Just like all local authorities up and down the land, Sheffield is facing the biggest reduction in our budget for many years as a direct result of the reckless spending carried out by the previous Labour Government. Not quite the ‘post Soviet meltdown’ predicted by Sheffield’s Labour MPs, but a reduction none the less.
Setting the budget has not been an easy process. Colleagues and I have been agonising over what to de-prioritise and what to protect, listening to what local people tell us they value the most whilst ensuring that the vulnerable in our community are protected.
I know that other many other councillors feel the same, so perhaps it is not surprising that some senior Liberal Democrat councillors agreed to sign the recent letter which appeared in these pages.
I have some sympathy with the sentiment. However, I fear that the only thing it will achieve is provide Labour with a useful distraction from their part in creating the mess our country is now collectively digging ourselves out of. I’m all for debate, discussion and even occasional dissent within the Liberal Democrat local government family. But not at the expense of letting the Labour Party off the hook.
Let us not forget that many of the budget reductions in some of our more deprived authorities are as a result of time-limited grants coming to an end. Ticking time bombs such as the ‘Working Neighbourhoods Fund’, for which no future funding had been identified by the previous Government. Ed Milliband himself listed this fund as one of the many things Labour would cut if re-elected. Nobody can pretend we would not be dealing with the same kind of issues if there had been a different result at the General Election.
We should also take the time to consider that some of the measures announced by Labour-run authorities are nothing short of playing politics with people’s livelihoods and local services. It is no accident that Sheffield has avoided shutting libraries, public toilets and leisure centres whilst Labour run Manchester, Leeds and Liverpool have not. You only have to compare Sheffield’s 270 job losses with the 1000’s announced by the other big northern councils to see how brutal Labour politicians have been. They believe they have the political cover by shifting the blame onto the Coalition. It’s our role to expose this argument and show there are better local alternatives.
Community politics is in the Liberal Democrat’s DNA. In many ways we are the natural party of local government. Now we are in power at Westminster for the first time in a generation we have the opportunity to influence the reform of local government for the better. Achieving change for the better will be a long journey, potentially made even longer by the fact we are in Coalition. Staying focused and patient is the only way we will reach our goal. Turning our guns in on ourselves will only make the Labour Party and other non-reformists stronger.
Cllr Paul Scriven is the leader of Sheffield City Council
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52 Comments
Entirely agree. Labour came to power with a recovering economy and a massive majority, yet still imposed the cuts previously announced by the Tories
By comparison, they bequeathed us a wrecked economy with an unbuilt deficit and various outstanding blank cheques (BSF)
It is astonishing to me that the media give them such an easy ride for the scorched earth economy they left behind.
And if I hear many more shroud waving labour boss on radio 4 I may well throw up
Paul, Yes we can and you won’t need to worry about it after May.
Well said. These are Labour’s cuts and it’s time the government turned its fire power on Labour rather than letting local councilllors take the flak.
More here: http://livingonwords.blogspot.com/2011/02/risking-wrath-of-lib-dem-councillors.html
There’s a whole lot in this article that I wholeheartedly agree with. The Lib Dems do have local politics in their DNA and that is why it should be a Lib Dem Minister not Pickles at the helm of Local Government.
It does however fail to address the root of the Times letters problems; namely that Pickles is unapproachable and that the cuts should not be front loaded to the extent that they are. Personally I didn’t see it as turning guns on other Lib Dems so much as highlighting Conservative intransigence. Intransigence that I would hope has been raised by Lib Dem Ministers but which thanks to Clegg’s decision to present a permanent united front us mere mortals are not allowed to know about.
Pickles seems intent on his sharing “back office” functions and Chief Execs message as if that is the cure for all ills. Perhaps some of the Ministries could follow suit leading to a reduction of Ministers and Top Civil Servants? If his logic (which never mentions whether the move would be practical or not) is followed to the nth degree we could have half the current number of Ministers. They have not even guaranteed this will happen once the number of MP’s is cut…..
I also have a feeling that just comparing job cuts is not a good indicator. There needs to be a move away from the narrative about Labour creating the financial mess. It’s true they bear blame for a significant part of it but people are switching off to it being the only answer given. If Labour were planning not to renew funding in some of the most deprived areas that does mean the coalition should follow suit. If the funding is required to provide basic services then it needs to be identified and provided (emphasis on “basic” everybody with a brain accepts the need for cuts and it was certainly accepted by the signatories of the letter). This then becomes a positive message for those areas of a coalition win and an improvement on what Labour could have offered.
Funny, I don’t remember many Lib Dems complaining about Labour’s “spending binge” before they jumped into bed with the Tories… in fact, I think I remember Vince Cable wholeheartedly supporting Labour’s fiscal stimulus during the recession and calling for an additional cut in the basic rate of income tax, which would’ve added a whole lot more to the deficit.
