So I was hesitant to get into ideological discussions but the argument often gets made that even if austerity is unpopular we must defend the small government “Classical Liberal” tradition. That argument needs to be answered- yes there has always been a laissez-faire strand of Liberalism, however, the idea that Liberalism only means small government and free markets is an idea that dates from around 1980.
Liberalism has a quite complicated and wide-ranging history from being initially associated with generosity (as in the word Liberality, a liberal act meant a generous one), to the alternative association of the French revolution (describing someone as a “Liberal” was an insult intended to suggest they were radical revolutionaries, there was no suggestion that Liberals were aiming for small government as such, just that they were anti-monarchist.). Liberalism went on to include large sections of the early Socialist movement, including such hailed Classical Liberals as John Stuart Mill. Early Liberalism was actually not very much to do with economics at all and was more part of the Whig and Republican movements that were about moving from a feudal system to the beginnings of democracy. (I heartily recommend Helena Rosenblatt’s ‘A forgotten history of Liberalism” for more of that story.)
It’s because of these political instincts and aims that when it became clear that unregulated markets were hurting people in the late 19th century Liberals changed policy rather than changing ideology. That’s where the social reforms of Asquith and Lloyd-George came from, leading into the Social Insurance systems of Beverage and the economic theories of Keynes. That’s how the Liberal party ended up to the left of the pre-merger SDP and how the Liberal Democrats ended up to the left of New Labour. It’s not an aberration, it’s just the natural place that Liberalism ended up.
The pro-austerity argument then naturally circles back to either electability or the economic necessity of austerity so let me put all three answers together:
- Austerity is bad economically and damaged the country and people’s lives.
- Austerity is bad politically and turned us from a party of government into a party of protest.
- Austerity is bad from the point of view of Liberal values as well as Social Democratic ones.
It is not just that austerity is damaging on one of these fronts but on all of them. So let me offer an alternative vision:
When parties are kicked out of government it takes a few years for them to recognise their mistakes and recover. We need to move on with that process and admit austerity was a mistake so that we can move forward and start rebuilding trust.
We need to be a serious party of government that does what is in our economic interests and not what satisfies the pressure-group-esk whims of people who like to refer grandiosely to themselves as ‘Classical Liberals’. Instead, let’s own our ideological roots, whether they be Liberal or Social Democratic, and remember what they really mean: generosity, not cruelty.
Let’s remember our liberality.
That’s why we must return to our sensible and decent roots, our instincts towards evidence-based sound government and denounce austerity as what it was: an ideological crusade against economic reality by people who are very clearly now on the political extreme. Only by saying that, and saying it loudly and clearly, can we regain the public’s trust. Trust we so desperately need to win back as the only party that is ready to stand up against climate change, against Brexit, for a strong welfare state and for opportunity for everyone throughout the country, wherever they live, and indeed throughout the world, wherever they may come from. Let’s stand up for Social and Liberal Democracy!
* Stephen is a Council Member for the Social Liberal Forum.
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The Joy of Six 1184
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Generosity, yes. Under the Tories slow bleed of the NHS to give it just enough to tick over.The restriction of drugs cos of cost leading to negative headlines . Giving it ‘targets’ to aim for when health does not work to timetables This leads to the right wing press being able to criticise it,This leads to public dissatisfaction and opens it to slow chipping away into privatisation Health should not be put into money cost but lead to the Nations wellbeing. Yes, austerity should not be continued.
How nice to read an article on LDV with which I am in complete agreement
I wonder if I am alone in finding the (admittedly erudite and interesting) history lesson going a bit off subject in regard to austerity.
My recollection was that in 2010 most of us felt the financial crash had starkly demonstrated that we were living beyond our means, and had been for a while, a fact the Ponzi scheme the banks had been operating with the housing market had masked.
It seemed obvious that some form of punishment was in order, and even if austerity wasn’t justified for that reason, the simple fact that we’d been spending more than we could afford meant we had to start spending less. Of course, that simplistic view might apply to household spending, but not necessarily to government spending and an entire economy. However, austerity seemed right at the time – for a while.
In recent years people have started talking about Keynesian economic theory, and pointing out that if you borrow to spend on infrastructure, you boost the economy (apparently it’s like priming a pump) and also end up with some valuable infrastructure. It is entirely possible that both approaches are right, and that austerity was needed for a while, in order to alter some rather profligate habits some government spending departments had got into under Labour, and that later we would need to prime the pump.
Few would argue that we’ve been wearing the hair-shirt for too long, but I would welcome a grown-up debate about how we should negotiate the transition to a more free-spending recovery period. Labour seem to want to score points by promoting the idea that Conservatives enjoy inflicting austerity because they have sadistic natures, rather than because of the alarming, and growing national debt after the crash. Unfortunately, that was actually a genuine problem that actually existed in the real world, and still does. However, it may be true that we should now be reducing our indebtedness by expanding our economy, but there are counter-arguments. For example, ever-expanding production and consumption are implicated in that other little matter, the one the school kids have been jumping up and down trying to remind us about.
