There is a lot of anger about in British politics today. But I believe we Liberal Democrats are not angry enough.
We write a whole pamphlet on Demanding Better, and pass an entire motion on what we want to Demand Better.
But we don’t condemn. We don’t say what we believe is rotten in the practice of government in Britain and the way it has allowed the decline in the state of our nation.
We won’t convince people about what we want until we say what we reject.
So what do we fiercely reject? These are what rouses most anger in me.
- The leaders of both main parties allowing the threat of leaving the EU to go on for nearly three years, and still choosing to risk a no-deal Brexit rather than unambiguously giving the people the final say in a People’s Vote.
- That so many top elected politicians appear to scheme for their own and their kind’s advancement instead of putting the needs of the country first.
- That the Government squanders the country’s resources on preparing for Brexit while ignoring the wish of ordinary people for secure lives without fear for the future, as well as the despair of industrialists facing continued uncertainty.
- The attitude of the Conservative Government in letting the weakest in society go to the wall. So ordering everybody regardless of circumstances to take any job they can find and look after themselves, and refusing adequate welfare benefits to those who struggle.
- The lack of response by this Government to the evidence of there being four million children now living in poverty here, and of the increasing necessity for poor families to use food banks, a disgrace in this rich country.
- The economic policies of the Government which have permitted the continuation since 2008 of a poor standard of living for ordinary people, while top executives’ rising remuneration widens the gap of income between them and the workers.
- That the Government does not provide enough resources for the NHS, mental health or care services because of refusing to introduce fairer taxation.
- That young people in this country today are often obliged to live in inadequate housing with a disproportionate share of their income used in paying for it.
- That local services provided by local councils have been forced to be cut back drastically to the detriment of local people and of their communities.
- That the discontent of so many people prepared to vote for Farage’s party is understandable in the light of the failures of both Government and the main Opposition party to serve them as is needed, or to advocate a fairer voting system to allow better expression of discontent.
Take your pick. Add anything you think is also vital. We have polioies to right these wrongs. But I believe we need to be shouting out our anger now, and THEN Demanding Better.
* Katharine Pindar is a long-standing member of the Cumberland Lib Dems
Follow @LibDemVoice on Twitter
Like us on Facebook
Subscribe to our feed
Sign-up for our daily email digest
Find Halloween and seasonal gifts in my Etsy shop today.
Weekly Road Report - West End Ward #dundeewestend
Sue Gray: Beware of beat-sweeteners and source-greasers
Is Kemi Badenoch still in the lead? - The Week in Polls
Belljar
England urged to bring in minimum unit price on alcohol as deaths rise 10% a year
David Warren
David Allen
Steve Trevethan
John Waller
Vince Thompson
59 Comments
Agreed Katharine. I’m afraid for far to long people have been reluctant to upset people, let’s play nice they say, for we are nice people. Trouble us by playing nice you allow those that are not nice to triumph. I’m afraid the “nice” virus has infected many in the Lib Dems, they played nice with the Tories ( that went well), they played nice with the Brexiteers ( we must be nice and understand them, err impossible you can’t play nice with stupid) and they even worried about saying “Bollocks to Brexit”, it’s not a nice word you know.
Well see where “nice” got you, it allowed the Tories to nearly destroy the Lib Dems, it allowed the Brexiteers to lie themselves to Brexit, if it carries on it will allow a hard Brexit. So stuff “nice”, make it clear we reject being “nice” at the cost of our principles and yes if Brexit does occur we will expect any pain to fall disproportionately on the heads of those stupid enough to vote for it. I suppose I should thank the Lord I’m not “nice” it saves me bending over backward to bad people and bad ideas.
Totally agree with this. Along with the other drafts I have in my head for LDV there’s one titled No More Mister Nice Guys – of course any finished item would be more gender-neutral. Unfortunately money and power nearly always follow the nasty rather than the nice; it’s usually about self-interest. So while I don’t condone milkshaking (I don’t want anything done to anyone else that I wouldn’t want done to me on the doorstep) we have to fight fire with fire.
Unfortunately the nice guys also lost out in Coalition, both within the party and between the parties, for the same kind of reasons. Never again.
In 2016 the Prime Minister was repeatedly asked by Labour MPs whether he would resign if the electorate votes against him in the referendum. He said NO.
After the votes had been counted he did resign as PM and again as an MP.
I know this from watching PMQs and from attending the consequent bye-election.
Leavers are now asserting that they did know why they voted as they did, but the opinion pollsters could do a service by asking more questions on this issue.
Thanks for expressing your support, chaps. There is even more reason for anger today, because the UN Rapporteur Philip Alston has just published his final report on extreme poverty and human rights here in the UK. You will probably remember his immediate long statement in November was discussed here in several pieces on LDV. I haven’t had opportunity to read the full new report yet, but it apparently details again how Government spending cuts have led to people’s impoverishment here, and shows how many are suffering from lack of income, lack of access to basic services, and social exclusion.
I want our leaders now to declare acceptance of these findings, on behalf of our party, and determination to pursue the policies which can mitigate and eventually end these ills. Six months have passed since Professor Alston did his investigation and published his devastating conclusions, which include condemnation of Government indifference and even callousness in the treatment of the poorest and most disadvantaged people in our country. Let us not let another month go by without raising the necessary outcry about this and demanding action.
That’s a long list, Katharine.
1. There is the old saying – don’t get angry, get even – starting with the EU elections tomorrow.
2. We know who these politicians are.
3. Industrial strategy has been sidelined as Brexit has sucked the life out of domestic policy as Vince Cable describes https://www.theguardian.com/politics/2018/oct/04/government-paying-lip-service-to-industrial-strategy-vince-cable
4. Reversing the most damaging cuts to Welfare benefits with an immediate £10bn+ package is an urgent priority. Let’s not look a gift horse in the mouth – Low unemployment is a good thing. The current low rate of unemployment is lower than anything that was achieved by Labour from 1997-to 2010 even if there are a lot more hand car washes and nail salons around.