Paul Scriven
I take it you will be asking for some more money from Mercure now
http://www.youtube.com/watch?v=WV5z9d2W6gs
Seriously, there is nothing wrong in criticising Labour for some of the things they do but the problem is that to a lot of your ex-voters such as me it is not being balanced by the same approach to the mob you have teamed up with in the Coalition – go and read Conservativehome if you want to see some of the thoughts from those you are sharing Government with.
I will also wait to see more detail of what happens when the cuts to funding become an actualité
Thank god the Lib Dems are allied with the Tories ,who have always done so much for South Yorkshire. I’m sure everyone over there will appreciate your efforts.
Let’s remind ourselves of those 2005 pledges from the Lib Dems (taken from a bbc webpage):
50% top rate tax on earnings over £100,000
Replace council tax with local income tax
Scrap university fees
21,000 extra teachers
£100 a month pension extra for over 75s
Free eye and dental checks
10,000 extra police
20,000 community support officers
Lower class sizes
Free personal care
Scrap the Child Trust Fund
Scrap the Child Support Agency
I can’t see anything there about reducing spending because of fears of an overheating economy. The same goes for the Tories – did they campaign to reduce public spending because they considered it unsustainable and built on artificially inflated tax receipts from the credit bubble? Nope.
It’s clear the electorate are getting fed up of hearing how it’s all Labour’s fault; the groans from the audience on Question Time every time a condem official blames Labour should be enough to work that out. However, if you want to keep digging a hole for yourselves then keep telling everyone about the mess that Labour left behind. A campaigning hint for you: tell the electorate what you’re doing for the Country, don’t tell them about the ‘mess’ someone else made.
‘it’s time the government turned its fire power on Labour rather than letting local councilllors take the flak’
I must have got ti wrong – I thought it was councillors that were turning the guns on the Tory coalition and I seem to remember that LibDem councils were in the vanguard.
Paul – did you see Francis Maude on Question Time when he tried this?
Take that and magnify it by twenty. That’ll be the response the next time you try to blame Labour for the choices you are making publicly.
What about the 92 Councillors who bravely wrote to the Times to complain about how your Government are front-loading the cuts, making it impossible to retain services? Are they wrong – are they letting Labour off the hook – or are they just avoiding the curious Tribalism that has infected Lib Dems who are part of the Coalition Cult?
@Steve and others – a selective list of manifesto promises when we won 23% of the vote is not exactly a killer argument. And if you want the bit on the economy then here are the three answers you are looking for:
a) Labour admitted after the election that there was ‘no money left’ and our initial budget was on the assumption that there was a bit. Hence Labour’s decision to not publish the figures or a Comprehensive Spending Review amounted to hiding the truth of our broke-ness from the opposition and public.
b) The relevant bits on the economy say: ‘We will reduce the deficit’ and ‘Public borrowing has reached unsustainable levels, and needs to be brought under control to protect the country’s economic future’ and ‘We will base the timing of cuts on an objective assessment of economic conditions, not political dogma.’ so you must be clearer about what our manifesto says. [1]
c) As for the general concept of listing some pledges that – with 23% of the vote – we haven’t managed to fulfil, it is not a strong argument, not least because using the link below [2] you can find a longer list of manifesto policies we have successfully achieved. (The only criticism I agree with is that on fees, as personal pledges were signed, and only a minority of our MPs backed the fee increase.)
So in reality, Paul’s points are not only accurate and justified, but the criticisms and references to the council leaders’ letter still need to get the facts right rather than just reading a write up of the story. [3]
[1] http://network.libdems.org.uk/manifesto2010/libdem_manifesto_2010.pdf
[2] http://www.scribd.com/doc/45992465/Lib-Dem-Achievements-in-Government
[3] http://nickthornsby.wordpress.com/2011/02/10/what-does-that-letter-actually-say/
@Cuse
There were just as many agreeing with him as heckling, and when Dimbleby ensured his argument was given an airing, the majority of the audience gave it time and respect. Whether you like it, or whether the public do, the position he took is a truthful one – Labour ran up a massive debt, spent way more money than they had, in a way that was not sustainable; the coalition government we have now has no option but to correct that, to balance the spending with their available income; Labour built an economy on sand and it all came crashing down around them – it’s in everyone’s interest we start again with stronger foundations.
AndrewTennant
So you are claiming Francis maude as one of yours now – how very sad!
There was once a time when the LD were and independent party with an independent voice. Now all we see is a parroting of the Tory line.
@bazsc
Agreeing with his argument isn’t equivalent to joining his party; you could actually listen to what individuals say rather than judge what is said on who’s saying it – novel, but you might even learn something…
Well I heard him and it was the same old clichés – also instead of listening to what people say it may be worth watching what they do before jumping to conclusions… you may learn something
@Henry
“a selective list of manifesto promises ”
I didn’t select it – I just copied it from the first website I found. However, the point stands and is perfectly valid. The Lib Dems said nothing in the 2005 election campaign about spending being out of control and said nothing about the unsustainability of the tax revenue. On the contrary, many additional spending pledges were promised. Ergo, the resulting deficit would almost certainly have been worse under a Lib Dem government that set about implementing the 2005 promises.