In some science fiction films, the thing that unites everyone is some impending disaster that threatens the whole world, and makes everyone realise their petty differences don’t matter. If only something like that could happen in real life…
Andrew Dear,
it’s a good question. We did not see a repeat of the great depression in the UK or the US. That was thanks to the fiscal response of Brown/Darling in the UK and Obama in the US.
Osbourne (with our acquiescence) did nearly put the economy back into recession in the early years of the recession but was persuaded to quietly abandon his commitment to trying to eliminate the deficit in one parliament by 2012/13. After this time the economy began to recover reasonably well. So perhaps two to three years of lost time was a genuine consequence of austerity.
Even if the government had changed nothing – no spending cuts, tax increases, tax cuts the economy would rebalance over time and the deficit would gradually reduce by itself. The issue of austerity is speeding up (or delaying) the recovery and getting back to full employment as quickly as possible.
As regards an “impending disaster that threatens the whole world” – maybe not the world but Brexit is a serious threat to the UK economy. Household debt levels are back to pre-crisis levels. A Brexit induced economic shock will find us in a similar position to 2008. A sharp drop in GDP and a lot of households with mortgages and consumer debt they can no longer afford. Monetary policy will not enable recovery from this next downturn. How fiscal policy is to be applied in this scenario is where minds should be focused now.
Of cause Andrew you could be partially right. You could be right that money was being misspent but rather than ceasing to spend it perhaps the best solution was to redirect it into productive policies like improving the infrastructure and skills of the country.
Joseph, the ‘schoolkids issue’ I was referring to is global warming – an even more disastrous world event than Brexit – but on that subject, I agree Brexit will be shock to the system in the UK and other parts of the EU. Brexit will be cathartic, and maybe the ‘uniquely talented’ Brits will rise out of the ashes, after regaining something called ‘sovereignty’. In the real world, the inevitable economic damage ought to be a warning about populism. Unfortunately, we in the People’s Vote campaign have found that those seduced by populism are immune to facts, and when faced with hard evidence about jobs losses, and the fall in government spending which a lower GDP will lead to, simply retreat further into the fantasy world they have grown to love.
@ Andrew Daer,
“It seemed obvious that some form of punishment was in order ….., the simple fact that we’d been spending more than we could afford meant we had to start spending less.”
This was a common theme at time. Along similar lines we heard that we’d all been at a party, drunk too much, and were suffering from the inevitable hangover. These aren’t useful analogies because the National and International Economies aren’t to be compared with human physiology. But it suited the neolibs because the crisis then became everyone else’s fault for behaving badly in the first place.
It’s not that difficult to analyse the problem in a more intelligent way. In 2007 everything seemed to be ticking along fine. But then in 2008 that all changed quite abruptly. We had a crisis. House prices fell. The Stock market slumped. Banks went bust. We’ll leave why that happened for now. We just know that it did.
So how do people react in such circumstances? It’s not hard to answer. They become much more careful with their spending if they suddenly feel less wealthy and less secure than they did previously. They don’t borrow so much. The banks aren’t that keen to lend in any case. They start to repay previous loans faster than they would have otherwise. They start to ‘repair their balance sheets’ in economists jargon.
.
@ Andrew Daer,
(cont)
Which fine for the individuals concerned but the slump in spending has macroeconomic effects. If people aren’t going out to restaurants, or whatever, people in the restaurants will lose their jobs. Unemployment rises. The Government receives less tax revenue, so even if they don’t spend a penny more their deficit will increase.
So what to do? The big mistake made by those advocating austerity is to say that because the Government’s revenue has fallen they now have less to spend and should cut back too. We all have to “cut our clothes according to our cloth”, “the credit card is maxxed out”, “there’s no magic money tree” etc etc. This just makes things worse. The Govt tries to cut its spending at the same time as everyone else is cutting back theirs, and so the economy spirals downwards. Trying to cut the deficit this way is like a dog chasing its own tail. The gap never closes.
The sensible thing is for the Government to spend more to make up for everyone else spending less. The only possible objection is the possibility of high inflation. But if everyone else is spending less, anyway, why would that be such a problem? The time to back off from the spending is when there is too much demand in the economy for what is being produced and inflation starts to rise again
We’re, whichever way we voted, are all probably somewhat worried about Brexit. However there is a much bigger problem looming in the shape of Italian and other EU banks which should be of more concern than it is. A big reason for the crash of 2008 was debts going sour in the financial sector. Debt which was rated AAA, and so considered highly secure, was suddenly realised to be not secure at all and downgraded to junk status. So banks which previously looked quite OK suddenly became bankrupt and had to be rescued by Governments.
Governments like the UK and USA can always do this because they can never run out of pounds and dollars. They are like the banker in a game of monopoly. It’s actually in the rules that the banker can write out his own money if the pre-printed notes ever run out in the game. Debt issued by a currency issuing government is just about as risk free as you can get. You’ll always get your money back – except of course inflation could make it worth somewhat less by the time you do.
