This week’s damning editorial about current Lib Dem performance and prospects in The New Statesman will have struck a chord amongst many Liberal Democrat supporters and activists. I know that the world is unfair, and that we are mass-media-invisible, but nonetheless our lack of progress has to be a real present worry. Mucking up critical votes on what is supposed to be ‘our’ issue above all – opposition to Brexit – only compounds the sense of drift.
I’m glad that Caron Lindsay thought that Sir Vince Cable was ‘sparkling’ on Pienaar’s Politics recently but I fear that such appearances are not enough to counter the growing perception that our central leadership and our party are losing our way. In a contest between two increasingly polarised extremes, the voice of the progressive centre has some appeal, but not if that voice isn’t really articulating anything very exciting, other than strong opposition to Brexit.
What are our messages of optimistic hope, particularly perhaps for those non-metropolitan voter groups in the South-West and elsewhere who supported us in large numbers between 1997 and 2010 but who have since run a mile from any kind of Liberal Democrat engagement?
What are we saying about housing? About education? About the economy? About the service sector? About health and social care? And about climate change? What radical vision for a better Britain are we trying to get across? Because without that we will remain stuck, exposed, and worryingly irrelevant to all too many Britons. The political corollary of being tough on Brexit is that we have to be very tough indeed on the causes of Brexit (as I’m sure somebody else has already said).
We need to be able to state, in social-media-friendly formats, half a dozen key policies that would give Britons renewed interest in what we have to say. And these policies have to be, above all, positive. We should say radical things about a wealth tax, about funding health and social care, about industrial and financial policy, about land ownership and non-residency. We should have the courage to state that not everything about a National Health Service founded in a completely different industrial and economic context in 1944, and now suffering from a genuine lack of resource, is beyond criticism or reform.
Liberals believe in the primacy of politics. This is a noble tradition in our civilisation, with its roots in Aristotle. We have to find, urgently, ways in which to join up the engagement of citizens with the promise of a better standard of living for many. We remain convinced that continued membership of the European Union remains the best guarantee of the latter, but we are also honest about the palpable lack of EU citizen engagement on all too many fronts. Radical reform of the politics of the EU should be a Liberal Democrat agenda just as much as continued membership thereof.
Westminster manoeuvres around a new centrist force will not, in end, come to anything much. FPTP renders any kind of Macroniste surge impossible. Of course we want to welcome in some dissenting voices from amongst both the Labour and the Tory tribes, but the pressures on individuals to maintain existing party affiliations will always be huge, simply because the penalties for deviation from those affiliations are correspondingly huge.
So responsibility for driving the progressive centre and centre-left comes back to us. I’d like to think that by the close of the September party conference we would have cohered around a small number of key ideas that we would be proud, indeed excited to put to our fellow citizens, whether Remainers or Leavers. And that really would be a basis for campaigning. In the immortal words of an old Liberal poster of long ago, Not Left, Not Right, but Forward!
* Richard Fisher is Vice-Chair of Cambridge Liberal Democrats. He writes here in a purely personal capacity. His father knew Lloyd George.
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125 Comments
Some good stuff here – and indeed this necessary sharpening of message is what I and others have been calling for over the last two years or so, and a significant part of why the Radical Association was founded. In particular, the observation that the “New Centre Party” and “Macroniste” routes to liberal success in the UK will not work is I think very pertinent. The UK does not really have a managerial-centrist gap in its political infrastructure, but it definitely often feels like it has a liberal-progressive one.
Our economic agenda in particular has often felt too tied to managerial-centrist viewpoints for much of the general public, many of whom want explanations as to how a Liberal Democrat economic policy would bolster their lagging wages (and indeed what one looks like to begin with). We should build on the social security commitments made in 2016 by getting serious about minimum income delivery mechanisms, and we should be working hard on the groundwork for a much more serious rebalancing of the economy. If voters don’t associate “small business” with “Lib Dem”, if they don’t associate “cooperative business” with “Lib Dem”, if they don’t associate “social enterprise” with “Lib Dem”, then our economic message isn’t clear enough, in my view.
Lots to agree with here. I for one would love to know why it was possible for the state to rebuild and house our population post WWII but seemingly isn’t now. Clearly private sector housing is built to maximise profits and not to provide good quality affordable housing for the many. If someone can formulate a policy to guarantee affordable housing it could be the modern day equivalent of introducing the state pension.
Brexit is sucking out the oxygen in the Lib Dems.
One issue Politics is not a healthy position to be in. Vince I a sorry is not an inspiring leader and is a poor media performer. The party is in a crisis and progress has stalled as far as winning votes is concerned.
If nothing is done the Lib Dems could end up an irrelevance in British Politics.
The question is important, however I do not see much of an answer here, though the need to be able to offer hope is pertinent.
The reality of politics is that it is overwhelmed by Brexit i which the mindless hope of the Brexiters is the most hopeless. Even in the hands of the two main parties, other issues are sidelined: no wonder Lib Dems struggle to get a hearing.
The awkward question is why, when the Liberal Democrat message on Brexit resonates with an increasing portion of the electorate, growth in support is so sluggish.
I wish I had a simple answer, however, I do think that the Party could do more to address younger voters with a message that fighting Brexit and its consequences is a fight for the aspirations of the young.
“Not Left, Not Right, but Forward!”
That was a vacuous slogan in the 60s and it still is. If that’s the best you can come up with, therein lies the answer to the question in your headline.
Charity begins at home. It’s that simple. Politics is primarily about neither altruism nor philanthropy.
Liberalism is completely at odds with anarchism.
Lib Dems may need philosophical dialogue but not in core policy & nowhere near an election manifesto.
I’ve said it before but we seem to be relying on Micawberism, something will turn up, rather than the pro-active, borderline agressive tactics necessary in today’s politics.
Vince made a public appearance in Bristol, not that you’d know, the LD providing no build up and lacklustre follow up.
We should be riding the crest of the turning tide against Brexit, but our timidity and lack of agency is holding us back.
We get poor or nonexistent media coverage. BBC particularly does not give a Liberal voice…it tends to choose varieties of Brexit plus right wing.
So what we do ourselves locally matters more..
Various places have done well to OK in byelections.
The percentage is brought down by some of the places which were hard to win in.
Being in Government and being attacked for everything by Labour MPs and Councillors did damage.
We have some very good MPs and we have to build up again.
And description of the Party as ‘centre’ does not help. The derided slogan at least avoided that and gave time to demonstrate our real position.
I’m sorry to say this; but most people have a very cynical, even jaundiced view of politicians. The ‘brown bread and sandals’ image is hard to dislodge from many peoples’ minds. As I said previously, it’s not ‘policies’ that get most people going, it’s Leaders, because we still have this obsession with the ‘strong man or woman’.
It’s a shame that schools are usually reluctant to feature ‘politics’ in their curricula. If they do, it’s usually in the rather anodyn atmosphere of a ‘Mock Election’. In Germany, where parliamentary democracy has struggled to establish itself, political parties are often invited into schools to display their wares, and not just at election time. If we had an emerging population that viewed an interest in how they were governed with the same interest, say, as which music they liked or which clothes or makes of car they preferred, we might be getting somewhere.
Despite Labour’s 500k membership (rumoured to be declining) most people view politics as something that slightly odd people get excited about. As they say, though; “You’ve got to be in it to win it”. So, how do you get people interested? One of our old Town Councillors used to have a recipe to get more people to attend the Annual Town Meeting. His answer: “Put the rates up 100%”.
@martin
“The awkward question is why, when the Liberal Democrat message on Brexit resonates with an increasing portion of the electorate, growth in support is so sluggish”
The reason it is so sluggish is because, the party lacks any vision or the ability to plan and adapt to circumstances.
Your obsession with brexit and constant message that without the EU we are all doomed, planes will stop flying, the NHS will come to a grinding halt, medicines will run out and people will be dying in the streets. Supermarkets are going to run out of foods.
in short it will be the apocalypse for the UK and the Liberal Democrats have no plan on how they would address this because the EU is our saviour and nothing else matters….
Well, lets say Brexit never happened but as we have seen with the banking crisis around the world, anything can happen, what if there was another global downturn, Other countries came crashing out of the Euro and the EU project collapsed, how would the Liberal Democrats respond and deal with events?
All the Liberal Democrats have shown me is their complete lack of ability to plan and adapt to events, why on earth would that encourage me to vote for them and have them leading our country..
That’s the message I get from the party with their obsession with Brexit and the EU as the saviour
I yearn for a political movement that will chart a clear and measured course between dog-eat-dog capitalism and Venezuelan socialism. I joined the party briefly as my son and daughter-in-law are members and i love and respect both of them.
However, as Matt says can you please offer the British people something other than the end of the world if Brexit actually happens (and some form of it probably will)?.
Although as we will all starve to death and die of cancer then I suppose the LibDems are justified in ignoring any form of “future”.
The unpallatable truth might – just might – be that the electorate had a sample of Liberal Democrats in power – after which they made a persisting judgement – about keeping promises, general competence in scrutinising welfare and NHS reforms – and in going along without a squeak supporting Conservative right wing austerity policies.
Of course I might be wrong…. and it might be that the electorate is (shame on them) just plain wrong and not particularly bright.
@Innocent Bystander
For me, that political movement between dog-eat-dog capitalism and Venezuelan socialism is called Georgism. It aims to eliminate unearned income (otherwise known as economic rent) by taxing that (and if possible, only that) instead of taxing earned income with all this being done through land taxation. It’s pretty much the only solution I see to us keeping our living standards and tackling unfair wealth inequality (socialism would probably do the latter but completely fail at the former). I’m hoping we take this further at the next Conference but I don’t have much faith in our party leaders anymore. I don’t even mind if they do announce policies which don’t follow my political ideology, I just want them to come out with policies which show we’re trying to address what’s going wrong with the economy.
What helps Labour is that they have a very simple and clear message that’s been consistent since the formation of their party – “profit is bad”. It’s a very poor message in my eyes but it’s simple and consistent and it resonates with workers because it’s a political statement on the “seen economy” (would implore everyone to read That Which is Seen, and That Which is Not Seen by Frederic Bastiat). Our party leaders have gone on and on about unfair wealth inequality but we have no policies which match what they say. If Corbyn came out with a Blair-like manifesto while talking about the injustices of the world then he too would be shunned by the electorate.
@ Richard
‘The political corollary of being tough on Brexit is that we have to be very tough indeed on the causes of Brexit (as I’m sure somebody else has already said).’
Not sure that I have heard anybody else put it like that and I think it’s a great sound bite. We cannot carry on playing this game of winners and losers with Brexit. The alternative to the lose lose of Brexit has to be a win win.
