I am a fan of Tim Farron. His decency, thoughtfulness and authenticity add a great deal to our party and to our politics. He is also one of the party’s best speakers.
But I don’t always agree with him.
His speech to conference on Tuesday was very well-delivered. It also contained some interesting themes and observations.
I was very pleased to hear Tim defend globalisation, though it is a shame he chose to do so so briefly:
Don’t get me wrong: the rewards of globalisation are real.
The free movement of people, of capital, of ideas, have all made our society better.
And Liberals should always defend that freedom.
As I have written before on LDV, the successes of globalisation are immense, particularly in the reduction and, in places, near-elimination of destitution.
The view, stated at rather greater length, that the impact globalisation has had in developed economies has not been entirely positive also has some truth in it. I have seen in my hometown of Rochdale, for example, how the movement of industry to other parts of the world thanks to cheaper labour costs can have a decades-long negative effect on local economies.
The conclusion that this leads Tim to reach is that the state needs to be active, ambitious and, if we are being honest, bigger.
I agree wholeheartedly with one of these aims. The state ought to be ambitious. Large-scale infrastructure projects that support both economic growth and social progress need state action, both to build directly and to facilitate investment. And it is precisely because I am ambitious for our public services that I do not think ideological objections should prevent innovation and open-mindedness in their delivery.
But it is in the explicit call for more active government, and the implicit desire for a larger state, that questions are raised. In part this is due to the lack of definition; how do we measure government activity, for example?
Because by almost every measure government is more active than it has ever been. True, the state runs fewer big industries. And rightly so. But notwithstanding the privatisations of the Thatcher and Major governments, as many, such as John Micklethwait and Adrian Wooldridge in their recent book, The Fourth Revolution, have pointed out, no government of the post-war era has succeeded in stemming the growth of the state.
The state accounts for getting on for half of the UK economy, despite the coalition’s cuts, and we are still borrowing at record levels. Moreover, New Labour’s (or rather, Gordon Brown’s) welfare state, largely left in tact by the coalition, has resulted in vast numbers of households, including a good number of two-earner families, relying in one form or another on the largesse of HMRC and DWP for at least some of their income. The reach of the state into people’s financial affairs has never been greater.
And thanks to the illiberalism of the last government and the failures of politicians to keep up with technological change, we now know that the state has never been more active in snooping on its citizens. Hauling in vast amounts of communications data and more, even from those never suspected of any wrongdoing.
In what sense, then, is government too inactive?
Tim did identify one area, already touched on above: infrastructure spending. And here, I and I think most others in the party (including, for example, Jeremy Browne) agree. Because while government has expanded over recent decades, it has clearly failed Britain’s infrastructure. Projects that should have been undertaken have been ignored. Those that went ahead have been mishandled. And the state’s restrictions on infrastructure renewal, particularly in the form of planning controls, have remained in place, retarding the potential for private investment.
So I agree with Tim when he says this:
So we must ensure that our economic policies are comprehensively liberal.
That means being prudent, wise and living within our means when it comes to revenue spending.
But it also means opening the door as wide as we can on capital spending to transform Britain’s infrastructure.
But the middle line of that quote poses another question: how to transform Britain’s infrastructure while eliminating the deficit insofar as it relates to current spending?
Most of the budget deficit goes on financing revenue spending. That deficit is still running at over £100bn a year – about a third less than we spend on the entirety of the NHS, and about two-thirds of total income tax receipts.
In other words, an “active state” on infrastructure, “opening the door as wide as we can”, while also being disciplined on revenue, implies very large cuts, very large tax rises (and not just a mansion tax here and a 50p rate there), or both.
There is also a final, more fundamental question: what is the limit of the state’s potential?
Listening to Tim, one would be forgiven for imagining that, financial constraints notwithstanding, there was no limit.
Yet in reality, there is. There are things outside the control of politicians. It was striking to hear Nick Clegg make exactly this point yesterday:
And – in what might be the least fashionable statement made by any party leader this conference season – politicians of every party have fed this growing cynicism by exaggerating and overstating what government’s can do. We’ve all done it. I’ve been there. When I apologised for the disappointment and anger caused by our inability to scrap tuition fees, I knew we could never, ever make that mistake again.