5. Child poverty act targets should be reinstated and closely monitored by the Social mobility commission i.e.
Relative poverty – for less than 10% of children to live in relative low income (equivalised net income below 60% of the UK median) families.
Absolute poverty – for less than 5% of children to live in absolute low income (60% of an adjusted base amount. families.
6. Pay inequality is not simply top executives. It includes top-performing sportsmen, performers, entrepreneurs and private financiers. There are corporate governance and corporate social responsibility issues to be addressed around giving shareholders more power to contain the pay of executives of publically listed companies.
7. A fairer system of taxation should address not only enough resourcing the NHS, mental health and care services but also the issue the inter-generational issue.
8. House prices and rents are a major obstacle for many younger people. Social housing policy based on land value capture should be a top priority.
9. Local Authorities and in particular Mayoral development and combined local authorities need to be given devolved powers to ensure that can assess and retain local taxes from business rates and a reformed council tax.
10. The fragmentation of the two-party system may well herald a more European style of governance where coalitions become the norm rather than the exception.
Joseph Bourke – British Steel has just gone into administration. Brexiteers keep arguing that it is because of EU State-aid rules and EU environmental “red tapes”. In fact there are many reasons, among them include a slump in orders from European customers due to Brexit uncertainty, and weak pound following Brexit leading to higher input costs. Also, it was the Tories who vetoed EU attempts to impose anti-dumping tariffs on Chinese steel. But can you clarify more about EU state-aid rules as well as EU environmental and carbon regulations?
Thomas,
Vince cable has commented on British Steel’s request for government support to get through a ‘Brexit-related’ funding crisis, echoing what British steels management and unions are saying:
“Uncertainty over Brexit is destroying jobs and ruining futures all over Britain. Investment is being cancelled, hopes are being dashed, opportunities are being lost. It’s not just in the high-profile cases like British Steel that the Brexit mess is doing damage. It’s in public services, like the hospitals unable to fill staff vacancies, and in the small businesses unable to win the export orders that would otherwise be in the bag.
“I personally spent a lot of time as Business Secretary working with British Steel to rebuild its competitiveness. It is tragic that the entirely self-inflicted damage of Brexit is undermining all the good work of the work force and the company.”
Nigel Farage is pointing the finger of blame at the European Emissions Trading Scheme During a European elections debate with Vince Cable, Farage claimed the company was propelled into financial difficulties as a result of the EU’s climate policy. EU state-aid rules are discussed in this article https://www.bbc.co.uk/news/uk-politics-41392469
where Jeremy Corbyn claims said that “European Union (EU) rules restricted so-called “state aid”, so Brexit could make it easier for the British government to support the British steel industry.”
British steel had asked the government for a loan of £30m but was requesting loan terms which would have breached EU state aid rules. This was on top of earlier loans of £120m from the government. The Company was bought by Greybull Capital from Tata Steel in 2016 for £1. Under a scheme to support large industrial users the business department has also paid out between £18m and £44m to British Steel since the start of 2017.
@Katharine Pindar
Lib Dems not angry enough? Well, I would have thought that ‘B……s to Brexit’ was pretty strong stuff!
@Thomas
What the current situation in Scunthorpe actually illustrates is the mountain the British economy would have to climb were it to go it alone. Since it emerged and ‘embraced’ capitalism (or at least certain aspects of it) China has already produced more steel than we have in the whole of our history! What do you expect with a state directed economy and a population of around one billion hardworking compliant people. Can we realistically expect to compete with that?
Lib Dem policy should be :
IMPLEMENT THE ALSTON REPORT NOW : BOLLOCKS TO POVERTY.
Yes, what I feel angriest about tonight is of course the thought of that playboy Farage getting useless MEPs elected tomorrow, John. But I’ve been trying to take the long view of what we should focus on and do something about, as you know, and I do think we need to show passion as well as practical policies of the sort so competently explained by Joseph. I read through the Demand Better paper and motion again (by the way, Kirsten added the three last words of the headline!) and felt a touch despairing – so many worthwhile thoughts and work gone into them, but we can’t make an impact with those. We need to be known for some striking views and policies, to continue our rise in relevance and popularity – some distillation, I suppose.
We don’t have to invent them, we already have the basis of them. But, Joseph – thank you for going through all ten of my concerns! – I don’t want things watered down. ‘Less than 5% of children to live in absolute poverty’? Surely we must aim for none! And for the complete elimination of food banks as the last resort of people who can’t afford to buy necessary food. The higher you reach, the more you attain. ‘A man’s aim should exceed his grasp, or what’s a heaven for? ‘ as I recall a Robert Browning poem well put it.
John Marriott – this is not about competing with China for global steel market leadership, which is a pipe dream. This is about protecting *what is left or our steel manufacturing capacity* and *national security*. The Tories always preach national security but fails to do anything about it when it matters. We cannot allow our defense capacity to become completely reliant on foreign nations for key inputs including steel.
Thomas – I don’t see the relevance of your comment to John Marriott “this is not about competing with China for global steel market leadership.” John’s comment had nothing to do with “global steel market leadership,” just making our way in a very competitive world.
The rest of your comment though is totally valid.
It’s better to remain positive and leave anger to others. The electorate is interested in what we stand for and what our values are. We have strong values so let’s make the most of them.
Katharine,
when talking about poverty it would be helpful to define how poverty is to be meaured for the purposes of developing policy Alston in his report noted:
“To address poverty systematically and effectively it is essential to know its extent and character. Yet the United Kingdom does not have an official measure of poverty. It produces four different measures of people who live on “below average income.” This allows it to pick and choose which numbers to use and to claim that “absolute poverty” is falling. Seen in context, however, other measures show that progress in reducing poverty has flat lined, child poverty is rising, and poverty is projected to rise in the coming years. The bipartisan Social Metrics Commission’s New Poverty Measure represents an attempt to create a single comprehensive measure of poverty, and these are the numbers I reference here unless otherwise noted. I would urge the Government to respond to the Commission and adopt its approach, which has received an impressive degree of cross-party support.”
