The 2010 election was notable for the failure of the three main parties to spell out clearly how they would reduce the budget deficit.  No-one wanted to scare the voters away. 2015 is already proving different. Nick Clegg has announced that Liberal Democrats would increase taxes by at least £8 billion and bring in a further £6 billion by tackling tax avoidance. There would still be up to £16 billion cut from  expenditure, £12 billion from government departments and £4 billion from welfare. Whilst not exactly a return to Keynesian economics, this is nevertheless a huge step away from the Tory approach which seemed to have dominated coalition fiscal policy. The balance between expenditure cuts and tax increases under Tory plans for the next parliament would be 98:2 whereas we will be proposing 60:40.

For most of this parliamentary term party conference was denied the opportunity to debate the central economic policy of the coalition. On offer to the electorate was the Osborne / Alexander  austerity policy, Plan A, presented as a TINA (There is no alternative). The Labour Party offered a series of variations dreamt up by Ed Balls, hard to dignify as Plan B as they were all essentially  modified forms of austerity. The Social Liberal Forum offered Plan C, but attempts to table motions to give expression to it were blocked. Finally in Glasgow in September 2013, Nick Clegg tabled a conference motion broadly rehearsing the existing coalition policy with some vague calls for changes. SLF tabled a long amendment, 80% of the text of which was accepted by the movers but the key point of changing the Bank of England’s fiscal mandate was successfully resisted. David Howarth, summing up for the amendment, outlined the dangers of trying to cut the deficit by expenditure cuts alone and warned that worse was to come. Nick Clegg summing up for the motion agreed that deficit reduction would require tax increases as well. Few people noticed at the time and little had happened since to give substance to that opinion. The following morning the BBC asked Danny Alexander which taxes he would increase and Danny gave no answer.  

In that same debate in Glasgow, I told Nick Clegg that he was not the lone ranger and should listen to his party.  He looked puzzled at the reference but it does appear now that the efforts of the Social Liberal Forum have finally borne fruit. I look forward to the publication of diaries over the next few years revealing the struggles that went on within the coalition, not only between the two parties but between ministers from our own party. Vince Cable may not be the Liberal Democrat economic spokesman in the General Election but make no mistake, Danny Alexander will now have to promote and defend Vince’s ideas, not his own.

Of course, this is not the entire package we would wish to see. Cuts to welfare continue. We would argue for more investment. Yet this is a huge and welcome step in the right direction. Coalition has often been a dispiriting business, but we need to have confidence in our ideas, courage to push them and patience to keep pushing. Rather late in the day the Liberal Democrats are proclaiming they are not Tories and there is indeed an alternative. Say not the struggle naught availeth.

This article was originally posted on Liberal Democrat Voice


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