That, in many respects, is precisely the reverse of what Farron was saying: that it is politicians pretending they can fix everything and inevitably under-delivering that fuels nationalism, not any initial lack of faith in their own power and control.
Political speeches should not always (or even often) give detailed answers to problems. It is beneficial to raise questions, and set out broad themes. But as Tim prepares to become former president of the party, I hope we can expect to hear some more answers too.
* Nick Thornsby is a day editor at Lib Dem Voice.
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28 Comments
The level of net investment has no direct bearing on how difficult it is to balance the current budget (i.e. the budget excluding net investment).
Indeed Adam – but the size of the current budget deficit has an impact on the extent to which it is possible to borrow to invest.
First of all I like Tim’s theme of bridging the differences between economic liberalism and social liberalism. Secondly, from what I can see he abstained on the first Syria vote and voted in favour of the Iraq vote. I think these were broadly the right votes and took courage.
However, I have two problems with his analysis on the economy. Tim might not say these in explicit terms, but it is what he is hinting at and what the left of the party would like. It goes broadly as follows:
1. That industries are lightly regulated. Businesses do not feel this at all and I have experienced regulations stifling innovation, reducing competition, harming services to consumers and basically causing all kinds of damage.
2. That the government is tight fisted when it comes to spending. When it comes to monetary policy the government has been too profligate for years, but consumers aren’t feeling it because it is all going to asset owners. I am also weary about “throwing open the gates” to infrastructure spending. This sounds like gambling and is no better than what the casino bankers do with other people’s money.
There are areas that could do with a more active government, but we need to engage a diverse group of members, including the business community and tory sympathisers.
Nick Thornsby
This is a well written piece, Carefully crafted and putting across your point of view and making a few contributions to the leadership election that has already started.
But I do not always agree with you.
You correctly identify the clip from Clegg’s speech which indicates that he, like ŷou and Jeremy Browne, are well to the right of mainstream Liberal Democrats.
But the wider question of small states / big state, which is the guts of what of what you have written is interesting.
You make some points on infrastructure . I may well agree with you on those. But you do not mention Tim Farron’s important call for house building for those in need, by social landlords. What old people like me still think of as “council houses”. Decent houses in decent well planned communities are just as much a part of important infrastructure as railways. A similar point could be made about state schools, the schools which are needed by the vast majority of our children, not just those who go to Bedales, Westminster and Eton.
But why does the small state that people like Clegg and Browne desire so much always involve taking away the infrastructure for the poor, the opportunities for the many?
Why is there never a call for a small state in the area of the Ministry of Defence? Do you know how much land the state expropriated during the second world war and the MoD is still sitting on? Do you know how much of that land was handed over to and is still in the hands of the US Air Force?
Why is the size of the state never seen in the context of the Royal Family which has grown exponentially since the beginning of the twentieth century? When the cuts are listed, and national assets are sold off to the highest bidder, why are the Duchy of Cornwall and the Duchy of Lancaster always exempted?
I will not go on with a long list of state expenditure that could be achieved without benefit sanctions or hitting the poor because I hope I have made my point. But I would be interest in your reaction.
The state should be being more active than it currently is, in part to make up for the collapse in private sector investment following an enormous credit bubble. Sadly only dodecahedron, rather than four cornered Liberals, seem to recognise this. The Government also needs to better spread the benefits of globalisation, for a happier and more cohesiveness society. I don’t think many in Glasgow and Clacton feel it is working well for them.
Sadly many now get rich in society by charging rent to people who don’t have enough capital to own their home. Our Parliament is corrupted by this racket – a third of our MPs are buy to let landlords: http://www.theguardian.com/commentisfree/2013/jul/17/when-we-pay-rent-to-our-mps. The tax system should instead be remodelled to better incentivise investment in research and development, making our economy less exploitative and more innovative and productive.
What John Tilley said.
It would be helpful if instead of having a pop at Tim Farron you actually had some constructive ideas to put forward about what a smaller state would mean.
Funny how the free market doesn’t do big infrastructure that is so vital to growth.