Using a different slogan to come out of our Euro campaign, I very much hope we will “give poverty the bird” in forthcoming campaigns.
@ Thomas,
“We cannot allow our defense capacity to become completely reliant on foreign nations for key inputs including steel.”
I agree. There is a strategic argument to make sure that we can produce whatever is necessary to maintain our defence capability. Just like there is a strategic need to maintain a viable agricultural sector so we can feed ourselves if we have to.
The problem is the EU. It ‘understands’ the need for the latter, probably helped by some intensive lobbying from French farmers, but it quite oblivious on the former. Instead it sets strict “state aid” rules to discourage anyone from treating the two as anything like equivalent necessities.
A case can be made for nationalizing British Steel on the grounds of strategic security and perhaps with support from semi-autonomous state customers like Network Rail https://www.networkrail.co.uk/british-steel-insolvency/
The business, however, would be a much slimmed down version of what currently exists. Rebar and other steel products widely used in the construction industry would likely be sourced from China and elsewhere.
The House of Commons briefing https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-7317 sets out the challenges the British Steel Industry faces. It has little to do with the EU and “state aid” rules. European steelmakers (including Germany, France, Italy and Spain) continue to be major producers of steel along with China, USA., Russia and India. State Aid rules would continue to apply in some form even outside of the EU as the report notes:
“…the type of trade relationship the UK ultimately has with the EU after Brexit will determine the degree to which EU State Aid rules will apply. If, for example, the UK retains full access to the Single Market by becoming a member of the European Free Trade Association (EFTA) and the European Economic Area (EEA), like Norway is, then State Aid rules will still apply.
Alternatively, the failure to agree any trade deal with the EU would enable the UK government a greater ability to intervene in the steel market, if it so wished. Note that this wouldn’t be carte blanche for the UK government to do as it liked, as World Trade Organisation rules would still apply (although these are less stringent than EU State Aid rules).
A bilateral trade agreement with the EU, outside of the EEA option, could have some provisions about State Aid included in order to facilitate free trade for instance, but this would be determined in the negotiations.”
The simplest and best answer to British Steel’s problems is an exit from Brexit.
“Give poverty the bird” – now that is truly inspired slogan, Sue Sutherland, especially if used next to our party’s logo – plus it has the added bonus of being eye-catching without the risk of offending anyone……
@ Joe Bourke “The business, however, would be a much slimmed down version of what currently exists.”
Why ? What percentage of steel produced in the UK is used by the British Army, Navy and Air Force ?
David Raw,
About 60% of steel procured by defence contractors is imported according to these exchanges in the Lords https://www.theyworkforyou.com/lords/?id=2019-04-30c.853.2&s=carbon. Defence is not however a major user compared with car and domestic products manufacturing, construction, rail and commercial aircraft and shipping.
This article https://www.mirror.co.uk/news/politics/royal-navy-urged-buy-british-12200894 reports how French steel was chosen for new Trident submarines, South Korean steel used in refuelling tankers and Swedish steel for offshore patrol vessels.
Donald Trump has made the argument that imported steel is a threat to American Security, but as this article notes https://www.realcleardefense.com/articles/2017/05/11/is_imported_steel_a_threat_to_american_national_security_111359.html
“It hasn’t been, it isn’t now, and it probably won’t be in the future.”
The HofC report says “…the Government tries to purchase steel from UK suppliers where possible. Anna Soubry commented that CrossRail used 97% “UK content” during its development. As well as encouraging public procurement of UK goods, the Government is also encouraging private sector manufacturers in the UK to use UK suppliers of steel, for example in the automotive industry.”
Another aspect is business rates. Were this to be assessed on the basis of land only excluding plant then the business would very likely see a dramatic reduction in theses overheads.
According to management and unions, it is uncertainty and loss of orders over Brexit that has halted the turnaround at British Steel in its tracks. Resolving this issue may give the company a future as a competitor in commercial markets.
Very helpful information about the steel industry, thank you, Joseph, and an interesting quote about poverty from the Alston report. But as Yeovil Yokel noted, it is Sue Sutherland’s inspired slogan, Give poverty the bird! which catches the imagination and will be remembered, and, I hope, made use of – thank you also, Sue!
@ Peter Hirst. I do think we should both be angry and express it about the poverty and deprivation described in the Alston Report, which I now have learnt from colleagues can be found at
https://undocs.org/A/HRC/41/39/Add1
I think also, Peter, that we are unlikely to get more votes, sadly, just by proclaiming our good values, which will certainly be of interest to middle-class well-educated left-of-centre people who I suppose may be our core voters, if they are not already Labour members. But since we see the way the mass of the people have been let down by the recent and present Tory governments, and know how we want to improve their standard of living and chances of secure and pleasant lives, there is no reason why we should not aim for mass appeal. And that will involve concentration of our public messages.
I can’t lay claim to the slogan it’s from a party cartoon with the motto: don’t waste your money on a milkshake give Farage the bird, with a picture of our logo. It just made me think that there are a lot of things I’d like to give the bird.
We should reject austerity.
We should reject people in the UK living in poverty.
We should reject having over one million unemployed in the UK.
We should reject the idea that a person should not have a home of their own.
@Thomas “We cannot allow our defense capacity to become completely reliant on foreign nations for key inputs including steel.”
There is a lot more than steel in the latest aircraft carriers, much of it sourced from foreign nations; the UK defence sector ceased being self-sufficient decades back…
@Peter Martin “I agree. There is a strategic argument to make sure that we can produce whatever is necessary to maintain our defence capability. Just like there is a strategic need to maintain a viable agricultural sector so we can feed ourselves if we have to.