“Labour admitted after the election that there was ‘no money left’ and our initial budget was on the assumption that there was a bit. ”
The idea of ‘having no money left’ is economically absurd and it wasn’t ‘Labour’ that admitted anything. What did happen is that the former Secretary to the Treasury made a very badly judged joke on leaving office. The fact you use Byrne’s note as an argument to form conclusions about Labour’s economic competence and admission of wrongdoing is a bit desperate.
“The relevant bits on the economy say: ‘We will reduce the deficit’ and ‘Public borrowing has reached unsustainable levels, and needs to be brought under control to protect the country’s economic future’ and ‘We will base the timing of cuts on an objective assessment of economic conditions, not political dogma.’ so you must be clearer about what our manifesto says.”
Clegg campaigned right up until the days before the election on a platform of a slower pace of cuts. If he had taken more than two minutes to ditch that policy after the election then I might consider that he made an objective assessment. He clearly didn’t mean a word of what he was saying during the campaign.
“Hence Labour’s decision to not publish the figures or a Comprehensive Spending Review amounted to hiding the truth of our broke-ness from the opposition and public.”
Which figures did they not publish exactly? Have you got some proof for this? The figures were in the public domain and were debated during the campaign. To suggest otherwise is an insult to the intelligence of the electorate.
I voted lib dem – I’m not here to do any other parties bidding – I’m just holding you to account because your account doesn’t stand up to reasoning and the weight of evidence.
@Steve [although @ always sounds more confrontational than it should!]: Clegg campaigned on the 2010 manifesto.
The 2005 election is a trickier beast, and spending was less clear, but this was quite a while ago and the hypotheticals on either side of the debate serve – in my opnion – little purpose.
Obviously you are right the concept of ‘no money left’ isn’t quite fair [if it was central to my argument I agree it would be absurd, but it is illustrative]; it is not the centre of my argument so much as the mis-handling of the economy and the lack of a CSR – so that may have been a bit of a rhetorical (not ‘desperate’ as such) point and hopefully you’ll forgive me. It is relevant however to assess the amount of Government spending compared to tax revenue etc… which was reaching concerning levels.
The route issue here is an argument over whether or not we needed to cut the deficit quickly – that, I am genuinely undecided on. (I am not some automatic cheerleader – so fear not.) I doubt very much that I – or anyone – is ‘insulting the electorate’ [this is an unfair charaterisation] by questioning Labour’s decision not to publish a CSR and to campaign on a platform of cuts with no detail. I also don’t think Labour were ‘insulting the electorate’ by not publishing this, I just think they were wrong.
I never accused you of doing another party’s bidding, but my point about a ‘selective list’ was that there is much you could list that is good that I reference as well. [I don’t have time to go through the full list, but by the election campaign, because the country was broke the police numbers was down to 3,000, so I think those figures were out of date by the time of the campaign.]
Whilst it is true that Labour and the Tories made the economic pace of cuts central to their debate, and tactically Clegg may have highlighted our concern at being too quick, the economy [with its aparent ‘either/or’ distinction] never made easy ground for us in the media battle. Rather what we campaigned on, on the title page of our manifesto were a) the pupil premium – done b) fairer taxes – done c) a green economy – part-done and d) political reform – we’ll wait and see.
So your vote has not been wasted, and if more people had voted for the Lib Dems, we may have been able to implement a greater proportion of our manifesto (ie on the banks, trident, fees, policy numbers, capital gains tax etc…) Alas, 36% of the country voted Tory.
Henry
I respect what you are saying but the crux of the argument is in your last sentence. You had 23% of the vote, the Tories had 36% but what we no have is a Tory Government with your support. A few scraps are being thrown to you but they are at the margins of importance at the moment (civil liberties have been slightly improved but to be honest I will wait to see a reaction to events – no current pressure on this subject.)
The LD in Government should be standing up for their principles and the problems you have is that it is clear they are supporting things (and being vocal bout it) that are not really believed. Noone forced your MPs to vote for any of the policies such as the altering of constituency boundaries with no consultation, fees, free schools (rushed through using anti-terrorist legislation), NHS reforms, council spending cuts etc.
It seems you are trying to show so hard that coalition works that your leadership is afraid to show any dissent at all. Your coalition partners do not have the same values as most of the LD I have ever met – perhaps some on the libertarian wing of your party are close to their Tory partners but you did use to have some social democracy in there as well. Your party is becoming rapidly a mirror of continental liberal parties – right wing libertarianists. Perhaps Social Democrats and Liberals cannot sit side by side and it would therefore be better if your party succumbed to a massive defeat and split back into two parties – we would then at least know what policies we were voting for
Steve
“It’s clear the electorate are getting fed up of hearing how it’s all Labour’s fault; the groans from the audience on Question Time every time a condem official blames Labour should be enough to work that out.”