We keep identifying ways the state could be made smaller – scrapping Trident, bringing defence spending in line with Nato averages, spending money on council housing not housing benefit, cut cat avoidance and tax allowances so the government can raise more revenue and reduce the deficit, the £65 billion ‘corporate welfare’
I read Jeremy Browne saying the minimum wage can’t be raised – because it would cost jobs, but has he tried to live on it ? Unless you already have no cost housing, it is impossible. You mention 2 income couples – but the reality is many of them are priced out of housing – what is your solution ?
If we really want people to stand on their own too feet, then we need a radical redistribution of wealth and power – all I hear from Browne is that the 45p tax rate is too high – nothing about the marginal tax art of people on benefits, nothing about people not actually paying the 45p tax rate.
So I don’t think Tim is calling implicitly or explicitly for a bigger state – he is calling for a Liberal State, it is a shame that the movers and shaker in Liberal Reform do seem like some neo=Thatcherite Federation of Conservative Students form the 1980’s – but then Browne regards Thatchers economic reforms as “authentically Liberal” – one of us is in the wrong party.
Moreover, New Labour’s (or rather, Gordon Brown’s) welfare state, largely left in tact by the coalition, has resulted in vast numbers of households, including a good number of two-earner families, relying in one form or another on the largesse of HMRC and DWP for at least some of their income.
So what do you propose instead? Leaving people to starve to death? Families with kids sleeping rough?
Why blame “New Labour” when the real cause of what you observe is the rich getting richer at the expense of the poor getting poorer due to Thatcherism? Throw people out of their jobs, or reduce their wages in the name of “efficiency” and the result is this reliance in welfare. So efficiency saving are made in one place, only to have this knock-on effect somewhere else. The rich are subsidised to get richer by welfare payments topping up low wages or paying for the high rents that arise due to getting rid of council housing. I wouldn’t call the result “socialism”.
… and the trashing of Tim Farron has begun.
Oldliberal
Who’s been trashing Tim Farron? I don’t see any evidence of that in this article. Unless you think that disagreeing with TF is inherently wrong? I think he’d probably disagree with you there.
Rex mortuus est, salve rex (aut regina)
@ JT – ” Why is there never a call for a small state in the area of the Ministry of Defence?”
Because it is has happened on a relentless year by year continual decline since 1990.
Defence spending as a proportion of GDP has declined from 3.6% of GDP in 1990 and as is just over 2.0% today.
Nick Thornsby
Reducing the size of the state. How about selling off Chevening House ??
For those who have not been invited there recently it is the 115 room mansion shared by Nick Clegg and one other minister.
No bedroom tax has been charged in the time Clegg has been in residence but one must assume that some of the 115 rooms are spare bedrooms. It would appear to have come into the ownership of the state because of a proposed marriage deal for Prince Charles.
http://en.m.wikipedia.org/wiki/Chevening
The wiki brief history (link above) contains this gem —
“….According to his biographer, Jonathan Dimbleby (for whom Prince Charles himself arranged access to unpublished royal diaries and family correspondence), at that time he was contemplating an eventual marriage to Hon. Amanda Knatchbull, granddaughter of his great-uncle the 1st Earl Mountbatten of Burma: “.
In1974, following his correspondence with Mountbatten on the subject, the Prince had tentatively raised the question of marriage to Amanda with her mother (and his godmother) Patricia Brabourne.
She was sympathetic, but counselled against raising the issue with her daughter, who had yet to celebrate her seventeenth birthday.”
As far as I am aware this information has not been drawn to the attention of the police officers
responsible for Operation Yewtree.
Jedi beef with too many chips
No mention of the MoD capital assets? Inconvenient truth? If the MoD is so strapped for cash as you seem to believe why is it sitting on land holdings which are far beyond the needs of today’s miitary?
@Nick Thronsby: “The view, stated at rather greater length, that the impact globalisation has had in developed economies has not been entirely positive also has some truth in it. I have seen in my hometown of Rochdale, for example, how the movement of industry to other parts of the world thanks to cheaper labour costs can have a decades-long negative effect on local economies.”