The 1st thing to say is that we are doing a lot better than we were in the spring. Our average polling has gone from between 6% & 7% in March to just over 9% now. That is frustratingly slow but if continued would transform British Politics in 2 or 3 Years. Theres no guarantee it will continue of course, we live in uncertain times.
The 2nd point is that the article above & most of the previous comments see everything from the weird perspective of an activist. Most Voters have very little interest in Politics, most of the time, they simply dont believe that it can have much effect on their lives. They are wrong about that but its an understandable mistake.
Even Big Parties like Labour or The SNP can only afford 2 or 3 Policies at a time, any more & all the messages get lost.
On 9%, we can afford one Policy at a time, endlessly repeated till we are blue in the face & even then we will be lucky if half our Voters pick up on it. As it happens, Brexit is an almost perfect Issue for us as it speaks to our core Values & will impact everyones lives if it goes “Wrong”.
We were clobbered in 2015, because of The Coalition & again in 2017, because of the “2 Party Squeeze” that hit all the smaller Parties. The Media find us boring & irritating in equal measure.
There is no magic bullet in our hands & looking for one could undermine our real Recovery.
This is a theme that keeps cropping up, and many of us in the grass roots of this party are totally disillusioned with the leadership, including the various federal committees who appear to lack vision.
I do not know what the answer is, possibly a revolt from the grass roots at Brighton.
We could use the Party President Election this year to elect a younger dynamic leader to work with the more staid figure of Vince.
We need to look at our publicity. Our boring web site has current news items up to seven weeks old, and you do not start off by asking them to donate. Get them hooked first. Have headlines tackling current issues, and forget about Trump and Tories who vote when paired. Thes are not addressing the issues of the man on the clapham omnibus
There is an opportunity there, we have ideas and policies to tackle many of the issues, but we are completely unable to put an act together that will promote liberal values and liberal ideas, in the meantime the far right are making the headway.
I think people do not understand this article, it is pro radical centre not against. It is against bland centrism. Not the same.
People are passionate but moderate. Understand that. We are wrapped in huggy kissy blandness or passionate about stuff that is right but wrong as far as being in touch.
Upskirting rather than knife crime, tough on one soft on the other.
That is what is wrong.
Faith schools and Islamic extremism/ tough on one soft on the other.
Perception not reality but that which is believed is that which is influential.
Say what good but concerned folk think. Do not denigrate them or their concerns.
More Shirley Williams less Emily Thornberry.
We are on 18% in the opinion polls which isn’t bad…
… unfortunately it is with those that voted Remain and we are on 2% with those that voted Leave.
I am sure that in the late 80s and early 90s you would find countless articles on how the Lib Dems were a spent force and had missed the boat. Only for us to embark on our most successful 15 years. And that followed being on an asterisk in the opinion polls – no discernible support whatsoever – at least according to Paddy’s telling.
My recipe for success = and apologies for repeating myself from previous comments but it was raised by the article – would be:
1. Win a parliamentary by-election
2. A bold package on policy – 1p on tax for education was a “risk” – people don’t like taxes. I have advocated a £20 billion package for education.
3. Signal change from the coalition years – I would advocate free university tuition fees. And also move closer to the Labour party – signalling our distance from a Johnson/Rees-Mogg Tory party but also different from a Corbyn party – as we did with the rabid Tories and Blair in the 90s.
4. Bold national “marketing” – not in the “weeds” of policies but backed up by them. See for Steve Job’s advice https://www.youtube.com/watch?v=0n8vqLE_w4U
5. Do well in local elections and rebuild the grassroots. I appreciate that local campaigning can be sometimes like banging your head against a brick wall. What are the key things that need changing in your local area? Campaign with your residents to change them. Sign them up as members, helpers, supporters to help you do that.
6. Be vastly optimistic and vastly pessimistic. We are only here because our predecessors actually got up off the backsides and did something! At times often when electing a Liberal councillor – let alone an MP – was a distant pipedream! When coming third in a ward was a a triumph! But also be vastly pessimistic – work your own ward or constituency but go and help in target wards and seats as well.
7. Events and luck!
8. March towards the sound of gunfire! “Those who are crazy enough to think they can change the world actually do!”
On Fri 12th May 2017 David Thorpe wrote an article in LDV explaining how “If you want a progressive alliance, you need to vote against Labour this time”…
With the LibDem’s ability to snatch defeat from the jaws of victory (2010-15) I’ll expect another article along the same lines. After all, that strategy worked out well, didn’t it?
Be truthful, stop pretending that functioning services and a stable society can be done on the cheap. Commit to greater resources for the NHS , the Emergency Services (including the armed forces) and local government. Point out cheap taxes for the people mean cheap services and while that doesn’t matter to the super rich it does for the other 90 plus percent. Stop trying to be all things to all men, the rabid Tories, the commited Corbynists and the hardline Brexiteers won’t vote for us so stop pandering to them and value the voters who will.
If u want to get the voters back on board:
Get rid of employee national insurance and base benefits and pensions on residence (closing quite a few govn depts in the process). Massive boost to the pay packets of the lower earners.
Get rid of council tax, again hits the lower paid more than high earners (if worried about house prices going up introduce a sales tax on property sales) plus those already paying rip-off rents.
Get rid of business rates.
Get all the lost revenue back, and perhaps more, using a turnover tax on companies so robot factories etc will end paying their fair share.
Those three policies would show you are genuinely putting individuals before big business rather than trying to go back in time, as is Labour, to the Really Big State that has its nose in everything and wastes fifty percent of the money it spends.
“80s and early 90s…………….. on our most successful 15 years”
That was because the left leaning voters before then had union dominated Labour to vote for. When Kinnock then Blair moved Labour to the centre these voters chose a left leaning LibDem offering.
Now that Miliband then Corbyn have taken all those voters back and scared all the “right leaning LibDems” into voting Tory the LibDems are back to where they were pre 80’s.
But I thought Lorenzo captured it well for me
‘Tough on upskirting, soft on knife crime’.
The party needs to try and re-capture the members who left under Clegg, not all of them will have gone to Labour. Whereas I can understand the negativity with the Party in the coalition years, thoses days have mainly gone and the Party needs to portray itself as having moved on from Orange Bookerism and into more positive Social Liberal territory, its natural home. It would be good to see more positivity around this on here and less of the negativity, polling at 10% is also steady yet unspectacular progress but better than no progress at all.
AIso I don’t buy into the all these comments the Party is obsessed with the EU, i can’t stand the B word. The party fought a sparkling campaign in Lewisham East on issues like the rise in knife crime and more community policing, concerns over the re-development of Millwall football club etc but the Press nationally bareley mentioned this. I also get fed up with the bile and vitriol aimed at the Lib Dems by the right wing press such as papers like the Daily Distress and would like to see members do more to combat it. There should be a Lib Dem supporting tabloid newspaper so that the Party has a clearer identity with voters it is less likely to reach. Finally I get fed up with the ageism aimed at Vince, Corbyn doesn’t seem to get it so I do wish these people with their ageist remarks, would give it a rest. Now who is the best person in the party to contact privately with policy ideas?
@Cllr Jonny Tepp
‘why it was possible for the state to rebuild and house our population post WWII but seemingly isn’t now.’
Try the 1948 Town and Country Planning Act.
“What are we saying about housing? About education? About the economy? About the service sector? About health and social care? And about climate change?”
Quite a lot, I fear. The trouble is that if we bang on about all these worthy causes at once, the press gets bored and prints nothing. So we spin a wheel and pick a specific issue.
At the last GE, a penny in the pound on income tax for the NHS was designed to fight its way beyond the press-boredom factor. Our opponents effortlessly squashed us by offering the NHS more phoney money (based on “efficiency savings and similar bogus concepts”) than we were proposing in real money.
There aren’t any simple answers. Especially when a party has trashed its own reputation by foolish past actions!
At long last!! someone else has now stated what I have been shouting since Brexit!!
Why oh why will the those in authority in our wonderful Party, not realise that there is so much more that stopping Brexit!!
Without the support of the Labour Party and all the other minority parties in Westminster, there is no hopeof a 2nd referendum! We should just let Mrs May get on with it, and the people will decide that they do not want Brexit, as is being proven in a very recent opinion poll! Even areas who strongly voted leave are now changing their minds.
We need to start, as has been said, to push forward with real policies, that mean real things to those members of the population who are suffering under this Tory Government, ie shortage of housing, shortage of NHS staff, Poor quality transport systems Etc Etc. These are what we should be addressing!
Sadly, we are rapidly becoming a one cause Party, ie UKIP backwards, and look what has happened to them!!
We need new leadership, with a new dynamic leader, who know what this Party needs to do and say!
When I was standing as a local council candidate at the 2015 Election, I spent 2 days with Norman Lamb MP, and I saw so many people, who told me they would normally vote Tory, but they support Norman Lamb because he is such a brilliant Member of Parliament.
Just look at the colours on a Party map of East Anglia and see the island of gold in a sea of blue, this is North Norfolk, the home of Norman Lamb MP. The best MP in Westminster!!
Hopefully, the leaders of our Party will sit and listern to what he has to say, and try to learn from him, not insult him!
Sadly, I can no longer physically support the Party I have been a member/supporter of for over 40 years, because of the current lack of leadership and the “One Cause only” Party stance of Brexit! I just cannot discuss Brexit with anyone, taking the Party’s stance on Brexit! Yes I voted Remain and I stand by that, but we should be trying to find ways of making the democratic vote work! We do not agree with it, but we are supposed to be Democrats, how can we call ouselves this, if we spend all our time trying to reverse a referendum that we do not agree with the result! Sorry, I am no longer willing to speak about a bad policy I do not agree with!
It is time for a drastic change in direction and it has to start at the top!
We have to talk about other policies and not just about Brexit or we will lose even more seats at the next General Election
“Lots to agree with here. I for one would love to know why it was possible for the state to rebuild and house our population post WWII but seemingly isn’t now.”
At that point, the UK had an Empire to exploit, Marshall Plan aid from the USA, and a far less worrying age pyramid.
I know it’s not really fair because it was a long time ago now, but I can’t help but think that a lot of it comes back to tuition fees and the bedroom tax. Many of those who would be tempted by an anti-brexit centrist party are also those who returned to the Labour fold because of those issues. I’m torn between the Greens and Labour, but won’t really look at the Lib Dems again until at least 2020.
I notice by scanning this piece that the author is a fan of “Not Left, Not Right, but Forward!” One of the worst slogans the Liberal party ever dallied with, from the late 1950s I think – into the 1960s. I am not sure it was ever officially adopted. In 1965 we (Manchester University Liberal Students) borrowed a van from Blackley Liberals to travel to the Roxburgh, Selkirk and Peeble By-election which had a board on the roof with this nonsense. We covered it up with posers before we set off. It was generally rejected by the party in the enthusiasm of Grimond radicalism. Since then the only attempt to revive it was by the SDP in the 1980s and even they soon dropped it.
