Tag Archives: economy

The Voice

Ed Davey: UK must stand firm against Trump’s attempts to divide and rule

By The Voice | Wed 2nd April 2025 - 11:28 pm

Ed Davey has responded to Donald Trump’s announcement of tariffs with various countries.

He said:

Today Donald Trump has launched a destructive trade war that threatens the jobs and living standards of people across the UK and around the world.

We need to end this trade war as quickly as possible – and that means standing firm with our allies against Trump’s attempts to divide and rule. The Prime Minister should bring our Commonwealth and European partners together in a coalition of the willing against Trump’s tariffs, using retaliatory tariffs where necessary and signing new trade deals with each other where possible.

If the Government gives in to Trump’s threats, it will only encourage him to use the same bullying tactics again and again.

On Peston he called for an EU/UK customs union and for an economic coalition of the willing to stand up to Trump. He also said we should work with our Commonwealth allies.

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Chris Whiting

Why I’ve realised I’m a Socialist, and why Liberals and Socialists must work together

By Chris Whiting | Thu 27th March 2025 - 8:30 am

For a long time, I simply considered myself a liberal. I believed in personal freedom, a strong but fair economy, and the power of government to create opportunity. I wanted a system that worked for everyone, but I also thought markets, when properly regulated, could be a force for good. But over the years, I’ve come to realise that these values of equality, fairness, and a society that serves all its people are not just liberal values. They are socialist ones too.

This isn’t about abandoning liberalism. My liberal resolve has never been stronger. But, I have been forced to recognise that if you follow the principles of liberalism to their logical conclusion, you arrive at socialism. If you believe in fairness, then you have to acknowledge that an economy where billionaires accumulate wealth while millions struggle is inherently unfair. If you believe in democracy, then you have to ask why it stops at the ballot box. Why workers don’t have real power in their workplaces, or why people don’t have a say in the essential services they rely on.

For too long, liberals have sought to mitigate capitalism’s excesses rather than confront the system itself. They have pushed for fairer taxation, stronger public services, and better protections for workers. But these are reactive measures that attempt to manage inequality rather than prevent it. And the problem with inequality is that it isn’t just an unfortunate byproduct of capitalism. It’s a feature.

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The Voice

Watch: Daisy Cooper respond to the Spring Statement

By The Voice | Wed 26th March 2025 - 11:09 pm

Watch our Treasury Spokesperson Daisy Cooper respond to the Spring Statement:

The text is below:

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Robin Stafford

The quest for liberal democratic capitalism

By Robin Stafford | Thu 13th March 2025 - 3:21 pm

It’s easy to argue that today’s failures – public services, low investment, poor productivity, decaying infrastructure, environmental degradation, etc – are the result of 10-15 years of economic policies pursued by a government pandering to selfish interests. But what if the problem is wider than those policies and ideology? What if our underlying economic system is actually working against the interests of liberal democracy, and contributing to the rise of populism and authoritarianism?

This is the core argument of one of the seminal texts to be published in the last two years, Martin Wolf’s The Crisis of Democratic Capitalism. The Financial Times’ chief economics commentator charts how today’s form of capitalism is actively undermining democracy, which it sees as getting in its way: interfering with its single-minded focus on money for shareholders and executives, regardless of the consequences for the wider economy, society and the environment. The result is that inequalities are growing, whilst those with money are retreating from society and criticising governments for money spent on public services. Wolf argues for reviving faith in the common good, and says citizenship has a vital role to play.

This presents an opportunity for Lib Dems to develop a different approach to the economy as a whole, building on the thinking of those economists who have been challenging the prevailing orthodoxy – not just Wolf but the eight who signed September’s letter to the FT, including Gus O’Donnell and the former Goldman Sachs chief economist Jim O’Neill. Their letter said it was so vital to invest in restoring Britain’s crumbling public services that they urged Rachel Reeves not to cut public spending (unfortunately, Reeves seems to have opted for austerity-lite, growing steadily heavier by the week.)

I’m not suggesting I have the perfect oven-ready new economic model to hand, but that’s deliberate. To gain widespread support, such a model needs to reflect the interests of a wide section of society, including the environment. There are countries which already have successful models that differ from the Anglo-Saxon version, notably in Scandinavia.

Such a model has to place a much greater emphasis on sustainability – not just environmental, but social and economic as well.  Economic policy must question the current roles of the Treasury and the Bank of England, which currently reflect the interests of finance rather than the wider economy, society, and sustainability. Business/industry policy must tackle underinvestment; it must look at the role of the City and finance in driving short termism and excessive rewards for a few; it must toughen regulation on monopolies and those firms and sectors that act against the country’s social, economic, and environmental interests; and it must act as a catalyst for publicly desirable activities, like the growth of renewables and improvements to quality of life. The aim is wealth creation for the whole country, not just wealth extraction to benefit a small minority.

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Paul Hindley

In the shadow of Trump, Britain requires a seismic shift in tax and spend

By Paul Hindley | Wed 19th February 2025 - 10:55 am

Harold Wilson once famously said that “a week is a long time in politics”. Well, the last week feels like an eternity in international politics. Last week, NATO member states received a scolding from the new US Defence Secretary, Pete Hegseth, who warned them not to treat Uncle Sam like “Uncle Sucker” on defence spending. While at the weekend’s Munich Security Conference, US Vice President, JD Vance spouted the ridiculous claim that immigration and tackling hate speech, such as through having safe zones around abortion clinics, were a bigger threat to European democracies than Russia or China.

