We need to be careful with our responses to the government’s economic policy. We had been calling for a freeze of the energy price cap, and wanted it to be at the April level of £1,971. The government has frozen it at £2,500 a year, saying this will cost £31 bn, up to April 2023. They also responded to widespread demand to provide similar support for businesses at the cost of £29 bn for the six months they are providing it.
So we are broadly in favour of these policies, as with the government’s reversal of the National Insurance increase, which costs £16.96 bn over a full year.
Our own policy is to cut VAT by 2.5% for a year, which will cost £18.75 bn more. We have said that this cut would increase economic growth, perhaps in the region of 0.4%.
We have to consider priorities now, and we believe our first aim must be to protect the poor and campaign against a further rise in poverty. We wish to spend about £7.5 bn in a full year restoring the £20 a week uplift to Universal Credit and extending it to all legacy benefits. Unlike the Labour Party we do not support the proposed one pence cut in the basic rate of income tax, since we are still talking about the need actually to increase the rate by a further penny to pay for social care.
In paying for its proposed new taxes, expected to cost about £43 bn more, the new government is contemplating savings in welfare benefits and in local government essential services, all of which we need to resolutely oppose. We should point out that if tax cuts are paid for with public expenditure cuts there can be no increase in economic growth. Our own proposals to spend around £40 bn on capital spending on green growth and growing our regions outside London and the south-east are far more likely to promote economic growth.
The Tory financial mismanagement which is leading to thousands of home-owners now facing the prospect of having to pay hundreds of pounds more in interest payments on their mortgages means that there will be much discontent among the population at large, already struggling with the cost of living increases including the energy costs which were already greater than a year ago. But protecting the poorest may not seem a priority, if people also dwell on the massively increased borrowing costs the government is now incurring to pay for their tax cuts, although defending education, health care and social care spending remains popular, and wage claims because of high inflation often seem not unacceptable.
Nonetheless, we need to defend extra government borrowing as not excessive in a time of successive crises, with no necessity to start repaying the national debt rapidly when the economy does indeed start to grow. But our principle of Fairness is very different from the Tory government’s. Just as we require different sharing of scarce national resources, we also press for greater contributions to them from the wealthy. That includes the oil and gas producers and the utility companies asked to share their huge new profits, along with the individual holders of great wealth. Land value taxation and taxing wealth as well as income are already in our policy intentions.
In these aims we cannot be far different from Keir Starmer’s Labour Party, whose Conference met under the banner, ‘A fairer, greener future’, acceptable sentiments for us. Liberal Democrats also have strong environment policies, and our concept of a Fairer Society includes moves to strengthen workers’ rights and security. So we suggest that an immediate answer to the question of what we must do next is to set up or strengthen liaison with their party at all levels, from national to local, so as to demand together much better outcomes for our citizens. Where we can we should attempt parallel campaigns against this government, and to achieve an improved level of economic growth and fairer outcomes for all.
* Michael Berwick-Gooding is a Liberal Democrat member in Basingstoke and has held various party positions at local, regional and English Party level. Katharine Pindar is a long-standing member of the Cumberland Lib Dems.
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77 Comments
I think the price cap is a really bad idea. It would be better to remove the cap on price, allowing price signals to reduce demand. Obviously that would need mitigation; I think that
1. the standing charge should be abolished.
2. Prepayment meters pay the same rate as direct debit customers
3. The first 2,000 kWh of electricity be charged at 10p a unit for each customer
4. the first 5,000 kWh of gas ditto 5p.
5. Suppliers have to accept any customer – or establish a nationalised supplier to take on any that they won’t accept.
6. Compensatory payments via Universal credit and other means – up to whatever the government decides it can afford to borrow.
The current policy effectively leaves the taxpayer on the hook for unlimited costs paid into the energy companies, while this approach would ensure a limited suppluy of affordable energy for all combined with strong price signals to reduce higher usage.
With Labour now entrenched on sensible ground with no hint of Trotsky hanging over it, the LibDems need to agree with the main popular headline issues and provide distinctiveness in details and in non economic areas.
This strong degree of overlap will encourage tactical voting which can now be a lot stronger , given the memories of the coalition are at last fading.
Public ownership on energy, rail and water are very much supported by the public who want change from the present various disasters and regulation and taxing has not proved to be nearly enough.
Further differentiation with labour can happen later on, but for now the public have had enough of what the Tories are offering and want deep change. Equidistance between the two main parties will not work, since ex.Tories and Labour voters both want much the same now..
In particular, the extreme free market doctrines are being shown up for the sham they always were. They never were popular, but got accepted when they were mixd with social policies of the right kind. Any LibDem policies that offer the Orange Book solutions will be akin to a deceased parrots.
I agree with a lot of what’s said here, both in the main article and the comments. But I think one thing to remember is that we are essentially spectators here. The really hard questions are which the quickest way is to becoming more than that, and whether the choices made on that journey effectively preclude enduring influence once in government – as happened last time.
I agree with those saying we need to be distinctive. We should make a point of being more radical and liberal (not more left wing) than Labour (who would win seats from us on current polls).
Currently Sadiq Khan is doing the job of the Lib Dems calling for single market membership to boost growth and a commission to review drug laws. Meanwhile we just keep talking about mortgages. I am frustrated with our leadership.
Whatever we decide on, we need it to be noticed, and no one other than some Lib Dems and a few others who look hard are noticing anything in the media about what we are saying, because we are hardly getting mentioned at all.
Likewise, none of the great ideas here will get any publicity at all –
1) Firstly, because we have no mechanism to adopt any of them nationally until the next party conference, currently set for next Spring, and
2) Secondly. we need to decide as a party that we want to be noticed, and over the last few years it has become clear that our policy pronouncements have such deadly dull wording that hardly anyone in the mainstream media regards them as newsworthy at all.
All this requires a special party conference being called, but the powers that be are dead set against it, and by next Spring, the moment will have well and truly passed, and once again the opportunity, once again, will have been lost.
We all need to call for one, unless of course we are happy with our current polling ratings and think it is all just too much trouble to try to get a message across to the public that we are relevant to their needs.
Jenny Barnes,
You have not justified your reduced rates and the quantities that apply for your reduced rates.