Anyway when I saw the article finished with this rubbish I knew I did not need to read the rest of it!
Do you mean the tuition fees and bedroom tax that were introduced by Labour? The party that started an illegal war in Iraq? And you are going to vote for them?
Tony Greaves
Actually, I think there was a very similar idea floated a few years back, I think by HQ or the powers that be, to the effect “Not Left, Not Right, but Ahead”, and that was in the last 10 years of LibDemmery!
Yes, why aren’t the libdems doing better? The major anti-brexit party in England and you are so quiet it is untrue. May I suggest a simple weekly publicity item highlighting the loss of so many aspects of life after Brexit? I am sure that your publicity people can do better than I, but as examples I offer:
Farmers – EU grants help now – but after Brexit?
Students – study anywhere in the EU now – but after Brexit?
Job seekers – work or set up a business anywhere in the EU now – but after Brexit?
Holidaymakers –no roaming charges now, but after Brexit?
Holidaymakers – EHIC covers you now – but after Brexit?
A weekly item such as these would surely bang the drum for the one party that should be leading on all of the losses faced by the public.
Good luck
That slogan was almost as good as the one used for the second General Election of 1974:
“One More Heave”!
But if we’re compiling an anthology of naff slogans, do not forget the one on the inside cover of the Jeremy Thorpe books of matches ( I kid you not, revealed when the matches had all been used): “Jeremy Thorpe is matchless”.
Just as a tedious nerdy bit of information : First used by H.H. Asquith in his farewell speech after losing his seat in Paisley in the 1924 General Election.
Source Lady Violet Bonham Carter’s diaries.
It could be argued (but I wouldn’t dream of it) that it’s been backwards not forwards (with the occasional upward spasm) ever since.
forward not backward upward not forward and always twirling twirling twirling towards freedom
I am tempted to quote Tennyson’s Charge of the Light Brigade
Cannon to right of them,
Cannon to left of them,
Cannon in front of them
Volleyed and thundered;
Stormed at with shot and shell,
Boldly they rode and well,
Into the jaws of Death,
Into the mouth of hell
Rode the six hundred.
—
Well Grimond did say march towards the sound of gunfire!
Richard Fisher is right: we need a sharper message to gain national attention. “We need to be able to state, in social-media friendly format, half a dozen key policies…” . Yes, they have to be distilled from our large and growing collection of good policies. Vince could give us a lead at Brighton by concentrating on some motions debated there which will make a real difference to national well-being if implemented. After that we need some of our major leading figures to get together and work with the Director of Campaigns and Press Office to choose and shape our dynamic post-Brexit message.
I am very sorry that my use of Asquith’s famous adage at the end caused Tony Greaves – a legendary Liberal figure from my youth – not to bother with the rest, and hope that he might reconsider…! But I am glad that some respondents have picked up on my plea for a much sharper set of messages that address both the evils of Brexit and (crucially) the economic and political reasons why the majority of our fellow-citizens (including perhaps 1.5 m people who supported us in 2010) thought Brexit might be in their interest. Anyway, thanks to all for taking the time to respond.
We should be majoring on inter-generational unfairness and be much more passionate and radical about solutions to the inequality in wealth that are so disadvantaging younger people. Brexit fits in neatly to this agenda as a subsidiary issue, but posters above are right that the party has become obsessed with this single issue to the point that the public no nothing else about us.
It is also blindingly obvious that our current leader doesn’t have the energy, imagination or charisma to lift us out of our current malaise.
Some very good points, but I ought to mention that polling evidence indicates that people who voted remain are more likely to support some of our other key policies. We should be targeting remain voters, but not just over the EU. Also too many Lib Dems are unwilling to engage with other campaign groups. For example, there are lots of people campaigning about the NHS, but most Lib Dems will have nothing to do with them. Our silence over the recent legal challenges to the Tory plans was awful.
@Richard Fisher, as others have said in response to your post and those made in the past on LDV by others i would welcome a set of cohesive radical policies from the party. A return to a more socially liberal focus with policies on housing, health, environment, social care etc linked to sustainable economic narrative would suit me. Difficulty is breaking through to get the message across. Can’t comment on the effectiveness of social media platforms as, like many others, I made a decision some time ago to not use any of them.
As one of the 30% of LibDem voters who voted leave i would welcome the opportunity to explain my reasons, which had nothing to do with immigration or messages on buses for example. Unfortunately it’s too easy for some to continue with the belief that everything in the EU garden is rosy (and I accept it has done a lot of good). Therefore leave voters must all be thick racists who believe in fairy dust and unicorns. But it’s ok we must all be old so we will soon die off so no need to persuade us. I am none of these but it didn’t stop my local party telling me to ” …… off” when I went to rejoin recently. I will still most likely vote LibDem as I like the look of some of the agenda items for conference. There also some good posters on here who don’t just dismiss but engage in constructive discussion. I also believe we live in a democracy and there should be a Peoples Vote.
@Sean Hyland
Thanks for an interesting post and for trying to rejoin and I hope you will be a member despite your local party.
Very clearly it is possible to argue from Lib Dem “first principles” and be either for or against Brexit. I have always been impressed by the arguments of Tony Benn – that you should be able to get rid of someone that has power over you at the ballot box and there is clearly a democratic deficit in the EU in that regard.
I was within myself 60% Remain/40% Leave – and clearly a large number of people who ended up voting one or another were in two minds.
It is sad that in British politics and debate there is a great tendency to say everything has to be perfect or everything has to be wrong. Many things are finely balanced – and I would support something even if I though it 45% “bad” – 55% “good” – it is an improvement. PR on Continental Europe gives far more scope to say “yes that is a good policy” but it could be improved by doing x.
I think some of the lateral thinking techniques of people like Edward De Bono could be usefully employed in British public life – for example he suggests doing a “Positive, Negative and Interesting” analysis of a proposal or course of action. Even realising the negative or interesting things can help focus on how to improve a plan or action.
For those talking about Macronizing our policies.
His policies are actually less neoliberal and more interventionist than most of us think.
https://en-marche.fr/emmanuel-macron/le-programme/industrie
https://en-marche.fr/emmanuel-macron/le-programme
He talked a lot about foreign investment control and anti-dumping policies especially from China. Actually, he mentions China every time he talks about foreign investment control and anti-dumping – China is a scapegoat in his platform. There is also a “Buy European Act” for public sector. There are also stuffs like industrial modernization or investments in deindustrialized regions. Besides, as he mentions France’s lag in the use of industrial robots, he is very likely to encourage automation.
I hate Brave Brexiteers’ lunatic idea of FTAs around the world especially China. If you want to oppose it, let’s use China as a scapegoat. In fact, China does steal technology by buying up European firms. This also allows us to attack the Tories for cosying with China. Yes, the Tories, especially under Osborne and Cameron were very China-friendly, but we must not.
Oh wait, a policy of cutting trade deficit WILL make our manifesto more popular, especially if we focus on using non-tariff measures. You know, all major parties have been ignoring trade deficit in their manifestos for years, and we must be the first ones to bring it up.
Finally, we must drop tuition fee. I know, some members here argue that abolishing tuition fee favours middle-class students, but for the sake of regaining trust and popularity we have no choice. Besides, complicated thinking like that will do us no favour. Germany and other European countries never think like “hey, free tuition fees favour middle-class at the expense of working class”, and this makes it easier and simplier for them to do so. Keep it simple please, we have more important things than tuition fee to devote energy to.
How about the Party offering the system developed in Bhutan of Gross National Happiness [GNH]? This would be in stark contrast to Osborne’s austerity measures that seem to have been designed to create the maximum possible misery!
https://en.wikipedia.org/wiki/Gross_National_Happiness
I agree with Arthur Bailey that Norman Lamb would be the ideal leader [if he has recovered his health] – particularly if this policy is adopted – since his efforts on mental health are closely related. People with mental health problems are unhappy.
The advantage of such a lead policy is that it is difficult to believe many voters would be opposed to such a plan – unlike ‘remaining in the EU’ and other policies included in the Party’s manifesto.
@ Thomas,
“…..a policy of cutting trade deficit WILL make our manifesto more popular”
Will it? The problem is that the only way to do it is by lowering the value of the pound, which will probably have the opposite effect! Vote LIb Dem for dearer Continental holidays doesn’t sound like a vote winner to me.
Any current account trade deficit has to be balanced by a surplus in the Capital account. If there’s a tendency towards imbalance the pound shifts. So if you don’t want a capital inflow which causes debt and the foreign takeover of UK companies you’ll inevitably cause the pound to fall. Tariff barriers won’t make any difference.
“We need to be able to state, in social-media friendly format, half a dozen key policies…”
Yes. So what’s hard about that? What do people want? It is obviously a secure job which pays enough to live on. We all need a place to live we can afford, and we want the NHS to be properly funded and and the education system to work for everyone and not just the wealthy. We want a clean environment and a good transportation system.
To answer my own question: it’s only difficult if you don’t want to sound too socialist in your policy prescriptions.
“Yes. So what’s hard about that? What do people want? It is obviously a secure job which pays enough to live on.”
That is possibly what a lot of people end up with or put up with but being a wage slave is not what most people actually want, certainly not young people who have aspirations to actual freedom.
@Peter Martin: “To answer my own question: it’s only difficult if you don’t want to sound too socialist in your policy prescriptions.”
Aiming to increase the UK’s ‘Gross National Happiness’ might well include socialist policies. However, if they were introduced in order to make the people happier – they may be seen in a different light – if the overall goal was generally accepted.
It is odd that regular visitors to this site complain of a lack of policies: education, housing, NHS, social services, local government, upskirting, public transport, mental health and other policy issues or initiatives of MPs have been well covered on these pages, but at best achieving a footnote in national media.
Whether messages are sharp or blunt matters little when they go nowhere. Come the conference season and as October approaches, Brexit will be an ever more desperate issue for the UK and infighting within both the government and Labour will dominate the agenda. Moreover there is no likelihood that support for another referendum will subside. Anyone who thinks that the way for Liberal Democrats is to attract notice is to talk about something else is out of touch with reality.
What exactly is the lib Dems policy on the structure of the NHS? My impression as a fairly close follower of politics is not very clear. I have the sense that many would like to privatise it, bit unlike Tories don’t have the guts to say so out loud.
@Martin: “It is odd that regular visitors to this site complain of a lack of policies: education, housing, NHS, social services, local government, upskirting, public transport, mental health and other policy issues or initiatives of MPs have been well covered on these pages, but at best achieving a footnote in national media.”
I think I can say with some certainty Martin – that if the Party announced that it would introduce a system to measure and improve ‘Gross National Happiness’ – it would make the front pages, probably as headlines. Also as long as this policy was clearly pursued [through regular announcements of how it would work] – the Party would be frequently on the front pages.