However Italy isn’t a currency issuing country any longer, but the practice in banking circles is still to consider that government debt is as low risk as ever it was. That could still be true if the ECB could always be relied on to buy up whatever amount of sovereign debt was necessary to keep it worth something. They’ve already done that to a large extent with their QE program. However, everyone is pretty keen to wind that down now. The political will has to be there to keep buying up otherwise worthless bonds, especially in Germany, and that’s a big question mark. Germans are much keener on austerity economics than anyone else so if they don’t agree to bailing out the Italian Government and their banks when the next crisis hits we are going to in for something much worse than even we saw in 2008.
It could be not far off. The world economy is slowing. Central banks are trying to push up interest rates. The EU May elections are likely to produce an influx of right wing eurosceptic MPs which makes the European Parliament unworkable. The smart money is already getting out of Italy, France, Spain and Portugal. It feels like there’s big storm brewing.
Stephen Richmond: do the Tories continue to win elections because they denounce austerity?
Denouncing austerity may be necessary to be successful. It certainly isn’t sufficient. The growth of the party was based to a great extent on local government success. Campaigning showed that people wanted to be informed, to be involved. Evidence is that other parties can do this too when they find people to put in the work.
Challenge for the party is to work out methods to do this on the national level.
I suggest we start with involving party members in the decisions of the party.
Now, I have to admit that I am no economist, so this current thread isn’t doing much to make me want to improve my knowledge. All I will say is that any person, or economy for that matter, that puts their faith in bricks and mortar is either missing the point, just barking up the wrong tree or just storing up problems for the future.
I’m grateful, as always, for Peter Martin’s informed contribution about the economic realities, but the original blog is about how to win elections, and that depends much more on the perceptions of the voters. For example, it was right to increase student fees, and make the ‘gap years’ at university something young people would evaluate in a more hard-headed way – we have a massive surplus of graduates – but voters hated it, and stopped voting Lib Dem, totally ignoring all the good work we did in coalition. My feeling is that Labour have cornered the market in claiming all would be lovely if only the government would print loads of money and dish it out to the NHS, students, etc. and that we ought to offer a more realistic appraisal of where we need to go from here. Apart from any other consideration, we were in government between 2010 and 2015, so we can’t disown the concept of austerity.
We need to be a little clearer about what we mean when we speak of austerity. The Libdem economic philosophy is grounded in Keynesian economics. Without going into detail or variations in approach,the basic philosophy is that the government should not cut spending or increase taxes in a recession and shuld run deficits until the economy is returned to trend growth or unemploment is reduced to normal level.
The other aspect of austerity is the level of spending on public services and welfare provision we advocate or more pertinently the level of taxes we advocate to pay for these services.
Keynesian fiscal stumulus is a short-term measure designed to ensure we do not have high levels of long-term unemployment and wasted labour resources in the economy.
The level of public services and taxation is a long-term social justice issue. Economies ca grow equally well whether they are low tax economies like Hong Kong or Singapore or high tax economies like the Scandavian countues.
The level of public vs private service provision is principally a political and efficency issue rather than a macro-economic one.
In terms of elections the Libdem mission means increased funding for the NHS, Schools, Welfare, pensions, local government including adult social. children services, and youth services, policing and adult education/apprenticrships as well as masively Increased funding for housing and public infrastructure. That requires significant increases in taxation and borrowing for investment.
Apologising for austerity is non-sensical. It is easy to be critical in hindsight. There was genuine uncetainty in 2010 around the impact of the Greek debt crisis on International financial markets and no-one could be confident of the outcome The UK was impacted by the ensuing Eurozone debt crisis. The state of the global economy is a key factor in the state of the UK economy. A factor often overlooked by simplistic Keynesian economic models.
Our focus should be on developing an economic and Industrial strategy that supports UK competitiveness in International markes; presenting a manifesto that addresses the under-funding of public services and housing crisis; ; and raising the taxes and borrowing needed to do so.
@ Andrew Daer,
I can’t see any conflict between wanting to win elections and telling the truth, as you see it, about how the economy functions. It’s no good saying you are anti-austerity.You have to explain why you aren’t.
So you’ll get the following from your political opponents. The austerians. And you need to have a credible answer.
1) “We have to live within our means. The Government can’t spend money it hasn’t got”
Answer. The Government isn’t like a household. The income of a household is largely independent of its spending. The income of a Government is highly dependent. IF the Govt cuts its spending it cuts its income too. The Govt’s role is to help fine tune the economy to ensure everything is ticking along as it should without too much inflation and without too much unemployment.
2) “Our borrowing is burdening our children and grandchildren with unpayable debt”
Answer: Our children and grandchildren will have a standard of living which is defined by what they can produce just like it has been for all previous generations. We can’t send debt repayments back and forth in time. The post war generation did just fine even though the debts of the previous generation were necessarily high to pay for the war. We should be concerned to leave the next generations a clean environment, a working education system, a functioning health service etc.
I won’t go on but you can develop your own list of credible explanations to debunk the common myths about how our economy works.
It was too easy, faced with a near unanimous political consensus in 2010 to accept the need for balancing the books in light go the 2008 crash and the Greek crisis. The mistake was doing it on the back of the poor, rather than at the expense of the richer in our society who could afford to pay more.
