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.

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Forget gaining £350m a week, Brexit would cost the UK £300m a week

Figures from the government's own Office for Budget Responsibility reveal the negative economic impact Brexit would have. 

Even now, there are some who persist in claiming that Boris Johnson's use of the £350m a week figure was accurate. The UK's gross, as opposed to net EU contribution, is precisely this large, they say. Yet this ignores that Britain's annual rebate (which reduced its overall 2016 contribution to £252m a week) is not "returned" by Brussels but, rather, never leaves Britain to begin with. 

Then there is the £4.1bn that the government received from the EU in public funding, and the £1.5bn allocated directly to British organisations. Fine, the Leavers say, the latter could be better managed by the UK after Brexit (with more for the NHS and less for agriculture).

But this entire discussion ignores that EU withdrawal is set to leave the UK with less, rather than more, to spend. As Carl Emmerson, the deputy director of the Institute for Fiscal Studies, notes in a letter in today's Times: "The bigger picture is that the forecast health of the public finances was downgraded by £15bn per year – or almost £300m per week – as a direct result of the Brexit vote. Not only will we not regain control of £350m weekly as a result of Brexit, we are likely to make a net fiscal loss from it. Those are the numbers and forecasts which the government has adopted. It is perhaps surprising that members of the government are suggesting rather different figures."

The Office for Budget Responsibility forecasts, to which Emmerson refers, are shown below (the £15bn figure appearing in the 2020/21 column).

Some on the right contend that a blitz of tax cuts and deregulation following Brexit would unleash higher growth. But aside from the deleterious economic and social consequences that could result, there is, as I noted yesterday, no majority in parliament or in the country for this course. 

George Eaton is political editor of the New Statesman.