That’s certainly not my experience. I think you’ll find more people agree with (say) Andrew Marr, when he had Ed Balls on recently, doing his amazing deficit-denial job.
Anyway, I always understood that Question Time audiences were required to have 30% Labour supporters in the audience. If they didn’t groan on cue they wouldn’t be doing their job, would they?
Simon Shaw
The polls seem to tell a different story from your anecdotal evidence. I accept pollscan be wrong but probably better than your ‘I reckon…..’
The last point is pathetic – I would assume there is probably is 30% Labour voters at least in the audience as that is approx their base vote – now probably more like 45% – and if you lot are lucky there may still be one or two of you supporters left. If they are in the North then probably more like 50-60% – would you suggest Question Time bus in a few southerners to make up for the collapse in the Coalition vote in those areas
“a) Labour admitted after the election that there was ‘no money left’ and our initial budget was on the assumption that there was a bit. Hence Labour’s decision to not publish the figures or a Comprehensive Spending Review amounted to hiding the truth of our broke-ness from the opposition and public.”
If you were “assuming” the budget deficit was any different to what the independent Office for National Statistics has always and always will publish, then that only shows how uninformed you about the intricacies of the economy. Like I say, the ONS was always publishing the deficit figures – take a look at this typical article from January 2008, when Labour were supposedly at the height of their spending binge, with a deficit of £43bn (note: a fraction of what the deficit currently is – thus confirming that most of the deficit is due to the recession):
http://www.guardian.co.uk/business/2008/jan/22/economy?INTCMP=ILCNETTXT3487
Nine months later, when Alistair Darling has said the Labour government will be increasing the deficit by stiumulating the economy and cutting VAT, and Cable gets up and criticises them – saying they weren’t stimulating the economy ENOUGH (correctly, imo), thereby implicitly accepting the side-effect of an even bigger deficit. Was Cable, the very experienced economist that he is, unaware of figures that even Guardian journalists knew of?
http://news.bbc.co.uk/1/hi/uk_politics/7746928.stm
Watch Cable’s speech in full, and show me where he calls for spending cuts (and also note that Clegg, David Laws and Jeremy Browne can all be seen nodding their heads vigorously) – and then skip to 5:30, when Darling suggests that he suspects Cable would also want to make about £20bn cuts, only to be met with shakes of the head from Cable and Clegg.
“b) The relevant bits on the economy say: ‘We will reduce the deficit’ and ‘Public borrowing has reached unsustainable levels, and needs to be brought under control to protect the country’s economic future’ and ‘We will base the timing of cuts on an objective assessment of economic conditions, not political dogma.’ so you must be clearer about what our manifesto says. [1]”
Indeed, that is what your manifesto said – and, on 1 May (5 days before the election), Clegg made it clear that he thought the Tories’ deficit reduction plans were founded on “political dogma”:
“Us siding with Labour? It’s siding with common sense,” he said. “My eight-year-old (son) ought to be able to work this out — you shouldn’t start slamming on the brakes when the economy is barely growing. If you do that you create more joblessness, you create heavier costs on the state, the deficit goes up even further and the pain with dealing with it is even greater. So it is completely irrational.”
http://main.omanobserver.om/node/8091
Those words now look remarkably prescient, looking at last quarter’s growth figure. So what exactly changed in the intervening 11 days between Clegg saying those words, and Clegg enthusiastically endorsing the Tories’ economic plans, apart from Dave fluttering his eyelashes at him? Are you really suggesting Cable and Clegg were unaware of the deficit figures that had been widely reported in the press?
@bazsc – there are some things I am not happy with, and hopefully that is clear, but I simply disagree with the opposite characterisation of things like the pupil premium, the tax allowance increase and a substantial – though not enough – increase in Capital Gainst Tax, and – dare I say – gay marriage, as ‘scraps’. I think we need to be tougher calling for more concessions our way, but just because I think we haven’t got enough, it doesn’t make the charaterisation in the opposite direction – namely that we are somehow getting nothing out of this – any more truthful.
Amazing stuff from Paul Scriven. The phrase going down fighting springs to mind. Assuming Sheffield is a bit like my own bit of Yorkshire, the May elections will be a wipe out for LD councillors. The combination of a recovering Lab vote, long standing hatred of Tories, Sheffield Forgemasters, tuition fees, EMA and Clegg will guarantee a slump back to levels of support of many years ago.
Odd that Paul does not mention the cuts that have been delayed until after the election and enabling him to write article such as this.
And @Daniel, more countries risking collapse, positive growth, etc… I merely point out that the Liberal Democrats position is dogma neither way. I have been very clear about my own doubts but they are not yet over-riding other concerns.
And LibDem MPs would have been the most vocal, in opposition, opposing cuts to local government. My, how times change. At least their are some in local government who are not prepared to just accept the cuts in a supine manner..
With respect, Paul (and posters above) seems to have completely missed the point his colleagues in local government were making.