The average annual usage of electricity is 2,900kWh and for gas it is 12,000kWh. Why are you not advocating the same percentage of average usage for gas (8275kWh) as for electricity? The capped price is 34.037 pence for electricity and 10.33 pence for gas. (The April prices were 28 and 7 pence). Looking at the Ofgem website it seems that without the cap being frozen the rates would have increased to 20 pence for gas and 92 for electricity. The annual standing charge for both is now £273.17.
The problem with setting a reduced price for a proportion of average usage is that people can’t easily reduce the size of their home so they can use less energy, and the poorest in society can’t afford to insulate their home, buy double glazing if they don’t have it, or buy a new boiler which is more energy efficient. Those who rent even if not poor have few things they can do to reduce their energy usage.
Ed Davey and our Parliamentary Party came out first calling for the energy price cap to be frozen, so it would seem hypocritical if we now said we were against it. The added advantage of the price freeze is that instead of the huge boost to inflation caused by electricity going up by 229% and gas by 182%, inflation will increase less with electricity only increasing by 21% and gas by 47%.
Michael Berwick-Gooding
John …
The Labour manifesto 17/19 GE …Had far more in common with what social democrat Scandinavian parties would be advocating…Hardly Trotskyist !
As for sensible ground – those at the bottom know what means – no fundamental change in their lives for the better , just a few more crumbs off the plate. ..
I’m not wedded to those exact numbers..the idea was half average usage. If those renting or with large houses choose to spend their compensatory payments on more expensive energy, fine. But they might choose insulation or other alternatives. Giving ablank taxpayer cheque to the energy companies seems unwise.
@Michael BG
Is your ‘average’ used in your posting mean or median please?
I agree with Jenny Barnes that the price cap is a bad idea (originally a Lib Dem idea, stolen by Labour, implemented by the Conservatives), because it reduces price signals for consumers to reduce demand.
There is a mistaken and populist idea that energy is expensive now because the energy companies are being greedy. Energy is expensive because there is a shortage (brought on by Western countries deliberately reducing and replacing their energy production with unreliable sources, as well as Russia’s war: these issues are linked because Putin calculated his ability to invade on the West’s silence because of its self inflicted weak and dependent energy status….he miscalculated for now at least).
What happens when you price cap the consumer price of energy in an energy scare global economy, is you artificially increase demand and consumption of energy (I thought we were supposed to be reducing consumption) exacerbating scarcity and causing further shortages and price hikes in the global economy, meaning poorer countries face even higher payments if they can get energy at all (I thought we were supposed to care about the poor in other countries)
Marco and David Evans. I agree with you, Marco, that we should be more radical; and as John suggests, what about the public ownership of energy, rail and water? David, I don’t believe a special conference is an answer – the media take little interest in what is said at our conferences, and it would have to be an urgent, radical proposal to be debated, a cause of the conference being called, to attract interest. I think there is more we can do by pressing our leaders to assert our important proposals as well as our protests. And we should debate among ourselves – in local and regional party meetings – further radical ideas, and how far we will support Labour’s and how develop our own.
More radical ought to be more left of centre than Labour – for heaven’s sake given Keir Starmer is Leader !The general public is ready to take rail, the water companies and energy utilities back into public ownership – so should the Lib Dems !
The Orange Group of free market proponents should go where they belong – the Tory party…….
Please Lib Dem spokespersons stop being polite by calling Liz Truss’s lot the ‘Conservatives – they’re not ! They’re ‘Tories’ – Gaelic for robbers and English outlaws…….
@Richard Dentin – W – agreed. I fail to see how the Tories can fly under the name Conservarive.any more. Disruptive would. be a more appropriate name for them.
I have much sympathy with the comments made by Katharine and Richard D.W…… and certainly many Liberals in my young days would have agreed with them. At the time (when the party still had significant strength outside the comfortable Home Counties) there was even talk of replacing the Labour Party as the radical alternative.
Unfortunately those days appear now to be long gone. Given the nature and attitudes of those who lead (and still lead) the party and who have called the shots after over twenty years now, this is unlikely to change.
“Energy is expensive because there is a shortage ” correct
https://usave.co.uk/energy/how-much-energy-does-the-average-uk-household-consume/
gives the 2,900 kWh of electricity and 12,000 kWh of gas each year average.
The thing about energy is it’s inelastic against price for both demand and supply. Overall supply will only change slowly in response to high prices, so if you need it, you just keep bidding the price up.
Now, the point of protecting a certain amount of usage is to ensure access to at least some energy for not-rich prople. Otherwise, the rich will just bid the price up. If there is a shortage, someone has to end up using less. You cannot magic a shortage away with financial legerdemain.
Katharine – you are right in your diagnosis, the media take little interest in what is said at our conferences, but equally they take little interest in what our leader says in his speeches outside of conference. You are also right in your follow up point “it would have to be an urgent, radical proposal to be debated, a cause of the conference being called, to attract interest” and indeed there is urgent, radical but also very practical proposal out there, being worked on at the moment, but without a special conference, there will be no national forum to debate it! The dead hand of Federal Board has almost completely squashed any possibility of us being a radical party, at least until Spring 2022, by which time it will be all too late. It reminds me of the joke about IBM computers – “Yesterday’s technology. Tomorrow”, but for the powers that be it seems to be “Last year’s problems. Sometime, or maybe never!”
I also like your idea that we should debate among ourselves in local and regional party meetings further radical ideas, but I cannot remember a single radical idea that came from Regional Conference that made it to Federal Conference in any sort of form that made it sound anything other than Dull, boring and obvious.
We urgently need to pull our socks up.
I notice that when a Green candidate stands where they did not the previous time, then the Liberal Democrat vote often falls and vice versa so we are appealing to the same type of voter. Maybe it is time to consider forming an electoral pact. Before the catastrophe of the coalition the Liberal Democrats used to get about 20% of the vote except for the 1989 Euro elections when all but 6% went off to the Greens and then came back when we sorted ourselves out but recently we have been getting 10 – 13% and the Greens 6 or 7% which added together is about 20%. The Greens do have some distinctive policies which make them more appealing to some younger people.
Martin Gray said:
The Labour manifesto 17/19 GE …Had far more in common with what social democrat Scandinavian parties would be advocating.
The Trotsky remark was parody rather than serious, but Corbyn Labour’s , manifesto loaded on firms a nationalisation of 10% of profits on top of ( justified ) Corpn. Tax increases and taking a ludicrous 1/3 of the positions on boards for workers without executive position.
