The Lib Dems must not accept more welfare cuts in return for new taxes

Higher taxes on the rich will not protect the poorest if spending is slashed.

We may no longer be in recession, but the nation still faces a critical year ahead. Choices that the government makes over wealth taxes and welfare spending in particular will shape the political economy, not just for the year ahead but for decades to follow, and recent signs are not encouraging. Beginning with George Osborne’s Autumn Statement on 5 December and culminating with a short and probably bitter Spending Review, the next year or so is the political equivalent of Alex Ferguson's "squeaky bum time" – only with livelihoods, not football, at stake.

The Tory party’s re-toxification under Cameron has continued apace since their party conference, whether through atavistic evidence-free posturing on crime and punishment, employment law or on welfare cuts – the latter, in particular, would ruin any chance the government has of keeping its promise of not balancing the books on the backs of poor.

Osborne doggedly adheres to a macro-economic platform being shown day by day to be more broken and discredited than previously thought. His insistence that reducing the deficit takes precedence over balancing the economy distorts spending decisions, and leaves today’s government and those that follow with their hands seemingly tied to a dangerous spiral of ever-harsher spending cuts. An alarming report from the Social Market Foundation and the RSA shows that closing the deficit on a rigid timetable, primarily through cuts, with neither tax rises nor growth playing a larger role, leaves us facing an additional £48bn of austerity. The knock-on effects on both demand and the quality of public services, and hence prosperity, are unthinkable – there comes a point, when you’re in a hole, to stop digging, and that time is now.

The determination to bring the deficit down by cutting welfare spending stems from the fallacy that feckless workshy scroungers are raiding the Exchequer, when the evidence shows that 93 per cent of new housing benefit claims are from in-work households and that the main driver of higher welfare spending is that we live longer. It’s the failure of wages to keep pace with spiralling cost of living – housing and fuel in particular – that means so many require in-work support. The Tories should be arguing for a living wage and investment in green growth if they want to shrink state spending in the long run, not cutting support to those who lose out in a dysfunctional economy. Senior Liberal Democrats are realising that further welfare cuts are unjustified – the party must not just reject £10bn in welfare cuts but anything in that region should universal benefits for better-off pensioners remain untouched.

Coalition is of course about trade-offs and compromise, but only up to a point. If the government decides to cut yet more from the welfare budget – without fixing the dysfunctional markets in pay and housing that leave millions needing in-work benefits – then is some form of higher tax on property an adequate trade-off? Most Lib Dems would say not, and those who will suffer the most from such a deal would no doubt agree. Alternatives to slashing welfare spending for the poorest do exist, including some from CentreForum, which advocates reforms to tax breaks for the wealthy. Using a mix of such reforms targeted to those who can afford to pay, and further flexibility in the speed of deficit reduction, the poorest could be protected from bearing the brunt of austerity; if only we had a more politically aware Chancellor.

The country faces a crucial twelve months, and of course we need a government that shows coalition can work, a united government. The question is, for whom should government be made to work, the parties who constitute it or the people they serve? Behind which policies should we unite? The Tories clearly refuse to make it work for millions whose living standards have fallen and whose lives have become more insecure, as their refusal to tax wealth and insistence on further welfare cuts shows.

Now more than ever, Liberal Democrats need to do more than just show that coalition works, but that it works for people in real world who are bearing the brunt of our economic malaise. Acquiescing to Tory demands in the vain hope of benefiting from government unity is not enough. The party’s leadership needs to show that the value of having Liberal Democrats in government is more than diluting Tory regressive tendencies, by clearly setting out how they’ll navigate next 12 months, and what they will not countenance.

Prateek Buch is director of the Social Liberal Forum and serves on the Liberal Democrat Federal Policy Committee. He writes in a personal capacity.

Nick Clegg speaks at the Liberal Democrat conference in Brighton earlier this year. Photograph: Getty Images.

Prateek Buch is director of the Social Liberal Forum and serves on the Liberal Democrat Federal Policy Committee.

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Forget the progressive alliance - it was the voters wot won it in Richmond

The Labour candidate on how voters have acted tactically for decades.

The Richmond Park by-election is both a triumph and a setback for the concept of an anti-Tory progressive alliance. As the Labour candidate, I was bombarded with emails and tweets saying I ought to stand down to prevent Zac Goldsmith being re-elected long after it was technically impossible for me to do so even if I had wanted to. I was harangued at a meeting organised by Compass, at which I found myself the lonely voice defending Labour's decision to put up a candidate.

I was slightly taken aback by the anger of some of those proposing the idea, but I did not stand for office expecting an easy ride. I told the meeting that while I liked the concept of a progressive alliance, I did not think that should mean standing down in favour of a completely unknown and inexperienced Lib Dem candidate, who had been selected without any reference to other parties. 

The Greens, relative newbies to the political scene, had less to lose than Labour, which still wants to be a national political party. Consequently, they told people to support the Lib Dems. This all passed off smoothly for a while, but when Caroline Lucas, the co-leader of the Greens came to Richmond to actively support the Lib Dems, it was more than some of her local party members could stomach. 

They wrote to the Guardian expressing support for my campaign, pointing out that I had a far better, long-established reputation as an environmentalist than the Lib Dem candidate. While clearly that ultimately did little to boost my vote, this episode highlighted one of the key problems about creating a progressive alliance. Keeping the various wings of the Labour party together, especially given the undisciplined approach of the leader who, as a backbencher, voted 428 times during the 13 years of Labour government in the 1990s and 2000s, is hard enough. Then consider trying to unite the left of the Greens with the right of the Lib Dems. That is not to include various others in this rainbow coalition such as nationalists and ultra-left groups. Herding cats seems easy by contrast.

In the end, however, the irony was that the people decided all by themselves. They left Labour in droves to vote out Goldsmith and express their opposition to Brexit. It was very noticeable in the last few days on the doorstep that the Lib Dems' relentless campaign was paying dividends. All credit to them for playing a good hand well. But it will not be easy for them to repeat this trick in other constituencies. 

The Lib Dems, therefore, did not need the progressive alliance. Labour supporters in Richmond have been voting tactically for decades. I lost count of the number of people who said to me that their instincts and values were to support Labour, but "around here it is a wasted vote". The most revealing statistic is that in the mayoral campaign, Sadiq Khan received 24 per cent of first preferences while Caroline Pidgeon, the Lib Dem candidate got just 7 per cent. If one discounts the fact that Khan was higher profile and had some personal support, this does still suggest that Labour’s real support in the area is around 20 per cent, enough to give the party second place in a good year and certainly to get some councillors elected.

There is also a complicating factor in the election process. I campaigned strongly on opposing Brexit and attacked Goldsmith over his support for welfare cuts, the bedroom tax and his outrageous mayoral campaign. By raising those issues, I helped undermine his support. If I had not stood for election, then perhaps a few voters may have kept on supporting him. One of my concerns about the idea of a progressive alliance is that it involves treating voters with disdain. The implication is that they are not clever enough to make up their mind or to understand the restrictions of the first past the post system. They are given less choice and less information, in a way that seems patronising, and smacks of the worst aspects of old-fashioned Fabianism.

Supporters of the progressive alliance will, therefore, have to overcome all these objections - in addition to practical ones such as negotiating the agreement of all the parties - before being able to implement the concept. 

Christian Wolmar is an award winning writer and broadcaster specialising in transport. He was shortlisted as a Labour mayoral candidate in the 2016 London election, and stood as Labour's candidate in the Richmond Park by-election in December 2016.