They did not deny the need to cut spending. Their critique was threefold. Firstly, the front-loading of cuts made it hard for them to deliver savings in a controlled and sensible fashion. Secondly, the cuts in local government funding are uneven and target northern cities much more severely than they do more affluent southern areas. Thirdly, Pickles’ unwillingness to seriously discuss these concerns with local government.
Here is a quote from Coun David Faulkner, LibDem leader of Newcastle City Council:
““We thought it was important that the Liberal Democrat local government family came together to express its disappointment at the way this whole thing has been conducted.
“To me it doesn’t meet the Government’s own test to be proved as fair and progressive. We are not saying local government shouldn’t take its share of cuts, we have to.
“But we think the Secretary of State has a duty to help local government and we don’t think he has done that.
“He has created a bit of a smokescreen around the use of reserves and chief executive’s salaries when I would rather he concentrated on the bigger picture which is how his department could help local councils. Some councils have a far higher council tax base and therefore a bigger council tax income. The whole purpose of the system is to recognise that and redistribute those resources, otherwise it’s not fair.”
We support a lot of things the Government is doing, but when it comes to the speed of cuts we don’t believe it’s justified.
@Daniel
Your points would be pertinent if not for one simple fact: the deficit was not caused by the stimulus. Labour were deficit spending long before the financial crisis, and less than half of the deficit inherited by the current Government came from the stimulus package.
@Steve
I’m not sure which 2005 Liberal Democrat Manifesto you are reading, but the one I have contains a statement from Vince Cable, criticising the Government for “Inadequate action to contain the explosion of personal debt. Economic forecasts making unrealistic assumptions about future growth. Failure to take the tough decisions to prioritise taxpayers’ money, to spend it where it matters most.”, and listing his beliefs “that government borrowing should only
finance investment over the economic cycle, and that government debt should be no higher than 40 per cent of GDP”, and “tough choices on public spending, cutting out low priorities in order to spend more on what matters most”
So the Liberal Democrats clearly were talking about the level of Government debt back then. Yes, there were new spending commitments in the 2005 manifesto, but this was when we still had the 50% tax rate over £100,000 policy, and the intention was to fund any new spending with this and with cuts to existing areas of spending.
You can read the whole 2005 manifesto here: http://news.bbc.co.uk/1/shared/bsp/hi/pdfs/LD_uk_manifesto.pdf
“Your points would be pertinent if not for one simple fact: the deficit was not caused by the stimulus. Labour were deficit spending long before the financial crisis, and less than half of the deficit inherited by the current Government came from the stimulus package.”
Then why is there no record of Vince Cable or any other Lib Dem ever castigating Labour for overspending prior to the financial crisis? And why, in the video I’ve posted, when the recession is starting, did Cable and Clegg baulk at the suggestion from Darling that they would like to cut spending (something George Osborne had declared the Tories would like to do moments before)?
“…and listing his beliefs “that government borrowing should only finance investment over the economic cycle, and that government debt should be no higher than 40 per cent of GDP”, and “tough choices on public spending, cutting out low priorities in order to spend more on what matters most””
Nowhere in that does it say the Lib Dems would cut OVERALL levels of government spending; it merely says it would reallocate spending on “low priorties” to increase spending on “what matters most”.
You can’t have it both ways: either Cable is an economic sage, and was always completely aware of how big the deficit was; or he had little grasp and knowledge of economics, and so was unaware of the levels of spending the Labour government had despite the figures being well-publicised.
@Daniel
If you actually watch the PBR response video that you linked to what you’ll see is Vince saying that the government’s economic stimulus was poorly targeted, resulted in very little expansion of growth stimulating infrastructure improvements, was weak on banks and enforcing bank lending, and that their future forecasts were based on a presumption the UK would rapidly return to bubble like growth; his position then, and his position now – remarkably consistent.
@Daniel
Just one of Vince’s personal and mortgage debt warnings: http://www.youtube.com/watch?v=gnpzpGz9xO4
@Henry
“The 2005 election is a trickier beast, and spending was less clear, but this was quite a while ago and the hypotheticals on either side of the debate serve – in my opnion – little purpose.”
I don’t think the 2005 election can’t be dismissed that easily, especially when we’re talking here about telling the electorate that the ‘mess’ was Labour’s fault. It was in the critical period of 2002-2007 that our economic problems were created – the deficit that eventually resulted was a product of thinking that the increases in tax revenue during this period were a result of a stable, balanced economy that would continue to function in much the same manner. In reality, the large increases in revenue were a result of a huge, unsustainable expansion of credit that fed in to massive bubbles in residential and commercial land values. If the Lib Dems are to use an argument that this is ‘Labour’s mess’ and there is no alternative to the current policies being enacted then it is necessary to examine the Lib Dem’s policies during 2002-2007, necessary to examine any alternatives that are being proposed at this current point in time (that would refute the idea that there is no current alternative to sorting out the ‘mess’) and necessary to examine what was said by the Lib Dems in the 2010 campaign.