One wonders what the workers would have contributed that 1-2 worker members could not have done. It would have caused firms to leave the UK or set up boards within boards. I don’t see the equivalent in Scandinavia and those countries are not just consisting of left wingery. For example Swedish ambulances are in the private sector. though we could learn a lot from them if we looked.
“…The Orange Group of free market proponents should go where they belong – the Tory party…….Please Lib Dem spokespersons stop being polite by calling Liz Truss’s lot the ‘Conservatives – they’re not ! They’re ‘Tories’ – Gaelic for robbers and English outlaws…….”
Hopefully, members will come over to a more centre left social liberal predominate view, more like D66 in coalition in the Netherlands. If not marginalisation or joining that other proponent of extreme free market policies just about to likely lose power, which is demonstrating that for 99% of the population, outside of disaster capitalists, the policies don’t work.
E.g. Patrick Minford forecasted a 6-7% boost to UK GDP from leaving the EU. Conventional and Keynesian economists including trade specialists forecasted a 4% loss in GDP. The figiure of loss is around 5%.
@James Pugh – thank you for raising those points, I like the way you challenge the rather simplistic consensus on this topic.
@Richard Denton – to try and offer more working class solidarity than Labour and/or more middle class radicalism than the Greens is pointless. Both those parties can and will always be more credible than us on those themes. 30-40 years ago we were the only alternative to Lab/Con and could easily pose under many flags of convenience. The market is a lot more crowded now. There is a distinctive liberal position in politics, though it’s quite different on many issues from ‘Labour-lite’.
What should the Liberal Democrats do now?
I don’t know..Without any media attention there is almost no chance of ‘getting our message across’..
I said at the time that cancelling the conference was a mistake, far better to announce that, on the ‘the’ monday, conference would be closed as a mark of respect (even the ‘Mail’ would be hard pressed to label that disloyal). In fact, with media trying to fill gaps in their covering of HM’s death, we might have got more than the usual ‘couple of words’ mention..
Mind you, Labour have trouble in getting media coverage; even during their conference reporters kept finding voters who repeated, “I don’t know anthing about them”..
Finally, I’m pleased to say that, this conference season, too much coverage has done the Tories no favours..The old adage about “Be careful what you wish for” has resonance..
James Pugh. You say, ” What happens when you price cap the consumer price of energy in an energy scare global economy is, you artificially increase demand and consumption of energy (I thought we were supposed to be reducing consumption) exacerbating scarcity..”
James, we have to cap the price for the sake of, not only the poorest of our fellow citizens, but the vast majority of ordinary people who are finding the rising price of goods they are in constant need of badly affecting their home budgetting. One consequence of that is that the food banks are getting fewer donations at a time of rapidly increasing demand. I think charitable donations are likely also to be falling. And ordinary people are already thinking anxiously about their Christmas spending and how to give their families and friends the normal largesse. So no, don’t let the energy prices rip. And don’t let the Tories refuse the increase of welfare benefits in line with inflation again. In the spring they kept it to 3%, as with the basic pension increase, quietly making life harder for the people on benefits and many pensioners because inflation was rapidly rising to 7% and more. Please let us Liberal Democrats stand up and be counted in these protests.
David Evans, what is this ‘urgent, radical but very practical proposal’ for which you want a special conference? Do tell us.
David Raw. I think you are saying that radicalism has departed from our party, David. And there is a danger in its being so – because our leaders don’t want to frighten off the Conservative voters in the many seats (is it 80?) where we have run a good second and are more likely to defeat Tory MPs than Labour is. Luckily the Labour Party is so popular for now, thanks to this terrible Tory leadership, that us being seen as their allies is not so frightening to the middle-of-the-road voters. But we radical-minded Liberal Democrats do I believe have to beware of our own leaders, comfortable in their southern fastnesses, leaning too much away from left-of-centre social liberalism.
nvelope 2003. No, no, I don’t think we should have an electoral pact with any other party. And it has been said that certain elements of the Green party philosophy don’t accord with our own principles, but if someone else is more familiar with that saying, perhaps they can inform us about it.
@ Katharine You got it in one, Katharine.
A small party (no matter what its history used to be) is irrelevant if it has nothing fresh, challenging and original to say. To merely be a ‘safe’ depository option for temporarily disillusioned Tory voters is a long term one way cul-de-sac to nowhere. Whatever happened to Orpington. a ‘blue wall’ gain in 1962, but fourth place and 6% in 2015. To rely on a ‘Blue wall’ approach is merely a temporary castles in the sand strategy.
Katharine – it relates to Liz Truss’ refusal to raise a further windfall tax and instead leave Big Energy and speculators with huge windfall profits and take it back from ordinary voters over years and decades to come. This can easily include key aspects that Labour, the Nats and even the Greens would not include.
Other motions on their total mismanagement of the economy over the last few weeks would also be pertinent.
Bit of course this all depends on our faith that we can develop meaningful policies, and the powers that be having the willingness to admit that their taking our team off the pitch when we were faced with an open goal was a misjudgement of significant proportions.
@ Katharine @ James Pugh
James is quite right when he points out that simply holding down the price of gas effectively by Govt subsidy is problematic. There has to be some sort of rationing mechanism for a scarce product. Normally in our “free market economy” this is price. Many of us don’t have the houses, or the cars, or the holidays etc that we would like because we can’t afford them.
So if we are rejecting the price rationing mechanism, and quite rightly so IMO, we have to replace it with another alternative. I can’t think of anything other than direct rationing which would work. However, it wouldn’t do any harm for the Govt to appeal to the nation for everyone to do what they can to minimise energy consumption, but this doesn’t seem to be their style.
We understood that this was the way it had to work during wartime but we’ve forgotten all that now. Therefore, we do run the risk of running out of gas this winter especially if it is colder than usual.
https://www.theguardian.com/business/2022/oct/03/significant-risk-of-winter-gas-shortage-threatens-uk-power-supply-says-ofgem
” the media take little interest in what is said at our conferences”, you could say that, but the media do take some interest and the conference does give us a perk in the polling. A conference does also means that Ed Davey and one or two others get some television exposure, not as much as we would like, but more than we are getting.
Currently Starmer and Labour have most of the running. Even so SNP are getting some attention at their conference. An emergency conference, addressing the urgent issues of the moment would give us the opportunity to lay out our critique of the missteps of Truss and Kwarteng and present our analysis and prescriptions.
Objections to an emergency event assume that it would have to be elaborate, but this does not have to be the case; membership attendance could be largely online with motions entirely focussed on immediate issues.