Frankie is correct. We could have redirected money to areas where spending it saved in the long run. We could have directed much more to creating well-paid work for the unemployed – easily the best way to take them out of poverty. Instead, we cut local government spending, destroyed many local services and did little or nothing for the unemployed, the homeless or the destitute.
So yes, we need to stop supporting ‘austerity’ in any circumstances. We need to be clear about higher taxes, we need to spell out what services we want to improve or resurrect and we need to be decisive in pushing policies to end poverty.
Only then will we be worthy of the name Liberal Democrat and those long ago Liberals like Keynes and Beveridge who did so much of which we can be proud.
“The sensible thing is for the Government to spend more to make up for everyone else spending less. ”
Yes this is perhaps how it should work but Gordon Brown et al were spending too much money when everyone was spending too much so had already spent all the money that should have been there for the downturn (in the sense that if the deficit was low it could be increased but it was already outrageously high). Debt servicing is currently heading for 60 billion a year, if we had had another ten years of Labour it would be 200 billion a year… the consequences of Labour’s incompetence will be with us for at least another decade, no good blaming austerity.
@Andrew Daer “it was right to increase student fees … but voters hated it, and stopped voting Lib Dem”
I believe that most voters didn’t and don’t care much at all about tuition fees per se. But Lib Dems chose to make a big deal about their position on tuition fees before the 2010 election and then reversed it immediately afterwards. That, on the back of a campaign based upon Nick Clegg’s sincerity and “no more broken promises”, is what voters hated and why they stopped voting Lib Dem.
These articles by Stephen and the intelligent discussion that has followed them are really welcome. It’s clear now what has happened to the economy, what has been done by recent governments of our country, and what Liberal Democrats advocate in the way of spending on welfare, local services, housing and education as some top priorities, and (from our policies) how we would revise and increase taxation to meet them. Brexit, if it happens in any form, presents an even greater challenge, but Liberal Democrat thinking seems more appropriate to tackle the problems than that of either large party. I would like to see summaries now which we can present to the voters, in leaflets and I suppose through social media too.
@ William Fowler,
“….. but Gordon Brown et al were spending too much money when everyone was spending too much”
Typically about 3% of GDP. Just before Labour took over the Tories were at 5% of GDP.
“….so had already spent all the money that should have been there for the downturn..”
Govt can’t save money in the same way as you or I can. It would be like saving our own IOUs for a rainy day.
“Debt servicing is currently heading for 60 billion a year, if we had another ten years of Labour it would be 200 billion a year”
Interest rates, and so the debt servicing costs, are what the Gov wants them to be. At the moment the yields on 5 yr gilts is less than 1%. Less than the rate of inflation. You’re not going to get rich buying them! The Govt, therefore, is getting a better deal than savers. You may have noticed that you don’t get much interest when you try to save your money
The GDP/debt ratio in the UK is about 90% That’s the equivalent of someone with an after tax income of £50k p.a. having a mortgage debt of £45k on which the interest is about 1%. OK maybe he’d rather not have it, but he’s not going to lose any sleep over it.
I am astonished how some Lib Dems can still trot out with such comments such as “it was right to increase student fees” without ever offering any reasoning, and as if the deliberate breaking of a promise and the near total destruction of the Liberal Democrats as a parliamentary force (a job that took 50 years of hard work by tens of thousands of Liberals) is something that can be ignored so long as (in the author’s opinion) it was the *right* thing to do.
Our key mission as Liberal Democrats must be to build and safeguard that fair, free and open society we all aspire to, and not being so incompetent as to allow our arch enemies, the two authoritarian parties, to destroy us by doing what they want us to do. Having around 60 MPs put us in a position where we could prevent the Conservatives from setting up and then incompetently running a referendum on Brexit. Eight or twelve MPs means you can’t even defend yourselves against lies put about by the others or get noticed in the media.
It’s a long, long way back to where we were. I hope the new generation have the determination and staying power the older generation had.
I suspect that a political party has stages that it goes through following a drubbing at the polls rather like but different to those that follow the death of someone close to you.
The trick is to put the coalition into context and also draw a line under it (which we are NOT doing it) and move on – there are many urgent issues that only the Lib Dems can address – climate change, Brexit, housing, funding for the NHS, better education for all.
And we are going to fail the British people if we indulge in too much self-pity and don’t get off our backside and build our party so that something can be done about them .
Without being too Pollyanna-ish the stirrings in our political fortunes may be encouraging.
I was a little surprised to see that just before the 1997 General Election campaign we were around 10% in the polls – around the same level as now – may be a tad higher. And in ENGLAND we have about the same number of MPs as after 1992 and before 1997. In 1997, we obviously had the great fortune that the Tory vote collapsed. But it was far from certain people would turn to us at all with Labour regularly polling above 50% just before the ’97 election.
You could easily see events or a good parliamentary by-election or good local election results in May transform a poll rating of 10% into one of 15% and us get well over 30 MPs at the next general election.
The overall local council by-election results this year are encouraging with @ElectionMapsUK twitter account having us up 9% compared to when the same seats were last fought.
The challenge for us – as always is not to get too pessimistic. Being either too pessimistic or too optimistic are the too big traps in politics especially with FPTP and really put a big effort in building our party – members, supporters, voters in the next two months.