The wavering of Trump’s America on its security commitments to Europe poses immense questions for Britain. Keir Starmer was right to commit British peacekeepers to Ukraine as part of an international mission. While Ed Davey was right to call for Labour to reverse the Conservatives’ 10,000 troop cutback to the British Army. It is clear that defence spending will have to increase considerably beyond NATO’s 2% of GDP requirement, even beyond the new government target of 2.5%.

But defence is not the only area that requires a considerable increase in public spending. Britain needs new and improved hospitals; the social care crisis needs to be addressed; several local councils are facing bankruptcy; welfare cuts, such as the two-child benefit cap, need to be reversed; and climate change needs to be tackled. All of this heralds a seismic shift in how we as a country facilitate tax and spend policies. In a nutshell, public spending in Britain will need to increase across the board.

One option to increase state spending is by making cutbacks elsewhere. However, after years of austerity, this is unwise. But what could we cut anyway? We cannot cut NHS spending or defence spending. Some schools and prisons are already crumbling, so education and justice are off the table. The welfare, local government and international aid budgets have already experienced deep cutbacks. Finally, we cannot cut back on green policies when we are facing a climate crisis.

What about funding the additional spending through borrowing? Borrowing can offer part of the answer. We should be borrowing to invest in the construction of vital infrastructure projects. Borrowing should also be used in the short term to immediately address the NHS crisis. While some EU nations, such as Spain, are calling for EU-wide borrowing to fund Europe’s necessary defence spending increases. However, we should be cautious. Borrowing is not a silver bullet. We have to be aware of the economic risks of relying too much on borrowing and the potential for a future debt crisis.

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Mo Waqas

Why populism thrives and how we beat it – Part 2

By Mo Waqas | Tue 11th February 2025 - 7:30 am

In Part 1, I introduced some ideas about how we beat populism, focusing on immigration. Today, I am going to look at the NHS, the economy and our political system.

Saving the NHS from Populist Scare Tactics

The NHS is under siege, and the populists love it. They use its struggles to push their own agenda, claiming that the solution is to privatise services or cut back on waste. But the NHS isn’t failing because of inefficiency or because too many people are using it. It is failing because governments have underfunded it for years, forcing doctors and nurses to work under impossible conditions while patients wait months for treatment.

The Conservatives say they are investing in the NHS, but in reality, they have allowed it to be slowly privatised, handing contracts to private companies and driving doctors out of the system. Reform UK claims it will get rid of NHS “red tape” but offers no actual funding or plan to stop the crisis. If we want to save our health service, we need real investment, not slogans. That means recruiting and retaining more doctors and nurses by increasing pay and improving working conditions. It means guaranteeing a GP appointment within a week, so people don’t turn to A&E out of desperation. It means properly integrating social care with the NHS so elderly and vulnerable patients aren’t left stranded in hospital beds because there’s nowhere for them to go. It means shifting the focus to prevention, tackling long-term health issues like obesity and mental illness before they become crises.

Fighting Economic Populism – Real Prosperity, Not Empty Promises

Nothing fuels populist anger more than economic insecurity. Wages are stagnant, housing is unaffordable, and bills keep rising. People feel like they’re working harder for less while the rich get richer. And they’re right—because the system is rigged.

Reform UK’s answer is to slash taxes and cut regulations. The Conservatives promise tax cuts too, despite 14 years of economic stagnation. Both parties push the idea that lower taxes will magically create jobs and growth, but we’ve seen this experiment fail again and again. Cutting taxes for the rich does nothing for working people.

The real solution is an economy that rewards hard work, not just wealth. That means raising wages so that people earn enough to live, not just survive. It means fixing the housing crisis so young people can afford a home again. It means backing small businesses so local entrepreneurs can thrive instead of being crushed by big corporations. It means making the tax system fairer, so billionaires and multinationals pay their share instead of shifting the burden onto working people.

Restoring Trust – Cleaning Up the Corrupt Political System

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Nick Baird

The challenge for liberals everywhere – what if Trump’s policies actually work?

By Nick Baird | Sun 26th January 2025 - 1:00 pm

A provocative title? Of course there is much to offend us in President Trump’s pronouncements, along with the character and antics of his various nominations to Government posts. But if we previously assumed that much of what he said was bluster, we now have to face the reality that he means what he says, and consider what the outcomes might be. In particular, what if he succeeds?

This is not a simple question. To start with – what does “success” look like? We often condense that into simple numbers – GDP growth, inflation, stock market indices and unemployment figures. It is certainly possible that by these simplistic measures, and in the short term, Trump might succeed and grow the US economy without runaway inflation. With the world’s reserve currency and largest economy under his control, he has options not available to the UK and most other countries, and if he can bully OPEC into increasing oil & gas production alongside increases in US domestic production, falling energy costs might offset the inflationary effects of import tariffs, along with his programme of deregulation and gutting of Government Agencies tasked with policing and enforcing what regulations remain.

I know what you’re thinking (because you’re reading LDV) – what about the cost? What about climate change and damage to the environment? What about all the lives destroyed when settled yet illegal migrants get rounded up and deported? What about inequality and minorities? What about healthcare and reproductive rights?

And you are absolutely correct, but what will the headlines be? Particularly when the full impact of some of his policies may not be felt until after he leaves office.

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Lord William Wallace

What’s our line on public spending?

By Lord William Wallace | Wed 14th August 2024 - 11:55 am

What should be our overall party line on taxation and public spending? We have a new government that came into office promising not to raise any of the major revenue-raising taxes. It claims that it has now discovered far larger holes in public spending plans than it had expected. The reality is that the Conservatives and their media allies managed to focus attention in the run-up to the election entirely on the level of taxation, without addressing what that implied for public services and long-term investment.