@David the bedroom tax/spare room subsidy was introduced by Labour? Sources please?
Former Dem
The party’s Health and Social Care policy is laid out in detail here:
https://www.libdems.org.uk/health
I am yet to hear or read any party member say they want to privatise the NHS – in fact all say the opposite, with great vigour.
Depends what you mean by privatise, but the orange bookers certainly want to break it up and make greater use of market forces and private providers. And the lib Dems of course got the health and social care act over the line.
@ Former Dem : You ask,
“What exactly is the lib Dems policy on the structure of the NHS? ”
As far as I know (and I was undergoing a transplant at the time) it was to splutter a bit but ultimately bow the knee to support Andrew Lansley in his 2011 NHS ‘Reforms’…… which, incidentally has produced a £ 2 billion profit over the last five years for Branson’s off shore Virgin empire.
Since then, an occasional mention of a penny on income tax (it pops up as a cure all for different things such as education on other occasions). To be fair Norman Lamb has tried (without much success) to improve Mental health provision.
In the Scottish Parliament one Lib Dem MSP torpedoed a Labour private members bill on transplants… thus delaying (and costing lives) what is now going to happen via the SNP government.
Fact is Europe seems to be the be all and end all of Lib Dem policy at the moment.As far as the rest of serious politics is concerned, it’s a bit of a vacuum.
@ William Fowler, OK if young people want to start a business then that’s fair enough. But they probably are well advised to work in their field of interest as a ” wage slave” first to gain some real experience before taking the plunge. Slaves don’t get paid BTW!
@ John Roffey, I don’t know about you, but if my home and income were taken away from me then my contribution to your Gross “National Happiness Index” would be less than it is. So let’s not pretend we can make homeless people happy until their situation actually changes and they do acquire a home. Similarly if they are unemployed or in a crappy ZHC type job.
“Not Left, Not Right, but Forward!”
This kind of banal sloganising is going to be highly counterproductive. We’re all a bit more cynical about this kind of thing than we were in the 60s.
How about, while the Tories are so hopeless, spending some time reframing the debate away from the neoliberal obsession with deficits and public debt, and, instead, elevating progressive goals of full employment, environmental sustainability and social equity etc to the centre stage. Lib Dems are supposed to occupy the centre stage!
That would deliver much more sustainable long-term benefits than remaining trapped in a neoliberal/ordoliberal macroeconomic mindset.
But then you would need to get some better advice than you’ve been getting from the Orange bookers in recent times. Surely you must have a few genuine old style Keynesian and Post Keynesian thinkers in your ranks?
Less banging on so much about Brexit as “The Sky is Falling Down!”
More in the style “What has tbe Roman Empire ever done for You?”
Wind forward to: “What has the EU ever done for You?”.
Local activists should bang on about the positive things the EU has made possible at constituency and ward level, and sell that message hard.
Regarding policy generation and suchlike, stop! We have shed loads of policies.
Dissolve all policy structures and replace them with ACTION teams containing technocrat skills. Two examples,
1 – Create an LD Action Team on fracking, to generate campaigning materials for all wards (hundreds of them) impacted by fracking? And the Team to include geologists, geophysicists and suchlike able to challenge fracking in public meetings and media briefings. Who is the LD spokesperson on fracking? Nobody. We just grandstand, and yet this is a mass-movement nationally far away from London.
2 – Create a LD Action Team on air pollution. As it happens, air pollution detectors have tumbled in price over the last few years enabling Citizen Science via schools, parish councils etc. Campaign on air pollution by action, not by grandstanding.
In essence, generate credibility and trust by active radical campaigns on issues that are immediately relevant to people (er the voters) beefed up by cutting-edge expertise, and show people “What has the EU ever done for You?” ward by ward. The Sky is NOT Falling Down.
I’m sure proposing an idea like Gross National Happiness would get us headlines, but if Lembit Opik’s career has taught us something, it’s surely that getting headlines for something doesn’t make it good. (And from what I understand, the people of Bhutan aren’t very happy…)
The problem is not that we don’t have policies, it’s that we have too many of them but very very few of them are big ideas that the public can easily understand and associate with us. To cut through with the public we need ideas that are distinctive and only being put forward by us, not a bunch of ‘a little from the right, a little from the left’ equivocation. It’s the same problem with our Brexit policy – instead of coming out and saying ‘it’s a bad idea and we want to stop it’, we end up with lots of equivocation and second-guessing ourselves so we end up with a limp mush that pleases almost no one. We keep trying to come up with policies that please everyone and offend no one, when what we need to do is actually have a vision and not be afraid that it might mean that some people might not want to vote for us.
The problem with your policies is.
That you still continue to trumpet out the same old lines to go with them.
i.e
If we go ahead with Brexit the cost to the economy will mean we cannot fund the NHS, welfare, Education, housing etc
What your basically saying to the voter is. The Liberal Democrats are not able to adapt to events.
God forbid should another global event happen and the whole EU project comes crashing down because as far as remainers and LD are concerned The EU is the saviour and without it, apocalypse is on it’s way to consume us all
The problem is that LibDems have been defining themselves by what we do not want. We don’t want Iraq war, we don’t want Brexit, we don’t want socialism, we don’t want capitalism…. Remember the election video? Not right, not left …. negatives again.
Only when voters associate parties with what the party stands for (as supposed what it does not stand for) the party can succeed. Ask average voter what Conservatives or Labour policies are and they will be able to answer with some garb …. Ask what LibDems stand for and the answer will be “LibDems???”
Paul Walter
I am yet to hear or read any party member say they want to privatise the NHS
Indeed, but has our party done enough to make that clear?
I feel “Former Dem” is illustrating the point David Raw made: we are seen as a party which supports with enthusiasm the sort of policies that the 2010-15 government pushed.
We needed to make clear that is not the case, that the coalition of 2010-15 happened because it was the only stable government that could be formed given the party balance in Parliament, and that the policies of the coalition reflected the balance of its two parties. The commonly believed idea that a small party in a coalition can get whatever it wants from it is wrong. We did nothing to correct that misassumption, and nothing to point out that the imbalance in the coalition and inability for an alternative with the other major party (the threat of which is the way a small party gets coalition power) came about because of the distortionate electoral system.
We should have broken the coalition when a major aspect of the coalition agreement – no top-down reorganisation of the NHS – was broken. Our Leader should have said to the other party “If you force that on us, it’s over”. Instead, he forced the party to accept it, and the fact that there was major opposition to it in the party conference at the time has been forgotten.
If we couldn’t make clear how the 2010-15 coalition was very far from our ideal in the 2015 election, we should have done so in the 2017 election. But we did not. Indeed, by making it out that we were the party of anti-Brexit and that was it, we enabled the misconception about what we stand for given by “Former Dem” to survive.
People are very unhappy about the way our country has gone due to the right-wing economic policies pushed by all governments since 1979. That’s why many voted Leave, as they thought it was a vote against that sort of thing. We did nothing to show an understanding of that, and nothing to point out the reality: that those financing and running the Leave campaign wanted the exact opposite in economic terms to what most of those who voted Leave thought they were voting for. Instead, we campaigned for Remain in a way that just gave support to the misconception of most Leave voters.
The reason why we were able to build so many houses after WW2 wa because we had so many demopped soldiers and industry did not need to produce weapons so we had the resources to put into house building. People were used to austerity and rationing so they were not demanding consumer goods.
Now if we want to provide major infrastructure such as a big housing programme we will have to divert resources from other public goods or from private consumption. People are not so willing to give up what they now have,
We need a range of radical clear policies that sound interesting to the electorate such as land value taxation, abolition of SATS and that property tax when you purchase a home. We must build on our popular exit from Brexit campaign. We must show how these policies will save money and create a fairer society. We must be willing to say outlandish things such as legalising soft drugs so we’re remembered. The electorate won’t expect us to necessarily implement all of them.
Innocent Bystander
Now that Miliband then Corbyn have taken all those voters back and scared all the “right leaning LibDems” into voting Tory the LibDems are back to where they were pre 80’s.
What, the major opposition to the Conservatives in most of the south and most of the more rural areas in the UK? Growing strength in opposition to Labour in places where Labour had become a complacent one-party ruler? No, I don’t think so, if only we were.
As we have seen, the idea pushed by Clegg and those who put in charge at the top of the party pushed – that there were millions of “right leaning” types who would vote for us if only we came out with the sort of economics the Tories support – was wrong. There are hardly any like that, but there are plenty who voted for us because they thought we were more effective and humble and understanding opponents to the Tories than Labour are. We lost their support through the Coalition and have done nothing since to win it back.
Peter Hirst: Like they did not expect us to abolish tuition fees
Cllr Jonny Tepp Couldnt agree more it is technically feasible brown field sites and existing housing land where proerties are no longer fit for purpose or suspect on safety grounds after Grenfell can be regenerated .I would put Tim Farron MP in charge of the policy because he has a passion for the subject and make as councils and health boards as they were in the past the drivers for change in delivering provision by allowing them to under -right substantive regeneration or new build schemes by them acting as not for profit funders utilsing their ability to borrow at lower rates of interest .
Matthew Huntbach: I agree with your second paragraph (14.08.18 11.47) but coming second in hundreds of Conservative seats mostly in the South since about 1964 did not seem to help us very much until the Conservatives collapsed in 1997. The only way forward is to have a distictive policy which millions of voters positively approve, not just protest votes, although some of these can help keep the party alive in difficult times.
Demanding the end of the remaining grammar schools which are open to all children with the required abilities while allowing Independent schools which are only open to the children of the better off to prosper and even retain charitable status will only appeal to the rich though I realise they do bring in money from rich foreigners and would have to be retained in some form for that reason.
@nvelope2003 “Demanding the end of the remaining grammar schools…”
Regardless of the pros and cons of grammar schools, this is an issue that for me epitomises one reason why Lib Dems aren’t doing much better.
The party opposes the expansion of grammar schools but does not want to get rid of the remaining ones, so it looks like an inconsistent and unprincipled “Not Left, Not Right, but stagnant”.
The New Statesman leader makes uncomfortable reading for Liberal Democrats.
There are two objective events that we can do little to initiate but which would transform our poll rating. First, a succession of by-election victories such as the five successes which more than doubled our poll rating between November 1972 and the February 1974 general election. The recent Lewisham East by-election would probably have been won within that period. As it was it was a creditable result but it was still a poorer result than in 2010. Second, high level defections would be helpful and are not impossible.
Apart from such events that we have to sit and await, there are two we can affect. First, few in the party, particularly amongst the thousands that have joined us since the referendum, have an understanding of the kind of Liberal society that has motivated and enthused those of us who have spent many decades sacrificially promoting it. They are not going to be enlightened by contact with party HQ – it has no literature available that sets it out. We have had to publish such a text in Leeds and it has sold out four editions. I am well aware from doing recent constituency meetings that there is a hunger for a more rigorous approach to Liberal politics.
