Why did the Lib Dems really U-turn on spending cuts in 2010?

Andrew Adonis's 5 Days in May offers new evidence of the party's disastrous economic misjudgement.

The Lib Dems have received no shortage of criticism for their failure to keep their tuition fees pledge (prompting that infamous apology from Nick Clegg) but there's been surprisingly little scrutiny of a far more significant U-turn, that over spending cuts. 

Although it's now hard to recall, the party ran on an anti-austerity platform at the general election, opposing any in-year spending cuts. In March, for instance, Clegg declared that "merrily slashing now is an act of economic masochism", adding that he would not compromise on this point in any coalition negotiations. "If anyone had to rely on our support, and we were involved in government, of course we would say no." On 1 May, less than a week before polling day, he reaffirmed his position: "My eight-year-old ought to be able to work this out -- you shouldn't start slamming on the brakes when the economy is barely growing. If you do that you create more joblessness, you create heavier costs on the state, the deficit goes up even further and the pain with dealing with it is even greater. So it is completely irrational."

Yet once the results were in and parliament was "hung", the Lib Dems made no attempt to keep their pledge to oppose immediate cuts, abandoning it even before they entered coalition negotiations with the Tories. Nor was this merely a pre-emptive attempt to appease Cameron and Osborne in the hope of concessions elsewhere. As Andrew Adonis's excellent 5 Days In May (which I have reviewed for this week's NS) reveals, the Lib Dems insisted in their talks with Labour that "there could and should be immediate in-year spending cuts for 2010/11 and 'further and faster' spending cuts than Labour's plans thereafter."

When challenged a month later to explain his Damascene conversion to austerity, Clegg cited "the complete belly-up implosion in Greece" and "a long conversation a day or two after the government was formed" with Mervyn King. The claim that the Greek crisis proved the need for cuts was odd coming from a man who had earlier warned that premature austerity would lead to "Greek-style unrest" and, as for King, Chuka Umunna has previously noted on The Staggers that the Bank of England governor told him during a Treasury select committee hearing that "he had given Clegg no new information on the debt situation during their chat". (Clegg, never a stickler for consistency, later confessed that he had changed his mind before the election.) 

But Adonis's invaluable account has revealed a new justification. He writes that during the talks between the two parties, Chris Huhne argued that "immediate cuts were now possible without jeopardising the recovery because the depreciation of sterling in recent weeks 'has provided a large, real, extra stimulus to the economy.'" This claim was repeated in a later meeting by David Laws, who argued that "the fall in the value of sterling made immediate cuts possible without an impact on the recovery." 

This, to put it mildly, is not a judgement that has aged well. After the coalition entered power and imposed £6bn of immediate spending cuts, including to infrastructure programmes such as Building Schools for the Future, the recovery that had begun under Labour ended and Britain fell into a double-dip recession. Those, like Ed Balls and Martin Wolf, who warned that tightening fiscal policy was the last thing a government should do during a slump were entirely right, and those, like Huhne and Laws, who argued that the economy was robust enough to bear early austerity were entirely wrong. As the UK endures the slowest recovery for more than 100 years, the Lib Dems do not to deserve to avoid their share of responsibility for this dismal outcome. 

Chris Huhne, Danny Alexander and David Laws leave the Cabinet Office following talks with the Conservatives on 9 May 2010. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty
Show Hide image

The UK press’s timid reaction to Brexit is in marked contrast to the satire unleashed on Trump

For the BBC, it seems, to question leaving the EU is to be unpatriotic.

Faced with arguably their biggest political-cum-constitutional ­crisis in half a century, the press on either side of the pond has reacted very differently. Confronting a president who, unlike many predecessors, does not merely covertly dislike the press but rages against its supposed mendacity as a purveyor of “fake news”, the fourth estate in the US has had a pretty successful first 150-odd days of the Trump era. The Washington Post has recovered its Watergate mojo – the bloodhound tenacity that brought down Richard Nixon. The Post’s investigations into links between the Kremlin and Donald Trump’s associates and appointees have yielded the scalp of the former security adviser Michael Flynn and led to Attorney General Jeff Sessions recusing himself from all inquiries into Trump-Russia contacts. Few imagine the story will end there.

