What Danny Alexander would say to his successor: “Jobs up, growth up, economy up, don’t screw it up”

We all remember the rather pathetic note that Labour’s last Chief Secretary to the Treasury left for his successor.

no money left

“I’m afraid there is no money left” he said. And he wasn’t a million miles from the truth.

Danny Alexander was asked yesterday at an event what he would put in a note to his successor. His reply was a little more, shall we say, motivating and inspiring, as the Vote Clegg, Get Clegg Facebook page reports:

At a meeting yesterday with Danny Alexander on the panel, he was asked what he would say in a note to his successor. Brilliant reply: “Jobs up, Growth up, Economy up, don’t screw it up”!

Posted by Vote Clegg, Get Clegg on Tuesday, 24 March 2015

The party should be talking up the fact that the last time the Tories were left in charge of the economy during a recession we had mass unemployment and hardship on a huge scale over many years. Every Friday night News at Ten had a job survey showing all the jobs that had been lost that week. It was a horrible time that left its mark on many of our party’s key figures as they were growing up – Willie Rennie and Tim Farron have both cited Thatcher as their inspiration to join the Liberals. The Liberal Democrats in government, in contrast, despite coming to power in a much more perilous economic time, have ensured that we haven’t seen the misery of 3 million unemployed. That’s why the Tories should not be trusted in power on their own.

 

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35 Comments

  • That note was a joke not intended for public consumption.

  • If Danny’s little joke had a least ended — “Don’t screw it up by letting The Tories back in.” — it might have helped a bit.

    The underlying message here is Coalition Continuity, which 90% of voters do NOT want.

    A Liberal Democrat Treasury summary of the coaltion years is what the voters need. Not “more of the same”.

  • Caron Lindsay Caron Lindsay 25th Mar '15 - 11:17am

    Membership recovering – and ask yourself what would have happened if we hadn’t gone into government 5 years ago. What would have happened at the inevitable second election?

  • Stephen Hesketh 25th Mar '15 - 12:29pm

    Caron Lindsay25th Mar ’15 – 11:17am
    “Membership recovering ”

    Yes, I keep reminding people that £12 will secure them the right to vote for Nick Clegg’s successor in the forthcoming leadership election.

    That could easily be the point when the real damage to the long-term existence to our party is discovered.

    I might suggest that any newly joined equi-distant Centrists would tend not to have the philosophical commitment to walk the streets in the cold and wet.

    In seeking to “Reclaim Liberalism” (i.e. to reposition us – especially economically – and away from the democratically agreed preamble position), the editors and key authors of the Orange Book have, I believe, done the movement a huge disservice and bequeathed us a dramatically more polarised and significantly weakened party.

  • Caron – there wouldn’t have been an inevitable 2nd election. But let’s reassess the options the Lib Dems faced. Even if coaliton was the right thing to do in 2010, Clegg struck a very bad deal. Not running a single major department, not taking one himself and only having 5 cabint members out of nearly 30. The biggest concessions from the Tories was a referendum on AV, a voting system Nick Clegg himself didn’t think much of and not only did the Lib Dems accept the Tories’ draconian fiscal plans (at a time when yes public borrowing was very high but the total debt, the interest we were paying on it and the cost of borrowing were all low by any historic standard) they made it the central plank of the coalition’s economic agenda. A complete surrender to Thatcherite thinking of ‘It’s government’s job merely to balance the books and then let the free market create the wealth’. After the biggest financial disaster in over 100 years it was a total trivialisation of our economic problems though no doubt a fair few bankers were delighted to see attention switched to the reckless overspending of the government.

    Even having struck a bad deal on the coalition Clegg had every right to pull out after two years when it was clear from schools to the NHS to the economy that the Tory modernisation agenda was a sham and we were dealing with the children of Thatcher as evidenced by the outrageous response to her death. In fact as soon as Lansley et al starting acting so radically Clegg should have laid down the law to Dave and George that the coalition was going to be centrist mush or he’d be pulling out in 2012.