Indeed Martin. I am astonished at the number of people who seem to think that March in York will be soon enough, and any alternative is a waste of money.
There is an old saying “Time and Tide waits for no man,” and it is absolutely clear that those Lib Dems who think that waiting 6 months and thereby giving Liz Truss the chance to cobble some sort of temporary patch on her crisis is just the way to show the voters that we are on the ball – Not.
The public have lost all residual faith in privatised industries and even a majority of Tory voters support nationalising rail, water and energy. Labour have supported rail in public ownership and to set up a competitive energy producer in the public sector, concentrating on Green energy. Labour’s support went through the roof after those announcements at conference.
It is time to realise that the era of neoliberalism and privatisation is over. Like it or not, globalisation is now rapidly in reverse, with long supply chains now looking unviable and North America re-shoring work from Asia rapidly. The LibDems need to look to their Social Democratic roots for inspiration and temper this with liberalism, but the main thrusts of the Orange Book are finished with and the Tories will sink by doubling down on extreme free market doctrines.
People have joked that she is the first Libdem prime minister. The party has to disassociate itself emphatically
Hear hear, Christopher. The question is, as people have said, is how to be heard, without waiting six months for the next conference.. How would it be if the party produced a survey and questionnaire for all members, to find out what a majority most want us to be saying and campaigning on? I suppose it would be cheaper than holding a special conference, and could give some direction to our leaders? It would also hopefully prove that we are a party predominantly centre-left, both socially and economically. The questionnaire could be based round leading ideas from some of the main motions of the postponed conference, for instance from F15 and F17. What do colleagues think?
Meantime I am going to go to my regional conference, North West, later this month, in search of discussion with fellow members on what we should be doing this winter.
Peter Martin /James Pugh. The basic point I think I want to make, James, is, that restricting the cost of gas and electricity artificially is not going to increase demand, just allowing millions of our fellow citizens to carry on heating their homes sufficiently for winter comfort. We can’t go along with the kind of thinking instanced by our dreadful-sounding new home secretary, who actually said there should be more ‘stick’ to force
persistent benefit claimants back to work, and so one imagines might like them to have cold homes as part of the ‘stick’.
@ David Raw. Ah, David, you touch a nerve mentioning Orpington! My long-term partner, who was briefly a Liberal while we were courting, never stopped reminding me in later years about its decline. I didn’t know the 2015 result, but hope for better results to come. How right you are about building castles in the sand! We did that again in December 2019, alas. But I am cheered by the small revival in my Cumberland new local authority.
“restricting the cost of gas and electricity artificially is not going to increase demand”
There’s a shortage of gas. There is not enough gas available to meet demand. So even if you don’t increase demand, there still isn’t enough. You could choose to ratiion it equitably, you could choose to ration it by blackouts, or you could ration it by price.
What you cannot do is ensure there is enough gas by financial trickery.
What will happen with the current plan is that poor households won’t be able to afford much gas/electricity as the price has risen a lot and many were struggling even at the previous prices. Rich people will burn as much as they like with the taxpayer subsidy, and the energy companies will coin it. When the shortage bites – there will be blackouts.
“People have joked that she is the first Libdem prime minister. The party has to disassociate itself emphatically”
Seconded wholeheartedly. She’s downright libertarian in my view.
‘Nonetheless, we need to defend extra government borrowing as not excessive ‘ – you do realise it’s the cost of extra government borrowing that has scared the markets, trashed the value of bonds/gilts, and forced the Bank of England to step in to try to prevent pension funds going bust?
And that has only slowed, not stopped, bonds/gilts continuing to go down in price because the government hasn’t shown how it will pay for the extra borrowing?
Energy prices are an emergency, getting inflation down so interest rates can fall ditto. Growth won’t happen till markets are calm and businesses have confidence to invest.
@ Cassie,
“it’s the cost of extra government borrowing that has scared the markets”
It has been a lot higher even in the relatively recent past. The markets didn’t feel the need to hide behind the sofa then. The government can borrow from the Bank of England interest free – if it wants to. It did a bit of that last week to push interest rates down after it had allowed them to rise too quickly.
It’s all about what the government wants to do. The problem at the moment is that the US Fed is pushing up interest rates aggressively and most other central banks feel the need to follow suit. Any new fiscal policy that is seen to be potentially inflationary means that real interest rates are going to be even lower than they are. This will cause a flight from the currency into US dollars.
It’s really all about inflation levels and protecting currency values rather than the costs of borrowing at the moment.
An independent monetary policy means the Bank of England set interest rates (and ‘quantitative easing or tightening’) at what they think to be the most appropriate level to achieve the inflation target set by the government while maintaining financial stability.
The value of sterling is driven by demand for the currency in International markets which is heavily influenced by the real rate of return (interest rate and inflation) overseas investors can expect from sterling investments. The UK borrows heavily in International markets to finance its trade deficit and needs to offer a competitive real rate of return to attract investments and/or make large gains on its own overseas investments.
Governments are always looking for an economic panacea where none exists. This current administration is no exception.
Government spending on public services and welfare needs to be maintained at a minimum in line with inflation and above inflation where demand is increasing as in the case of the NHS.
To calm market sentiment, inflation must be contained through a mix of higher interest rates and a higher level of taxation with effective redistribution to support those dependent on benefits. A land value tax on mortgage lending institutions should be imposed to provide transitional relief to residential borrowers experiencing negative equity or unsustainable mortgage interest costs relative to income.
Jenny is right about the price mechanism for energy. Across the board price caps are not the answer. The support should be targeted at lower-income individuals and funded with a windfall tax. Small business support should be directed at business rates through adoption of the LibDem Commercial Landowners Levy.
Jenny Barnes,
As you say demand for energy is inelastic. The demand for energy changes slowly when the price increases. This is why letting the price increase as you want will make life more difficult for the poorest in society because the amount of cheaper energy you want is not enough for every poor family and they can’t reduce their energy usage for the reasons I have already stated to your amount at the cheaper price. This is why an energy price freeze is the best policy because providing enough money for everyone who needs it is too difficult, because it is so difficult to identify those who need it. It is better to provide help for everyone than let some people fall through the cracks.
The government has not given energy suppliers a blank cheque because Ofgem is still setting a cap to the retail price. It would have been better if both the retail price and the wholesale price had been frozen and then the government would only have to pay extra for foreign produced supplies and not that produced here.