The problem is the EU. It ‘understands’ the need for the latter, … but it quite oblivious on the former. “
What a load of tosh Peter. You (and others) have clearly forgotten the discussion about British Steel both in the media and on LDV in 2016 and the obvious outcomes arising from the UK leaving the EU. I suggest you refresh your memory, as nothing has changed since then other than time has passed and monies spent. Okay the UK hasn’t left yet, but no one expected the Conservatives to totally lose the plot and still be unable to agree among themselves on “the easiest deal in history”.
@ Micheal BG,
“We should reject austerity.”
I’d just add the proviso that if total spending is too high, leading to an inflation problem in the economy, then the Govt should cut back its spending and/or increase rates of taxation to cool down an overheating economy. Arguably we could call this “austerity” and so it can be justified under these circumstances.
However, the notion that we should apply “austerity” to reduce the government’s deficit should be rejected. For the simple reason that it doesn’t work. If the Government reduces its spending it also reduces its income. If Government raise taxes it will slow down the economy – again reducing its income. It’s rather like a dog chasing its tail. No matter how hard it tries it won’t succeed!
We should feel no less anger, I believe, in considering whether Theresa May had good intentions for ‘a Britain that works for everyone’ and could have achieved good things but for the necessity of Brexit. That suggestion of her good friend Damian Green on Today an hour ago cuts no ice with me. I see a hard-hearted Tory leadership that has had no genuine care for people in the last nine years, and a major figure among them Mrs May as Home Secretary, turning away refugees and telling immigrants to go. She could and should have alleviated the hardships of ordinary people in these three years, for instance by ending the benefits freeze and the roll-out of Universal Credit. The failings of the Tory leadership of these years has now been fully exposed by UN Rapporteur Philip Alston, and it is for us to lead in accepting those challenges.
Peter,
Interesting point. Can “austerity” be carried out when the economy is experiencing a boom? Recent experience of austerity has been when the economy has not been preforming well as a measure to the boost confidence of “the markets” and credit rating agencies.
I agree that if economic growth has reached the maximum that can be expected for the economy and inflation seems to be increasing because of excess demand in the economy a government should reduce its spending or increase taxes or a combination of both to try to remove the excess demand from the economy, but is this what we call “austerity”?
This Harvard Review of a recently published book “Austerity: When It Works and When It Doesn’t”, by Alberto Alesina, Carlo Favero, and Francesco Giavazzi” makes an important point. “…if fiscal policymaking were left to prudent hands, austerity would almost never be needed. The authors do not deviate from the economics orthodoxy that governments should run surpluses in boom times and deficits in lean times. The German allergy to deficits of all kinds, in a show of Teutonic “moral superiority,” is rejected by Alesina as “bad economics.” But the same goes for countries that run up debts “for no good reason.” Prudent fiscal policymaking is precisely what Libdem economic policy aims to achieve.
With a new Conservative leader/primeminster expected this summer and the potential for a slide towards a no deal Brexit, thoughts should be turning towards the UN special envoy on poverty Philip Alstons warning that it will be “the most vulnerable and disadvantaged members of society who take the biggest hit from Brexit”.
Anyone thinking that an estimated hit to GDP of 4% to 8% can just be made up and economic growth restored with the application of either big tax cuts or increased government spending should study Japan’s failure to resuscitate significant economic growth for three decades now. The UK will be much poorer and the poorest will need to be protected against the impact of this loss of national income.
Dear colleagues, please concentrate now without too much intricate economic discussion on how we can ptogress acceptance and action on the Alston Report recommendations. Jeremy Corbyn in commenting on Mrs May’s resignation did mention the problems revealed by Philip Alston which have not been tackled at all. Perhaps we can co-ordinate demand for action with progressives on all sides this summer. It is desperately needed – as also of course is a People’s Vote with the possibility of throwing out Brexit altogether. The ambitions and manoeuvring for self-interest of Tory leadership contenders will be typical distraction by this currently shameful party, which we must set aside, telling them that the interests of the country MUST at last come first.
Katharine,
Philip Alston this week warned that “worse could be yet to come for the most vulnerable, who face “a major adverse impact” if Brexit proceeds. He said leaving the EU was “a tragic distraction from the social and economic policies shaping a Britain that it’s hard to believe any political parties really want”.
The Keynesian economist Robert Skidelsky last year warned that Ten years on from the financial crash, we need to get ready for another one https://www.theguardian.com/commentisfree/2018/sep/12/crash-2008-financial-crisis-austerity-inequality
Like other economists he makes the point “..prevention is far better than cure. Once a downturn gathers momentum, the scale of intervention needed to reverse it becomes frighteningly large.”
“If the economy is allowed to fail, the “cure”, as the events of the past 10 years have shown, is very difficult.”
“Three essential lessons should be, but have so far been only incompletely, learned. The most important is to prevent financial collapses in the first place. Banks have to be stopped from putting the economy in jeopardy by risky lending. This is a big reform agenda that has barely been scratched by telling banks to hold more capital or reserves. It requires breaking up banks into smaller units, and instituting controls over the type and destination of loans they make.
The second essential step is the revival of proper macroeconomic policy. Monetary policy on its own is too weak to prevent economic collapse, and too weak to bring about economic recovery. Fiscal policy needs to become again a powerful tool for economic management, not by “fine-tuning” the business cycle but by maintaining a steady stream of public investment amounting to at least 20% of total investment, to offset the inherent volatility of the private economy.
The third essential preventive step is to reverse the rise in inequality. If too much wealth and income is concentrated in too few hands, the consumption base of the economy becomes too weak to support full employment, high or low. ”
This is what Libdem Policy is aimed at – stopping Brexit, shifting bank lending from property speculation to productive uses, maintaining a steady stream of public investment and addressing inequality via policies like reversing damaging cuts to welfare funding and wealth and land value taxation.