Second – returning to my hobby horse – we have to abandon the targeting strategy that has been responsible for the abandonment of active campaigning in much of the country. We lost 375 deposits in last year’s election. These are seats where we could not even poll one voter in twenty, and in many case far fewer. How can we expect the electorate to express support for the party when we do not exist in perhaps two-thirds of the constituencies? We are simply not in the game.
The perverse continuing attachment to such targeting reminds of the press statement after an early heart transplant: “The operation was successful, but unfortunately the patient died.”
Peter Martin – well, if you boast that you can reduce national debt, you will attract voters. In the case of Britain, you must reduce trade deficit and consumption, and encourage savings. British people already consume too much and many run into debt for not just housing (ok, most people cannot buy houses without borrowing) but also consumer goods.
In the manifesto, we can simple put a sentence about tackling trade deficit, and talk about trade deficit like a calamity, but do not go into details like weaker pound (anyway, this is when we actually govern (dream dream dream) and work with BOE, not when campaigning) Case in point: Mr. 45. Instead, we can babble stuffs like improving national competitiveness via raising productivity (which should lower relative unit labour cost), modernization, anti-dumping… As you mention, deficit must be financed via foreign capital inflows, which lead to takeover of UK companies, which we should promise to impose controls over, especially Chinese takeovers. Come on, we actually want tougher foreign investment controls, especially from non-allies like China.
One reason may be overthinking, right? Case in point: tuition fee.
We must drop tuition fee. I know, some members here argue that abolishing tuition fee favours middle-class students, but for the sake of regaining trust and popularity we have no choice. Complicated thinking like that will do us no favour. Germany and other European countries never descend into overthinking like “hey, free tuition fees favour middle-class at the expense of working class”, and this makes it easier and simplier for them to do so. Keep it simple please, since we have other important things to devote energy to, not just tuition fees.
Peter Martin – “Yes. So what’s hard about that? What do people want? It is obviously a secure job which pays enough to live on. We all need a place to live we can afford, and we want the NHS to be properly funded and and the education system to work for everyone and not just the wealthy. We want a clean environment and a good transportation system.” – and yet we don’t want to pay as much tax as our Continental friends.
Also, putting neoliberalism and ordoliberalism into the same bracket is false. German ordoliberal/social-market model never advocate laissez-faire and never attempt to privatize public services and social care. Besides, it does not push for financialization of the economy. Germany still has 5-time larger manufacturing sector than the UK.
You can: call for tougher foreign investment control AND use China as a scapegoat like Mr. Macron AND trashing the Tories as Chinese cheerleaders.
Anyway, go to En Marche Programme, read it carefully, concentrate on industrial, energy and scientific policies. There are lots of things that can be copied.
David Raw made an important remark early on, about the electorate, and I’ld like to reply. But first (because it is difficult to find among the 71 `comments’) a suggestion: please could we have each comment assigned a number showing its location in the list, to facilitate swift reference?
“We have had to publish such a text in Leeds and it has sold out four editions.”
And in Leeds the party went backwards in May and couldn’t contest every seat – unlike the previous all ups in 2004. (And I think I’m correct that none of the people who wrote that book put themselves up for election). LIke in large parts of the North the LIb Dems are moribund and have continued to decline since the election of 2015.
Given that the government can apparently borrow at low interest rates what about advocating some targeted bond issues. Could be used for social/affordable housing, buying out PFI contracts, infrastructure etc. Not talking about allowing unlimited issuing.
@ Roger Lake I think you might have to wait a long time, Roger – if not forever – so fire away and I’ll try to respond.
Thomas: And who would believe us if we promised to abolish tuition fees ? We would be ridiculed. The most we could do is promise a complete review by an independent body whose findings would be accepted. Or say nothing if that is likely to create an imposible situation.
May I offer a SOTBO that we on here seem determined to avoid; in the absence of an upcoming general election the great majority of citizens take no interest in politics, political parties or politicians. They have more important things on their minds. Policies, slogans, sound bites and the like have no traction to use an activist term.
What are we doing with our apparent 200,000 membership ?
Nick Cotter, Bicester, Oxon
@ Thomas,
“well, if you boast that you can reduce national debt, you will attract voters.”
Possibly. But the problem is that the voters tend to not understand this sort of thing!
“In the case of Britain, you must reduce trade deficit and consumption”
Like they have to take their holidays in the UK rather than in Europe, buy cheaper English cider rather than expensive French wine, buy fewer German cars, eat more potatoes, but less French cheese? And this is going to be popular?
…..and encourage savings.”
But our savings ends up as Govt debt. Say everyone goes off and buys some National Savings certificates. They have the asset of the certificates. The Government has the future liability of paying out on the certs. ie They have more debt.
See what I mean?
“British people already consume too much and many run into debt for not just housing”
If the UK GDP is £2 trlllion and you want 3% growth and 2% inflation (that’s our target and not an upper limit -BTW) then we need another 5% of spending from somewhere. That’s £100 billion. So how are you going to get that if people are borrowing less (and so spending less), the Government is borrowing less ( and so spending less) because the Lib Dems think it is a good idea that everyone should consume less and save more?
It’s like I said. It’s not difficult but hardly anyone grasps all this!
@ Thomas,
“Also, putting neoliberalism and ordoliberalism into the same bracket is false.”
Ordoliberalism is just the German variant of a more typically Anglo-Saxon neoliberalism. There are differences but they go together, in the same bracket, as ‘evil twins’. The German solution to the sort of contradictions I outlined in my previous comment is to export them to someone else. So the German model is always to have a large surplus of exports over imports. That usually means taking action to keep your currency cheap. The euro does the job nicely for them at the moment. And they seem to think that if everyone was as thrifty as they are, and worked as hard as they do, that the world would be much better place with everyone running an export surplus, and a balanced government budget.
Don’t they see the obvious problem here? I’m not sure they do!
Meanwhile in the neoliberal Anglo Saxon world, our neoliberalism dictates that our currencies should float. If Germany and other similar aggressive net exporters are running export surpluses, we end up running import surpluses or trade deficits. To replenish the money lost to our economy, the Govt has to run a budget deficit which causes us no end of worry. So we cut spending and and raise taxes to try to close the gap but only succeed in in depressing our economy. Then someone, in the Gov or BoE (same thing really) has the bright idea that the economy needs more private borrowing to keep the wheels turning! Interest rates are reduced to almost zero.
Then someone else in the Govt, or BoE, worries that the extent of private borrowing is too high. They start to put up interest rates. ie Forgetting why they reduced them in the first place! To keep the wheels turning! This is where we are now.
The wheels could well stop turning any time soon! It can all be blamed on Brexit of course !
“Don’t they see the obvious problem here? I’m not sure they do!”
Oftimes I despair of economists. They don’t have a problem.
Economists are resolutely determined to view the world as an economic system. It isn’t. It is 193 (at last count) separate economic systems all in competition with each other.
Why would the Germans or the Chinese worry about the deficits in the other 191?
You can see what they are doing with their wealth. They aren’t grieving about zero sum stuff they just buy up the losers houses, infrastructure, industry and assets to give them a future income stream.
We need a national crusade to turn us into one of the winners (again) and not an economist to explain that there has be losers as well as winners. We knew that. Some of us are just fed up being an economic loser.
Innocent Bystander – If the UK had joined EMU then we would have been a loser and then some. We would have made Ireland look like a minor downturn.
And as for ordoliberalism: they are in a currency union! It is that straightforward. They need to be acting in the interests of the currency union. It is the whole problem with EMU, a currency area needs a meaningful political area. The German debt brake is a clear cut example of something that may or may not be in the interests of Germany, but is absolutely is not in the interests of EMU. If you want some idea of just how asymmetric EMU is and the problems it has stored up then the TARGET2 balances give some idea of the issue. There has been divergence in the EZ and no amount of ordoliberalism will change that.
The dumbest sentence ever in UK politics was the statement that EMU is economic and not political – it is profoundly political.
Innocent Bystander – ‘Why would the Germans or the Chinese worry about the deficits in the other 191?’
Because those deficits are their surpluses.
‘You can see what they are doing with their wealth. They aren’t grieving about zero sum stuff they just buy up the losers houses.’ But again that’s true to the extent that they are in EMU. The ‘debts’ in the Southern European economies aren’t any sort of problem. The ECB owns the euro – it can create and cancel euros at the discretion of its governing council (where deficit countries have a majority). Those Italian/Spanish TARGET2 balances can be cancelled at the push of a keyboard. But in doing the ECB would be writing off German assets, that is zero sum stuff. Now you could say that’s the nature of a currency union, whether EU populists would see it that way is rather another matter. The politics of this can’t be stripped out.
Buying up houses shouldn’t matter because with free movement supposedly there are wonderful opportunities all over the EU. A look at the asymmetric nature of that free movement again suggests the level of EZ divergence.
@ Michael Meadowcroft
1970-1974 by-elections
As far as I can see the only by-elections we won were off the Conservatives (then in Government) – none off the Labour opposition with the exception of Rochdale where the Liberals were starting off from a high base and actually the swing was less than that in Lewisham East. Lewisham was a very good result given it was against Labour in opposition. It also took us 2 years before we won the first by-election after 1970 election.
https://en.wikipedia.org/wiki/List_of_United_Kingdom_by-elections_(1950%E2%80%9379)#45th_Parliament_(1970%E2%80%93February_1974)
Targeting
Last time we discussed this we came to the conclusion that if the national party had done rather more targeting and given Leeds West the help that it needed then we might have retained it in 1987 and you might still be the MP for it. That said 1983 was stonking result in Leeds West!
I think you and I are in agreement that it will be events/by-elections that will move our poll rating but before that we could spend millions and not increase our poll rating by one jot.
The New Statesman
I am not sure that the Liberalism it wants a return to – that of Blair, Cameron and Clegg is yours – or indeed mine. The number of times that the British media have written off a political party is countless – including I suspect the New Statesman about Corbyn before the last election. Occasionally like a stopped clock they are right but seldom. Indeed normally about the time they write off a political party is the time that they bounce back! I am not sure that the record shows British Journalism is that good at political predictions – probably more accurate to trust Mystic Meg!
Peter Martin – you do know that when we save more and consume less, more domestic savings are also available for investment, instead of relying on foreign capital flows that normally end up taking over UK firms and assets, and consequently UK technology and practices. And if savings exceed or equal investments then trade deficit will gradually fall.