The truth is there weren’t any Lib Dem policies during 2002-2007 were aimed at correcting the imbalances in the economy (whether that was through regulation of the banks or fiscal policies such as whacking up CGT on houses, taxes on buy-to-let, etc – I know a few of you like to talk about land-value tax as a bit of a hobby in your spare time, but you lack the balls to ever put it in your manifesto or try to implement it when you’re in government).
Here are the opinions of some leading economists on the government’s austerity drive. It’s well worth a read:
http://falseeconomy.org.uk/cure/what-do-the-experts-say
As for the Lib Dems’s rhetoric during the 2010 campaign – the policy espoused by Clegg et al was for a slower pace of cuts – a policy that was ditched immediately after the election. Most people understand that governments have a tendancy to promise too much and may not be able to deliver everything over the course of five years due to unforseen problems over that time period. With Clegg, it is clear that he didn’t believe a word of what he was saying during the campaign due to the unseemly haste with which he ditched the policies after the election.
If the major structural problem in our economy is the personal debt to income ratio (which seems like a perfectly rational assumption given the increase in the ratio of the last couple of decades and the size of the credit bubble and it’s importance in creating our current problems) then how is an austerity drive and wage stagnation/decreases for the lower orders (big society) going to help re-balance the economy? It’s quite obvious that it’s going to do the opposite. Pursuing deflationary policies for a nation with debt-to-income problems is a recipe for disaster.
“a) the pupil premium – done b) fairer taxes – done c) a green economy – part-done and d) political reform – we’ll wait and see.”
a) pupil premium – matched by education cuts – re-arranging the deckchairs on the titanic?
b) fairer taxes – somewhat debatable – CGT partially raised back to something approximating where it was before 2008 when Gordon slashed it to try and prop up house prices. Ok, the lower income tax threhold is being increased at a bit of a faster rate then normal over a period of a couple of years, so cradit for that. However, we have the VAT rise (regressive across all income deciles), despite the Lib Dem campaign warning us of the tory VAT tax bombshell – a disgraceful piece of electioneering (see the poster – http://dailyelection.files.wordpress.com/2010/04/lib-dem-poster-vat-tax-bombshell.jpg?w=500&h=250 The small print at the bottom clearly shows that it was a get out clause for the Lib Dems to raise VAT anyway and claim it was just the amount they were ‘warning’ the electorate about – if the advertising standards authority had authority over such political posters then it would have been banned). The rise in tuition fees is effectively a tax increase for future generations and one which is regressive above average graduate incomes.
c) green economy – I’ll take your word for it – don’t know much about it.
d) political reform – yes, we’ll wait and see
@Ross Stalker
“and that government debt should be no higher than 40 per cent of GDP”
It was the notion that keeping debt at less then 40% of GDP (whilst ignoring everything else, such as rampant house price inflation caused by increases in personal debt based on fraudulent lending practices) that helped get us in to this mess. At the time of the credit-crunch, the national debt was less than 40% and lower than when Labour came to power in 1997. The quote you provided from the manifesto actually backs up my argument – you were just repeating Gordon’s golden BS.
@Steve the Guardian said in April that the Liberal Democrat manifesto had more detail on how and where they would cut spending than any of the others.
@Andrew Tennant
“was weak on banks and enforcing bank lending”
You’re right his position on this is consistant, unfortunately he is now part of the Government that is continuing Labours errors of being weak on banks and enforcing bank lending.
In the small business world there is just scepticism of the latest agreement. We have previously seen the merrygoround approach to lending that will be used to distort the true position. Using this, banks state they have approved x million in new lending when in fact they are offering small increases in overdraft / lending to companies to move bank. We have been offered this by 4 seperate banks over the last 18 months. Even where lending is offered it generally requires levels of security form directors that make them overly risk averse.
The joke is that as a sector we employ a great many people (my company employs 60 employees and give work to dozens of independent contractors) and did not contribute to the financial crisis….
@Andrew Tennant
I can’t fault anything Cable says in that youtube clip, however it was said in 2007! By that time the only question that rational people in the UK were asking was why hasn’t the housing crash happened yet – 2002 was the year that house price ‘inflation’ peaked) The important point is that all three major political parties shied away from talking about over-priced housing and putting forward policies to mitigate against it, as they were too afraid of losing certain home-owning voters. I find it particularly shameful that both Labour and the Lib Dems did nothing about this issue (other than Cable making the occasional vague comment that had no effect on his party’s policy) given the disastrous social effects on the young.
@Simon
“the Guardian said in April that the Liberal Democrat manifesto had more detail on how and where they would cut spending than any of the others.”
I don’t think the detail is the issue. The issue is the pace of the cuts.
@Ross
Actually 124 Billion of the deficit is directly related to propping up the RBS, Bradford and Bingley and Northern Rock alone. That figure doesn’t include Loans lent to the banks either!
Check out the NAO report for exact figures. http://www.nao.org.uk/idoc.ashx?docId=d5923f64-5ae8-4909-883d-bb31d24bc445&version=-1 as it makes very interesting reading. We maybe paying 5 billion a year in interest but at the moment we get that back in Interest from the banks.