Agreed, Joe, thank you, but I think we also need to consider restoring balance of economic development between your London plenitude and our regional and rural deprivation. Alston addressed these issues among his final recommendations, as follows.
(c) Restore local government funding needed to provide critical social protection and tackle poverty at the community level, and take varying needs of communities and
differing tax bases into account in the ongoing Fair Funding Review.
(k) Re-evaluate privatization policies to ensure that the approach adopted achieves the best outcomes for the citizenry rather than for the corporate sector; transport, especially in rural area, should be considered an essential service and the Government should ensure that all areas are adequately and affordably served.
Joseph,
How I wish we had policies to end relative poverty in the UK within 8 years. In our 2017 manifesto we promised to spend £9.71 billion on welfare. We didn’t promise even to restore the basic benefit levels to their April 2012 real term value. We need to promise to increase the basic benefit levels to the poverty level as defined by the Joseph Rowntree Foundation, excluding housing costs. This will cost between £30.8 and £47.9 billion depending on how many claimants are single or couples. This could be done over years two to seven of a Lib Dem government costing between £5.13 and 8 billion a year.
@ Michael BG,
“but is this what we call “austerity”?”
Probably not. I did say ‘arguably’.
The curious thing is that what I’m saying is nothing new at all. Even in the mainstream. Those of us who were around in the 60’s will perhaps remember that the Govt’s fiscal policy was often likened to a car’s accelerator or brake. If the Govt wanted the economy to go faster or slower, it was a matter of touching the accelerator or the brake.
There was no question that the Govt would put its foot on the brake in the middle of a recession! Not that there was one then.
This made perfect sense to me even even as a teenager. So it is quite remarkable that what was widely understood then has come to be not understood now.
Michael BG,
I don’t have any issue with promising to increase the basic benefit levels to the poverty level as defined by the Joseph Rowntree Foundation (excluding housing costs) so long as those promises can be delivered.
Where I disagree with you is that this can be achieved without significant increases in tax funding. Benefits can be increased in line with earnings growth after an intial injection (funded by borrowing) of circa £9.71 billion and £1.4 billion to remove the freeze. However, increasing benefits beyond this level means taking either money from other areas – public sector pay, NHS, schools or policing (not credible) or increasing levels of taxation beyond the levels required to fund other public services (which already require significant additional funding) that will have a deadweight effect on economic output.
I think the most effective way to target poverty is full-employment (as defined by Beveridge) with investment policies that drive increases in real wages and a realignment of tax policies that seek redistribution from areas of the economy where it will not depress output i.e. taxation of economic rents.
Joseph,
It is really good to read that you support that basic rates of benefit should be increased to the poverty level as defined by the Joseph Rowntree Foundation (excluding housing costs).
We also agree that a Lib Dem government should borrow an additional £100 billion to fund infrastructure and new homes over a five year Parliament.
Therefore we differ on how much the economy can grow by each year and how much extra government revenue there will be.
An initial stimulus of £19 billion will increase growth to 2.3% and generate £17.76 billion in extra government revenue. For me using just over £6.6 billion of this a year to increase benefits is money well spent. It will still leave £4 billion extra for the NHS and social care; £1.42 billion for the introduction of CLL in England and Wales; £1 billion extra for the Individual Placement and Support programme to help people with health issues into work; £2 billion for free training for unemployed people; and £2.7 billion for public sector pay increases.
In the following year if £7 billion extra is spent on infrastructure and building homes funded from borrowing, economic growth would be 2.7%, producing £21.4 billion in extra income for the government to spend.
Michael BG,
it is not a question of differing on how much the economy can grow by each year and how much extra government revenue there will be. It is a question of using the best available data on what growth is expected to be when the economy is operating close to full capacity. As the article notes https://www.theguardian.com/business/2019/may/02/bank-of-england-holds-interest-rates-and-vows-to-restrict-future-rises-
“A rise in growth above 1.5% in 2020 and 2021 would be enough for the economy to begin overheating and spur the bank’s monetary policy committee to raise rates.”
Wage growth is current at 3.5% against an inflation target of 2%. This will be reflected in public sector pay settlements in the near future as the NHS and other departments struggle to fill vacancies. Any hike in interest rates will have a dramatic impact of the governments cost of financing public debt.
@ JoeB,
You’re argument seems to be that the official unemployment figures are very low, of course we should believe them, and be therefore grateful that people have jobs. Any job. We’d all expect that sort of line from the Tories but not from someone who is in a party which proclaims:
“we seek to balance the fundamental values of liberty, equality and community, and in which no one shall be enslaved by poverty, ignorance or conformity.”
I would say there is general agreement on the left and centre of British politics that real wages have been squeezed in recent years and there need to be some catching up. That means that wages should rise faster than inflation. How else is ‘equality’ (your word) going to be increased? However you quote some recent BoE figures which show just the possibility that this might be happening as if it were a dangerous sign of overheating in the economy. You ought to get away from London now and again and look for signs of overheating in the North East!
Ken Loach has recently made a new film called “Sorry We Missed You”. It’s the story of a working-class Newcastle family who find their lives are overwhelmed amid the pressures of the “gig economy”. I must say I’ve not had chance to see it yet but I’m sure I know, even if you don’t, what he’s talking about. The point of reducing unemployment isn’t to just get the numbers down, its to get everyone into decent jobs. We all rely on parcel deliveries and there’s no reason why those employed in the industry have to be part of the gig economy.
It’s fair enough to have some sort of technical discussion about how the economy operates but we do have to have in the back of our minds that we are trying to build a society based on ” liberty, equality and community” too. Anyone who doesn’t agree should be in the Tory Party.
Well said, Peter. We do need to be thinking of employment not just in gross terms, but of how we can help to give people jobs which are not just zero hours or short-term or not earning a living wage. I believe we must be promoting more worker involvement in firms, and more co-operative enterprises, as our policy on Good Jobs, Better Businesses and Stronger Communities should help to foster.