@Mick Taylor “It was too easy, faced with a near unanimous political consensus in 2010 to accept the need for balancing the books in light go the 2008 crash and the Greek crisis”
The Coalition Govt made no attempt to ‘balance the books’. It increased govt debt by £500bn
@Mick Taylor
Good points about socking it to the poor. For me our response to the 2008 crisis was to nationalise debt while still privatising profit. It was a big mistake the whole world made was expecting the speculators, banks, big corporations and money shufflers to reform themselves without a bit of big stick.
@David Evans
It was right to increase student fees simply because, in my opinion, we are encouraging too many people to attend traditional universities, which have become business many of which appear to be more interested in numbers than in offering worthwhile degrees. You will hopefully notice my use of the word ‘traditional’. There are other institutions more worthy of adequate funding such as FE vocational colleges.
@Michael 1
Yes, please. If only we could draw a line under the Coalition (and the same applies to bloody Brexit). Unfortunately many of the public won’t let us!
Simon McGrath. I never said that the coalition balanced the books. I said it was too easy to accept the argument and that what actually happened was the poor bore the burden of austerity.
The big mistake the LibDems made in 2010 was making the pledge on student fees. I was a parliamentary candidate and I really didn’t want to offer this hostage to fortune. I was browbeaten continuously to do so (by a now former MP) until, reluctantly and with much protest, I did so. I was appalled that the pledge was abandoned so quickly and with so little thought to the consequences.
Having said that I think there was much else that caused voters to abandon us, not least the inability of our former leader to listen to what the party was saying and act as if he alone knew what was right and none of us had a clue. The list of things we did in government did indeed include good things, but in voters minds they were outweighed by others.
Nevertheless, going on about something that ended six years ago rather than putting froward our ideas for the future is damaging and pointless. I do not intend to enter into any further debate about the coalition. I suggest that others writing on this blog take a similar view and focus on winning the political arguments of today.
The big mistake of 2010 was not taking Charles Kennedy’s advice. A poltical giant surrounded by good looking midgets. Truly a triumph of style over substance.
@John Marriott, I agree when you say that ‘we are encouraging too many people to attend traditional universities, which have become business many of which appear to be more interested in numbers than in offering worthwhile degrees,’ but increasing tuition fees by a factor of three as the way to offset it??
Indeed I can hardly believe that you, as a long standing and experienced Lib Dem who knows how tough it is to deliver even a bit of Liberal Democracy at a local level, really mean it when you imply that breaking a promise and nearly destroying the Lib Dems was acceptable in order to discourage students from attending traditional universities in such high numbers and instead go into FE college instead. Especially as it hasn’t worked.
is that what you really mean?
Again we here the plaintiff plea can we draw a line under Brexit, well the only way of doing that is to revoke the article 50 declaration. No appetite for that I fear, so even if the jump the fence of Brexit as Ivan Roger’s said the next phase of negotiations are harder, so this mess isn’t going away. The decsion to vote leave will haunt us all for decades. I rather suspect in future years finding a vocal Brexiteer will be as rare as finding a commited Iraq war supporter; nothing to see here will be their battle cry, bless.
@Mick Taylor. I largely agree with your assessment of coalition, a massive amount did go wrong, Nick preferred to listen to his close confidants rather than the wider party and that tuition fees, although totemic, were just one of many things that went wrong. However, I disagree with your conclusion.
You say “going on about something that ended six years ago rather than putting froward our ideas for the future is damaging and pointless” and “I suggest that others … focus on winning the political arguments of today.” but this simply ignores the problem we face. Putting it simply, no-one is listening to us. Mainstream media ignore us. The press don’t mention us. People on Facebook never refer to us. You know it, I know it, everyone on LDV knows it.
A few have been permanent denial about it, but it is the fundamental problem we face. And its cause is what happened in coalition. But yet we continually try to close down discussing its consequences and what we can do about it.
You can’t win an argument if no one is listening, and Liberal Democracy will die as a political force if we don’t change.
Mick Taylor 9th Mar ’19 – 9:10am………Nevertheless, going on about something that ended six years ago rather than putting froward our ideas for the future is damaging and pointless……
The ‘tuition fees’ debacle was almost 8 years ago and the coalition ended 4 years ago; so your ‘six years’ is rather an (un)happy medium.
What those urging ‘forgetfulness’, themselves seem to forget the student anger and protests at that betrayal. Those same students are now mature, well educated voters, many of whom should be supporting and involved in this party; but, despite overwhelmingly voting ‘Remain’, most of them aren’t..
From an electoral viewpoint my take would be: austerity until 2015 was right and measured. You never get everything right in such an abrupt change of course, and that is OK. The big mistake is not to harvest the fruit of these efforts. Instead, Cameron threw all progress away by putting Brexit on the agenda. Without this Tory-spectacle, the UK would have continued to grow dynamically, investment and household incomes would have recovered, substantial spending increases would have been possible, the budget would balance, and austerity would be a fading memory by now (and LibDems would not have to torture themselves and turn off potential voters by continuing to indulge in this past topic). You would not even use the term austerity anymore.