While the supply of energy is inelastic the UK government is doing somethings to try to increase it. I wonder if it would be possible to restore some of our lost energy storage capacity. Three generators are to keep five coal units open and on standby.
Are you aware that the majority of people on benefits will receive all but £2 of the increase in average energy costs?
I feel it is a myth that nationalised utilities work better than private ones and I also think it is a myth that Corbynism would be mainstream politics in Scandinavia.
The Nordic countries have in recent decades gone down the road of deregulation and marketisation and are attractive places to do business. There have been controversial privatisations and in Sweden a school voucher system was introduced. That’s why Corbyn, McDonnell and Co look more to Cuba and Venezuela for inspiration.
David Evans,
Even if you managed to get 2% of members, in not less than 10% of local parties to request a Special Conference it is unlikely that it would change how the party is run. We need to increase the number of members who want us to be noticed so they are more than those who want a steady approach.
Why don’t you write an LDV article setting out what motion(s) you want to be debated at a special one day Conference?
If your ‘urgent radical’ motion is to “close the loopholes in the current windfall tax by ensuring it applies to super-profits accrued since October 2021; making it broader, with fewer exemptions; scrapping carve-outs that allow oil and gas giants to offset their tax liabilities against investments they were going to make anyway; and setting a target of raising about £20 billion over one year” then it would be no more radical than that proposed for debate in September. This according to our website is already party policy – https://www.libdems.org.uk/scrap-energy-price-hike. Also I am not sure that such a policy would get media attention or make much difference to our poll rating. Our policy to freeze the energy price cap and increase the take from windfall taxes did get some media coverage for a few days but didn’t make much difference to our opinion poll rating. I am not sure a quick fix is the answer.
John, I haven;t got back to you before, but entirely agree with what you have been writing, about the need for us to assert our social democratic base (tempered as you say with liberalism) and denounce neo-liberalism. Should we go further with what the public are believed now to support, the nationalisation of rail, water and energy? Whether we can go so far as a party we shall need to ask our members, but I do like meantime the new Labour idea of having a competitive energy producer in the public sector.
nvelope2003,
“the Liberal Democrats used to get about 20%”
In the 1992 general election we received 17.8%, in 1997 – 16.8%, and in 2001 – 18.3% (average 17.6%). None of these is about 20% to me.
In the 1987-92 Parliament our poll rating fell to 5% with a peak in support just before Thatcher resigned (about 14%) and then next year rising to the region of 15% for most of the rest of Parliament. For most of the 1992-97 Parliament we did better mostly in the region of 17.5% falling off in the later part of 1996 before picking up for the general election.
It is much more difficult for our leader than before 2010 to get media coverage. One of the main reasons for this is because we are no longer the third largest party in the UK Parliament. We need to have in the region of 40 MP’s to have any hope of being the third largest party in the UK Parliament. While I would like to think we could win 29 more seats than in 2019 I don’t think we can. In 1997 we won 26 more seats than in 1992 and once boundary changes are taken into account won 28 seats more than we would have had.
@Peter. It may be it was the inflationary effects of extra government borrowing rather than the cost that trashed the markets after the mini budget. But the promise of unfunded tax cuts pushed gilt yields up and their price down, as I understand it. Leading to a fire sale and a vicious spiral. They’ve continued to fall in price since, only more slowly, because of the pound, US, etc. BoE trying now to reduce scale of further slides after this Friday, but hard to see any prospect of improvement.
Either way, it was extra government debt at the wrong time that triggered the meltdown.
Any further borrowing plans need to be costed to show how they will be paid for.
In view of the disquiet members are showing about having no presence nationally or chance to debate before the Spring Conference, I have just written to the President, Mark Pack, proposing he arrange a national survey and questionnaire for all members, probably including questions arising from major motions that would have been debated last month. I think if there were such a survey, it would show the Media the democratic nature of our party as compared with the others, and be a news story in itself.
michael bg
I didn’t claim that my idea would solve global capitalism, neoliberalism and poverty, just that it would be better than the Tory idea of stuffing the pockets of the energy companies with taxpayers money while allowing the rich to burn as much subsidised energy as they want.
Are you aware that many poor households were already unable to afford energy and food?
Cassie 10th Oct ’22 – 9:14am:
…may be it was the inflationary effects of extra government borrowing rather than the cost that trashed the markets…
The extra government borrowing is mostly to fund the energy support package which is estimated to reduce the Retail Price Index by around 5% thus reducing the uplift on index linked gilts.
…unfunded tax cuts pushed gilt yields up and their price down,…
The extra borrowing was well trailed in advance. The tax cuts are largely ’smoke and mirrors’ and likely fully funded…
‘£21 billion raid on incomes despite ‘tax-cutting’ Budget’ [6th. October 2022]:
https://www.telegraph.co.uk/business/2022/10/06/income-taxes-rise-21bn-despite-budget-cuts/
…it was extra government debt at the wrong time that triggered the meltdown.
The bond sell off started on the previous afternoon after markets were disappointed by the Bank of England’s decision to raise rates by just 0.5% rather than 0.75% as had been expected. It was a spot of bond vigilantism – a warning shot across the bows of the BoE – to show that inflation needs to be taken more seriously…
‘Central banks must ‘aggressively’ raise interest rates to prevent spiralling wages, warns IMF’ [5th. October]:
https://www.telegraph.co.uk/business/2022/10/05/central-banks-must-aggressively-raise-interest-rates-prevent/
Colleagues will like to know that our President, Dr Mark Pack, responded promptly to my email requesting a survey (see my comment of 10.43 am above). He writes, “As you say, there are significant things we’ve missed out on due to having to cancel conference. In case you’ve not yet heard, Ed is going to be giving a substitute conference speech next month, with the timing being negotiated with the media to get similar coverage to that which he’d have otherwise got from Brighton…. (And) the membership team is working up plans for an alternative way of consulting members over the For A Fair Deal pre-manifesto document that we were due to debate.
“I’ll certainly bear in mind your comments about the need to further involve members in policy discussions as these plans get worked up – thank you.”
Stick to a few obvious policies such as increasing the amount from fossil fuel companies, target the less well off regardless of whether they’re in work, promote green growth and campaign for a more effective, more transparent government with less corruption.
