This wasn't the speech Clegg needed

The Lib Dem leader offered little to reassure his anxious party.

Addressing a party that has lost more than half of its support since the election, a quarter of its membership and hundreds of its councillors, perhaps it's not surprising that Nick Clegg felt the need to reassure the Lib Dems that they would, at least, still exist by the time of the next election. "If we secure our country's future, we will secure our own," he cried, suggesting that extinction was not an unthinkable outcome.

The big policy announcement was that he would block any reduction in the 45p tax rate. While he "conceded" the cut from 50p to 45p, Clegg declared that all future tax cuts must pass "one clear test": "do they help people on low and middle incomes get by and get on?" The problem with this argument is that it applies equally well to the original cut. Why is it only now, after the government has handed 14,000 millionaires a £40,000 tax cut, that Clegg discovers his progressive soul and insists any measures must benefit lower earners? With the exception of one token reference to taxing "unearned wealth", we also heard nothing about the new "wealth tax" he had previously spoken of.

For much of the speech, which was short by recent standards, it was what Clegg didn't say that was most notable. There was no mention of the NHS (perhaps understandably), nothing on constitutional reform (the Alternative Vote and House of Lords reform having been defeated) and nothing on welfare. It is some indication of Clegg's standing in the party that the biggest cheer came when he announced that a former leader, Paddy Ashdown, would chair the party's 2015 election campaign.

Today, Clegg needed to reassure anxious activists that he has a plan to avoid a disastrous defeat at that election. In that task, he singularly failed. His voice rising with anger, the Deputy PM declared that "it was Labour who plunged us into austerity and it is we, the Liberal Democrats, who will get us out." But the failure of the coalition's strategy to deliver growth (indeed, its success in delivering recession) means there is no end in sight for austerity. "Let's go for it!," he rather limply ended. But few, one sensed, were prepared to follow him.

Nick Clegg gives his keynote speech to the Liberal Democrat conference in Brighton. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty
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Scotland's vast deficit remains an obstacle to independence

Though the country's financial position has improved, independence would still risk severe austerity. 

For the SNP, the annual Scottish public spending figures bring good and bad news. The good news, such as it is, is that Scotland's deficit fell by £1.3bn in 2016/17. The bad news is that it remains £13.3bn or 8.3 per cent of GDP – three times the UK figure of 2.4 per cent (£46.2bn) and vastly higher than the white paper's worst case scenario of £5.5bn. 

These figures, it's important to note, include Scotland's geographic share of North Sea oil and gas revenue. The "oil bonus" that the SNP once boasted of has withered since the collapse in commodity prices. Though revenue rose from £56m the previous year to £208m, this remains a fraction of the £8bn recorded in 2011/12. Total public sector revenue was £312 per person below the UK average, while expenditure was £1,437 higher. Though the SNP is playing down the figures as "a snapshot", the white paper unambiguously stated: "GERS [Government Expenditure and Revenue Scotland] is the authoritative publication on Scotland’s public finances". 

As before, Nicola Sturgeon has warned of the threat posed by Brexit to the Scottish economy. But the country's black hole means the risks of independence remain immense. As a new state, Scotland would be forced to pay a premium on its debt, resulting in an even greater fiscal gap. Were it to use the pound without permission, with no independent central bank and no lender of last resort, borrowing costs would rise still further. To offset a Greek-style crisis, Scotland would be forced to impose dramatic austerity. 

Sturgeon is undoubtedly right to warn of the risks of Brexit (particularly of the "hard" variety). But for a large number of Scots, this is merely cause to avoid the added turmoil of independence. Though eventual EU membership would benefit Scotland, its UK trade is worth four times as much as that with Europe. 

Of course, for a true nationalist, economics is irrelevant. Independence is a good in itself and sovereignty always trumps prosperity (a point on which Scottish nationalists align with English Brexiteers). But if Scotland is to ever depart the UK, the SNP will need to win over pragmatists, too. In that quest, Scotland's deficit remains a vast obstacle. 

George Eaton is political editor of the New Statesman.