And we can promise to improve productivity (then list measures like automation and energy efficiency) and hence reduce relative unit labour cost (and thus avoid the whole pound devaluation debacle); plus export promotion (I mean, push British manufacturers to engage in export trade, which will also improve their productivity – this relationship between export and productivity has been proven true by numerous economic studies). Oh, we can adopt a Buy British consensus for public sector, similar to Macron’s Buy European idea.
“Possibly. But the problem is that the voters tend to not understand this sort of thing!” – and thats why they believe that high debt + high trade deficit = economic loser, which is actually not entirely true, but not entirely false (look at Spain and Ireland please, what saved us was the decision not to adopt the euro). And we can describe trade deficit/debt as a calamity, then promise to tackle both unlike other parties by opting for an export-led, manufacturing-led model, when all other parties still stuck with our current model. If UK adopted euro then the list would have been UGIIPS, not just GIIPS. UK had exactly the same problems as Ireland: capital inflows to real estate sectors creating bubbles plus trade deficit. Remember, most people out there believe that high trade deficit equals economic loser, and our job is to exploit this belief thoroughly like Trump did with Midwesterners and Rust Belt population.
And you obviously ignore a consequence of being a long-time deficit nation: the fall of our manufacturing base. Being a deficit nation means that our manufacturing always has to compete with cheaper exporters, and steadily declines over decades. Besides, I have to say that Germany has been an export country long before EMU.
nvelope2003 – we can afford free tuition fee.
https://www.quora.com/How-can-Germany-afford-to-provide-free-education-to-everybody-while-most-other-countries-e-g-US-UK-China-India-etc-can-not
https://www.quora.com/Why-does-Germany-offer-free-university-education-to-international-students-From-what-I-know-Germany-offers-free-university-education-to-international-even-non-EU-students-How-does-it-benefit-Germany-How-does-Germany-fund-such-a-huge-program
German universities implement various cost-saving measures: not funding sport clubs and student clubs and societies, not funding uni dorms, higher number of students per professor, no scholarship (because it is already free, right). I agree with all of these because I believe that the purpose of universities must be strictly learning, not for fancy stuffs. I also read somewhere that German unis also make their first and second year incredibly hard so that many students will have to drop out and go to apprenticeship.
And finally, when the government funds unis, it can dictate or at least interfere in their curriculums. The government can pressure unis to drop what it deems as Mickey Mouse courses, which ironically should never exist. Degrees like golf management, surfing management or stand-up comedy would have never existed under a free university system. Some polytechnic-turned unis can go back to being a polytechnic.
Besides, we can still have international students paying £9k – £12k per year like currently.
But, German people are less individualistic and have greater sense of community: they are willing to pay more tax to fund the university system.
The brown bread and sandals stuff is actually the attractive part of the liberal image. The basic problem is that the orange book end of history thinking was already obsolete when it accidentally gained a foothold in government.
@ Innocent Bystander,
“We need a national crusade to turn us into one of the winners (again) ……. Some of us are just fed up being an economic loser.”
The problem with this ‘national crusade’ line of thinking, in the past, has been that economic disagreements turned into currency wars which turned into trade wars which then turned into real wars. So, sure, you can whip up these kinds of feelings to suit you own political purposes, and gain some electoral advantage, but where does it get you in the end? It is not what the Liberal concept of free trade should be about.
Its better to explain to the voters that the UK is like a bank and if other countries like Germany want to swap more things in exchange for fewer things and put their extra money in our bank, then it isn’t necessarily us which is the loser. Why would a bank worry about its customers putting money into their accounts?
@ Thomas,
“And if savings exceed or equal investments then trade deficit will gradually fall.”
Not necessarily. Say S-I =0 in the well known sectoral balance equation. This then means the external deficit has to equal the Govt’s budget deficit, which may, or may not, be less than previously.
Not that the sectoral balances give you everything you need to know. Sure, if the Government imposed draconian cuts to its spending then the external deficit could fall. All it would mean would be that the economy had collapsed and people were too poor to buy imports! This is pretty much what has happened in Greece. They now have a trade surplus. This is not really what anyone should be aiming for.
@ Thomas,
“Being a deficit nation means that our manufacturing always has to compete with cheaper exporters, and steadily declines over decades.”
Its more to do with being a wealthy country than a deficit country. If the wages of clothing workers are higher in the UK than they are in Bangladesh, and transport costs are a relatively small part of any overall cost, then it obviously makes more sense for any capitalist to manufacture clothing there rather than here.
This does cause a problem to the UK clothing workers which we shouldn’t ignore. But the solution isn’t to try to depress the wages of the UK workers to match those of Bangladesh! But we have ignored it, tried to force down their wages and they voted for Brexit in revenge! Quelle surprise!
As I said to Innocent Bystander, the UK running a deficit has to mean others putting their money into our bank. Our mistake has been to use that money in the wrong way. There’s much better ways than using it to create an asset bubble in the property market.
@Thomas @nvelope2003
We can also afford university tuition because… um… we already do – it makes no difference to the affordability question whether you pay “directly” or you tax people and use the tax money indirectly.
As to being ridiculed – unfortunately it is clear viz Blair and Cameron that parties only regain public support when they change policies on those things that are holding them back – especially when they were in Government. They only do it slowly – but they do it. I fear – unfortunately – that we will do it too slowly on tuition fees.
Any subject can – and indeed should – be studied academically. Stand-up comedy is as much a subject for study as languages that no-one speaks any more.
Michael 1: Of course everything could be made free if we wanted to but taxes would have to be raised – what would be the point of that ? It could lead to a lot of waste and misallocation of resources like the free heating where it was easier to open the window than turn it off when it was not needed and the free bread which was wasted and caused shortages – it was cheaper to feed your pigs bread than animal food.
Well I agree that Liberal Democrats should advocate free tuition fees because most of their supporters – probably almost all of them – are middle class and they are the people who will benefit. So after going to an independent fee paying school with charitable status your middle class Liberal Democrat supporter will then have free tuition paid for by the taxes of the cleaner or postman who has to go to a state school because they cannot afford to pay school fees. Wonderful !
@nvelope2003
“So after going to an independent fee paying school with charitable status your middle class Liberal Democrat supporter will then have free tuition paid for by the taxes of the cleaner or postman who has to go to a state school because they cannot afford to pay school fees.”
I’d imagine most Lib Dem voters would send their children to the local state school. So you’re saying those who have been to fee paying schools could be excluded from any future commitment to free tertiary education?
That’s probably a good idea which won’t cost too many lost votes!
@nvelope2003
“Of course everything could be made free if we wanted to but taxes would have to be raised – what would be the point of that ?”
There is a debate to be had on what is paid for by taxes and what is not. Of course many in America would apply your arguments to health care.
Of course a graduate tax is one way “round” the fairness issue. With about 50% going to university – by definition – it’s also the children of cleaners and dustmen who are going to university. And indeed I have encountered some of the most vehement opposition to the Lib Dems u-turn on tuition fees in working class areas.
In education, the compulsory school/education leaving age has risen from 14 to 18 in 70 years. There is no doubt in my mind that it will rise effectively another 3 years in another 70. Meanwhile we will get to 70%+ going to university within 15-30 years as is the case today in South Korea. That is in a blink of an eye in historical terms everyone will be educated until they are 21.
In fairness, on LDV comments, I have advocated a broad package. Doubling the pupil premium and school funding so that more poorer pupils can get the A-levels to get to university. I have also advocated a lifelong adult learning fund for everyone of £27,000 – 3*£9k. People could use it how they wanted – a cheaper full degree done over 2 years leaving some over to do extra things, do the equivalent of two “sub-full” degrees, business and foreign language skills to enable them to export, just adult education classes which have a strongly beneficial effect on mental health….
As I have said before it is difficult to say which courses will have the most “economic” payback. A calligraphy class in this day and age would seem to have little. But the class that Steve Jobs took led Apple to produce the Mac computer with typefaces and probably had a payback of several billion times to the US economy. Similarly tertiary education has a many billion times payback to the British economy – benefiting your cleaners and dustmen.
Michael 1 : While some ill health can be due to life style choices most is just bad luck and it is reasonable that the state should provide free medical care funded by taxpayers as otherwise many people would be unable to pay for it.
Before the age for compulsory education is raised any further it would be advisable to see what the effect has been in South Korea as I have heard some worrying news about the problems this is causing, such as suicide and mental illness. Not everyone wants to spend their life studying. Many want to work, to do something useful and earn their own living, a concept which seems foreign to many in the educational establishment who have a vested interest in extending the leaving age.
I am not surprised that the strongest opposition to the raising of tuition fees should come from working people as they are more likely to suffer but also because many ordinary people have a strong belief that promises should be kept, something which is not so common among middle class people who tend to look for the main chance whatever u turns they need to make. It will take a very long time to regain the trust of ordianry people.
Peter Martin,
it is a mistake to equate the ordinary meaning of savings with its use in macroeconomics. In everyday life savings means the opposite of spending. In macroeconomics it means the opposite of consumption(or more precisely , not buying new consumer goods with income earned from production). In macro spending money on buying a house (repaying the capital element of a mortgage) is saving.
Savings represent deferred consumption or a claim in money terms on future production. Thomas is right. Domestic savings should finance domestic and overseas investment by UK firms. Government deficits are justified by investment in assets that produce the public services that will be consumed in the future when the savings that finance the deficits will be spent and consumed.
Peter Martin – Its more to do with being a wealthy country than a deficit country. If the wages of clothing workers are higher in the UK than they are in Bangladesh, and transport costs are a relatively small part of any overall cost, then it obviously makes more sense for any capitalist to manufacture clothing there rather than here.
Sir, Adidas recently has been producing shoes in Germany/France using robots.
https://www.economist.com/business/2017/01/14/adidass-high-tech-factory-brings-production-back-to-germany
Mike Ashley could have done the same, but he never did.
You want to reduce labour cost without depressing wages? Let’s adopt modern technology and improve productivity.
There should also be a programme of reindustrialization, but instead of trying to revive old industries like coal, we should focus on building up new and high-tech manufacturing sectors like robots, electronics, non-military aerospace, energy generation equipment, advanced materials…, many of which are non-existent in the UK. Also, our policies should encourage exports. I have said above that most studies have found that involvement in export trade has a positive impact on firms’ productivity, and firms that export tend to be more productive than those do not. In preparation for Brexit, we must also have policies to build up manufacturing capacity to produce parts and components that are currently imported from the EU.
“Sure, if the Government imposed draconian cuts to its spending then the external deficit could fall. All it would mean would be that the economy had collapsed and people were too poor to buy imports! This is pretty much what has happened in Greece. They now have a trade surplus. This is not really what anyone should be aiming for.” – Actually what I aim for is to cut down private/household consumption rather than austerity, with a strong focus on consumption of imports. Many households overspend and fall in debt for consumer goods alone. We could start by levying some kind of VAT on consumer goods which are mostly imported but not basic necessities, like bourbon whiskey or wine or tropical fruits of all kinds. I am sure that these stuffs are not consumed by working class. I am also fancy with the idea of compulsory savings. For government sector, I am thinking of a consensus similar to the 1933 Buy American Act, rather than a draconian cut in spending. In fact, Macron proposed a Buy European Act in his programme.