@David Evans
The mistake the Lib Dems made was giving a ‘promise’ in the first place to ABOLISH tuition fees and then agreeing to RAISE them when ‘in power’. I’m pretty sure that the party went along with ‘the pledge’ because it never, in its heart of hearts, thought that it would ever be placed in the position actually to deliver.
Having said that, and not having changed my mind over many years that public finances, at current levels of taxation, cannot subsidise ever increasing numbers of students at university, had I been a parliamentary candidate in 2010 I would not have allowed my arm to be twisted either by the NUS or the party machine to sign that pledge. You see, I’ve never been much of a ‘team player’. As a fully paid up member of the awkward brigade I like to think for myself.
The reason that many people keep throwing the ‘broken promise’ back at the Lib Dems is because they find it hard to get their heads around how a Coalition government works, and would continue to work, if we ever do get electoral reform. In a PR world political parties, when setting out their stall, need to identify policies that, in the event of a hung parliament, are not negotiable and those that are aspirational. So, to use the example of 2010, policies such as, say, easing the tax burden on low earners, helping pupils get a good start and, yes, reforming the voting system would have belonged to the former and policies like abolishing tuition fees would have belonged to the latter.
As I have said before, the answer to those who complained in 2010 that they had never voted for a coalition is that they should learn to live with the fact that no single party ‘won’ back then; but at least in the Coalition government of 2010 to 2015 you had a government that, in theory, represented over 50% of those who cast their vote back then. Cynics gave it two years tops. It lasted five years. Yes, it made mistakes, the first being not taking sufficient time in putting together a programme for government, and yes, David Raw, in the apparent enthusiasm exhibited by some senior Lib Dems to get the keys to the ministerial limos.
Two intelligent and thoughtful contributions from Arnold Kiel and John Marriott. I was a Parliamentary candidate in 2010, 2015 and 2017, spend part of my working-time as a University lecturer and have four adult children, each of whom have student loans.
The simple fact is student do not pay fees, graduates do and only when their income exceeds £25,000 https://www.moneysavingexpert.com/students/student-loans-tuition-fees-changes/. Student loans are part of public sector borrowing. The fees are paid by the government borrowing and funded by future taxation, as they always have been.
The key issue of focus for Libdems should be making access to vocational training, appenticeships and adult education equally accessible to the 50% of school leavers who do not attend University.
Our membership rose sharply after the 2015 election and the 2016 referendum and we have been presented with a great opportunity to build a core base of young, liberally inclined voters by addressing the issues that need to be tackled – climate change and sustainable energy; housing and homelessness; real wages, pensions and welfare; health and adult social care; children services, childcare and schools funding; policing and violent crime; Internatonal relations and our ongoing relationship with Europe.
John – we do need to get the facts straight when discussing the Fees issue.
The 2010 ‘Pledge’ (which as an MP I whole heartedly signed) was to vote against any proposed INCREASE in fees. Regardless of what people think about austerity/cuts etc such a pledge was cost neutral. Not increasing Fees (beyond the then £3,000) would not involve a single penny of extra spending or a single penny less.
The Party policy on the other hand was, ever since 1997, to oppose Tuition Fees and to abolish them. The 2010 incarnation in our Manifesto (and nothing whatsoever to do with the ‘Pledge) was to phase out Fees altogether over a 5 year Parliamentary term. This policy was (said both Clegg and Alexander separately when launching our Manifesto) fully costed and affordable at the then existing £3,000 a year level. Remember that the austerity stricken Coalition also went on to make £27Billion of tax cuts. Politics is all about choices.
Remember too that George Osborne expected Fees to be a Lib Dem Red Line and was quite happy to let sleeping dogs lie and keep them at £3,000. The Tories couldn’t believe it when we instead enthusiastically endorsed a massive increase and acted as fall guy for it. I think it was William Hague who said that we had just killed ourselves off?
So yes, Mick and David are both correct that a whole number of things led to our unnecessary self destruction between 2010-2015. But breaking our 13 year old policy on abolishing Fees, let alone the then very recent pledge to at a minimum oppose any increase, remains a flagship in many minds for LD Broken Promises. Especially after that terrific Party Political Broadcast during the 2010 election about ‘no more broken promises’!
@Paul Holmes
Thanks for putting me straight on tuition fees. I think that the argument has now moved on. As a fellow pedagogue I understand your desire to open up opportunities for youngsters to continue their education post 18. My problem is that we often seem to direct them into areas where theory outtrumps practice.
I am afraid David Evans is right in that, if the Lib Dems have any role to play at all in the great tragi comedy that is unfolding before our eyes, it is at most a bit part.
I wonder how happy Stephen Richmond is with how this thread has evolved. To answer his initial question, if winning elections requires denouncing austerity I, for one, would struggle to look the voters in the eye. As Mick Taylor said a while back, austerity in itself made sense only if we were all in it together. That those least well equipped to cope with it were to a great extent expected to make the most sacrifices, and I include here in particular local government, meant that, the longer it continued, the less chance there was of emerging from it in a timely fashion with the minimum of harm.
