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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What type of Brexit did we vote for? 150,000 Conservative members will decide

As Michael Gove launches his leadership bid, what Leave looks like will be decided by Conservative activists.

Why did 17 million people vote to the leave the European Union, and what did they want? That’s the question that will shape the direction of British politics and economics for the next half-century, perhaps longer.

Vote Leave triumphed in part because they fought a campaign that combined ruthless precision about what the European Union would do – the illusory £350m a week that could be clawed back with a Brexit vote, the imagined 75 million Turks who would rock up to Britain in the days after a Remain vote – with calculated ambiguity about what exit would look like.

Now that ambiguity will be clarified – by just 150,000 people.

 That’s part of why the initial Brexit losses on the stock market have been clawed back – there is still some expectation that we may end up with a more diluted version of a Leave vote than the version offered by Vote Leave. Within the Treasury, the expectation is that the initial “Brexit shock” has been pushed back until the last quarter of the year, when the election of a new Conservative leader will give markets an idea of what to expect.  

Michael Gove, who kicked off his surprise bid today, is running as the “full-fat” version offered by Vote Leave: exit from not just the European Union but from the single market, a cash bounty for Britain’s public services, more investment in science and education. Make Britain great again!

Although my reading of the Conservative parliamentary party is that Gove’s chances of getting to the top two are receding, with Andrea Leadsom the likely beneficiary. She, too, will offer something close to the unadulterated version of exit that Gove is running on. That is the version that is making officials in Whitehall and the Bank of England most nervous, as they expect it means exit on World Trade Organisation terms, followed by lengthy and severe recession.

Elsewhere, both Stephen Crabb and Theresa May, who supported a Remain vote, have kicked off their campaigns with a promise that “Brexit means Brexit” in the words of May, while Crabb has conceded that, in his view, the Leave vote means that Britain will have to take more control of its borders as part of any exit deal. May has made retaining Britain’s single market access a priority, Crabb has not.

On the Labour side, John McDonnell has set out his red lines in a Brexit negotiation, and again remaining in the single market is a red line, alongside access to the European Investment Bank, and the maintenance of “social Europe”. But he, too, has stated that Brexit means the “end of free movement”.

My reading – and indeed the reading within McDonnell’s circle – is that it is the loyalists who are likely to emerge victorious in Labour’s power struggle, although it could yet be under a different leader. (Serious figures in that camp are thinking about whether Clive Lewis might be the solution to the party’s woes.) Even if they don’t, the rebels’ alternate is likely either to be drawn from the party’s Brownite tendency or to have that faction acting as its guarantors, making an end to free movement a near-certainty on the Labour side.

Why does that matter? Well, the emerging consensus on Whitehall is that, provided you were willing to sacrifice the bulk of Britain’s financial services to Frankfurt and Paris, there is a deal to be struck in which Britain remains subject to only three of the four freedoms – free movement of goods, services, capital and people – but retains access to the single market. 

That means that what Brexit actually looks like remains a matter of conjecture, a subject of considerable consternation for British officials. For staff at the Bank of England,  who have to make a judgement call in their August inflation report as to what the impact of an out vote will be. The Office of Budget Responsibility expects that it will be heavily led by the Bank. Britain's short-term economic future will be driven not by elected politicians but by polls of the Conservative membership. A tense few months await. 

Stephen Bush is special correspondent at the New Statesman. He usually writes about politics.