those in the south – reflected in the pounding LibDems took in the May local government elections in the North.

    As for the argument about 75% of the LibDem election manifesto being implemented – that may please party activists (although it depends very much which policies are included in the 75% and which in the 25%) but I don’t think voters make their choices in such a calculated way. In many of our Northern cities, voters feel that: a) the LibDems helped a despised Conservative party gain power; and b) they reneged on their flagship tuition fee policy. That may be unfair but who said politics is fair?

  • Daniel Henry 11th Dec '11 - 9:10pm

    Here’s the IFS report that Aaron is quoting from:
    http://www.ifs.org.uk/bns/bn99.pdf

    (Just incase anyone was interested in the source. I’m actually finding it to be very interesting reading)

  • Philip Young 12th Dec '11 - 5:08am

    The Newsnight interview is only now being discussed? Where has the topicality of the Lib Dem voice disappeared to? Danny’s interview was deeply depressing. He looked (as he often does), far too nervous, far too the bunny-rabbit caught in the headlights, lacked any punch, failed to knock anything back, and as for the question from Paxman, “come on then, what possible reason is there for anyone to vote Liberal Democrat” got the wet reply: “You will have to wait for our manifesto”. As if a manifesto from anyone has ever changed anyone’s vote. Do we really all have to wait until then for that to be answered?
    Its not what he said, its how he came across that ought to be the debate and the concern here. Coming out with exactly the same line as Cameron/Osbourne could have been nailed rather better.
    Every single spokesman who is wheeled into a TV studio needs to sharpen up, and be ready to at least answer the question: “What are you for?” or, “what’s the point of the Liberal Democrats right now?” Not being able to answer this basic question is deeply depressing.

  • Tony Dawson 12th Dec '11 - 8:59am

    @Philip Young:

    “as for the question from Paxman, “come on then, what possible reason is there for anyone to vote Liberal Democrat” got the wet reply: “You will have to wait for our manifesto”. As if a manifesto from anyone has ever changed anyone’s vote. Do we really all have to wait until then for that to be answered?”

    As you say, Phillip, the number of people who vote for a Manifesto in the entire UK can be counted on one’s digits if one is prepared to remove one’s socks. Nobody voted for the 2010 Manifesto. Few people even read it. Maybe, those Lib Dem MPs who lost their seas in 2010 relied upon it? Who was it wrote it, again? 😉

  • Don Lawrence 12th Dec '11 - 5:06pm

    @Stephen Tall

    “Danny Alexander’s Newsnight interview was debated here on LibDemVoice – by Mark Pack and myself ”

    With the utmost due respect Stephen, a couple of side references to Danny in your debate on the Lib Dem Economic Narrative, coupled with a few more in the comments is not a debate on Danny’s interview. Also being a bit tougher on you, I wouldn’t say you and Mark were perhaps the best two in the party to put both sides of the Danny Alexander debate forward fully, but that’s just my opinion.

  • Richard Boyd 12th Dec '11 - 7:36pm

    Some common sense is creeping into the discussion.

    50 years ago, less 3 months, I joined the Liberal Party as a star struck school leaver
    and, through thick and thin, have campaigned to get the Liberal hands on the levers
    of power, Through this, to activate dreams of colleagues now dead, to improve and
    achieve a non-socialist alternative to the conservative agenda. Handling levers often
    means hands are burned and may even get dirty, but without evidence of success
    we remain a debating society posing as a political party. Years of hearing at doors
    “I would vote for you if you had a chance. I would vote for you if you had ever done
    anything instead of just carping” has made me a pragmatitist.
    We made a hard decision to live with the world that was produced from the last
    election, when the public said ” a plague on all of you” and agreed to work with the
    least of the worst alternatives. Do the job. Be proud and get off your knees. Then
    offer yourselves as doers and achievers ( even if it was not 100% of what was
    offered) and live with the results. The fair votes disaster is a lesson of what not
    to do, in terms of mixing messages, so let’s move on.

    Richard Boyd OBE, DL, FRSA.

  • Tony Greaves 12th Dec '11 - 11:28pm

    The problem I have with this is

    (1) I am not proud of what the coalition is doing which is destroying a great eal of what I have been (well off my knees) working hard for over many years, and

    (2) The coalition economic policy is not working anyway and show no signs that it will work in the forseeable future (ie the rest of my active political lifetime).

    Tony Greaves

  • Richard Boyd – its comments like yours that make me realise I’m not alone and want to persevere with a party that wants to run away from reality. Thank you.

  • Jonathan Hunt 13th Dec '11 - 3:22pm

    The words Danny Alexander should be uttering are: “Honey, we’ve shruk the eonomy.”

    So far, that is all the dogma masquerading as an economic policy has achieved.

    The plan to cut public spending and rely on the private sector to replace jobs lost and
    absorb the bulk of benefit claimants is fine in principle. But to make it work, government
    needs to ensure the private sector is aware and ready to take on its new role.

    For example, that small business can obtain credit from the banks, and able, entrepreneurial
    men and women have the confidence to leave secure jobs to start up on their own. Not as an alternative to
    the dole queue.

    It has been obvious since the coalition came into being that the deficit would not be
    eliminated by 2015. The real question was, and remains, how much of the deficit will be reduced
    by the next election, and what kind of expansion would it allow.

    It seems by the time we have emerged from the double dip, and
    also suffered a less severe triple tumble before 2015, that a huge amount
    of Gordon Brown’s legacy would still be writ large in red numbers.

    Where Danny Alexander’s lack of vision, imagination or faith fails him
    is believing that it should mean more of the same.

    The role of Liberal Democrats must be to persuade voters there is anothe way.

    But by then, we shall all be frightened of the effects of Cameron’s Euroseptic [correct]
    policies, and of being the one-in-three British workers aout to lose their jobs
    as a result of our being chucked out of the EU.

    As Robert Walpole said of the reaction of the masses to the declaration of war on other
    European nations: “Today they may ring their bells, but soon they will wring their hands.”

    How apposite for our times.

  • econ liberal 14th Dec '11 - 9:25pm

    @ Tony Greaves

    1) You’ve spent a great deal of your life promoting the growth of the British state to over 50% of GDP that was achieved by over 13 years of Labour govt? I think the Labour party managed fine doing it themselves!

    2) As opposed to which economic policy that is working in a comparable nation? Italy’s, Frances? Or perhaps the Keynesian stimulus’ in the USA. As always ‘it is too soon to tell’ what the effects of this coalitions economic policy is.

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