Paul/John,
it is important to get the facts straight. One of the key concerns or arguments made against University fees and fee rises was that it would put off students from disadvantaged backgrounds from applying. This has patently not been the case https://www.bbc.co.uk/news/education-40511184.
I think, as Matthew Huntbach has often argued here, that the fee system secured funding for the University sector that otherwise would have faced deep cuts in 2010. The inevitable restriction on student numbers that would have followed would have impacted disadvantaged students disproportionally. It was clear in 2010 that both Labour and the Tories would implement the Browne review.
Fees are currently under review again. David Blunkett has written about how this
won’t help poorer students – arguing for a reduction in interest rates instead https://www.theguardian.com/commentisfree/2019/jan/18/tuition-fees-students-reduce-interest-rates-university-funding-review. Even Teresa May’s social mobility tsar recognises this issue https://www.theguardian.com/society/2018/dec/09/social-mobility-tsar-warns-of-risks-of-cuts-tuition-fees suggesting that restoring maintenance grants would be of greater benefit to disadvantaged students.
As Libdems we need to decide what is more important. Jeremy Corbyn like populist election promises or doing the right thing for the sustainability of University education in this country. Mark Pack’s blog suggests young people continue to be the age-band most willing to consider voting Liberal Democrat and provides an objective view of the fees issue https://www.markpack.org.uk/151431/vince-cable-graduate-tax/
@Joseph Bourke “One of the key concerns or arguments made against University fees and fee rises was that it would put off students from disadvantaged backgrounds from applying. This has patently not been the case”
One factor here is nursing. It’s a few years since I regularly made this point here and I’m too lazy to look up the details again ( 😉 ), but entry to nursing started to become exclusively via a degree shortly before 2010 and it became the largest subject in terms of UCAS applications. Tuition fees for nursing students were paid by the NHS and grants/bursaries were available so it was relatively immune to the changes, and applicants come from a wider range of backgrounds than traditional university courses. This flatters the figures for the time that tuition fees were increased.
However, regardless of the merits or otherwise of increasing tuition fees, the volte-face by Lib Dems begs another question about “competence” that never seems to be addressed, with the focus always being on the issue of “trust”. If the previous policy on tuition fees was so wrong, despite having gone through all of the party’s democratic procedures, then why should voters have confidence in any other policies put forward by Lib Dems?
Peter Watson,
It is a very good question. At the special conference held at Birmingham in 2010, it was clear to me that there was not general enthusiasm among the Leadership on the stage for getting into an argument over tuition fees. It was strongly supported by many engaged in the education sector who were also worried about a marketization of higher education. I seem to recall a passionate defense of the policy by Dr. Evan Harris. The main argument was that tuition fee loans would deter debt-averse students from poor backgrounds whereas a graduate tax would not carry the same deterrent as debt. I think something of the order of 21 Libdem MPs voted against the measure when it came to be voted on in Parliament, largely on the issue of trust as you describe.
We now have several years of evidence to draw-on including the impact of entry to nursing becoming exclusively via a degree. With the Augur review underway, we will need to come to a view on the proposals such as excluding students without three Ds at A-level that would impact courses such as nursing https://www.theguardian.com/education/2019/jan/08/university-chiefs-angry-elitish-student-loan-plans
It will be important to carefully consider the evidence of the Augur review this time around before coming to a settled view on party policy.
Our economy was not broken in 2010 and we didn’t face a crisis and the Liberal Democrats recognised in our 2010 manifesto a stimulus in the first year of government was needed and the deficit should only be addressed when the economy was strong enough to cope with government deflationary policies. Personally I would have made no cuts and would have allowed economic growth be the main provider of extra government revenue coupled with keeping the higher tax allowances unchanged and increasing taxes on the rich in other ways.
Following their defeat at the 1979 general election it took the Labour Party at least 16 years to recover; following their defeat at the 1997 general election it took the Conservatives about 11 years to recover. Both parties distanced themselves from their previous governments (I don’t recall them speaking about any successes from these periods) and had nearly no-one in their top team who had experience in government. The lesson for us should be to remove from high profile roles anyone who was a minister in the Coalition government and not to claim any successes from it. Also I think it would be a good idea to ditch any talk of balancing the budget and highlight that our new leadership recognises the harm done by our policies in government and want to rectify the situation by reversing many of the things we supported. Emphasising that now we know better, we would scrap the benefit cap, the HLA, the bedroom tax, the benefit freeze (it would be good if we said we would restore benefits in real terms to their 2010 level), all sanctions, the work capacity assessment, Universal Credit, Personal Independence Payments and we would restore the national Council Tax Benefit scheme (in fact we would repeal the 2012 Welfare Reform Act).
@ Michael 1
Where did you get the idea we were at 10% in the polls in 1997, the moving average was always over 10% and we achieved 16.8% in the general election.
@ Michael BG “The lesson for us should be to remove from high profile roles anyone who was a minister in the Coalition government and not to claim any successes from it. Also I think it would be a good idea to ditch any talk of balancing the budget and highlight that our new leadership recognises the harm done by our policies in government and want to rectify the situation by reversing many of the things we supported.”