George Osborne has added a further 7 Billion to the deficit propping up Irish banks becuase of the knock on effect a collapse over there would have. It begs the question Is it okay to cut £7 billion of UK services because we are propping up foreign banks? Interesting dilema isn’t it?
Again the pain is because the Conservatives want to reduce the deficit in one parliament – Not two like the lib-dems and Labour wished too.
The party has let itself be led into this and has to take responsibility rather then shallow attempts at blame shifting. I had this espoused on my doorstep the other evening whilst being asked for my support
I had to explain that I am now a very ex-libDem
@Steve
Before you ask for any earlier, please remember that Vince was only elected as an MP back in 1997!
http://www.independent.co.uk/opinion/commentators/vincent-cable-be-warned–the-housing-market-is-about-to-crash-734586.html
@Andrew Tennant
Every rational person thought house prices were about to fall in 2002/2003, but they were proved wrong because the banks began their fraudulent lending and propelled the bubble even further forward – what happened was that those who were urging caution were trampled underfoot by the madding crowd.
What Cable was saying at the time was bleeding obvious. I remember saying it at the time. Here’s a typical property article from the telegraph (2002), which mentions the possibility of a slow-down and fall in house prices:
http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/2773720/How-to-mend-a-housing-chain.html#
Here’s an episode of Have I Got News For You from 2003, discussing the fraudulent lending by the banks and the expectant debt time-bomb (at 5:50):
http://www.youtube.com/watch?v=I9-WDWADdis
Vince Cable was no more of a sage than either myself or the numerous authors of stories in the mainstream media about the problem. The question is, did Cable’s pronouncements have any effect on Lib Dem policy? The answer is no. If there were policies and manifesto commitments promising to tackle the problem then the argument about Labour’s ‘mess’ would be valid.
As for the current government’s understanding and tackling of the issue, there’s an excellent blog today in the guardian:
http://www.guardian.co.uk/money/blog/2011/feb/15/first-time-buyer-summit
Ah, @Steve, I see you’re intent on playing ‘if you don’t like the answer, change the question’; when you’ve appropriately contrived ‘a reason why you’re right’ be sure to let us know?
@Andrew Tennant
Show me the evidence of a Lib Dem policy or manifesto commitment that was aimed at dealing with the credit/property bubble or dealing with the by-product (unsusainable government spending commitments) by reducing government spending/increasing taxation to build up a surplus. If there is some evidence, I’m happy to be proved wrong.
Until recently Cable was one of the few MPs I had any respect for on this issue. It’s only now that I’ve seen how ineffective he is as a minister that I’ve gone back and looked at his record on the whole crash issue and it seems that nothing he said during the bubble years had any impact on Lib Dem policies. So what’s the point of him? The comments he made during the bubble years were really only echoing what many mainstream commentators were saying about the economy. It was the rest of the MPs in the commons that studiously ignored what Cable and many others were saying (whilst flipping their property portfolios) and it appears that this included whoever put the 2005 Lib Dem manifesto together.
I’d just like to add that Cable’s prescience only extended to saying houses were overpriced and that levels of personal debt were too high, which was quite obvious and well discussed outside of parliament. He didn’t work out that the result of the bubble bursting would be the collapse of the financial system and a huge fiscal deficit. The Lib Dem 2005 manifesto was a tax and spend affair and was easily to the left of Labour. There was no mention of modifications to fiscal policy in order to build up a surplus and reduce the debt (for when the bubble burst).
I really can’t see how the Lib Dems claim to hold the moral ground over the ‘mess’.
‘moral high ground’
“@Daniel
If you actually watch the PBR response video that you linked to what you’ll see is Vince saying that the government’s economic stimulus was poorly targeted, resulted in very little expansion of growth stimulating infrastructure improvements, was weak on banks and enforcing bank lending, and that their future forecasts were based on a presumption the UK would rapidly return to bubble like growth; his position then, and his position now – remarkably consistent.”
Yes, like I said – he said the stimulus wasn’t big ENOUGH, and that cuts in income tax rather than VAT were needed (which would’ve added a lot more to the deficit). I agreed with him then, and still agree with what he said then – while the Labour government had the right idea about stimulating the economy rather than cutting immediately and causing spiralling unemployment and possibly a depression (something that, of major parties in the developed world, only the Tories and the US Republicans called for), they didn’t go far enough, and they should’ve followed the example of Australia – which had the biggest stimulus in the developed world, and, although they added more to their deficit than Britain did in the short term, it paid off with a quicker and stronger recovery. This just backs up my point – it’s incredibly disingenuous for Cable to claim that the deficit would be smaller than it is now if he had been Chancellor since 1997, because, in his 2005 manifesto, he pledged to maintain the then overall levels of spending, and, in 2008, he called for an even bigger stimulus.
“@Daniel
Just one of Vince’s personal and mortgage debt warnings: http://www.youtube.com/watch?v=gnpzpGz9xO4”
This is utterly irrelevant to a debate about SOVEREIGN debt.
