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Commentary 340 – August 2010
16 August 2010 (23:11:07)


Was June's emergency budget the moment when the Liberal Democrats became just another political party that says one thing at election time and does another when in power?

For all the detailed policy gains won in the coalition negotiations, the overriding message from the budget was that the Lib Dems had gone along with 'savage' public spending cuts only a matter of weeks after they had prophesied disaster were this to happen.

During the election campaign, the party certainly said that cuts were unavoidable. But it also warned they should be phased sensibly to avoid being a cure worse than the disease, which would tip the economy back into recession.

By June, these cuts had suddenly become unavoidable on the basis of the Greek meltdown and a chat between Nick Clegg and Bank of England governor Mervyn King.

Since King has said that he thought whoever won the general election would subsequently be out of power for a generation, he may not be an entirely wise source to consult. The different circumstances of Greece make it an example of limited value to the party in avoiding charges of hypocrisy.

It is easy enough to see how electoral damage might be caused were the cuts indeed to create a second recession. The coalition parties would be slaughtered at the next election, with the Lib Dems in danger of once again finding that a taxi would be sufficient to hold all their MPs.

The dangers of the coalition's economic policy failing are clear. What is less clear is where the reward would come were it to succeed.

Unemployment has remained surprisingly low during this recession, partly because of pay cuts and short-time working. For people in work, able to take advantage of low interest rates and prices, the recession has impinged relatively little.

For most of the public, the deficit is so large as to be meaningless. The effects of interest rate increases on government borrowing are so abstract as to seem equally meaningless.

As a result, when the coalition says it has taken a scythe to education, local government, the police, benefits and infrastructure, it will be hard for the public to understand what calamity this pain is supposed to have averted.

So, will the public be grateful if the coalition succeeds in averting something few can grasp anyway?

It is hard to think of a single voter-friendly consequence that will flow from cutting public spending, even if, on its own terms, the policy succeeds in cutting the deficit. Come the next election, the country will be so battered that it is hardly likely to be grateful.

But it is easy to see what will happen if the coalition's message at the next election is, 'we went through this pain so things weren't as bad as they might have been,' which seems to be the only message it has now.

And who will put over the coalition's message? Those Lib Dems who always believed that parties working together was an end in itself, rather than an occasional necessity, argued that having two parties in power would mean that a government commanded wider support and consent, had two lots of MPs to support it, two lots of activists campaigning for it and, in effect, would be strengthened by having two of everything.

What if it doesn't? It is already clear that the right-wing of the Tory party does not believe that the coalition is 'its' government and, when the effects of the budget bite, plenty of Lib Dems with seats to hold may conclude that it's not their government either.

Thus the coalition could end up supported wholeheartedly by neither party and neither set of activists because both feel aggrieved about its actions.

True, Lib Dems are unlikely to desert until after the referendum on the alternative vote, but that can be won only by an appeal, as was done in New Zealand, to change the voting system to "keep the bastards honest".

If it becomes a referendum on people's opinion of the government, it will be as good as lost, given how unpopular the coalition is likely to be by next May.

The referendum campaign has to be carried by a message of inspiration and hope, and preferably led by figures not closely identified with the leadership of any party.

A 'yes' campaign needs also to put aside squabbles between supporters of AV and the single transferable vote.

AV is indeed not proportional but it is the only system on which the Conservatives (or anyone else) is likely to accede to Lib Dem demands for a referendum on voting reform. It is inconceivable that, were it lost, first-past-the-post would somehow throw up a majority for STV.

The referendum is going to need campaigning flair and positive messages, which is precisely what the coalition lacks on economic policy. It appears to be obsessed instead with cutting the deficit as an end in itself, but cannot say what benefits would flow were it to succeed in this endeavour.

Offering only blood, toil, tears and sweat was appropriate at the outset of the Second World War. It won't be enough to carry the coalition parties now.

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