From the TUC

Lib Dems are abandoning the centre-ground

12 Mar 2011, by Guest in Politics, Public services

This is what I’ve just said to a fringe meeting at the Lib Dem Spring conference in Sheffield, where I’m sharing a platform with Treasury Chief Secretary Danny Alexander:

I like to think that the TUC has developed good relations with the Liberal Democrats in recent years – of course there have been disagreements but also mutual respect.

Charles Kennedy addressed our annual Congress when he was leader, as my predecessor John Monks spoke to your Assembly. Chris Huhne addressed the TUC environment conference last October – and in turn I’ve been delighted to speak at a number of your fringe events.

That mutual respect has been based on a recognition that we share some basic philosophical roots and approaches.

Social Liberalism was a driving force behind the creation of the post-war welfare state of Keynes and Beveridge, but it also drew on important work done by the TUC on social insurance.

The social democratic tradition that helped regalvanise your party in the 1980s was the UK’s main advocate of what I would call the social Europe bargain – a key belief in today’s trade unions.

On the one hand support for a dynamic economy, but on the other a recognition that prosperity should have a wider social purpose through progressive taxation and well-funded public services.

On the one hand the energy of markets, but on the other protection from their inevitable excesses and instability.

Above all a recognition that markets should not trump democracy – that some issues are just too important to be left to market forces to settle.

Now we can trace and identify the roots and philosophies behind those beliefs, but it might just be as easy to say that they come from the common-sense and deep support for fairness built into the British psyche. It’s the politicians who tap into that who command the centre ground.

But it has to be said that I am finding it increasingly hard to see how those core beliefs can be reconciled with important elements of coalition policy.

Now of course I accept that coalition government is difficult. Uncomfortable compromises have to be made – especially when you are the junior partner.

And I also recognise that you can point to real achievements – linking the state pension once again to earnings is one that sees success for a long campaign backed by unions. The referendum on AV is a big Lib Dem win for a party long committed to electoral reform.

Nor can anyone deny that the public finances remain in a very difficult state, and whoever had won the last election would have faced difficult choices after the damage done by such a deep and world-wide recession.

And while I’m not going to be able to resist a little political knockabout by quoting old speeches and manifesto pledges, I recognise that circumstances change and coalitions constrain choice – a certain amount of bilge water in the diet is inevitable.

But even allowing for all of this, people are now beginning to see a growing disconnect between what they thought your basic values to be and what is actually happening in reality.

And that can’t be a good thing for any party wanting to win votes.

I think there are two areas I want to draw out – not simple disagreements but policies that simply clash with what I always understood to be the basic principles of Liberal Democracy.

First, let me say a few words about the economy, growth and jobs.

As the Lib Dems said before the election: “If spending is cut too soon, it would undermine the much-needed recovery and cost jobs. We will base the timing of the cuts on an objective assessment of economic conditions, not political dogma.”

Yet what we’ve experienced since is the exact opposite.

We’ve been told that we have to eradicate the structural deficit in this parliament and that it has to be done by four pounds of cuts for every pound of tax increase – and that from VAT the unfairest tax of all.

The claim that without this we would become the next Greece is absurd. Our debt is manageable and lower than many comparable countries. It is not to deny the deficit to acknowledge that borrowing is relatively cheap and straightforward.

A four year timetable to undo all the fiscal damage done by decades of a mistaken economic model is not just arbitrary, but a very deliberate political choice. And one that runs the dangers of repeating the errors made in the 1930s.

Even before austerity really gets a grip, dole queues are lengthening with solid predictions of a million more unemployed. And alarmingly the economy contracted by 0.6 per cent in the last quarter of 2010.

Deep rapid front-loaded cuts are not the answer to our economic woes. As that great Liberal John Maynard Keynes rightly said – after seeing the damage done by similar policies, the best way to secure recovery and pay down the deficit is not through massive cuts – but through jobs and growth.

Keep people in work, keep tax revenues flowing, limit the costs of unemployment: that’s the social democratic response to the crisis we face, that’s the progressive approach. But even for those who disagree that there is room for an economic alternative and accept the government’s budget judgement however reluctantly, my second charge still needs answering.

Because my concern is that under cover of the fiscal deficit, public spending cuts are being used to fundamentally restructure the welfare state. The UK version of that Europe style social bargain is being decisively rolled back. The balance between markets and democracy is being fundamentally shifted away from people power.

This is what lies behind the most rapid reform of public services in living memory, with the Prime Minister promising to open up services to competition by “any willing provider” – code for privatisation on a huge scale.

“There is a kind of Maoist revolution happening in a lot of areas like the health service, local government, reform, all this kind of stuff, which is in danger of getting out of control.” Not my words, of course, but Vince Cable’s.

As many people here have realised already this weekend the changes are greatest and most dangerous in the health service.

The Health and Social Care Bill represents the biggest upheaval in the history of the NHS. Yet it wasn’t in the coalition agreement, nor was it put to the electorate last May by either coalition party. Indeed the Conservatives stressed the NHS was safe in their hands and that there would be no top-down reform. Some of us thought that went without saying for the Lib Dems.

There’s an old cliché about putting Count Dracula in charge of the blood bank. Now as a result of the planned privatisation of the National Blood Service it appears he will at least be able to bid for it.

But the damage being done to local government is just as damaging and just as much part of this revolution hidden by cuts. Being a local councillor has become one of the toughest jobs in Britain.

The scale of the cuts is bad enough, but it’s their front loading that is adding hugely to the damage. And it is the clear bias shown by imposing the biggest cuts on the most deprived areas that reveals the politics.

Scaling back ambitions and making planned savings when times are hard, knowing that they can be restored when times get better, is one thing. Deep cuts that destroy services and close community facilities for ever are another.

The new localism has turned out not to be about restoring respect, dignity and resources to local government, but by-passing town halls and leaving individuals to fend for themselves.

Even the Pupil Premium has come at a price – with Michael Gove admitting that funding is coming from cuts to welfare and cuts elsewhere in the schools budget.

Indeed after the Spending Review the IFS has calculated that 60 per cent of primary school pupils and 87 per cent of secondary students will see their school’s funding cut in real terms.

In any event, the Premium will be worth just £430 per pupil this year – not the £2,000 or so originally planned.

Even after making every allowance for the realities of coalition and an election result that closed down options, the Liberal Democrats risk ending up on the wrong side of the fundamental divide in British politics.

It is not just a difference of judgement about the state of the economy, but a move away from the basic principles of not just left-of-centre Britain but middle Britain.

Above the ebb and flow of party politics a big majority of the British share a basic support for fairness – and unlike many in the USA – support an active state providing services and countering deprivation and inequality. Call it the European mainstream, the British sense of fairplay, or basic civilised values – that doesn’t matter.

Detoxifying the Conservative brand was all about appearing to recognise that, even if we see that the conversion was not even skin-deep.

But my worry is that the Lib Dems show signs of leaving that space too – or at least that’s what voters now think.

That’s not just a bad place for your party to be, but it’s a setback for that very broad coalition that has secured so much of the social progress that we have seen in the last hundred years.