Want to know what the Lib Dems are for? You'll find out tomorrow.

How lovely it is that we've started setting the agenda.

In the Autumn Statement, a Tory Chancellor will announce a set of Liberal Democrat policy initiatives, and, all things considered, be congratulated on his foresight and wisdom by his Labour Shadow.

I'll let you all chew that over for a moment. OK? Right then, onward...

Up until May 2010, the easiest way to poke a Lib Dem into fury was to announce, "I often ask myself, what is the point of the Lib Dems?". I seem to recall Anne Leslie was especially good at putting a lot of vitriol into it. I've no idea what was said next, as I was too busy shouting at the TV by then.

Since the last general election, everyone has found it rather too easy to answer that question.

If you're on the left, then the Lib Dems are a bunch of never to be trusted pseudo Conservatives determined to shove a right wing regressive agenda on an unsuspecting public.

If you're a Tory, then we're a crowd of yellow livered wets stopping them thrust a fiscally driven tidal wave of horrid tasting medicine down the throats of Britain.

In truth we are neither of these things. But we did leave a bit of a vacuum -- so we've no one to blame but ourselves.

For 12 months, pursuing a line of "not a cigarette paper between us" did indeed make us look like we were interested in pursuing nothing but a Tory agenda. This was not true and the grassroots hated it. But a narrative was set.

Fortunately, since the nadir of May 2011 -- and our own dose of electoral medicine -- we've started pointing out the opposite is true. Now we get credit all over the place for stopping the Conservatives doing all they want - from the Conservatives. Here for example, is the delightful Nadine Dorries

Mr. Speaker, the Liberal Democrats make up 7 per cent of this parliament, and yet they seem to be influencing our free school policy, health -- many issues -- immigration and abortion. Does the prime minister think it's about time he told the deputy prime minister who is the boss?

Hmmm...

Anyway, while we've delighted in playing the role of Tory handbrake, going forward it does beg the old question of what we're "for" once again. Because we can't just be seen to be playing defensive to the Tory bouncers. We need to get on the front foot -- and remind people what we're actually about.

So how lovely it is that we've started setting the agenda.

Last week, Martin Bright (once of this Parish) wrote a good summation of the Youth Contract entitled "So this is what the Lib Dems are for".

And now we'll see George Osborne announcing a whole heap of other initiatives -- infrastructure investment, raising the bank levy, extra school places, cheaper borrowing for businesses -- that have Lib Dem stamped all the way through them. And which Ed Balls, to his credit, has welcomed as the right things to do.

No doubt there will be a ton of measures announced by George Osborne tomorrow that grassroots Lib Dems will find difficult -- any freeze on tax credits, for example, will be especially hard to swallow.

But at least there is clear yellow water between plan A and Plan A+, with A+ combining fiscal accountability with social responsibility.

Which is what the Lib Dems are for, by the way.

 

Richard Morris blogs at A View From Ham Common which was named Best New Blog at the 2011 Lib Dem Conference

 

Richard Morris blogs at A View From Ham Common, which was named Best New Blog at the 2011 Lib Dem Conference

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There are risks as well as opportunities ahead for George Osborne

The Chancellor is in a tight spot, but expect his political wiles to be on full display, says Spencer Thompson.

The most significant fiscal event of this parliament will take place in late November, when the Chancellor presents the spending review setting out his plans for funding government departments over the next four years. This week, across Whitehall and up and down the country, ministers, lobbyists, advocacy groups and town halls are busily finalising their pitches ahead of Friday’s deadline for submissions to the review

It is difficult to overstate the challenge faced by the Chancellor. Under his current spending forecast and planned protections for the NHS, schools, defence and international aid spending, other areas of government will need to be cut by 16.4 per cent in real terms between 2015/16 and 2019/20. Focusing on services spending outside of protected areas, the cumulative cut will reach 26.5 per cent. Despite this, the Chancellor nonetheless has significant room for manoeuvre.

Firstly, under plans unveiled at the budget, the government intends to expand capital investment significantly in both 2018-19 and 2019-20. Over the last parliament capital spending was cut by around a quarter, but between now and 2019-20 it will grow by almost 20 per cent. How this growth in spending should be distributed across departments and between investment projects should be at the heart of the spending review.

In a paper published on Monday, we highlighted three urgent priorities for any additional capital spending: re-balancing transport investment away from London and the greater South East towards the North of England, a £2bn per year boost in public spending on housebuilding, and £1bn of extra investment per year in energy efficiency improvements for fuel-poor households.

Secondly, despite the tough fiscal environment, the Chancellor has the scope to fund a range of areas of policy in dire need of extra resources. These include social care, where rising costs at a time of falling resources are set to generate a severe funding squeeze for local government, 16-19 education, where many 6th-form and FE colleges are at risk of great financial difficulty, and funding a guaranteed paid job for young people in long-term unemployment. Our paper suggests a range of options for how to put these and other areas of policy on a sustainable funding footing.

There is a political angle to this as well. The Conservatives are keen to be seen as a party representing all working people, as shown by the "blue-collar Conservatism" agenda. In addition, the spending review offers the Conservative party the opportunity to return to ‘Compassionate Conservatism’ as a going concern.  If they are truly serious about being seen in this light, this should be reflected in a social investment agenda pursued through the spending review that promotes employment and secures a future for public services outside the NHS and schools.

This will come at a cost, however. In our paper, we show how the Chancellor could fund our package of proposed policies without increasing the pain on other areas of government, while remaining consistent with the government’s fiscal rules that require him to reach a surplus on overall government borrowing by 2019-20. We do not agree that the Government needs to reach a surplus in that year. But given this target wont be scrapped ahead of the spending review, we suggest that he should target a slightly lower surplus in 2019/20 of £7bn, with the deficit the year before being £2bn higher. In addition, we propose several revenue-raising measures in line with recent government tax policy that together would unlock an additional £5bn of resource for government departments.

Make no mistake, this will be a tough settlement for government departments and for public services. But the Chancellor does have a range of options open as he plans the upcoming spending review. Expect his reputation as a highly political Chancellor to be on full display.

Spencer Thompson is economic analyst at IPPR