    So where are we in 2015? Well there’s lots of talk about recovery but I don’t see any of the long term problems in the UK economy being fixed. I’m so angry because 2008 should have been a wake up call to think more substantially about how the economy works and what’s wrong with it. The Lib Dems appear delighted that the speedometer says we’re going pretty fast right now (as we were before 2008) but why? Well given a huge trade deficit in order to fund our current lifestyles we’re selling the country off to any Tom Dick or Harry. The government has borrowed £200bn more than planned, there’s been the reckless Help to buy and we’ve got the continual supply of cheap money from the Bank of England. Meanwhile we have to go to EDF (effectively the French government) to build a new generation of nuclear power stations at a cost of billions because British business remains incapable of that kind of long term project. And yet we mock the French for their backward economy! Levels of saving and investment are frighteningly low yet the government has the nerve to talk about a long term economic plan – perhaps if we didn’t rank 34th out of 34 countries in the OECD for investment!

  • Stephen Hesketh 25th Mar '15 - 1:21pm

    Frank Booth25th Mar ’15 – 12:41pm

    Very well said Frank. Very well said.

  • malcolm, here Byrne explains why he did it
    http://www.bbc.co.uk/news/uk-politics-24173270

    It was part of a tradition, then cynically, although predictably, hence Byrne’s regret, used by David Laws for political advantage.

  • It was pretty despicable of Laws to shout about the jokey note, something that was commonly done when clearing government desks. It was things like that which made me start seeing the party differently and made me lose sympathy for Clegg & his leadership.

    Judging by the polls, I was not alone.

  • Caron, I thought that at the time but hindsight says we should have taken that hit in 2010, it would not have been half as bad as what is coming. I hope you have prepared yourself for Friday morning the 8th of May,

  • Andrew Watson 25th Mar '15 - 5:03pm

    Given slightly later events concerning David Laws was it not foolish of him to have thrown that particular stone at Byrne.? I believe Reggie Maudling left a similarly jocular note to Jim Callaghan in 1964 along the lines of, “Good luck old cock, sorry to leave such a mess.”

  • Frank Booth 25th Mar ’15 – 12:41pm

    Spot on.

  • Alex Sabine 25th Mar '15 - 7:44pm

    I guess Liam Byrne’s parting note was too close to the bone to be found amusing. Apparently David Laws was less tickled by its candour than appalled by its flippancy. Evidently he felt that justified breaking the tradition of omerta in the private correspondence between holders of his office. Certainly coalition ministers have milked it for all it was worth.

    In his enjoyable memoirs As It Seemed To Me, the former BBC political editor John Cole tells a story that conveys how such light-hearted exchanges between political opponents were handled in a bygone era. In 1964, the outgoing Tory Chancellor Reginald Maudling popped his head through the door after his Labour successor Jim Callaghan had started work at the Treasury and said, “Sorry about the mess, old chap”. Ostensibly he was referring to the state of the office, but his apology was suitably ambiguous to encompass the large balance of payments deficit that he had stoked up through a consumption boom…

    Danny Alexander’s proposed note wasn’t a bad effort for an off-the-cuff reply. But he might want to be a tad less self-congratulatory given that, even after his yeoman work as Chief Secretary, the budget deficit is still an unsustainable 5% of GDP. Laws’s valedictory note after his truncated stint in the role still applies: “Carry on cutting, but with care”.

  • Alex Sabine 25th Mar '15 - 8:52pm

    The author of this piece mentions the mass unemployment that was such a distressing feature of the recessions of the early 1980s and early 1990s. The main reason for that was the cause and character of those recessions (runaway inflation not financial crisis) and the nature of the labour market back then compared to today (real wages did not fall to protect jobs, so a fall in national income translated directly into higher unemployment).

    In each case the recession was triggered by the need to tame double-digit inflation (itself the consequence of government policy mistakes, by Labour at the end of the 1970s and self-inflicted by the Tories with the Lawson boom in the late 1980s). When interest rates were hiked to tackle the inflation, real wages continued to rise unchecked, so the result was large-scale unemployment. The wages of those in work did not suffer the sort of compression they have in recent years, but more than 10% of the workforce was laid off instead.

    The government could have mitigated this by tolerating higher inflation, but the respite would have been strictly temporary and the eventual cost of taming the inflation higher, not lower. (I’m over-simplifying here, because in the early 1980s the fiscal/monetary policy mix could have been better calibrated and in the early 1990s the ERM prolonged the recession, but the general point stands: if there is no real wage and/or hours adjustment, lower national income will inevitably result in higher unemployment.)