It’s still on the Lib Dem Website – ‘ Not left, not right but forward’ ……an absolutely meaningless slogan. Back awhile I formed the Chard Group (i992) when Paddy Ashdown was leader and I was the parliamentary candidate for Kettering to more closely define our party ideologically. We saw the Lib Dems as a radical left of centre party. I still do……..
Left / Right is part of a perfectly acceptable common language defining ideology.
Part of being ‘left of centre’ means it is perfectly acceptable agenda to take rail, the water companies and energy companies back into public ownership. It gives us a clearly defined position that can make certain our results in 80 Tory target seats- especially given public support for a much more radical agenda.
Being ‘nice’ and middle of the road has gone on from our current leadership for far too long. Shirley Williams famously said in one media interview ‘ the problem with being middle of the road is that you get knocked down by the cars on the left and the cars on the right!’
Social liberalism Scandinavian- style is exactly what our core ideology should be. ANYONE who’s travelled in Sweden should instinctively embrace it – never mind that the right have won over the country recently. It has to be fought vigorously. hej da !!
Richard
Your views are your views. I respect those. The issue is that only the left, of our party or Labour, seem to think everyone else agrees or should. We happy to identify as in the broad centre and yes often centre left are not left of centre radicals. We are radical and moderate. We are happy to share this terrain. We know there are two other parties for those on the left proper, Labour, Green. We do not see any party for those in the genuine broad radical and moderate centre and centre left.
I am happy to back nationalisation of utility companies or rail. I am a staunch backer of a basic income. I favour a radical policy on the NHS though which does not favour the current monopolistic top down, no choice, no variety, be grateful. But I am not on the centre right saying this, but the centre left, because I want it free for everyone at usage. In America that is left, in France too. Being radical left of centre here is staus quo jargon circa 1970’s 80’s 90’s. It is a very conservative identification.
To throw money at institutions is not radical if with no change to them. The NHS is a catastrophic service for some. Similarly the DWP. Radical and left, fine. I see that too often means, saying yes, boss, not to the boss, but to the govt, to the power that runs the services it funds. And treats people as grateful.
Michael BG: I think most people would think 17.8 per cent to 18.3 per cent was not far off 20%. There was a period around the time of the 1989 European elections when the Liberals and the SDP were fighting each other in by elections etc and the Greens took about 15% in those elections and our party took about 6 per cent but there was a recovery in the 1990s. If we want to become at least the third party in the House of Commons we would need either proportional representation which would reduce the SNP to about 30 seats if they got 50 per cent of votes in Scotland (4 pc in UK) and the Liberal Democrats got at least 9.5 per cent of the votes in the UK giving them about 60 seats in the Commons, more than the total number of seats in Scotland, or Scottish independence, or a new and more charismatic leader. Scottish independence is the most likely to happen. Maybe we should go for it and give the Scottish Liberals the help they need to keep their seats in the Parliament of an independent Scotland. Or maybe we should just give up and merge with the Greens or the Labour Party.
Could i be so bold as to suggest Ed, Daisy and Layla get themselves to our various regional conferences and make keynote speeches on a issue of the day. I am finding it difficult to find the government offering any real help to social housing providers to meet the energy bills of sheltered and disabled accommodation, no real help to switch from gas to renewables at residential care homes , requests to ask voluntary and community organisations to offer warm spaces but no help with the running costs to heat, light and offer a warm meal to the vunerable .We should high light what the government hasnt done and who they have left out in the cold .
The price cap or not is not the problem here. The Govt, regulator and big 6 suppliers are scamming the public and business. Jenny Barnes above talks of leaving the price free floating to reduce demand, but that does NOTHING to assist the poorest and most vulnerable. That is such a a Waitrose shopper view of those aleready struggling.
The Govt have repeatedly claimed the cap rose is down to supply and demand, yet the price is currently cheaper than 6’months ago. There is no need for a lift in the current cap. That however doesn’t explain why an element of the bill that is NOT impacted by spot gas and oil prices have risen 86% on average across the U.K.
The regulator assesses the need to raise the cap on retail supply businesses. The big six retail suppliers are all part of large energy businesses and at least 5 generate their own electricity as well as supply gas. These parent companies are ‘generating’ huge profits already. This whole debate is how we should allow ourselves to be scammed.
Carrie,
It is likely it is because there was no OBR report to go with the mini budget to give an independent assessment of the government’s measures that scared the markets rather that the idea of increasing government borrowing. The increased borrowing is because the government is cutting day to day revenue and this might be another reason for markets to be scared. They might be less scared if the reason for a larger deficit is because there are more unemployed and benefit costs have increased because they would hope that the increase in unemployment would be short-term (a tax cut would be expected to be long-term). If the government has increased borrowing to fund investment to grow the economy again markets might be less scared because they can see where the growth is coming from and see that there are people who are unemployed who will be employed because of the increased investment.
If the market had identified how much demand has been removed from the economy because of the previous government’s tax rises and the increase cost of energy it is possible that they would have been less concerned with some of that demand being put back into the economy and they might have believed that this increase in demand would not be inflationary.
If the US Fed is increasing their interest rates this will make the dollar more popular and increase its value. Therefore to keep the pounds value against the dollar the Bank of England has to increase our bank rate.
Carrie,
The Tory government didn’t increase government debt with the mini budget, it announced unfunded tax cuts which long-term will increase the national debt. The £43bn is for the year 2026-27.
Jenny Barnes,
I didn’t suggest that your idea would “solve global capitalism, neoliberalism and poverty”. I am arguing that it is not as good as an energy price freeze. I am arguing that it is better to provide help for everyone than let some people fall through the cracks. I am not arguing that the Tory policy is 100% correct. I am arguing that the price freeze is correct but it should be done differently so UK energy companies do not make big profits. I am arguing that your suggested policy is not a good idea.
I am very aware that that many poor households were already unable to afford energy and food because the Tories scrapped the £20 a week uplift to Universal Credit and didn’t extend it to legacy benefit (which is our policy because of my Conference motion amendment).
nvelope2003,
I set out how our vote changed over the period 1989 to 2005 above. I can’t see proportional representation being implemented until there is an agreement with the Labour Party and this I predict will not happen until after the next general election. I do believe that we can replace the SNP as the third party in Parliament with Scotland still in the UK before 2036.
Wow Michael, what a jump you made there from my contentions “none of the great ideas here will get any publicity at all” (largely agreed by Katharine already) and “We all need to call for [a Special Conference]” to “it is unlikely that it would change how the party is run.”
