Tag Archives: danny alexander

“Help to buy” undermines the very purpose of the Lib Dems in government

AlexanderUnlike a lot of disgruntled former Lib Dems (and, for that matter, disgruntled current Lib Dems), I still have a lot of time and sympathy for the party. I still think that joining the coalition was the right thing to do. I see the Lib Dems stopping Tory madness on a daily basis and anyone who doesn’t accept this must either deluded or plain dishonest. I oppose many of the welfare reforms, but recognise that with Labour offering virtually no opposition on the subject and public opinion very much in favour, there is not a whole lot they could really do.

And while I’m distinctly uneasy about George Osborne’s economic policies and the Lib Dems’ support for it, I will give him this: even if he wanted to adopt a dramatically different approach, the combined forces of Germany and the financial markets would make it exceedingly difficult for him to do so. And while it’s possible the recovery would have been swifter if we had borrowed more and cut less, I can’t honestly say that I know this to be true.

But much of my respect for the Lib Dems’ work in government is rooted in the fact that it was a responsible decision in the face of economic chaos. It stops right at the point where I think they start signing up to policies which are economically irresponsible. And that brings us to this “help to buy” scheme.

I am hardly the first person to point out that inflating house prices at this time to help people to take out mortgages in an untargeted way will simply help to increase property prices in an unsustainable way and price even more people out of the market altogether. I was alarmed to hear Danny Alexander on the radio this morning denying that the current rate of unaffordable house prices was even a problem and insist that all that was needed was easier access to mortgages. To hear him wistfully talk about how he got a 95% mortgage “25 years ago” (which meant he got his first mortgage when he was 16, incidentally), made it sound as if the Lib Dem policy was now simply a case of returning to the old housing boom fuelled economics of the last few decades and had lost all interest in learning from those excesses.

Housing was one of Labour’s greatest failures. More than anything, their failure to get Britain building during the noughties both heightened the boom and deepened the inevitable bust. And of course, the housing benefit bill would not have escalated in the way it has done. Yet, tellingly, this is one area of policy the coalition have failed to attack Labour on. In the case of the Conservative wing, the reason is fairly obvious: they are engaged in class warfare and very much see the retention of an economy in which the elite’s rent-based wealth is preserved. Historically, the Liberals and Liberal Democrats stood against that sort of thing, at least in the 20th century. Cynics like myself bemoan that Clegg and his former adviser Richard Reeves are part of a faction within the Lib Dems that consider the 20th century Liberals an aberration and see themselves as merely the heirs to Gladstone. It is hard to dispute that when you hear them talking about this issue.

The 2010 Lib Dem manifesto had this to say about the economy:

Fairness is an essential British value. It is at the centre of how the vast majority of British people live their lives, but it has been forgotten by those at the top. Instead, greed and self-interest have held sway over the government and parts of the economy in recent decades. They have forgotten that growth must be shared and sustainable if it is to last.

It would appear that in government, the Lib Dems themselves have forgotten that lesson very quickly indeed. Justifying your role in government as having to tackle the economic crisis is one thing; setting the foundations for the next economic crisis is quite another.

Conference and canards

God know’s why I’m still up at 3am. Still a bit wired after conference I guess. I’m not staying up much longer but I wanted to write that I thought it was an excellent weekend both for the party generally, the Social Liberal Forum in particular and me personally. A few random thoughts:

1. I was pleased by the answer Danny Alexander gave me regarding the FPC playing a more pro-active role in formulating a response to government legislation in light of the Digital Economy Bill debacle. I have a few thoughts on this but will write about them later.

2. I was less pleased by Nick Clegg’s non-commital answer to my “friendly” question about if he rules out further tax rises, as he appeared to do in the Spectator this week. He neither confirmed nor denied the position he took. SLF Chair David Hall-Matthews also pressed him on this during the economy debate. The rumour going round was that he privately acknowledges “misspeaking” but it is concerning nonetheless.

3. Despite my constant grumblings, I really do think that Nick Clegg nailed it in his conference speech. “Change that works for you. Building a fairer Britain” is a lousy slogan but then, aren’t they all? As spelt out during the speech however, at its core is a brilliant narrative which encapsulates what distinguishes the Lib Dems from the other parties. The fact that we even have a narrative (or rather, a narrative of our choosing rather than one imposed on us) is a bit of an innovation for the Lib Dems going into an election. The four themes work well and, crucially, join together. The bad old days of the 2005 policy pledges seem long ago.

4. Standing room only at both SLF fringes, including the one about passing a constitution. FTW!

Finally, over on the SLF website, I’ve written a response to the Left Foot Forward/Fabian “research” which purports to prove that the Lib Dem tax policy is regressive – by its own admission it only applies if you cherry pick the tax cut while ignoring the tax rises being introduced to pay for it. Spectacularly bad.

Avast! How Clegg and Alexander are doing it wrong.

(Cross-posted from here)

This article pretty much sums up what is wrong with the party’s communication strategy at the moment. Apart from the fact that it has been published roughly four days too late, it repeats many of the mistakes we witnessed last weekend.

Reading it carefully, it is clear what Danny is getting at. But journalists don’t – and often can’t – spend time reading the subtle nuances of every press release and statement. I’m not sure if the talk about ‘the vast majority of the “spare” money’ going on tax cuts is part of a thought out strategy, or a retrofit designed to spare Nick Clegg’s blushes following the Telegraph interview, but its potential to mislead is, well, vast.

Let’s be clear: if the £20bn of savings is to be earmarked for existing spending commitments, then that means that only £2-4bn will be left for tax cuts. Whichever way you spin it, that is not a “vast” amount of money – perhaps a penny in the pound on the basic rate of income tax (which will benefit low income earners not one jot). So why all this talk of “vastness”?

There’s nothing wrong with admitting that any tax cuts we come up with are likely to be modest – given the current economic climate it is prudent to be prudent. All this talk of “vastness” is an open invitation to misinterpretation.

Several people walked away from the “Make it Happen” launch in July under the genuine impression that Clegg had promised £20bn in tax cuts (Iain Dale even described that sum in his Telegraph column as a small amount). We can’t keep leaving so much room for confusion and doubt. And that means choosing words much more carefully.

NB My Parliamentary Monitor article, which is related to this subject, is now readable online to all and sundry.