Peter Martin,
the economist feature this week begins with noting that “….it is said today’s workers are underpaid and exploited by unscrupolous bosses. They face a precariois future, as machines threathen to make them unemployable.
There is just one problem with this bleak picture; it is at odds with reality. Most of the Rich world is enjoying a jobs boom of unprecented scope. Not only is work plentiful, but it also on average, getting better. Capitalism is improving workers lot faster than it has in years, as tight labour markets enhance their bargaining power. The zeitgest has lost touch with the data.”
The left needs to accept the fact that many of the criticisms it capitalism do not fit the facts. The right should acknowledge that jobs have boomed without the bonfire of regulations that typically forms its labour-market policy.
This is the reality. Neither Labour or Conservatives have credible answers. The answers lie in Liberal economics with its focus on directing bank lending towards productive investment versus over-consumption; maintaining a streay stream of public investment to underpin investment by the private sector; and adressing inequality with tax and social welfare policy.
Misguided Keynesian stimulus in an economy near capacity (that would have Keynes turning in his grave over the abuse of his name and theories) leads to stagflation and a reversal of the jobs boom. This is why competent and prudent fiscal policymaling is so important to maintaning full-employment. Real wages will increase as a consequence of investment that increase labour productivity and disposable incomes will be enhanced by policies aimed at ensuring that increased disposable incomes are not wholly absorbed by excessive housing costs.
London’s overall poverty rate remains higher than the rest of the country; and the proportion living in ‘deep poverty’ has increased https://www.trustforlondon.org.uk/publications/londons-poverty-profile-2017/
“London’s high levels of poverty relative to the rest of England are largely explained by high housing costs. Private rents in London are more than twice the average for England.”
Katharine,
on the issue of promoting more worker involvement in firms, and more co-operative enterprises the growth of social enterprises as part of the economy could play an important role in this https://www.fsb.org.uk/first-voice/the-value-of-social-enterprise-on-the-uk-economy.
As the FSB article notes:
“From a macroeconomic perspective, the perception persists that social enterprises are more like charities than ‘proper’ businesses responsible for significant job creation.
While it’s true they still account for just 5.6% of UK employment, mainly from the voluntary and community sector, this view is being challenged by changes to recruitment fuelled by demand for their services, and new funding options available for social enterprises that deliver.
The evidence suggests that social enterprises are doing rather well, in fact, and playing an increasingly important role in economic growth.”
Joseph,
It is very unusual for you to criticise party policy. I really thought we both agreed with it. The Bank of England guess-ament for the limit to UK growth is likely to be wrong as it has been wrong in the past. I have explained that their guess-ament for the amount the economy can grow from increased productivity is likely to be wrong in the long term.
I have already informed you that there are 7.9 million people working 30 or fewer hours, some of whom would want to work more hours. There are 1.34 million people unemployed. Then there are the nearly 2 million people on ESA, some of who would like to work.
Your views on future growth and government public sector pay seem contradictory.
It seems that you believe that the £19 billion economic stimulus we promised in our 2017 manifesto is too large now. As economic growth is forecast to be 1.6% this year you would not increase government spending on anything this year. For 2020 and 2021 it is forecast to be 1.4%, therefore you must believe that government spending can only be increased by 0.1% of GDP, which for 2020 is £2.16 billion and for 2021 is £2.19 billion. However, you also seem to be saying that my £2.7 billion for public sector pay increases is too small. This would also mean we couldn’t introduce a Commercial Landowner Levy or spend £5 billion in the first year and £7 billion in the second year of a Lib Dem government on infrastructure.
Social enterprises sound very worthy, Joe, after following your link (thank you) and looking them up on Google. But they only cover 5.6% of UK employment. I don’t know that compares with other SMEs in the economy. I am wondering several things . Can these, plus co-operatives and other SMEs, perhaps grow in the future to satisfy the needs of large numbers of under-employed and unemployed people, do you suppose? Or in a world of digital technology and robotics demanding highly-skilled workers and major investment to develop, must they remain peripheral?
And, most relevantly to us, can and should the growing number of local councils that we run themselves develop social and environmental enterprises? I am wondering if this should be a specific aim of our councils – perhaps a non-London councillor could comment on that. I remember some conversation with a South Lakes councillor about that, when helping out at the 2017 GE, so perhaps it is already widely undertaken.
Michael BG,
additional government spending is not a fiscal stimulus when idle resources in the economy are already being fully utilised. It is a transfer of real resources from use by the private sector to use in the public sector. This is effected by tax and borrowing (deferred tax). At full employment, tax and borrowing transfers spending power from the private sector to the public sector.
Aggregate demand is equivalent to GDP and can only increase at the rate that the capacity to produce goods and services can increase. Fiscal stimulus will not increase aggregate demand in an economy near full capacity – it will generate stagflation – increased inflation and rising unemployment.
You are making an argument that increased government spending will always increase economic growth and that you have better information on current and future economic trends than the Bank of England or Office for Budget Responsibility. You make this argument even though the BofE has warned that a modest recovery over the next three years will warrant higher interest rates than financial markets currently expect as inflationary pressures force the central bank to act.
You are free to make such arguments but it is not evidence and it is not Keynesian economics.
In 2017 the current spending budget was not in balance. It is now and as Libdem policy is to run a balanced spending budget (outside of recessions) such that increases in current spending will need to be matched with tax receipts which grow broadly in line with earnings and profits growth. One-off increases in the proportion of government spending in the economy to fund the reversal of welfare cuts will need to be funded by borrowing. These transfer payments will move spending power from taxpayers to welfare recipients without any significant impact on aggregate demand/GDP
increases in capital spending on infrastructure and public housing are to be funded by borrowing but only to the extent that public debt as a % of GDP is falling slightly year on year leaving some fiscal room for sharp increases in borrowing when necessary.