So Labour are now stuck. They knew well before the election (as the Institute for Fiscal Studies (IFS) and even the business pages of the Times were telling them) that government spending projections were unreal, that maintaining Tory plans would necessitate cuts in core programmes, and that Jeremy Hunt’s reductions in national insurance were almost criminally irresponsible. But they didn’t dare to be honest with the voters, for fear of the Tories branding them as a ‘tax and spend’ party.

We have been here before. Tony Blair similarly promised before the 1997 election not to raise overall rates of tax. We Liberal Democrats were braver, promising ‘a penny on income tax’ to raise the quality of education. I was then chairing our manifesto group, and vividly recall a Labour adviser telling me that we were mad to do so; ‘voters will never support a party that talks about raising taxes.’ But voters don’t want to vote for cuts in schools, health services, police numbers, courts and prisons either. It turned out to be the most distinctive theme of our campaign.

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Should Lib Dems rethink our new fiscal rules after our successful General Election campaign?

By Michael Berwick-Gooding and Katharine Pindar | Wed 31st July 2024 - 8:55 am

Following the announcement of the new (so-called) £22bn ‘Black Hole’ in the Government’s finances, Chancellor of the Exchequer Rachel Reeves has announced over £3bn in departmental spending cuts, making the winter fuel allowance mean-tested, and scrapping the previous government’s social care reforms (which set a maximum of £86,000 on a person’s personal care costs) meant to be implemented eventually in October 2025.

During the General Election it was generally recognised that there would need to be cuts to the non-protected departmental budgets, which the Resolution Foundation said could be as much as £33bn and the IMF said could be about £30bn. During the General Election the Labour Party talked of less than £10bn in extra government spending.

In our Manifesto we suggested how £19bn more could be raised from increased and new taxes. These included  buy-backs, increased taxes on social media firms and tech giants and reforming capital gains tax, as well as including one copied by the Labour Party, higher taxes on the energy giants (but raising £900 million less than ours).

There is a way forward, which our pre-Manifesto passed in the Autumn Conference of 2023 proposed. We stated that we would  “safeguard the UK’s economic prosperity while making the investments our country needs. We will make sure that day-to-day spending does not exceed the amount of money raised in taxes over the medium term…”

However, in our Manifesto those words were replaced with, “Foster stability, certainty and confidence in managing the public finances responsibly to get the national debt falling as a share of the economy and ensure that day-to-day spending does not exceed the amount raised in taxes, while making the investments our country needs.”

Why make that change? It would leave us on the same horns of a dilemma as the new Chancellor has. You can’t simultaneously pledge to reduce the national debt AND pledge to make the investment the country needs, in one parliamentary term.

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Lord William Wallace

William Wallace writes.. .Tax Cuts versus Public Investment and Services

By Lord William Wallace | Fri 14th June 2024 - 9:38 am

The Conservative Manifesto confirms that they have dug in on tax cuts as their core offer to the voting public.  They know that this is an illusion, on which they would not be able to deliver if they won.  Opinion polls show that most of the public don’t think it’s realistic.  An IPSOS poll in early June found 68% of the public describing public services as ‘underfunded’ – confirming similar responses in multiple polls over the past year. 

Labour have been so frightened of the Daily Mail that they have committed themselves to holding almost all major sources of revenue to current levels.  They promise instead to fund increased spending out of future growth – a dubious prospect when UK growth is currently minimal and the global economy is being hit by wars in Ukraine and Israel and by the threat of a China/US trade war.  This has made the campaign so far surreal, with the Institute for Fiscal Studies (and the Institute of Government, and BBC Verify) pointing out the widening gap between promise and necessity, and with both major parties refusing to engage on where future cuts must fall.  Happily our manifesto has focussed on fair tax rather than low tax, and received compliments from the business pages for daring to do so.

Any of you who may be going to meetings with Tory candidates in the next three weeks can have a field day over the gap between rhetoric and reality.   Sunak’s party have promised to raise defence spending by 0.5% of GDP, and attacked Labour for its more cautious half promise.  Given the re-emergence of Russian threats to Europe and the current weakness of UK armed forces, such an increase is irresistible. So ask the Tory candidate what other budgets they will cut to fund this significant increase?  Education, when teachers are leaving in increasing numbers, universities in danger of bankruptcy, and apprenticeships less than half of what our economy needs?  Justice and prisons, which are already buckling from court delays, prison overcrowding, and probation understaffing?  Local government, where budgets have been squeezed to the point where key services are disappearing?  Or maybe the NHS, of all things?

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Peter Wrigley

J K Galbraith and the Liberal Society

By Peter Wrigley | Wed 15th May 2024 - 7:55 am

A friend who hoards his newspapers for years has just passed on to me an interview by Roy Hattersley with JK Galbraith in the latter’s 90th  year (1998)

The article is headlined “Sage of the Century”* and there is no doubt that, after Keynes’s  death, Galbraith  was the pre-eminent economist of the second half twentieth century.  He got most things right (including opposition to the Vietnam War) and many of the issues raised in the interview are as relevant today as they were  a quarter of a century ago. Indeed, having ignored his views provides a good explanation as to why we are now in our present  dire predicament.

The following quotes (in italics) are from the article;

To The Affluent Society we owe the prediction of “private affluence and public squalor.” Which we can see all around us, in spades after the Margaret Thatcher inspired dominance of the inadequately regulated market since 1979.