Meanwhile, the New York Times has cast off its image as “the grey lady” and come out in sharper colours. Commenting on the James Comey memo in an editorial, the Times raised the possibility that Trump was trying to “obstruct justice”, and called on Washington lawmakers to “uphold the constitution”. Trump’s denunciations of the Times as “failing” have acted as commercial “rocket fuel” for the paper, according to its CEO, Mark Thompson: it gained an “astonishing” 308,000 net digital news subscriptions in the first quarter of 2017.

US-based broadcast organisations such as CNN and ABC, once considered slick or bland, have reacted to Trump’s bullying in forthright style. Political satire is thriving, led by Saturday Night Live, with its devastating impersonations of the president by Alec Baldwin and of his press secretary Sean Spicer by the brilliant Melissa McCarthy.

British press reaction to Brexit – an epic constitutional, political and economic mess-up that probably includes a mind-bogglingly destructive self-ejection from a single market and customs union that took decades to construct, a move pushed through by a far-right faction of the Tory party – has been much more muted. The situation is complicated by the cheerleading for Brexit by most of the British tabloids and the Daily Telegraph. There are stirrings of resistance, but even after an election in which Theresa May spectacularly failed to secure a mandate for her hard Brexit, there is a sense, though the criticism of her has been intense, of the media pussy-footing around a government in disarray – not properly interrogating those who still seem to promise that, in relation to Europe, we can have our cake and eat it.

This is especially the case with the BBC, a state broadcaster that proudly proclaims its independence from the government of the day, protected by the famous “arm’s-length” principle. In the case of Brexit, the BBC invoked its concept of “balance” to give equal airtime and weight to Leavers and Remainers. Fair enough, you might say, but according to the economist Simon Wren-Lewis, it ignored a “near-unanimous view among economists that Brexit would hurt the UK economy in the longer term”.

A similar view of “balance” in the past led the BBC to equate views of ­non-scientific climate contrarians, often linked to the fossil-fuel lobby, with those of leading climate scientists. Many BBC Remainer insiders still feel incensed by what they regard as BBC betrayal over Brexit. Although the referendum of 23 June 2016 said nothing about leaving the single market or the customs union, the Today presenter Justin Webb, in a recent interview with Stuart Rose, put it like this: “Staying in the single market, staying in the customs union – [Leave voters would say] you might as well not be leaving. That fundamental position is a matter of democracy.” For the BBC, it seems, to question Brexit is somehow to be unpatriotic.

You might think that an independent, pro-democratic press would question the attempted use of the arcane and archaic “royal prerogative” to enable the ­bypassing of parliament when it came to triggering Article 50, signalling the UK’s departure from the EU. But when the campaigner Gina Miller’s challenge to the government was upheld by the high court, the three ruling judges were attacked on the front page of the Daily Mail as “enemies of the people”. Thomas Jefferson wrote that he would rather have “newspapers without a government” than “a government without newspapers”. It’s a fair guess he wasn’t thinking of newspapers that would brand the judiciary as “enemies of the people”.

It does seem significant that the United States has a written constitution, encapsulating the separation and balance of powers, and explicitly designed by the Founding Fathers to protect the young republic against tyranny. When James Madison drafted the First Amendment he was clear that freedom of the press should be guaranteed to a much higher degree in the republic than it had been in the colonising power, where for centuries, after all, British monarchs and prime ministers have had no qualms about censoring an unruly media.

By contrast, the United Kingdom remains a hybrid of monarchy and democracy, with no explicit protection of press freedom other than the one provided by the common law. The national impulse to bend the knee before the sovereign, to obey and not question authority, remains strangely powerful in Britain, the land of Henry VIII as well as of George Orwell. That the United Kingdom has slipped 11 places in the World Press Freedom Index in the past four years, down to 40th, has rightly occasioned outrage. Yet, even more awkwardly, the United States is three places lower still, at 43rd. Freedom of the press may not be doing quite as well as we imagine in either country.

Harry Eyres is the author of Horace and Me: Life Lessons from an Ancient Poet (2013)

This article first appeared in the 20 July 2017 issue of the New Statesman, The new world disorder