That takes a long run up!!
Conference would enable us to establish a set of Liberal Democrat proposals relating to Liz Truss’ catastrophic mismanagement of our economy – Specifically attacking her refusal to raise a windfall tax, leaving Big Energy and speculators with huge profits and dump the costs on ordinary citizens to pay for over decades. However, we would also need motions on other aspects of their economic incompetence.
To “ … change the way our party is run,” as you suggest would take much longer!
Michael, almost everyone here is agreed that we are not getting noticed in the national media, and it has been reflected in our poor opinion poll ratings over the years. However, a summary of your position seems to be that we need to be careful with our responses to the government’s economic policy and we are broadly in favour of many of their policies.
That headline isn’t going to get printed!
However, your proposal then morphs into “we must do next is to set up or strengthen liaison with [Labour].
Somehow I don’t see Labour working with us when we are saying “We agree with the Tories policies.
Honestly, do you?
Lorenzo – I don’t understand what you mean about ‘broad based centre’…….except for more years of the quagmire of wishy washy thinking that’s kept the Lib Dems on 10.9 % of o[ opinion polling for the past 20 years of ill defined ideological nowhere.
Democratically common ownership of rail, the water companies and energy companies would put the Lib Dem up in the mid 20’s before Christmas without frightening off Tory voters in those 80 targets.
There’s nothing outdated about making such a sensible move. Currently it’s just plain common sense.
Years ago I argued at Conference to stop the Tory lunacy of taking the rail network into private ownership. An MP said it was ‘ Barking mad’. He turned out to be right on a whole range of issues including hyper price ticketing, infrastructure investment and Beeching’s legacy. For rail users ‘ sake Liberal Democrats get a grip and commit to public ownership …….It’s exactly what the travelling public want in survey after survey.
Apologies if you see typing mistakes in my comments, as am having difficulties with keyboard, working between two operating systems, endeavouring to overcome these with subsequent posts here.
Richard David Denton : Public ownership of railways is not exactly what the users of railways want or why would the numbers using trains have almost tripled since the end of British Rail and before the pandemic and 80 per cent of rail users expressed satisfaction with the service. It is the general public who travel everywhere in their cars who favour public ownership of transport. The railways have been publicly owned since Network Rail was nationalised in 2014 and since then the DfT has been obsessed with interfering with the running of trains.They have stopped the private operators of trains from paying their staff good wages and forced them to put on more services when Network Rail was unable to cope with the extra trains because of lack of investment in track and signalling, though fortuitously this may no longer be needed because of a 50 per cent drop in 5 day a week commuting.
Unlike water and the energy companies railways do not have a monopoly as they compete with road and air transport for customers and competition encourages efficiency. All this political tinkering with the railways has caused strikes by perplexed and unhappy staff, demoralised the management and forced traffic back onto the roads so that buses are held up in traffic jams, thus requiring more bus drivers who have to be trained and tested before they are allowed to drive a bus.
Richard
There’s nothing wishy washy about the centre ground if the conviction is felt and the policies are needed.
We veer to the left of there when necessary, but the path ahead is not a sideways move for those who are genuinely of the view that extremism is the problem. This is why that old slogan is not as lousy as you believe it to be to me. The journey is indeed forward.
All that is wrong with this country and this world is due to extremes.
Truss is very right wing. Blair was predominently in the centre. IWhen he veered to an extreme, on Iraq, disaster struck, in tandem with Bush, as with Clegg, a decent man of the cewntre, but with Cameron, right wing, embraced too readily.
But I prefer a broad perspective, one that does not denigrate the convictions of those who are sincere, much of our party and the best in the others identify as in the centre ground or centre left, or right.
@ David Evans. I suggest there is a world of difference between the government’s economic position and the way Michael and I, and I hope our party, are viewing the national economy. We are obviously not in favour of tax cuts which will disproportionately favour the well-off and do hardly anything for the poor. We also want commitment to spending, as you may see in the policy paper 146, Towards a Fairer Society, with its spelling out of the need for welfare enhancement and reform, and its proposal of also choosing between a Universal Basic Income and a Guaranteed Minimum Income. Our proposed spending, unlike the proposals of the Chancellor’s mini-budget, is carefully costed, but we do not propose reduction of borrowing at a time of limited national income growth. Our party’s policies, as you will know, include taxing wealth as well as income, and at present a larger ‘windfall tax’.
As to greater liaison with Labour, Michael and I hope they will come to support our policies aimed at reducing inequality, and especially eliminating deep poverty and the necessity for food banks. This is the Fairer Society policy which Michael and I associate with, and which we envisage being effected over two terms of the next, hopefully progressive, government. I think there will be sufficient scope for Media coverage there.
Katharine, I note your response and acknowledge the total sincerity of your hopes and beliefs, but quite simply the media world and the political world do not work like that.
Right now, the Conservatives are on the cusp of completely trashing our whole economy including pension funds.
However your line, which is essentially we agree with a large chunk of what the Conservatives are doing, but not how they are doing it, just won’t even register as a Ripple in the Tsunami of what could be coming in a few days’ time.
Likewise, the hope that somehow we will find some sort of understanding with Labour about working together when its leadership are looking at a potential landslide of gains – and a leadership that has, within a week of its Conference vote, already trashed its members wish to support PR – is quite simply ignoring the lessons of forty years of history.
I fear you will end up being totally disillusioned with how the real world trashes your hopes and dreams.
But going back to my original point and your responses, we desperately need a Special conference and we need it now. Otherwise, once again we will have missed the boat.
David, you are quite mistaken in your reading of what Michael and I are putting forward. Of course we do not support the thinking and actions of the new government. The libertarian approach of Liz Truss is, thankfully, opposed by many centre-right Tory MPs, and it is to be hoped that they manage to restrain her wrecking ball, and force more U-turns, if not the speedy removal of herself and her chancellor. We two of course want borrowed funds to support services and more equal distribution, as is our party’s thinking. As for our approaches to Labour, clearly we will not agree with them on everything, but the parties have many good aims in common to restore the country. Democratic thinking is not sufficiently shared, though, if their leader can just dismiss his party’s 80% support now for electoral reform, and that will have to be a red line for us if we have influence as we expect with their upcoming government.
Uncomfortable with seeing the Lib Dems as ‘nice’ Conservatives with a centre agenda slightly to the left of mainstream Rishi Sunak. That will never see the Lib Dems in power.
