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

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.

Conservatives have long tended towards a “low tax, small state” view, but now the acolytes of the Institute of Economic Affairs have gained control of the ship of state, we may find out what a “very low tax, minimalist state” looks like.

It is all well and good to suggest that letting people keep more of their hard-earned cash is a good thing, and that people will tend to make better decisions about how it is spent than the state. And that might well be true of the relatively wealthy amongst us. But privatising key services means that the poor and the vulnerable are less likely to have access, and that inequality will increase.

As liberals, we tend to want people to have opportunities, and know in our hearts that poverty tends to strip people of them, which is why we tend to be redistributionist to a varying degree. It was the reason why we proposed increasing personal tax allowances to remove the poorer amongst us from the income tax system – why tax people whose earnings are below the poverty line with one hand, and give it back to them with the other? The pupil premium was another redistributionist measure, offering support to those from poorer homes to improve their chances in later life.

In fairness to Mark Littlewood and his friends, they’ve been quite honest about what a smaller state looks like to them. I have a nasty feeling that Liz and Kwasi didn’t read past the executive summary though. Actually, let me rethink that. I have a nasty feeling that Liz and Kwasi read it and don’t care.

Now, you may argue that, if they can achieve GDP growth at 2.5% per annum, the supposedly short term pain will be worth it. But, achieving it in such a way that most of the benefits go to a small minority whilst inequality grows is unlikely to be popular for long, if ever. And, if the price is that voters spend more of their money on what they believe to be essential services than they did in taxes, they may conclude that a “higher tax, larger state” is what they really wanted all along.

If the American model is any guide, with health spending more than twice that of the United Kingdom with worse outcomes and a sizeable chunk of the population effectively without healthcare, where private opulence goes hand in hand with public squalor, many of our citizens will have little to look forward to. Those of us with a social conscience, who believe in helping the poor, as Mark L. so calmly labelled his opponents, will face the challenge of rebuilding a state that protects the poor and the vulnerable. And that challenge will be all the steeper if the economy reacts in the way so many experts fear it will.

It may only be two years until the next General Election, but you can do a lot of damage in two years…

* Mark Valladares is the Monday Editor of Liberal Democrat Voice.

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  • Steve Trevethan 26th Sep '22 - 8:52am

    What is L. D economic policy?
    Might we have a clear socio-economic policy?

  • When normally staid economists use words like ‘Goodness’, ‘Blimey’ and ‘Jeez’ in their comments you know it’s bad..

  • Joseph Bourke 26th Sep '22 - 1:43pm

    Liberal Democrat economic policy was set out by Ed Davey for the 2019 election Ed Davey’s speech

  • I’m old enough to remember Harold Wilson getting a huge amount of stick from the Tory press for a definite Government decision to devalue the £ by 14% back in November, 1967. The reason….. an inherited deficit from the previous Tory government.

    Since January this year, under the Tory Johnson/Truss administrations the pound has been effectively been devalued by nearly 33%. Shameful the Tory press seem so silent.

  • The sad thing is the austerity imposed on us by non thinking LD agreeing with Tory trap. How many committed suicide and are still traumatised. Everyone should have a home in a constitution

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