The public sector employs 6m people. It has been able to hold down public sector pay while pay increases have been subdued in the private sector. With the current high levels of employment pay rises are running at 3.5% a year. The LibDem 2017 Policy of holding public sector to inflation only increases is no longer viable with labour shortages across the public sector and the economy in general.
@ Joe B
“Most of the Rich world is enjoying a jobs boom of unprecented scope. Not only is work plentiful, but it also on average, getting better.” ???
I seriously doubt you’re in the right party, Joe.
Presumably the Economist article describes the USA labour market? According to the graph below wages keep in line with increased productivity up until about 1973 but then flatlined. I doubt it would be a much different position in the UK. I’d expect the divergence to be slightly later that’s all.
There’s widespead disquiet throughout Europe and the USA. This does not tally with your ‘never had it so good’ line. At least when Harold Macmillan said this in the 60’s he was probably right -even he was rather tactless to actually say it.
https://www.washingtonpost.com/resizer/pKL2F7HOwXjnLNDA4zbWdav_1S8=/671×0/arc-anglerfish-washpost-prod-washpost.s3.amazonaws.com/public/BN7QAMQQVIYZZCPQEVGBAMQKDE.png
Peter Martin,
I think the economist article is referring to improvements since the financial crisis. But it is a good point about wages growth lagging increases in productivity, particularly in the USA.
Piketty points to growing inequality and the declining share of wages versus returns to capital in the economy. Joseph Stiglitz concurs and highlights a major increase in rent-seeking activity in the economy as the culprit http://evonomics.com/joseph-stiglitz-inequality-unearned-income/.
Rent-seeking depresses real wages and in the housing market absorbs an increasing proportion of disposable incomes.
Addressing inequality has to be close to the top of the political agenda. That is not simply a matter of restoring welfare provision or more progressive rates of income tax. Piketty suggested a wealth tax, Stiglitz proposes taxes on economic rents including land value tax.
The late Tony Atkinson left a long list of proposals including job guarantees https://www.tony-atkinson.com/the-15-proposals-from-tony-atkinsons-inequality-what-can-be-done/. Several of these proposals have been adopted as Libdem policy.
We have to ask ourselves why is it that in the 1960s a family with a single breadwinner on an average wage could afford to buy a house and raise children without the need for extensive welfare assistance, but struggles to do so today when per capita GDP has trebled in the UK since 1960.
When we can answer that question we might be on the right road to doing something that can make a real difference.
Absolutely, let us put redressing inequality and ending austerity at the top of our Lib Dem agenda. It’s good to know that taxing wealth along with income, and bringing in a land value tax which should deter rent-seeking activity, were agreed at our last Conference, and that they concur with proposals of those distinguished economists, Thomas Picketty and Joseph Stiglitz. But as you say, Joseph, it will still be a hard road to travel, to ensure that ordinary working people can afford homes and to raise families without welfare assistance or resort to food banks, and it is one we must commit to.
@ JoeB,
“We have to ask ourselves why is it that in the 1960s a family with a single breadwinner on an average wage could afford to buy a house and raise children without the need for extensive welfare assistance, but struggles to do so today when per capita GDP has trebled in the UK since 1960.”
Well that’s a good question. If a single income is the norm in society then the price of housing will reflect the lower effective demand. As it becomes more the norm to have dual incomes, the effective demand increases and so does the price of housing. As the price rises, speculative buyers who are more interested in the capital gains to be made, rather than wanting to occupy the property per se, are added to the market further pushing up prices. Add in ultra low interest rates and a penchant of neoliberally inclined governments to stoke up the economy via private credit and its not difficult to understand how we’ve ended up as we have.
You could probably expand the argument into a book! So I’m not offering a complete explanation in single paragraph. We can also point out that we didn’t have a LVT, or wealth taxes, in your golden-age and so introducing one now is unlikely, to say the least, to do what you hope it will. I’m not saying you shouldn’t do it, but it’s never going to be a silver bullet solution.
As I was saying on another thread, your world view is essentially defined by a right wing ‘laissez-faire’ ideology that the economic system is self regulating. A more modern view is that it isn’t. Its as chaotic as our weather systems. It will only do what we want it to do if we apply our own regulation.
Somehow, you seem to have convinced yourself that if you tack an element of 19th century economics, ie Georgism, on to 21st century neo-liberalism then everything will come right. And you’re somehow going to convince millions of centrist voters, whose support you’ll need in the Lib Dems, who’ll be scared stiff at the the prospect of government taxing land that they think they already own, that this is going to be a winning formula?
I don’t think so.
What happened to ‘burning injustices’? Don’t stop rejecting Tory policies and being angry about them! Reading the weekend appraisals of Mrs May, her intention to deal with ‘burning injustices’ leapt out at me. The trouble is, she did nothing about them. In her first speech as PM, she mentioned among other ills she perceived and meant to deal with, poverty, social mobility,mental health and the housing crisis. All of which have got worse. I would be more interested in what these Tory pretenders to the post of PM propose to do about such societal ills than on whether they favour a less or a more hard Brexit. But on the record of the past few years of Tory rule, I expect nothing. It remains up to us to continue to stress the ills and to demand the remedies. .
As usual Katharine is right. It appears the Tory leadership candidates are like ferrets in a sack – though I loved Rory Stewart’s comment that he would rather be Jimminy Cricket than Pinocchio.
Thanks, David. I see what you mean – but I can’t be doing with Rory Stewart, not only because he supports Brexit, but also because he is MP for Penrith and the Border where I cut my baby teeth as a teenage Liberal activist! He would of course be better for the country, not that that’s saying much, than Johnson. If the Tories see Johnson as the answer to Farage, they surely are doomed. We can find other answers, notably I think in undermining Farage’s pretensions of representing the people, as populist leaders always pretend to do.