Galbraith’s first success was his analysis of “The Great Crash” of 1929.  In 1998 he predicted: “A sump will surely happen again, sooner or later. . .they are a normal feature of the market.”  

Well, it did happen again, in 2008 and we are still paying for the consequences.  Keynes was in favour of “animal spirits,”  but I think he had in mind investors in the “real economy” rather than manipulators of the financial markets, allowed to over-reach themselves by Mrs Thatcher’s Big Bang.

“The poor are politically emasculated.  They don’t vote so they don’t have a strong expression in Congress or the White House.”  

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Mark Valladares

17 April 2024 – today’s press releases (part 1)

By Mark Valladares | Wed 17th April 2024 - 11:15 pm

Back after a few days on grandparent duty…

  • Inflation figures: Nobody will notice this in their pockets
  • Three in four of worst hit constituencies for sewage dumping held by Conservative MPs
  • Mark Menzies scandal: Sunak must suspend the Whip

Inflation figures: Nobody will notice this in their pockets

Responding to the latest inflation figures, Liberal Democrat Treasury spokesperson Sarah Olney MP said:

Nobody will notice this in their pockets, with mortgage bills still skyrocketing after Liz Truss crashed the economy, and prices still so much higher than last year. By patting themselves on the back for this record, Rishi Sunak and Jeremy Hunt have proved just how out of touch they are.

Conservative Chancellors have presided over the worst cost of living crisis in living memory. The blame lies squarely with their gross economic incompetence.

Three in four of worst hit constituencies for sewage dumping held by Conservative MPs

  • 75 of the the top 100 constituencies for the worst number of sewage spills last year held by Conservative MPs
  • Rishi Sunak’s constituency was the 10th worst hit in England, with the duration of sewage dumping doubling to 42,000 hours in 2023
  • Theresa May’s seat of Maidenhead saw a staggering forty fold increase in duration of sewage dumping
  • Lib Dems warn of a “reckoning at the ballot box” from former Conservative voters furious about the sewage scandal

96% of Conservative held seats in England saw an increase in sewage dumping last year, with the worst constituency for sewage dumping facing 100,000 hours worth of spills, Liberal Democrat analysis of House of Commons Library research has shown.

Geoffrey Cox’s seat of Torridge and West Devon was the worst affected last year by sewage dumping, facing 97,000 hours worth of sewage being pumped into the area’s waterways, a 65% increase on 2022’s figure This was followed by Central Devon, Skipton and Ripon, Penrith and The Border, and Totnes, all of which experienced over 50,000 hours worth of dumps by water companies.

450 of the 508 seats in England saw a rise in the duration of sewage dumping and 456 saw a rise in the number of spills in 2023 compared to the previous year. In a staggering 96% of Conservative held seats in England there was an increase in sewage spills last year.

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Peter Wrigley

Growth: We’re there!

By Peter Wrigley | Wed 20th September 2023 - 8:58 am

I can’t find out when Gandhi said: There is enough for everyone’s need, and not for everyone’s greed,” but it must have been before 1948 because that’s when he died.  Yet, still 80 or so years later, rather than concentrating on better sharing of the world’s munificence, we are still looking for yet more economic growth as a free pass for “enriching” everyone without anybody paying the price.

The measurement of an economy’s growth via its GDP is largely a post 1945 obsession.  When he was the UK’s Chancellor R A Butler alerted us to the fact that, if we could achieve growth at the rate of 3% per year we could double our standard of living in 25 years.  Harold Wilson and the Labour party, in the campaign for the general election of 1964, promised all sorts of wonders, and they wouldn’t cost us a penny: they’d be financed out of growth.

Waring shots about this painless panacea were fired by the Club of Rome and its publication of “The Limits to Growth” in 1972.  The earth’s resources are finite and  more and more production risks poisoning  it .  It’s not a question of “Will the planet survive.” It almost certainly will, but not necessarily life as we know it, or perhaps any life at all.

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Mark Valladares

19 September 2023 – today’s press releases

By Mark Valladares | Tue 19th September 2023 - 10:30 pm
  • OECD Report: UK economy is “stuck in the slow lane”
  • Revealed: Truss taxpayer handouts now reach over £40k
  • Sunak has failed to embrace the industries of the future

OECD Report: UK economy is “stuck in the slow lane”

Responding to the lastest OECD report, Liberal Democrat Spokesperson for Treasury and Business Spokesperson Sarah Olney MP said:

This damning report shows that under the Conservatives, the UK economy is stuck in the slow lane. We’ve had zero apology from Liz Truss for trashing the economy, and now zero plan from Rishi Sunak to fix it.

It’s time for a proper plan to grow the economy and tackle the cost of living. That means boosting apprenticeships to tackle skills shortages and helping exporters by fixing the government’s botched trade deal with Europe.

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Caron Lindsay

Ed Davey calls for action to help those struggling with rising bills

By Caron Lindsay | Wed 16th August 2023 - 8:48 am

As inflation falls to 6.8%, Lib Dem Leader Ed Davey appeared on Sky News this morning to give our party’s reaction:

While it was positive news that prices aren’t using quite so fast, he said, but they are rising fast,  faster than they are in many other countries and faster than they have for many, many years.

Families and pensioners when they go and do their shopping, when they get their energy bill, when they pay their mortgage, their rents, they are still seeing them go up by huge amounts. And what is worrying Liberal Democrats today is that this month’s inflation figures will be used to calculate rail fares for next year and we are calling for a freeze as some way of helping people who are really really struggling.