Thomas,
“bourbon whiskey or wine or tropical fruits of all kinds. I am sure that these stuffs are not consumed by working class.” If you are sure about this, you are not getting out enough to know what is going on.
Jack Daniels and Coke or wine spritzers are very popular drinks despite the heavy vat and alcohol duties o them. The days of a pint of mild and bitter or a bottle of stout warmed by a coal fire are long gone. Consumption of tropical fruits and juices (Bananas, oranges, pineapple etc) is not only widespread across the population but positively healthy. We don’t want to go back to the days of scurvy and Ricketts, do we?
@ JoeB,
“it is a mistake to equate the ordinary meaning of savings with its use in macroeconomics.”
OK we can get over technical about it, if you like, but it’s pretty much the same meaning in both.
Say we have an isolated island economy and the King introduces a new currency called the Crown. This is in pre computer days so its all done via metal tokens. The King spends 1000 crowns into the economy and imposes a hut tax to create a demand for the Crown. In the first year he get back 800 crowns in taxation. So, he’s running a deficit. He’ll have to do something about that 🙂
So where are the 200 crowns? They are obviously still out there in the economy. If everyone kept their tokens in piggy banks they could well be called savings.
Of course we can computerise the monetary system, and have imports and exports, but it doesn’t really change anything.
@ Thomas,
“Also, our policies should encourage exports. ”
Why? Yes we should export to an extent to enable us to afford imports but there’s no need or desirability of exporting just for the sake of it. If you grow apples and I grow pears then it makes sense to trade one for another. But it doesn’t make any sense for me to give you more pears for fewer apples, month after month, year after year and just accumulate your IOUs which I never spend.
What’s the point? After a while you can’t possibly pay in any case because you just can’t grow enough apples!
Peter Martin,
the issue is that it is not pretty much the same meaning in both, although you frequently equate both.
When individuals make monthly mortgage repayments they do not consider that saving They are spending their income not saving in in the ordinary sense of the word.. However, in macro terms they are saving i.e. not buying new consumer goods with income earned from production. They are buying land, a non-produced good and in 99% of cases an existing building that was produced long ago.
The mortgage payment constitutes the purchase of non-produced goods that are not consumed – Land – and produced goods – the building – that is consumed over time. The charges and interest payments represent a charge for the services of the financial intermediary (a produced good) and a charge for the use of capital (a non-produced good). The higher land prices go the higher the charge for capital and the less that is available for spending on goods and services produced by private or public sector workers and firms.
@ JoeB,
I’m not quite sure what you are driving at. Saving is when you spend less than you earn. If you have a debt of £1000 then you need to pay that off by spending less than you earn. I suppose the interest and any other costs associated with the debt can be classed as spending but the repayment of capital is saving. Both in macro and micro-economic sense.
The opposite of saving is when you spend more than you earn. Technically de-saving. If you go less than zero it’s borrowing and here there can be some conflict between a technical use of the word borrowing in a macro sense and in everyday parlance. I have seen borrowing used in connection with running down bank deposits. That would normally just be regarded as spending your own money.
Peter Martin,
the fruit analogy is one used by the economist Nick Rowe. As a monetarist, he thinks the explanation for recessions lies in an excess demand for money, the medium of exchange. To illustrate the point he has built a “minimalist” macroeconomic model, the smallest he can get away with. Its aim is to show what is required for a recession and, by what it leaves out, what is not necessarily required.
In this model half the people have apples, the other half bananas. The two groups also have mangoes, but not as many. The apple-sellers would like more bananas; the banana-sellers more apples. But what they all want most is more mangoes.
People in this world can clearly gain from trading apples for bananas. And in a barter economy that is exactly what happens. But what if one of the fruits—mangoes—serves as the medium of exchange? What if apples and bananas can be traded for mangoes but not directly with each other? This parallels the real world where goods are typically traded for money but not each other.
In this scenario less fruit will change hands and potential gains from trade will be lost. People are unwilling to buy much with their mangoes, which they hoard. As a result they are themselves unable to sell much of their fruit for the mangoes that everyone else is similarly hoarding. This, according to Mr Rowe, is what a recession looks like. An excess demand for the medium of exchange depresses trade. Workers are unable to sell their labour for money, partly because they (and everyone else) are unwilling to part with their money for the fruits of anyone else’s labour.
Monetarists think the medium of exchange is distinctive for a variety of reasons. With any other good or asset, when people want more they must buy it. If they want more money, however, they can simply refrain from buying other things, a drop in spending characteristic of a recession. Similarly, if any other asset or good is in hot demand, its price will rise until the demand is quenched. But because everything is priced in money, it has no price of its own. It can rise in value only if the price of everything else falls, a deflationary pressure also characteristic of recessions.
Peter Martin.
“Saving is when you spend less than you earn”. In normal everyday usage. Yes, but not in macro. In macro saving is when consumption is less than income. Spending on non-depreciable assets such as residential land, precious gems, fine art etc is not consumption. Net saving is income less investments. If savings are recycled into productive capital the economy operates in an equilibrium. The problems arise when savings are accumulated in inflated non-productive assets and financial instruments underpinned by those assets.
@ JoeB,
Yes I take your point but some of these examples are rather grey areas. If I paint a picture of your dog then that’s a job of work, just the same as if I’d rewired your house. Possibly my picture could be considered fine art at some time in the future. But probably not! Also your house could be worth more if I’d done a good job with the wiring. Gems involve digging out of the ground so there is some labour power required there too.
It really depends on what is or isn’t included in any definition of GDP. Would my artwork be included? If I found a diamond in a river bed would that be?
GDP = C + S + T
GDP has to equal consumption of households plus savings plus taxes paid to Govt.
Does anyone except the writers find this stuff interesting or of any use ?
nvelope2003 – when the percentage of students going to unis exceeds 50%, it’s save to say that the interest in tuition fee issue is no longer limited to middle-class. In Germany and Continental Europe, people are fine with paying extra tax even though there are more people going to vocational training, because German/European people believe that the amount spent will be eventually paid back by these graduates when they get a job. After all, you can still have international students and students from fee-paying schools to pay tuition fees as mentioned above by Peter Martin, with the highest rate for international students. And we can raise entry requirements, cut down non-curriculum funding and unnecessary courses to save money.
Peter Martin – “Why? Yes we should export to an extent to enable us to afford imports but there’s no need or desirability of exporting just for the sake of it” – We need to reduce debt and deficit, or end up like Spain and Ireland during 2010-2012. Our economy is already a huge debt bubble driven by debt-fuelled consumer spending, very similar to Spain and Ireland before 2010. The only long-term way to reduce debt is to reduce trade deficit, by export more, and by limit consumption and encourage savings. British high debt is as a result of foreign capital flows to finance our trade deficit. Worse, these capital flows are often speculative and usually go to financial and real estate sector rather than industries, since they tend to prefer quick profits. Our trade deficit is caused by low productivity, which increases our unit labour cost and depress our competitiveness.
Politically, trade deficit can also be leveraged very effectively in a national campaign, since both the Tories and Labour have ignored it and most importantly by far, most voters associate it with being an ecomomic loser. Case in point: Trump and the Midwesterners. However, Corbyn may no longer ignore this in the future.
If we manage to actually reduce deficit, this also means that some of those aggressive exporters will see their huge surpluses falling.
Encouraging manufacturers to export more also have a positive impact on productivity, as found by most economic research. Firms will have to actually adapt, modernize and innovate to remain competitive against cut-throat international competition. Case in point: in Japan, exporters are always more advanced equipped technologically and more productive than firms which only operate in domestic markets.
There are many ways other than devaluing the pounds to cut down trade deficits. Actually, devaluation of pound can be counter-productive since UK manufacturing sector imports lots of materials, parts and components from the EU.
@ Thomas,
“We need to reduce debt and deficit, or end up like Spain and Ireland during 2010-2012.”
Spain, Ireland, Greece, Portugal, Italy etc all have a problem because they use someone else’s currency which is fixed in value and which they can’t control. We obviously don’t have that.
Our economy is already a huge debt bubble driven by debt-fuelled consumer spending
Are you talking about Government debt or Private sector debt? They are generally the inverse of each other. If you get a tax rebate of £100 your debt falls. The Govt debt rises. Penny for penny. Everything has to sum to zero.
“British high debt is as a result of foreign capital flows to finance our trade deficit”
Or is it that we have a trade deficit because foreign capital flows in and pushes up the pound’s value? Enabling us to afford cheaper imports have those cheap foreign holidays?
“There are many ways other than devaluing the pounds to cut down trade deficits.”
Well yes. You can impose tariff barriers. The Govt can have a policy of always buying British. But, without exception, you’ll find that every large net exporter will always have a policy on their exchange rate and will do what they can to keep their currency cheap.
@ nvelope2003,
“Does anyone except the writers find this stuff interesting or of any use ?”
Sorry about the algebra! I’m a Physicist/Engineer by background and that doesn’t faze me but I know it’s a big turn off for many, so I try to avoid it.
Is it of any use? Well, yes it is. The kind of society we want does depend on having a well functioning economy so it must be, mustn’t it?
You can’t fix a car or computer or a human being without knowing at least something about how everything works. Otherwise you’ll end up making things worse. Like 18th century doctors used to routinely make things worse by bleeding sick patients for example. Some 21st century economists aren’t much better IMO!
It is disappointing to see upskirting treated earlier in this discussion as a trivial matter rather than an issue of human rights. Perhaps some people posting here might just consider that the party’s relevance to younger women could prove to be part of its survival!
Thomas: You have not answered my point about suicides and mental problems affecting students in South Korea. There is an obsession with a certain type of university education when it is often completely irrelevant or positively harmful. We do not have enough skilled people.
Peter Martin: I was referring to the endlessly repeated details of macroeconomics not the need for an educated workforce. I agree that most Liberal Democrat voters, at least before 2015, probably sent their children to state schools but I think many who post on this site do not because of the embarassed silence at the mention of fee paying schools. This is another issue that needs to be addressed but is being ignored.
Funny how the answers dry up when someone asks a difficult question !
Peter Martin – “Or is it that we have a trade deficit because foreign capital flows in and pushes up the pound’s value? Enabling us to afford cheaper imports have those cheap foreign holidays?” – in principle trade deficit comes first as we consume more than we save. Foreign capital flows then go to the UK to finance the deficit, and yes, it drives up the pound, causing a cycle.