Some truth? Globalisation has been horrible for working and lower-middle class communities all across the nation. Good, stable, decent paying jobs have been continually moving overseas for at least 30 years and often the jobs that replace them (if they are even replaced) are insecure, low-wage jobs. Now we have zero hours contracts. There aren’t enough jobs to go around, yet those without a job are demonised. Although I am not against reasonable levels of immigration in the slightest, our communities have had a huge influx of migrants, which helps to keep wages low. Right-wingers like Jeremy Browne are against raising the minimum wage (funny how it’s always the comfortable rich who are against raising the MW) and then complain that millions of people need state support through tax credits, housing benefit, etc. So these right-wingers are not only happy for us to be paid less than is enough to survive on, but you also want to remove state support so we have even LESS?! It sounds like they really do indeed want a scared workforce with no rights who are paid the absolute minimum. But of course they never ask for THEIR jobs to be outsourced. MPs would revolt if they were asked to work harder for less pay. In fact, they oftern argue why they should be paid more. But they expect us to just sit back, live on less and simply take it.
The message I any many others constantly get from the globalists is this: gloablisation means we must compete in a world market, therefore we must keep wages as low as possible and you should be thankful if you even have a job. Complain or join an union and we’ll send your job overseas or hire some immigrants who are willing to work for less than the minimum wage. Those who have benefited from globalisation (the upper middle classes and the rich) seem to think they can keep pushing the wages and living standards of the poor and low-paid further and further down with no backlash. And now we have the TTIP looming which will further gut social protections and hand more power to unelected multinational corporations, many of which are more rich and powerful than sovereign nation states (and why have so many Liberal Democrats been quiet on this monstrous trade deal?) Surely that cannot be right? These corporations and rich have no loyalty to any nation or their people. Their only loyalty is to profit and profit alone.
Those of us lower down the social ladder get it: you few globalists who benefit are happy for everyone else to become poorer, happy for the state to become even smaller, even if that results in increased poverty and hunger. It feels as if we are sleepwalking into a New Feudalism, with we serfs working harder and longer for less with the Lords (multinational corporations and finance capital) lording it over us all. The rich and these corporations get ever increasing subsidies and tax breaks while millions of normal people get benefit cuts and austerity. But our MPs and their hangers-on in the Westminster bubble won’t do anything about this at all because they benefit greatly. They don’t even fear being voted out of office because they already have their well-paid directorships and consultancies already lined up. There will inevitably be a backlash and it won’t be pretty. Maybe that’s why Western governments have slowly been militarising police forces as of late?
Basically this is a long-winded way of agreeing with @Matthew Huntbach, @JohnTilley and @Caracatus.
@ JT – they seem to be looking at that pretty thoroughly:
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/33228/20111005MODLandDisposalStrategy.pdf
https://www.gov.uk/government/publications/disposal-database-house-of-commons-report
http://data.gov.uk/dataset/defence-infrastructure-organisation-disposals-database-house-of-commons-report
And in the meantime; Defence spending as a proportion of GDP has declined from 3.6% of GDP in 1990 and as is just over 2.0% today.
I’ve said this before, but as no one ever seems to engage with me on the subject, I’ll say it again. There is a serious disconnect in Liberal thinking about globalisation: we are in favour of free trade, free trade areas, and (within limits) free movement of labour. We are against the concentration of power, particularly power that is wielded by the democratically unaccountable. Globalisation has allowed multinational companies to move their operations around the world in order to seek out the places with the lowest labour and tax rates with no regard to the well-being of the workforce which is being thrown on the scrapheap, and no sense of social responsibility (other than a bit of cosmetic window-dressing in some cases) towards the communities which are their markets. As Stephen Campbell suggests, Liberal Democrats have ignored the way that globalisation has leached agency (it was hardly power at any point) away from the individual and the community, and this is one of the principal reasons for the alienation of so many voters from the political process. UKIP have an incoherent grasp of the fundamentals, but blaming the EU is a simple-minded solution, but we don’t even seem to recognise the problem. A few weeks ago the Wentworth golf course was sold to a Chinese consortium: personally that is not something that bothers me. But that it was welcomed by George Osborne as being “part of our long term economic strategy” frightens the hell out of me.
jedibeeftrix 9th Oct ’14 – 5:37pm
I followed the links you provided and they underline and iustrate exactly what I said in my earlier comment.
Huge capital resources (1% of all the land in the entire countr, over 184,000 hectares in England) and you are pleading poverty for them.
tony hill…
and Stephen Campbell
A way on engaging with youTony, courtesy of Billy Bragg —
I grew up in a company town
And I worked real hard ‘’til that company closed down
They gave my job to another man
On half my wages in some foreign land
And when I asked how could this be
Any good for our economy?