Challenged that the Government has to balance the books, Ed said that we always do balance the books and go to the country with a fully costed manifesto, compared to the Conservatives who have been reckless with Government money and that’s why the country is in such a mess.

I listen to Conservative ministers and they seem so out of touch with the realities that most families and pensioners are facing. When we talk about these sorts of figures they seem quite complacent and give themselves a pat on the back when families are really struggling out there. I just want a Government that seems to care a bit more and this lot just don’t.

Let’s just pause a minute there. This “families and pensioners” phrase irks me a bit. It isn’t quite as bad as the awful “hard working families”, but it completely ignores a huge swathe of people who are struggling just as much as the soft Tory voters in the blue wall seats we are going after. They like the “families and pensioners” language because it has a comforting ring of deserving poor about it but that’s no excuse.

We need to make sure that the young people struggling to get by on low incomes, earning less and getting less in benefits despite living costs being just as high feel included, or the growing number of single person households with only themselves to rely on.

What’s wrong with just using people? Our mission as Liberal Democrats is to build a fair, free and open society where NO-ONE is enslaved by poverty, ignorance and conformity and our language should reflect that universality. We have so many good ideas that would help all people who are struggling so it seems a shame to limit our language.

Rant over and back to the interview. Ed was challenged that our plans to help people were not realistic. He said:

The real world is that the economy is struggling and we need to get people back to work. If you took up Liberal Democrat ideas to boost the economy, you would get more people using public transport which is more important for our economy, for the environment and so you have many benefits.

I just think the Government is so out of touch. They don’t seem to get how the combination of  price rises, mortgages, rents, energy bells railway fares, is hitting people.  We’ve calculated that a commuter family is going to be clobbered by an extra bill of £300 every month due to the combination of mortgage, food and rail fares. This is a huge amount and when I hear government ministers saying they can’t do anything. They could do something but they don’t. The fact that they don’t backs up my argument that they are out of touch and don’t care.

He was asked whether the energy price cap should be rethought as it harmed competition:

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Michael Taylor

Reflections after a Conference – a challenge to the Lib Dems

By Michael Taylor | Wed 28th June 2023 - 8:22 am

Editor’s Note: Mick wrote this piece after the Brighton Conference in 2018 and sent it to me recently as he felt it was still relevant today. Apart from the fact that Brexit is now an (at least for now) inescapable reality, he’s right.  We need to be radical and punchy to deliver the liberal, fair, more equal society that we want to see. I’m reminded of the Liberal not Moderate t-shirts that some of us wore proudly around that Conference…

After a short period at the Lib Dem conference I am still in Brighton for a couple of days. Brighton is quite a good place to reflect on the state of the UK.

Thinking back, Brighton used to be in much better nick than it is now. Many pavements are cracked and broken, many of the houses and hotels look run down and in need of repair and renovation. The seafront is not particularly special and the West Pier is still a burned out shell. Here, in one of the UKs premier resorts, there are many homeless people on the streets and many beggars as well. Hardly the sort of Britain that we Liberal Democrats want to see!

Recycling largely takes place by means of unsightly bins strewn around the streets and the former green-run council’s recycling policies made a mockery of recycling anyway.

I suspect that much of this is the result of austerity, especially the massive cuts to the finances of the local council that no longer enable it to respond to the needs of the Brighton and Hove Community.

Brexit will hardly improve matters, because hotels and restaurants here rely heavily on European workers and they may not be available after March 2019.

Although I have no direct information, I suspect that housing is expensive and that many people, especially the young, have no hope of getting on the housing ladder and live in the private rented sector with its high prices and insecurity of tenure.

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Caron Lindsay

Davey: Sunak asleep at the wheel

By Caron Lindsay | Wed 4th January 2023 - 9:56 pm

Listening to Rishi Sunak speak today, you wouldn’t think that the country is in the grip of economic turmoil and crisis in the NHS. You don’t have to go far to read of NHS trusts and boards calling major incidents, or London Ambulance saying they will only wait 45 minutes before leaving patients in hospital corridors. Everywhere there are accounts of traumatised, stressed nurses, doctors and patients in A and E departments up and down the country.

It is all very grim.

Sunak’s five priorities would fail the SMART objective test on any work training day.

He could claim he had done them without alleviating much suffering. I mean what does “NHS waiting lists will fall” actually mean for someone who has been told that they can have an appointment for their hernia in mid 2024? What does “the economy will grow” mean? A tiny decimal point which makes no measurable difference? Reduce national debt – to what, how and what will that mean for public services? And a piece of red meat for the xenophobic right about getting rid of asylum seekers. The one specific pledge, to halve inflation, seems to be going to happen anyway according to the Bank of England forecasts.

It’s all very cynical.

Ed Davey was unimpressed, saying:

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Steve Trevethan

A socio-economic impert’s thoughts on the OBR’s report and the Autumn Statement

By Steve Trevethan | Wed 23rd November 2022 - 12:33 pm

An impert is interested in a subject and tries to find out more about it. The writer aims to become a socio-economic impert because the writer considers it impossible, in reality, to separate “economics” from its inevitable social consequences.

The foundational OBR’s report is in error because it omits sectoral balances. Whenever a government has a debt, the non-government sectors of the domestic, the business and the foreign, must have a surplus. The valid question is the size of the difference between governmental expenditure and its tax gathering. Too much is harmful as is too little. Without this surplus of money, homes and businesses do not have enough money with which to function. As currently presented, “Balanced Books” are a disaster for regular people.

By extension, sectoral balances tell you where money has come from and where it goes, but not necessarily in that order!