“With Clegg, it is clear that he didn’t believe a word of what he was saying during the campaign due to the unseemly haste with which he ditched the policies after the election.”
I actually disagree with that – I think Clegg is so economically-illiterate that he genuinely doesn’t see the contradiction between what he was saying then and what he’s saying now. Cable, on the other hand, is far more intelligent, and knows perfectly well how disingenuous it is for his Lib Dem collegues to be wailing about “Labour’s mess of debt” – which is why he looks so ashamed so regularly whenever Osborne is announcing one of his recovery-crushing cuts.
@Daniel
You should listen more carefully; Vince doesn’t call for an additional stimulus, but a different appropriate one that will create demand and infrastructure in the UK and thus actually be effective!
When Vince said in the quote from 2003 that individuals had untenable levels of unsecured debt, and that the government was basing their economic policies on the further artiicial inflation of a likely to painfully fail property asset bubble, he identified how we could avoid incurring said sovereign debt…
Right, now point me to where in any Cable quotes pre-2007 calls for immediate spending cuts. Everyone would now look back and retrospectively say the credit boom and rise in personal debt should’ve been addressed earlier – it’s something every major government (and the Tories) got wrong. But to suggest the risk would’ve been averted by cutting government spending back in 2005-06, or that the Labour government were the only government in the world doing it, or if it would’ve been any different if the Tories were in power, is fantasy. What’s needed now is exactly the steps Cable outlined in that video from 2007 that you posted, i.e. tightening up on bank lending and a move away from over-reliance on the private sector – which is why it’s so reckless for the current government that Cable’s part of to be doing precisely the opposite, trying to force banks to lend more and slashing the public sector, putting us even more at the mercy of the casino economics of the financial and private sectors than we were even in 2007-08, while the Lib Dems’ bedfellows Cameron and Osborne are busy blocking any pan-European attempts from France and Germany to tighten up bank regulation (in contrast to Brown and Darling, who had been leading calls for more regulation at European summits, before the Lib Dems enabled the Tories to regain office).
As for after the financial crisis, during 2008-09 – Cable made it clear over the months that he fully supported most of Labour’s stimulus in bringing forward loads of capital projects. And not once did he call for immediate spending cuts – like Labour, and unlike the Tories, he knew throwing public-sector and council workers out of work was the very last thing you should be doing when the private sector is on its knees (so why he’s joining the Tories in doing so now is baffling). The only area he criticised them was in calling for a cut in income tax instead of VAT – if you really don’t think a 4p cut in the basic rate of income tax would’ve added more to the deficit than a 2.5% cut in VAT (a tax that brings in a quarter of income tax revenues), then I don’t know what to tell you.
But Paul Scriven is criticising the Coalition for their cuts in all the Sheffield press
@Andrew Tennant
“When Vince said in the quote from 2003 that individuals had untenable levels of unsecured debt, and that the government was basing their economic policies on the further artiicial inflation of a likely to painfully fail property asset bubble, he identified how we could avoid incurring said sovereign debt…”
I’ve just re-read Cable’s 2003 article to find the bit you’re talking about – can you point it out to me please – is it between the lines somewhere?
Cable talks about regulation and fiscal reform to deal with the house price/personal debt problem, discussing very briefly about stamp duty hindering mobility and the public’s response to the prospect of property taxes (hardly surprising given that such bubbles are driven by greed – they might have said in the survey that they didn’t want extra taxes but in reality they were thinking: get orf my land). Again, it’s difficult to find fault with anything Cable says in the article, but it is essentially meaningless because the Lib Dems didn’t put any of Cable’s ideas on regulation and fiscal reform in their manifesto. It’s difficult not to like dear old Vince, but he had zero impact on Lib Dem policy in this regard. On the point about the likely effect of the collapse of the bubble on government finances, he stays silent (unless you can point me to the bit I seem to have missed?).
“Vince Cable: Osbornomics would make Britain poorer and less equal” October 2009:
http://www.independent.co.uk/opinion/commentators/vince-cable-osbornomics-would-make-britain-poorer-and-less-equal-1797942.html
“But here, the discretionary and deliberate deficit – that is, over and above the deficit caused by the crisis and recession – is very tiny: a stimulus of around 1% of GDP. I quarrel with the way the stimulus was executed, with its heavy reliance on VAT cuts, but Mr Osborne has chosen to make this marginal policy a major dividing line (as has Gordon Brown from the opposite direction). ”
That’s strange, it’s all the Lib Dems talk about now – the deficit monster and how labour caused the ‘mess’ – but here’s Cable describing it as a marginal policy, as recently as Autumn 2009.
^ Ha, great find! I’m going to bookmark that article and use it whenever any mindless LibDem-bot tries to moan about “Labour’s mess”.
Fact is that 124 billion was related to Nationalising Northern Rock and Bradford & Bingley, and the stakeholding in RBS group.
More like a bankers mess.