    I’m certainly not arguing that the policies followed in the early 1980s or early 1990s were the optimal response to the inflation-triggered recessions. But the errors were largely in the detailed execution, not in the strategy of taming inflation as a precondition for sustainable growth. More could also have been done at an earlier stage (by way of retraining etc) to prevent short-term unemployment becoming a long-term blight. Above all, it would have been much better not to have allowed inflation to take root in the first place, thus making corrective action necessary – and both Tory and Labour governments were culpable on that score.

    But in noting the striking contrast between the the flexibility of firms and wage negotiators in this recession and their rigidity in previous recessions – which is the key reason why unemployment has been so much lower this time around – most economists think at least part of the credit is due to the trade union and other labour market reforms the Tory governments undertook in the 1980s and 1990s.

    If the UK labour market still functioned as it did in the 1970s, it is inconceivable that we would have emerged from the largest recession since the 1930s with unemployment barely any higher than when we went in to it (indeed lower on the claimant count measure) and the employment rate at an all-time high. Even the Tory-bashing Lord Oakeshott accepts this point, acknowledging after Margaret Thatcher’s death that “unemployment would be millions higher in this recession” without her reforms.

    So while the macroeconomic management of that era can justly be criticised, it is only fair to recognise that some of the controversial nettles that were grasped in terms of structural reform have had a much more beneficial and enduring legacy.

  • Peter Watson 25th Mar '15 - 9:07pm

    @Stephen Hesketh “I keep reminding people that £12 will secure them the right to vote for Nick Clegg’s successor in the forthcoming leadership election.”
    What are the rules about new members voting in a leadership election: is there a minimum length of membership before one is allowed to vote? I do not want to rejoin the party before the election but might afterwards if a change in direction looks likely.

  • TechnicalEphemera 25th Mar '15 - 10:13pm

    For heavens sake, if you are going to bring this up at least tell the truth.

    The note said “There is no money”

    The word left was added by David Laws because he wanted to suggest Labour had spent it all, which as many respected economists will tell you is a complete untruth.

  • What type of jobs? Is a job simply a job and that’s all that matters – scratch one of the unemployment return, jobs a good’un??

  • Alex Sabine – I’m sure labour flexibility plays its part. However there may be a darker side too this. An interesting piece in the Telegraph (of all places) looked at the productivity problem and concluded that labour flexibility may be something of a double edged sword. The endless supply of cheap labour makes it easy for employers to keep costs down, whereas in France businesses know they have much more resrictive abour laws so they’re forced to invest in people, machinery, improving efficiency – hence their much higher productivity. I’m not saying France is perfect by any means, but the one-sided critique of it compared to the UK indulged by various newspapers and I fear even some in the Lib Dem high command needs to be challenged.

  • Philip Thomas 25th Mar '15 - 10:46pm

    @Stephen Hesketh
    I’m happy to canvass in the cold and the wet. I don’t know why you would think that only those on the left of the party have stamina for canvassing in foul weather, but this “equidistant Centrist” isn’t going to let a little weather stop him.

    Of course, it would help if he had a clue what you think “equidistant Centrist” means…

  • Frank: Sure, I’m not saying the UK economy is a bed of roses. There are plenty of problems. But the article highlighted unemployment. It is indisputable that our relatively flexible labour market has been better at limiting unemployment during the recession, and creating jobs during the recovery, than most others and in particular the French economy and the French labour market.

    Indeed, when the coalition boast about more net new jobs being created in Yorkshire than in the whole of France, what they neglect to mention is that France didn’t create any net new jobs at all last year… Yet a few years ago many left-wingers liked to believe that Francois Hollande would be schooling the coalition and other EU members on how to reduce unemployment.

    You are right that labour productivity in France is higher than in the UK: in a statistical sense this is simply the flip side of higher unemployment. If a given amount of output is produced by fewer workers, the level of output per worker will be higher. It is not clear that it is preferable from a social point of view to consign a large proportion of the workforce to involuntary unemployment and reliance on social security benefits.

    Labour productivity is also a function of the amount of productive capital investment undertaken in previous years, and here France (and especially Germany) has tended to have a better record than the more consumption-driven UK economy, although it is important to remember that the quality of investment matters as well as the quantity (some Asian economies have suffered from too much investment of the wrong kind, and investment booms can be as damaging as consumer booms if the investments turn sour).