Another hidden truth is that inflation is a year on year calculation. This year, pre-conflict inflation is used as the basis for this year’s conflict affected calculation and so is high. Next years will be based on conflict affected inflation figures and so is incredibly unlikely to be other than less.

The Autumn Statement does not differentiate between the causes of inflation. There are various internal and external causes. The current inflation has significant external causes, such as the Ukraine conflict and the opportunistic raising of prices by power companies. The latter are invalid profits because they are out of proportion to actual research and development, production and distribution costs. Again using the sectoral balance model, we  can see that these extractive “profits”  come not from worth or need, but from the exploitation of fellow human beings.

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Mark Valladares

22 November 2022 – today’s press releases

By Mark Valladares | Tue 22nd November 2022 - 10:35 pm
  • Debt figures: Conservative Chancellors have blown black hole in Britain’s finances
  • Welsh Liberal Democrats to Vote to Withhold Legislative Consent on the Northern Ireland Protocol Bill
  • OECD forecast: Damning verdict of the Government’s economic record
  • Sewage: Budget means almost £500 million less to tackle the sewage crisis
  • Levelling Up Bill: Conservative chaos to blame for cancellation of vote

Debt figures: Conservative Chancellors have blown black hole in Britain’s finances

Responding to new ONS figures showing the scale of UK government borrowing in October, Liberal Democrat Treasury spokesperson Sarah Olney said:

These figures reveal just how badly the long list of Conservative Chancellors have trashed our economy. This Government has blown a massive black hole in Britain’s finances and is now expecting hardworking families to pick up the bill.

It is a national scandal that big banks are getting massive tax cuts whilst the squeezed-middle gets clobbered with endless tax rises.

The sensible way to solve this is surely to tax the richest companies making bumper profits. We can’t trust this Conservative Government to clean up their own mess. They should never be trusted to run our country’s economy.

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Mark Valladares

15 November 2022 – today’s press releases

By Mark Valladares | Tue 15th November 2022 - 11:15 pm
  • ONS earnings figures: Economic mismanagement is leaving pay packets stretched further than ever
  • Vaughan Gething Qatar Press Briefing – More Soundbites Rather than Real Solidarity
  • Liberal Democrats Raise Concerns Over the Impact of Australian and New Zealand Trade Deals on Wales
  • Conservatives failing to count cost of windfall tax loophole

ONS earnings figures: Economic mismanagement is leaving pay packets stretched further than ever

Responding to the latest ONS labour market and earnings figures which show pay falling in real terms, Liberal Democrat Treasury spokesperson Sarah Olney MP said:

This Government’s economic mismanagement is leaving pay packets stretched further than ever before just as bills spiral out of control.

This is the worst cost of living crisis in a generation and Thursday is judgement day for the latest Conservative Chancellor in post. He cannot make the same mistakes as his predecessors who crashed the economy and left families to pick up the bill.

Thanks to the Conservative party’s botched budget and reckless mismanagement of the economy, homeowners are being forced to pay hundreds of pounds more a month on their mortgage whilst their take home pay is eaten away by inflation. The public will never forgive Conservative MPs for this.

Vaughan Gething Qatar Press Briefing – More Soundbites Rather than Real Solidarity

Responding to Vaughan Gething’s press conference where he continued to defend the Welsh Labour Government sending a delegation to Qatar during the World Cup, Welsh Liberal Democrat Leader Jane Dodds said:

I am not convinced by the arguments set out today by Vaughan Gething nor previous arguments from the Welsh Labour Government seeking to justify this morally unjustifiable trip.

The Welsh Government should be upfront about its intentions going to Qatar, it is not to ‘support Team Wales’ but is to seek investment.

These tainted investment opportunities are going to come at the cost of providing diplomatic legitimacy to Qatar’s hosting of this tournament despite the country’s atrocious human rights record that has left over 6,500 migrant workers dead, punishes being gay with execution or imprisonment and treats women as lesser human beings.

Vaughan Gething has stated that the Welsh Government will “proactively use Wales’ place in the World Cup in Qatar to promote our strong Welsh values”, yet today has again not provided any evidence on how the Government will do this.

The last time I checked, unless the three ministers have been promote to Team Cymru itself and are going to be on that pitch, their presence isn’t going to affect how our national team performs and our national team are already upholding our values.

If Labour actually wanted to show solidarity with those living under Qatar‘s poor human rights record, or the families of the victims that have died during the construction of World Cup stadiums, they would cancel their unjustifiable trip immediately and instead join the vast majority of fans who will be watching the games from home, and to show some consistency on “saving them air miles” that was used to justify the Welsh Government not attending COP27 last week.

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Kevin Langford

We should not oppose some stealth taxes

By Kevin Langford | Wed 2nd November 2022 - 7:30 am

The autumn statement on 17th November will probably provide reassurance for the markets, but bad news in other respects.  We don’t yet know how the unpleasant ‘medicine’ will be mixed, but it will include higher taxes (including stealth tax rises through long term freezes to personal allowances), cuts to services and to government investment, and real terms cuts to some welfare payments.

Elements of our response to the forthcoming statement are easy.  1 The Tories got us into this mess through the Truss shambles, through Brexit, and through the lack of policies to build a decent economy over many years of poor stewardship.  2 We don’t want cuts to services and to welfare.  3 We should increase levies on companies which have happened to have benefitted from the war in Ukraine.  But when it comes to any tax rises that may be proposed in the statement, we need to think carefully.  We need to balance the short term expediency of pointing out everything the government is doing which could be unpopular, against longer term considerations of how to deliver a better society.