Well said Michael, couldn’t agree more. We should also emphasise to the powers that be in the party that the whole question of inequality should be looked at afresh. What a pity Katharine Pindar’s excellent motion was not accepted for the York Conference. An opportunity missed.
Once the Brexit distraction is removed, one way or another, it will be time to press for your suggestion of a changing of the guard at the top. If not it will probably be Kaput.
@Michael BG
If you look at the old BBC news reports on youtube, Peter Snow talks about the Lib Dems moving up from 10% at the beginning of the campaign. In fact you are correct probably 11% is more accurate – the polls for March 1997 have us around 11%-12% (with ICM being an outlier at 16%-17%) with the first week of April 1997 having us at:
11%, 11%, 11%, 12%, 11%, 9%, 14%. 10%
An average (without doing the maths!) of around 11%. So we were probably 2% higher in the polls than now.
https://en.wikipedia.org/wiki/Opinion_polling_for_the_1997_United_Kingdom_general_election
@Michael BG
That’ll teach you not to mess with #1. Wait til #2 comes along. But seriously, #1, you really ought to get out more! There really is more to life than statistics.
@ Arnold Kiel,
“Without this Tory-spectacle, the UK would have continued to grow dynamically, investment and household incomes would have recovered, substantial spending increases would have been possible, the budget would balance, and austerity would be a fading memory by now……..”
And pigs would fly!
The imposition of austerity economics since the 2008 GFC occurred before there was any significant move for the UK to leave the EU. That doesn’t mean the EU was entirely to blame, but it does show that EU membership shouldn’t be entirely viewed through a pair of Lib Dem issue rose coloured spectacles.
As I have explained before, it simply is not possible for the UK govt to run a balanced budget at the same time as the country runs a significant trade deficit. Think of a bath tub with the plug being partly open. Water is draining out. That’s the money leaving the economy to pay our import bill!
So if there’s no water coming in from the taps, ie the deficit spending by Govt, the money/water will drain away and the economy will cease to function due to lack of money.
@ Joe Bourke,
“The simple fact is student(s) do not pay fees…………….”
The equally simple fact is that students do pay fees if they, or their parents, are wealthy enough to avoid taking out a loan. It’s also a simple fact that those who need the loans are acquiring significant financial liabilities for later life.
Their personal balance sheet is being severely adversely affected in economics terms.
When the country was a good deal poorer than it is now we not only trained student nurses for free, we actually paid them, albeit not a lot, too. We actually provided them with somewhere to live if it wasn’t practical for them to commute.
So how is it, now that we are supposedly much wealthier, that we can’t do that now?
@ John Marriott,
All I will say is that any person, or economy for that matter, that puts their faith in bricks and mortar is either missing the point, just barking up the wrong tree or just storing up problems for the future.
You’ve been somewhat critical of my line on economics from time to time. However, I’d just make the point that I totally agree with the underlying sentiments with this. Except I might just make the point that its not ‘bricks and mortar’, per se, which are the problem but the financial debt which nearly always goes with owning them for younger people.
As I was just explaining to Arnold Kiel, running a trade deficit does have to be financed by debt. Someone in the UK has to borrow to fund it. Partly it is by the government and partly its the private sector. The problem we’ve seen in recent decades is that Govts haven’t bothered at all with the trade deficit. Largely because they can’t do much about it with a floating currency and membership of a trading bloc that bans tariffs.
However, they haven’t been willing to shoulder their fair share of the borrowing and have pushed that on to the private sector which has the collateral of the bricks and mortar. That is until the bubble bursts and the Govt finds we don’t have the collateral after all! Then something unpleasant hits the fan!
The political brand of Austerity is surely owned by one George Osborne. So distancing ourselves from it should not be a problem internally. We may have to apologise to the public for failing to mitigate it adequately (supposedly our strategy at the time). But why not do that?
The decisions back then around student funding seem more problematic. As noted, either the cost is picked up the the government, or the graduate can afford to pay it off. However it leaves the graduate with a large life changing debt, and just possibly the government of the day might “sell off the loan book”, changing the rules retrospectively. Possibly the worst of all worlds. We should seek to walk away from all that smartly.
@Peter Martin, you say, ” The equally simple fact is that students do pay fees if they, or their parents, are wealthy enough to avoid taking out a loan. It’s also a simple fact that those who need the loans are acquiring significant financial liabilities for later life.”
And Peter’s quite right. They do…………… which oddly enough came up under the Chairmanship of Cameron’s pal Jeremy Clarkson on ‘Who wants to be a millionaire’ last week.
A young student competitor said he wanted to win £ 32,000 to pay off his student loan. Clarkson sniffed….. but the young chap won over six figures. Maybe Joe B (and his other aliases) ought to get in a bit more and watch telly….. though we can’t all compete in ‘Who wants to be a millionaire’.
Peter Chambers “So distancing ourselves from it should not be a problem internally. We may have to apologise to the public for failing to mitigate it adequately (supposedly our strategy at the time). But why not do that?”
Careful, Peter, you’ll be told to ‘butt out’ by a former polytechnic lecturer if you push this line. Sensitive territory.
To disown one of the main points of the coalition is madness. I also do don’t like sentences beginning with the word “so”.