    In the next parliament and beyond, the challenge for UK policymakers and companies will be to raise productivity growth so that the economy can begin to support decent sustained real wage increases. This cannot be done at the stroke of a legislator’s pen, by simply legislating for higher wages as Labour now seem to believe.

    It requires supply-side reforms to unclog logjams in the planning system, house-building and infrastructure, and to reform the tax system in an enterprise-friendly way; it means refraining from adopting restrictive immigration policies; and, crucially, it involves companies using their strong cash positions to boost investment, which is now underway with business investment growing well ahead of overall GDP for the past two years and throughout the OBR’s forecast horizon.

  • I’m no fan of Liam Byrne but releasing the letter was a cheap shot indeed.

  • @TechnicalEphemera –

    If only there was an image of the note showing the correct wording. Oh wait, there is, in the bloody article.

  • David Evans 26th Mar '15 - 1:21am

    Caron, membership up 2,000 in 2 years. That’s 24 years to recover to the levels prior to the Nick Clegg disaster. Ask yourself, what would have happened if Nick Clegg had listened to other wiser counsel and chosen to behave like a real Liberal Democrat over the last five years. The one opportunity in a generation to show the public what Lib Dems can do in government and he behaves just like the others, ignoring the party and surrounding himself with sycophants.

  • David Evans 26th Mar ’15 – 1:21am
    “Caron, membership up 2,000 in 2 years ..,”

    I read this fact in the same week that it was announced on The Marr programme that membership has topped 100,000 in the SNP.

    I wonder how many members there are for the SNP and for the Lib Dems in Danny Alexander’s constituency.

  • @refitman

    Um, might want to actually look at the image in the article. TE was right, it doesn’t say “left”.

  • @ Iain

    I rather suspect @refitman was agreeing with @TE & pointing out the error made by ‘the voice’ in his second line of the article !

    Quoting something that wasn’t said & is different to the image where the actual note can be seen is rather poor form.

  • Philip Thomas 26th Mar '15 - 8:04pm

    @Alex productivity vs unemployment: in normal life, if I can perform the same task with 5 people as with 10 people, it is usually better to do it with 5 people, even if 5 people are just standing around doing nothing. Why? Because those 5 people are untapped potential.

  • Alex Sabine 27th Mar '15 - 1:18am

    @ Philip
    From a long-term supply-side point of view, I agree. Higher productivity is essential, and part of that requires allowing unproductive firms to go bust and new ones to open and thrive. Much of the productivity hit since the crisis reflects a failure to reallocate capital from declining activities to what you refer to as “untapped potential” – the process sometimes characterised (often pejoratively) as “creative destruction”. As Jeremy Browne said in his final House of Commons speech, we do not improve our economic prospects by subsidising candlestick makers and frustrating light bulb inventors.

    But from both a human point of view and the long-term health of the labour market, it is surely better to weather a massive recession without discarding 10%-15% of the workforce, with the resulting loss of skills, employability and habits of work (what economists call ‘hysteresis’, an unhappy name for an unhappy phenomenon). The flexibility of real wages and working hours is also an eloquent testimony to the improvement in industrial relations since the destructive “us versus them” mentality that prevailed in the 1960s and 1970s.

    It is important to recognise that high employment creation and high productivity are two quite different challenges of economic performance. The task now is to maintain the flexibility and job-creating potential of the labour market while creating the right conditions for increased skills, capital investment and ultimately labour productivity. That is the only sustainable route to higher wages and living standards. There is no shortcut via legislating for higher wages.

  • Alex Sabine 27th Mar '15 - 1:30am

    @ Malcolm
    “Let’s remember Maudling did indeed leave a mess – at least he was honest.”

    I agree. Though by the standards of future Chancellors (Barber in 1974, Healey in 1979, Lawson in 1989, Darling in 2010), the mess Maudling left was small beer. The main problem was the large balance of payments deficit which, under the Bretton Woods system of fixed exchange rates, predictably triggered a sterling crisis.

    The incoming Wilson government made the fundamental strategic error of ruling out devaluation, floating the pound and deflation while they could still pin the blame on the inheritance from Maudling. The rest, as they say, is history… “The pound in your pocket has not been devalued” rang pretty hollow in 1967 after the Wilson government had spent three years insisting devaluation would represent national humiliation.

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