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Caron Lindsay

Olney: PM’s apology brings nothing but cold comfort

By Caron Lindsay | Tue 18th October 2022 - 9:38 am

Yesterday afternoon, Penny Mordaunt was given an impossible job – defending the indefensible. She was asked to deputise for the Prime Minister in the Commons for Labour’s urgent question on the sacking of the Chancellor.

Mordaunt did much better than Truss ever could have done. She had a reasonable balance of “**** you”, humility, and even a bit of sincerity in the face of quite an onslaught from opposition MPs. It is hard to imagine anyone having a go at the opposition when they were part of a government that had made a crap economic situation much worse.

Labour missed a trick …

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Caron Lindsay

Olney: Jeremy Hunt expects people to pay for Conservative mistakes

By Caron Lindsay | Sat 15th October 2022 - 12:15 pm

Jeremy Hunt’s media round this morning was sobering stuff. Tax rises and public spending cuts seem to be the order of the day.  While he might talk about protecting the most vulnerable, Conservatives have never been good at understanding how to do that.

Our Treasury spokesperson Sarah Olney had this to say:

This may be a new Chancellor but it’s still the same old Conservative party whose failed economic experiment has cost this country billions.  Now Jeremy Hunt expects struggling families and pensioners to pay the price for those mistakes.

Thousands of families are facing increased mortgage costs and rising prices at the checkouts while our struggling public services will have their spending slashed.

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Why our Country and our Party need an Emergency Lib Dem Special Conference – Now

By Cllr David Evans | Wed 12th October 2022 - 12:15 pm

In less than 26 minutes on Friday 23 September Liz Truss and Kwasi Kwarteng took an axe to what remains of the British Economy and the hopes and prospects of so many ordinary people, and totally destroyed the last vestiges that the Conservatives are the party of Economic competence. By the end of the day the pound had crashed over 4% in value (and is still falling) and the FTSE a further 2%, undermining the savings, pensions, and prospects of workers, the retired and the unemployed, be they Teachers, Doctors, Farmers, workers in industry or workers in entertainment. It affects them all.

However only a few days before, Federal Board and Federal Conference Committee decided to completely cancel Party Conference and put everything on hold until Spring Conference is held In York next March. While the decision that it would be seen to be inappropriate to hold conference during the period leading up to the Queen’s funeral was totally justified, it was totally misguided to think that the Lib Dems, as a party, should have no opportunity to say anything about the new prime minister and her deeply damaging new ideas for six months.

Every Lib Dem who met Liz Truss when she was, temporarily, a member of our party, seems to have quickly formed the view that she was a young lady with an eye for self-publicity and an extremely radical view on things – but it wasn’t a Liberal Democratic view, as she quickly found out as they began to question the reasoning behind her vision.

Everyone who works in Business knows that real growth and progress comes slowly, and need careful planning and sustained amounts of effort over years and sometimes decades.  The desire for a quick fix, a dash for growth based on throwing vast amounts of borrowed money at its supporters, underpinned by a total lack of understanding of simple economic realities is no substitute for hard work and effort.  Sacking a Permanent Secretary on Day One and calling the most outrageous gamble with our nation’s economy “A Fiscal Event” in order to avoid OBR scrutiny shows linguistic cunning that Vladimir Putin would be proud of.

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Lord William Wallace

Public spending and the social contract 

By Lord William Wallace | Wed 5th October 2022 - 12:43 pm

Raising the rate of domestic economic growth, against the background of a global economic recession which may well be worsened by the current downturn within China, cannot have been the main rationale for the Truss and Kwarteng’s ‘fiscal event’.  The underlying purpose was to force public spending cuts, to shrink the size of the state and to make it more difficult for a successor government to raise taxes sufficiently to restore the social democracy that adequate public spending underpins.  Simon Clarke, now ‘levelling up’ minister, has specifically remarked on what he sees as the over-extension of the UK’s welfare state.

If current ministers were serious about introducing supply-side reforms they would recognise that public investment is needed to repair current inadequacies.  Low productivity is partly the result of inadequate education and training, most evident in basic skills for our domestic workforce.  Years of under-funding for pre-school support (yes, we should have fought harder against the coalition’s killing of the ‘Sure Start’ programme), for state schools and further education colleges, are to blame.  But as the Conservative chair of the Commons Education Committee has just protested, the new government has only talked about grammar schools and entry to Oxbridge so far, leaving education and training for the vast majority of British citizens to one side.

The UK has a lower proportion of its population in work or looking for work than many other advanced countries.  That’s not just due to the rising number of retired; it’s also because we have such a high proportion of people under 66 who are unfit for work or long-term unwell.  Underfunding of the NHS, and in particular of public health programmes that focus on healthy lifestyle, explains a good deal of this.  Lengthy waiting times for treatment translate into absence from the workforce.

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Matthew Green

Productivity isn’t everything: understanding the growth debate

By Matthew Green | Fri 30th September 2022 - 7:31 pm

Economic growth is at the heart of the current political debate. And yet growth is a complex aggregate statistic, and few people take the trouble to pick apart what is actually happening to it, as opposed to speculating what in theory might be happening. That has created a vacuum into which think tanks, economic commentators and politicians project their own hobbyhorses without fear of serious challenge. So what really is going on?