I was told nobody cares
So long as they make money when they sell their shares
Can you hear us? Are you listening?
No power without accountability!
I lost my job, my car and my house
When ten thousand miles away some guy clicked on a mouse
He didn’t know me, we never spoke,
He didn’t ask my opinion or canvass for my vote
I guess its true, nobody cares
‘Til those petrol bombs come spinning through the air
Gotta find a way to hold them to account
Before they find a away to snuff our voices out
Can you hear us? Are you listening?
No power without accountability!
The ballot box is no guarantee that we achieve democracy
Our leaders claim their victory when only half the people have spoken
We have no job security in this global economy,
Our borders closed to refugees but our markets forced open
The World Bank says to Mexico,
We’ll cut you off if you don’t keep your taxes low
But they have no right to wield that sword
‘Cos they take their orders from the chairman of the board
IMF, WTO,
I hear these words just every place I go
Who are these people? Who elected them?
And how do I replace them with some of my friends?
Can you hear us? Are you listening?
No power without accountability!
More lyrics http://www.allthelyrics.com/lyrics/billy_bragg/npwa-lyrics-1271508.html#ixzz3Fg2wlSq8
Thanks John! Continuing on the musical theme, as Joni Mitchell said, “you don’t know what you’ve got ’til it’s gone”, but it’s worse than that: at least we elderly people know what it is that we are losing – privacy, anonymity, the belief that we could change things for the better, non-engagement with brand awareness and the other trappings of consumerism, the sense that one can live a life based on one’s own autonomous values, confidence that if we saw something that we thought needed doing then people would join with us to do it. None of that applies any more, it’s what I think of as the ‘cuckoo syndrome’: for people of our age the sound of the cuckoo in the distance is synonymous with the coming of summer, and something deeply satisfying stirs within us when we heard the first cuckoo of the spring. For my daughter’s generation it means nothing, because there are no cuckoos any more. We are reaching this critical point where the freedoms that our generation fought for will no longer even be understood as something which has been lost. Liberalism as I understand it is an antithesis of global monopoly capitalism – but the Liberal Democrats seem now to be of a generation which has never heard a cuckoo.
tonyhill 9th Oct ’14 – 9:50pm
Yes indeed. There was a short piece on Ch4 yesterday about the buying up of public space in London. They were not allowed to film on the open space outside County Hall because it is now owned by a Gulf State.!!! I am not making this up. What most people thought was public space outside the building which houses the London Assembly and the London Mayor has “security” people who stop a TV News crew from filming. So much for democracy, so much for public space. A new serfdom indeed.
Another example of this new globalised serfdom — The Shard (London’s tallest buiding and a modern icon) is owned by the Qataris — the Wahhabi nutters who fund the guys with the black flags who are beheading their way through Syria and Iraq. This is nor not an element of globalisation that Nick Thornsby or Jeremy Browne like to talk about.
When I was in hospital earlier this year a young man from the hospital radio asked me to pick a record. I had just heard Syria mentioned on the news so I asked for Joan Baez singing “God on our side “.
He had not heard of it but all credit to him he downloaded it and played it on hospital radio.
The hopeful and encouraging part of this story is that he came back the next day to thank me — he was bowled over by this song, still very relevant fifty years after she first recorded it.
If anyone else is reading this and like the hospital radio guy has not heard it, just google Bob Dylan – ‘God on our side’.
Here is a verse (unlikely to be featured on the globalised, corporate sponsored X-Factor)–
But now we got weapons
Of the chemical dust
If fire them we’re forced to
Then fire them we must
One push of the button
And a shot the world wide
And you never ask questions
When God’s on your side.
tonyhill 9th Oct ’14 – 9:50pm
Response to your latest comment held up by software censor. Hopefully it will appear soon.
A common mistake, I suppose – but the size of the state is not essentially related to how much land/how many buildings the state owns (unless, of course, you are talking about geography). A ‘big’ state with no government land holdings could be borrowing and spending a lot more than a ‘small’ state next door where the government holds lots of land and has many palaces.