“Are you talking about Government debt or Private sector debt? They are generally the inverse of each other. If you get a tax rebate of £100 your debt falls. The Govt debt rises. Penny for penny. Everything has to sum to zero” – Both. The UK’s GDP is driven by debt-fuelled consumer spending, which accounts for over half of total GDP. Household debts in the UK account for about 150% of GDP. A hike in interest rate can see many households defaulting on their debts.
“Well yes. You can impose tariff barriers. The Govt can have a policy of always buying British. But, without exception, you’ll find that every large net exporter will always have a policy on their exchange rate and will do what they can to keep their currency cheap.” – you can also adopts import substitution policies; and invest in modern technology, plant and machinery to improve productivity and thus our competitiveness. Devaluing the pound only works when our economy already becomes less dependent on imports to some extent. Otherwise, trade deficit may worsen due to inflated import prices.
You ignore things that are not really reflected in theory. When we incur huge trade deficit in manufactured goods, our manufacturing suffers from cheap foreign imports and declines all around, not just low-tech sectors like textile and garment but also advanced industries. This decline widens inequality because the service sector consists of very high-income jobs on one end and low-paid jobs on the other. Besides, the UK is still a great power, and thus we need to preserve if not expand our current manufacturing sector to backup our great power status. In the long run, our military capability will depend on our manufacturing sector. In the past, the backbone of the Royal Navy was our huge shipbuilding industry, not trade, banking and colonies. It declined when our shipbuilding was gradually collapsing.
nvelope2003 – “m
Thomas: You have not answered my point about suicides and mental problems affecting students in South Korea. There is an obsession with a certain type of university education when it is often completely irrelevant or positively harmful. We do not have enough skilled people” – I am not the one who brought up South Korea. Actually, I look at Germany and I want more students to take up vocational training. In Germany, fewer people go to unis because: German universities have tougher admission requirements and tougher first and second years; and it has strong manufacturing sector and larger vocational system. One problem in Britain is that you need a strong manufacturing sector for a vocation system to thrive. It does not have one.
nvelope2003 – South Korea, well, East Asians always prefer their children to go to universities, this is even true with most ordinary families. However, SK students tend to study STEM courses.
One decisive advantage of a public-funded higher education system is that the government can dictate or at least influence universities’ policies on their courses and curriculums to ensure that they are in line with national industrial strategy. Garbage degrees like drama, celebrity journalism, football management, golf management, surface management or stand-up comedy, as well as various other Media and Journalism courses wouldn’t have existed under this system. Under a fee-paying system, universities are free to offer trash degrees for pure commercial purposes to rip off students.
@nvelope2003,
OK My three children all went to State schools and have all been to uni and already have degrees. So I don’t have a dog in this fight!
@ Thomas,
“in principle trade deficit comes first as we consume more than we save.”
You can’t say this. Very occasionally there is an economic crisis and the Govt sets out to actually borrow some money from the IMF, or maybe the USA, in the same way as we might go to the bank to borrow for a car. But usually it’s not like this at all. The Govt is the bank and people want to park their money in the UK. If we were such a basket case, as some suggest, you might wonder why they would want to. But they do. The interest rate on 5 year gilts is less than 1%. Less than the rate of inflation. So why would the “Bank of the United Kingdom” not want to take in money from our suppliers and customers? OK it’s a debt but it’s only a technical debt that any bank has when their customers put money into their accounts.
“Devaluing the pound only works …………..”
Devaluation is a fixed exchange rate concept. The pound floats.
“….when our economy already becomes less dependent on imports to some extent.”
And this just happens by itself? And to what extent?
“Otherwise, trade deficit may worsen due to inflated import prices…..”
This can happen in the short term if there are existing contracts to be honoured. But, generally speaking, we can only afford to import according to the value of the pound. If the pound is high we can import more. The UK market becomes more attractive to both home and overseas manufactures and suppliers. If the pound falls then it makes more sense to export and the UK market is less attractive to overseas suppliers too.
If the pound is higher, it less expensive to holiday in Benidorm than Blackpool. So people tend to go to Benidorm now whereas at one time they’d go to Blackpool.That’s all there is to it.
Let’s face it, Liberal support is never more than 10% – anything above that is a protest vote as people in this country are so tribal. Cable is saying all the right things but no-one is listening. Suggestions like scrapping tuition fees is plain stupid and would make the Libdems look stupid. If the Libdems start adopting policies they don’t believe in but think will be popular, I’ll be leaving the party. In my opinion the Libdems should be making electoral reform a priority. I’m also tempted to join “another party” as soon as it is clear that there will be a leadership contest. For £25 I get to vote for the next PM and that’s a lot more impressive than the very limited power I have in a safe Labour seat!
Peter Martin – “If the pound is higher, it less expensive to holiday in Benidorm than Blackpool. So people tend to go to Benidorm now whereas at one time they’d go to Blackpool.That’s all there is to it.” – well, a party aiming for government should not limit their thinking to “cheap holidays”. The downsides of an overvalued pound are also clear: it makes our manufacturers less competitive in international markets and thus less capable in expanding their business abroad. Meanwhile, the competitive pressure of cheaper foreign import becomes higher. These factors are not alone, but they certainly help accelerate our manufacturing decline. Other factors include incompetent management, short-termism, shareholder value model instead of stakeholder value model of corporate governance, outdated machinery and technology (I’d love to use the term “industrial conservatism”), lack of access to financial markets, lack of investment…
“And to what extent?” – currently UK car industry imports 60% of its input components, mostly from the EU. This put the industry under even greater risk of supply chain disruption with Brexit looming. Another source also suggests that 70% of UK construction machinery are imported from the EU.
Britain’s debt mountain is also a ticking timebomb. It’s not about government debt but private sector debt. Instead of funding going to business investment to improve productivity and thereby wage, we only see households borrowing like crazy for consumption. Unsecured consumer credit has been rising rapidly in recent year. Many of them will have to default if interest rate rises. Mortgage debt and car credit also increased. Meanwhile, wage growth stagnates and household savings in the UK have gone negative recently. Certainly a ticking time bomb, as household debts are no risk-free.
The biggest reason for my preference for an export-led model is that involvement in export trade has positive impact on business productivity, this relationship has been confirmed by most economic studies. Exporters have to actually modernize and innovate to remain competitive in international markets. They also learn about new products, processes and technology. Japanese and Korean manufacturers became world leaders through export, by doing so they improved themselves and gained experience via the “learning by doing” effect. There is a reason why Japanese METI forced their firms to export during the 1950s-1980s.
@Thomas,
In many ways you’re right. I do agree that it’s private debt which is the problem rather than Govt debt. If the housing market/and or the stock market goes sour, we end up with too much negative equity, and we have large scale defaults on debt then everything will start to look very bleak very quickly. And you’re right that, from a purely British perspective, one way to tackle the problem would be to make the UK as a whole balance its books by exporting more and importing less. That does mean doing what many other countries do and managing our exchange rate. We’d have a ‘managed float’ rather than a free float.
But from an international perspective it won’t work, if everyone does it. Because it sets country against country. It requires the Americans, in particular, to be more than generous in accepting the exports of the exporters and there are signs that their patience is wearing thin. If everyone let their currency freely float, everything would work much better. The currencies of the net exporters would rise and their trade would naturally be more balanced afterwards.
We are in a situation where many of the world’s countries manage their exchange rate, (not to say manipulate it!) and others like the UK, USA, Australia, Canada, NZ genuinely let their currencies float. So its hardly surprising that these are the countries who end up with a trade deficit, most of the time. It doesn’t mean that we net importers are any less hard working, or spendthrift than our friends the Germans! But that’s the conclusion that we are often invited to draw. However, its purely the consequence of macroeconomic policies.
If the UK as a whole imports more than it exports (counting the invisibles too) then someone in the UK has to borrow to fund the difference. This can be either the Govt the Private Sector or a mixture of both. The Govt doesn’t want to do the borrowing so it tries cutting spending and raising taxes. This doesn’t work. It just pushes the economy into recession. So, hey ho, let’s reduce interest rates, deregulate lending, and let the private sector do the borrowing! That’s been deliberate Govt policy for many years now. It’s not going to end well!
@ Thomas (contd)
The only way that could work is for the Govt to do the borrowing and spend the proceeds into the economy to keep it buoyant. Essentially what we’d be saying to the Germans, the Dutch, the Danes, the Swiss, the Chinese, the Koreans etc is “Fine if you want to send us your BMWs, your flowers, your bacon, your expensive watches, your computers or whatever else you want to export to us then we’ll pay you with our IOUs. And if you’re happy taking them for ever that’s fine but don’t ever come back with them and expect anything real in return. You aren’t going to get it!
That’s probably already the position. We, including the Americans, the Canadians etc just need to spell it out to the rest of the world.
” and expect anything real in return. You aren’t going to get it!”
Apart, of course, from the very real houses, infrastructure, industry sectors, power stations, hotels, businesses they have bought already (as well as the football clubs).
I rage at politicians who welcome these “investments”. That’s what they are. They are not gifts they will be repaid by our toil and the toil of our children and grandchildren many times over. And it won’t matter what the state of the currency will be in twenty years time our offspring will still be handing over large amounts of whatever value tokens they will be using. The Chinese will own the solid assets.
Sorry, that should read “The Chinese already own the assets.”
All this happens in the real world. I implore you to put down your absorbing text books and just look out of the window. Your “IOUs” are being cashed every day.
@ Innocent Bystander,
The overseas wealthy will always be potential buyers of those things you mention: UK property, industry, football clubs etc. Running either a surplus or a deficit in our trade isn’t going to make any difference. In fact running a surplus might even make the problem worse as the pound would have to be lower in value and therefore London houses, and football clubs, would be more affordable.
It’s really down to us to set laws about what they can and can’t buy with their money. The Americans would be happy to sell Californian grapes to the Chinese, they probably would sell Boeing passenger jets but they wouldn’t sell military jets and they certainly wouldn’t allow the purchase of the Boeing company itself.
If we don’t want rich foreign buyers to buy up half of London, and keep it empty, then we just need to make all foreign purchases subject to a review by a statutory body which could apply suitable Nationality and residence tests.
“We need to be able to state, in social-media friendly format, half a dozen key policies…”
I think this misunderstands the nature of social media. Web sites, leaflets and old media need no more than three themes relentlessly pursued. Social media (and I don’t mean us tweeting at people who have chosen to follow us) requires a distinctive Liberal Democrat presence with a liberal response to whatever other people are discussing.
Thomas: Sorry I think it was Michael 1 who mentioned South Korea but I did not have time to look through 129 posts to check. My apologies. I agree with your views on Germany – and silly degrees here but many people do things which I consider silly so maybe I should be more tolerant. Betting shops seem silly and also harmful but the streets are full of them because people prefer them to Art Galleries and Museums or even universities.