The main mistake people make is to assume that the main driver of growth is productivity. This is exemplified by the famous quote from American liberal economist Paul Krugman: ”Productivity isn’t everything, but in the long run it is almost everything.” Cue a furious debate on a “productivity puzzle” or “gap”, especially here in Britain – supported by  unreliable productivity measurements. Productivity is such a heterogeneous and hard-to measure phenomenon that measurements depend heavily on assumptions – and it is hard to understand their significance anyway. Prior to the crash, for example, improvements to Britain’s measured productivity depended almost entirely on two narrow sectors: financial services, whose profits proved largely illusory, and “business services” a shadowy sector the real value of whose output is hard to be sure of.

But help is at hand. American economist Dietrich Vollrath decided to pull apart growth figures to settle the debate on why American growth had slowed so much in the 21st Century compared to second half of the 20th – this debate isn’t just a British thing. As it happened, he had his own hobby horse which he was convinced was behind the issue – the growing market power of large companies. Vollrath found that two thirds of the decline in growth rates (1.25% per annum per capita at the time he was doing the work – a very similar figure to the UK) was down to demographics – the proportion of working people to the population as a whole, which has been declining as the dynamics of the baby boom work themselves out. Nearly half of the rest was down to what economists call the “Baumol effect” – named after an economist who pointed out that increases in productivity lead to a shift to economic sectors with lower productivity. As we get more efficient at making mobile phones, for example, we don’t buy more mobile phones – we spend the surplus on things like healthcare or designer clothes instead. Incidentally, he found little evidence that his own hobby horse, market power, had much effect, and none that tax changes and deregulation did – except changes that restricted worker mobility, and especially restrictions to house building. He called the two principal phenomena the problems of success and published his findings in a book: “Fully grown: Why a Stagnant economy is a Sign of Success.” This was rated as one of The Economist magazine’s books of the year for 2020, though its writers have failed to take its findings to heart.

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Mark Valladares

Welcome to my day: 26 September 2022 – a bad time to be poor, or vulnerable, or…

By Mark Valladares | Mon 26th September 2022 - 7:45 am

High inflation, rising interest rates and a mad scientist approach to economic management do not tend to instil confidence, as the markets indicated on Friday, following Kwasi Kwarteng’s “this is not a budget” statement. The hedge fund guys have already made hay – they obviously had a pretty good idea what was coming – and now the rest of us can find out what is in store.

There is little doubt that there is much that needs to be done in order to build a thriving future for the United Kingdom. From how our country is governed, to the supply of housing or provision of energy, and onto protecting our environment, many tough decisions will need to be taken. And, from a “customer perspective”, some patience is needed too. You can’t turn round the NHS overnight, just as infrastructure projects, especially big, strategic ones, don’t happen just because someone announces the intention no about it.

But the first thing you need is government that can think strategically, and not just about securing its own future in office. The outgoing administration seemed solely focussed on this week’s headline, making it to next weekend without imploding. But you would have to admit that this one does seem to have a strategy, even if it seems hard to credit it.

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The Conservatives no longer stand for a stable economy

By Andy Boddington | Sun 25th September 2022 - 9:30 am

Friday’s Kwasi-Budget was not officially a budget, despite being on of the most important fiscal statements since the Thatcher era. Because it was not a budget, it was not scrutinised by the Office of Budget Responsibility. That is yet another example of the Conservatives trying to circumvent processes designed to ensure that government’s act rationally.

This was a budget that will make top earners even more wealthy, while leaving the country and the poorest more impoverished. It was a budget based on the discredited myth of trickle-down economics. It was a budget that will allow wealthier people to dine out in style while those on the breadline scramble for crumbs.

This is an idealist budget driven by a leader who is beginning to make Margaret Thatcher look left wing.

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Davey: We have most right wing government in modern history

By Andy Boddington | Thu 22nd September 2022 - 7:30 pm

In an interview with the Guardian yesterday, Ed Davey discussed Liz Truss’s administration ahead of tomorrow’s budget that is not a budget. He said of Truss:

She is saying some of the most extraordinary ideological things. She has appointed probably the most right wing government in modern history. And it seems completely out of touch.

He said Truss’s decision to style Friday’s announcement as a “fiscal event” rather than a budget seemed to be aimed at preventing the independent Office for Budget Responsibility (OBR) scrutinising its impact.

The failure to have an OBR assessment shows the economy is being run by ideology, not a plan. They clearly don’t want the evidence, because that would be unhelpful to their argument. And that should trouble everybody.

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Lord William Wallace

Which public services will the Conservatives shrink further?

By Lord William Wallace | Thu 22nd September 2022 - 10:34 am

Liz Truss has just handed Liberal Democrat campaigners a powerful set of questions to put to Tory MPs. She insists that tax cuts are the answer to Britain’s economic problems – amounting to 1-2% of GDP, perhaps more once the full package of proposed cuts emerges. She’s pledged to raise defence spending by 1% of GDP – for which, sadly, there is a case when Russia intervention in Ukraine threatens European security. She’s promising to provide financial support for household and business energy bills, likely to amount to between 2% and 4% of GDP over the coming year, without offsetting the cost through a windfall tax on energy companies of the sort that most of our continental neighbours are levying. Other government programmes will have to be slashed to prevent public deficits spinning out of control.

So what cuts in other public services will Conservative MPs accept in order to prevent government debt spiralling and the pound sinking further on international markets? A squeeze on schools, or policing, or on the already-overstretched NHS? Holding down public service pay, while letting bankers’ bonuses soar? Slashing public investment in hospitals and transport infrastructure, and reducing local authority budgets further, thus saying goodbye to the promises of ‘Levelling Up’ that helped them to win the last general election? Or holding down benefits, leaving the poorest in our society even poorer? Ask every Conservative MP what further cuts they will support – or whether they will oppose this tax-cutting strategy.

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