An exciting , unashamedly left of centre positioning might have more popular appeal after a term of Labour government.
Taking the utilities into parliamentary common ownership is NOT ‘extreme’. Trouble is our politics have gone so far right that the Lib Dems think moderate conservatism is ‘centre’.
The Lib Dems need to be much bolder and catch up with current public opinion. In terms of tactical voting the Lib Dems are still a potent force. Here in West Dorset they can win provided they go out of their way to not alienate Labour and Green voters and not call Tories ‘ conservatives’ ! Because it’s them who are ‘extreme’ !!
Richard David Denton: When the Eastern bloc Socialist countries and China abandoned public ownership did their standard of living and their countries improve or decline ? Going back to a failed past has rarely been the way to a successful future.
David Evans,
I don’t understand why you think your earlier comments (8th Oct 22 12.46am) didn’t suggest that you felt the party was not being run the way you want. I thought you were saying that you wanted us to be noticed and you didn’t want us to continue with the ‘deadly dull’ policy pronouncements which the mainstream media ignore. And you were calling for a special conference to change this way the party is run.
We state, “The estimated £39 billion cost should be met by expanding the windfall tax on oil and gas company profits, and using the Government’s higher-than-expected VAT revenues as a result of soaring inflation” (https://www.libdems.org.uk/scrap-energy-price-hike). Would a special Conference change this policy?
Opposition is not just opposing everything the government does, it is supporting the good things and attacking the bad. When appearing in the media I would expect our MPs to attack the government’s weak windfall tax and state “it needs to be made broader, with fewer exemptions; scrapping carve-outs that allow oil and gas giants to offset their tax liabilities against investments; and setting a target of raising about £20 billion over one year” as this is our MP’s policy.
The Labour Party agrees with the government on scrapping the National Insurance increase and on cutting Income Tax by one penny from April (this last one we pointed out in the fourth paragraph of the article). Differences of policy should not stop us working together on the policy areas where we agree.
Richard Denton-White. I agree with your wish for our party to take a firm centre-left approach, and avoid seeming just to be slightly more sensible middle-of-the road people, even while we avoid the extremes of Right and Left. We have to pass and proclaim radical policies which cannot be associated with the clear bias of the present government to favouring the wealthy. I am hoping that our March conference will commit to aiming to end deep poverty and the need for recourse to food banks, which I suppose the present government regards as a useful tool to supply the poorest who cannot work. You wish to have public ownership of the utilities. What else do you favour?I believe we are going to have to fight to protect the environmental and planning standards against this government with its ruthless attack on regulations agreed with the EU.
The Lib Dem mindset is wrong- centre politics ( whatever that means !) and being polite to the ‘Conservatives’ who have become free market libertarian and ‘extreme’ right wing. I personally can’t stomach them, nor should any Lib Dem for fear of alienating them in 80 key seats.
The strategy’s wrong – start looking at the polls !
Richard, luckily for the country there are numbers of centrist Conservative MPs who themselves object to the present right-wing libertarian direction of the new Prime Minister. It seems likely she will have at least to put off some of her proposed reforms, though that will not satisfy us left-of-centre Lib Dems. We must continue to assert our individuality, our difference from both major parties, and we agree it is difficult to be heard – but the more radical we can be, the more we can be noticed. Meantime, I think some fall in the polls for us may have been because of the increased attractiveness of the Labour party, no longer been tinged with Corbynism. Best wishes for your Dorset campaigning.
@Katherine Pindar
“luckily for the country there are numbers of centrist Conservative MPs who themselves object to the present right-wing libertarian direction of the new Prime Minister.”
But are they concerned about the well-being of their constituents or the possibility of losing their seats?
Nonconformist radical – Hi! Would you expect enough self-sacrifice from any politician, not excluding you and me, to think of giving up their seats because the Tory government is on its last legs and an MP from another party would serve their constituents better? No, I guess not. And being only as human as the rest of us, I suppose, yes, they will worry about losing their seats (‘Not for me, but for my family!’ you can imagine them arguing). Notwithstanding sympathy for their loss, we will try to evict them! After all, far worse things are happening in poor Ukraine.
Richard Denton-White
“More radical ought to be more left of centre than Labour
I would like us to be a radical social liberal party which would mean we would have to be less conservative than the Labour Party. However, I am not convinced that a majority of members of our party want us to be that sort of political party. We need to change this.
David Evans,
We are going to elect a new Federal Conference Committee soon. It is this committee which chooses which motions and amendments are discussed. It is important that those of us who want more radical policies try to discover which candidates support this and reject a conservative view of what it is possible for the government to do.
Just because at the moment the Labour Party has a huge lead in the opinion polls does not mean we should not still be looking towards “some sort of understanding” with them about working together. It is still in the interests of both parties to do this, especially having parallel campaigns against this government or in favour of policies where we agree.
Apart from something on a windfall tax which you haven’t stated how is different from the policy on our website (that I have quoted above), you have not given any clear idea of what other motions you would like discussed at your special Conference. I am unsure how you could ensure that your motions are discussed at your special Conference.
@Katharine Pindar
“I suppose, yes, they will worry about losing their seats (‘Not for me, but for my family!’ you can imagine them arguing)”
Since they get paid somewhere between 2 nd 3 times the median full-time wage shouldn’t they be able to put something aside? Unlike large numbers of less well-paid people?
And it seems to me that many MPs who lose their seats at a general election don’t seem to have much trouble finding a means of earning a living afterwards.
Sorry – I’m feeling extremely cynical about tory MPs’ possible motives….
Few comments have mentioned the real reasons why this crisis may well become a disaster for some as that there is extreme inequality in the UK today.
We need higher personal taxation on higher earners and higher tax thresholds. This should be a start to redistribute wealth. The richest individual should be not more richer than say 5000 times the poorest.
With more wealth distributed, we still need investment, so we will move towards ‘Egalitarian Capitalism’ where we all hold our our stocks and shares in the wealth of the country and the world. This is real liberalism and we should be the ideology of the Liberal democrats/Plaid Cymru/Greens etc.
It is not democratic to see high percentages of stock in intermediaries such as hedge funds. This concentration of wealth is monopoly capitalism but so is nationalisation of the economy.
A modern social liberal force taking the very best from both traditions within the party is a firm foundation on which to build. We should not be embarrassed to offer the best solutions regardless of where that stands in the Centre or Centre left of modern progressive politics.