Peter Martin,
“As it becomes more the norm to have dual incomes, the effective demand increases and so does the price of housing”
This is the point. Real incomes have trebled since 1960 and many more households have two partners working. Dishwashers, car ownership, wide-screen colour TVS, mobile phones, personal computers, leather bound three-piece suites, central-heating and package holidays are the norm for the great majority. Spendng on basic foodstuffs and clothing as a proportion of disposable income has fallen dramatically, while spending on eating out and entertainment has risen dramatically, There is only one commodity that has risen inexorably as a proportion of disposable income and that is land. Rents have risen from an average of 10% of disposable income in 1960 to 30% (from 15% to 40%) in London. This is the law of rents. When the supply of land cannot increase to meet demand an ever greater proporion of income will be absorbed by the competition for housing. Dual incomes boost the level of eanings bid up the price of housing.
Keynes speculated that in the 21st century the main problem we would have as a society is what to do with all out free time as all the goods we could possibly need would be easily produced by the march of technology. He had not reckoned with the Law of Rents developed by Smith and Ricado and refined by the likes of John Stuart Mill.
@ Katharine. Endorsing the remark doesn’t mean I’m endorsing the bloke. He’s a bit of a smoothly ferret.
@Joseph Bourke
“Dual incomes boost the level of earnings bid up the price of housing.”
Adding a partially non-economic issue, irrespective of how you and Peter Martin appear to be obsessed with economics at the expense of all other issues….
Dual incomes might boost the level of earnings while for most leaving less time for their families (especially interacting with children) and while needing to spend more on childcare…?
David and Katharine
Rory Stewart does not support Brexit, he, as with all government ministers, is in acceptance , he realises that he must to serve in this government, and, like many such as moderate Labour mps, supports the view of the referrendum in which he was for the Remain side.
He is not a smoothy, he is a thoughtful, principled man of tremendous service who but fr this issue should be in the contest to pick our leader instead.
Nonconformistradical,
“Dual incomes might boost the level of earnings while for most leaving less time for their families (especially interacting with children) and while needing to spend more on childcare…?”
It is an important point. But the question is – Why do you need two incomes today, when one would suffice pefectly for thr typical family in the 1960s and 1970s. Why are families with incomes 70% below average (relative poverty) suffering deprivation when real incomes have trebled over the last 50 years and the cost of
basic foodstuffs, clothing, building costs etc have declined signifcantly in real terms as a proportion of income. If its not housing ciosts (specifically land costs) then what is it?
The JRF report https://www.jrf.org.uk/report/housing-costs-and-poverty-private-rents-compared-local-earnings notes:
“Paying for housing, whether rent or mortgage payments, is the single biggest cost for many households. The proportion of people in the poorest fifth of the working-age population of the UK who spend more than a third of their income (including Housing Benefit) on housing costs has risen from 39% in 1994/95 to 47% in 2015/16. This has been driven in part by the rise in the number of people renting in the private sector, where costs are highest.”
Hi, Lorenzo, always good to hear from you again. But unfortunately it was the determination of all those Tory AND Labour political leaders to wave through Article 50 and accept the Referendum result without waiting to discover how harmful it would be to the country that has landed us all in the present crisis. Even ardent Leavers now have to close their eyes to the threatening catastrophe of leaving without a deal.
Act in haste and repent at leisure, indeed! The first duty of our MPs whether in government or opposition is surely soberly to assess the good of their country: not to seek their own or their party’s gain, or to allow nonsense about the will of the people (38% actually) or dog-whistle following of ill-thought-out notions of democracy to guide them. The people have been in many ways fooled and failed by the present leaders in Parliament, and are finally being led up a path to nowhere by a preening populist.
After this great night, now we have to organise to defeat Farage and his nationalists as well as Brexit. That ties in with answering the question that many of our fellow citizens may be putting this morning, ‘What do these Lib Dems offer nationally besides Bollocks to Brexit?’ We know the answer of course – our principles and our policies. We have now to show up the hollowness of Faragism, and campaign again for the policies which actually will promote the health and happiness of our fellow citizens. Part of that will be through expanding the dialogue with and combining action with the progressives in the other parties.
Joseph,
It is good to see you accept that aggregate demand can be equal to GDP. Next you will accept that increasing demand will increase output.
As someone who went to university I look at what the experts say and then reach my own conclusions on the strength of their arguments.
I have never said that increasing government spending will always increase economic growth. I am saying that the UK economy normally (i.e. without Brexit) can grow at 3% a year. I am saying that if businesses believe demand in the UK economy is growing they will increase the amount produced. The Bank of England guess-ament is based on the expectations of business. Change the expectation and then the plans of business will change and so will the guess-ament of the Bank of England.
I don’t accept that increased government borrowing always has to be a transfer from private spending to public spending. That seems like neo-liberal economic thinking which was used to justify austerity. The money used to fund government spending is likely to come from people buying shares or investing in property, neither of which activity increases GDP, or from unused spare investment capacity.
I think you have not dealt with my points about the effect of believing that the economy can grow at 1.5% on our plans for increasing government spending not funded from increasing taxation, including my point where you think £2.7 billion is not enough to fund pay sector pay rises but you believe that the government can only increase spending by 0.1% of GDP which is less.
If you believe that the £7 billion of infrastructure government spending will come at a reduction in business investment to improve productivity why is it a good thing?
@ Michael BG,
You’ve said to Joe:
“Next you will accept that increasing demand will increase output.”
Possible, but unlikely I’d say. Joe understands that:
“spending and economic growth go hand in hand” That’s a quote from another thread. BTW.
But he’s got an ideological block when it comes to taking the logical next step. ie being in favour of increasing Govt spending, and/or reducing taxes to increase private spending, and so creating more economic growth.
Or maybe he’s just not allowed to say that! Otherwise he’d be expelled from the neolib union!
P.S. As always I add my usual comment about backing off if inflation is a problem. Sorry to have to keep repeating this but neolibs will go off into a rant about Zimbabwe, or wherever, given half a chance