The view, stated at rather greater length, that the impact globalisation has had in developed economies has not been entirely positive also has some truth in it. I have seen in my hometown of Rochdale, for example, how the movement of industry to other parts of the world thanks to cheaper labour costs can have a decades-long negative effect on local economies.
Stephen Campbell & Tony Hill beat me to it but the complete logical disconnect in this paragraph just can’t be allowed to pass. Can Nick Thornsby and/or others who subscribe to this view please explain, (a) what are the offsetting benefits enjoyed by the people of Rochdale and similar towns and (b) who are the principle beneficiaries?
In considering your answer please remember: (a) People often confuse scientific and technical progress with globalisation which is an entirely separate process happening at the same time. (b) The benefits have been overwhelmingly captured by a tiny elite, the 1% of bankers and others. (c) Although lower wages are commonly blamed (as in this post) for the perma-depression of places like Rochdale wages are now in fact a very small component of total costs in most manufacturing. Also this excuse doesn’t explain how some high wages countries manage to thrive.
In his speech Tim Farron claimed that, “The free movement of people, of capital, of ideas, have all made our society better.” Ideas have always been internationally mobile and really aren’t included in what people mean by ‘globalisation’ but I doubt he has any evidence the other factors. Academic work suggests that free movement of capital destabilises the economy and leads to crashes – just as we have seen. And who would now argue that multiculturalism is a rip-roaring success? Not, I suspect, the people of Rochdale.
I understand “active government” in this case to mean government that attacks problems and aims to achieve things, rather than necessarily a bigger state. There is nothing illiberal about state agencies commissioning services from the voluntary sector, for example, or promoting alternatives to imprisonment, and they may achieve things thanks to government action. without a bigger state.
There is also the point that “the state” includes Bugsthorpe Town Council which, if effective, will represent and empower a local community, sometimes by direct action: I remember meeting a group of parish councillors digging out a clogged drainage ditch.
What I particularly admire about Tim’s words is his tackling head on the idea that there is something inherently illiberal about the state. After all, Liberals fought to extend the right to vote and remove discriminatory disabilities to being a representative or servant of the state, and they didn’t do that to make the state powerless. The state is based on one person, one vote, and the market and commerce on one pound, one vote.
Small state or large state? This really goes to the heart of quite a lot of what we believe yet I fear much of the debate misses the point in that it is couched in terms of more of less budget for X where ‘X’ is a department like MoD or a named project like HS2.
In other words it’s an essentially top-down approach conducted by armchair
generalspoliticians in Westminster with outcomes determined as more by manoeuvres within the bubble than the need on the ground. Hence also the fondness for appointing ‘Czars’ at the drop of a hat.This doesn’t work. Indeed, it’s not capable of working hence former Home Secretary John Reid’s 2006 condemnation of the Home Office as ‘Not fit for purpose’ which now applies to most of government. A ‘fit for purpose’ government would do far more – especially of the socially useful things like house building, providing good health care and decent infrastructure – but would do it for a lot less money. So it would be both big and small at the same time but in different senses.
GF — who would now argue that multiculturalism is a rip-roaring success?-
Well I would. But I am not from Rochdale. Is there any practical alternative to multiculturalism? Would you prefer Apartheid? Or maybe the situation in Northern Ireland before 1969 ??
The Young Liberals used to issue a badge which said KEEP BRITAIN COLOURFUL. I have still got mine — perhaps I should start wearing it again
@ JT – “Well I would. But I am not from Rochdale. Is there any practical alternative to multiculturalism?”
Assimilation, rather than (the normative definition of) multiculturalism, perhaps?
John Tilley – I’m not arguing for any particular approach. We hoped that large scale immigration would lead to a multicultural society that would be a better one in all sorts of ways. In some ways it is, but overall it hasn’t worked out to be as straightforward or to bring the unalloyed benefits some assumed. You may cling to a rose-tinted view of the benefits but I rather think most of Rochdale doesn’t agree. I would say the by-elections yesterday make that Q.E.D. Heywood & Middleton is right next door to Rochdale.
For what it’s worth I don’t think the views of idealists would ever have had much weight in promoting immigration. For more important was the neoliberal’s desire to create a reserve army of unemployed to depress wages and destroy union power and also perhaps to cover up the disaster in training and education that they have no answer for.