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.

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Copeland must be Labour's final warning

Unison's general secretary says Jeremy Corbyn is a friend - but must also take responsibility for turning the party's prospects around. 

No one objective could argue that last night’s by-election results were good for Labour.

Whilst it was undoubtedly pleasing to see serial fibber Paul Nuttall and his Trumpian politics put in their place in Stoke, this was never a seat where the result should have been in doubt. 

But to lose Copeland – held by Labour for 83 years – to a party that has inflicted seven years of painful spending cuts on our country, and is damaging the NHS, is disastrous.

Last autumn, I said that Labour had never been farther from government in my lifetime. Five months on the party hasn’t moved an inch closer to Downing Street.

These results do not imply a party headed for victory. Copeland is indicative of a party sliding towards irrelevance. Worse still, Labour faces an irrelevance felt most keenly by those it was founded to represent.

There will be those who seek to place sole blame for this calamity at the door of Jeremy Corbyn. They would be wrong to do so. 

The problems that Labour has in working-class communities across the country did not start with Corbyn’s leadership. They have existed for decades, with successive governments failing to support them or even hear their calls for change. Now these communities are increasingly finding outlets for their understandable discontent.

During the 2015 election, I knocked on doors on a large council estate in Edmonton – similar to the one I grew up on. Most people were surprised to see us. The last time they’d seen Labour canvassers was back in 1997. Perhaps less surprisingly, the most common response was why would any of them bother voting Labour.

As a party we have forgotten our roots, and have arrogantly assumed that our core support would stay loyal because it has nowhere else to go. The party is now paying the price for that complacency. It can no longer ignore what it’s being told on the doorstep, in workplaces, at ballot boxes and in opinion polls.

Unison backed Corbyn in two successive leadership elections because our members believed – and I believe – he can offer a meaningful and positive change in our politics, challenging the austerity that has ravaged our public services. He is a friend of mine, and a friend of our union. He has our support, because his agenda is our agenda.

Yet friendship and support should never stand in the way of candour. True friends don’t let friends lose lifelong Labour seats and pretend everything is OK. Corbyn is the leader of the Labour party, so while he should not be held solely responsible for Labour’s downturn, he must now take responsibility for turning things around.

That means working with the best talents from across the party to rebuild Labour in our communities and in Parliament. That means striving for real unity – not just the absence of open dissent. That means less debate about rule changes and more action on real changes in our economy and our society.

Our public servants and public services need an end to spending cuts, a change that can only be delivered by a Labour government. 

For too many in the Labour party the aim is to win the debate and seize the perceived moral high ground – none of which appears to be winning the party public support. 

But elections aren’t won by telling people they’re ignorant, muddle-headed or naive. Those at the sharp end – in particular the millions of public service employees losing their jobs or facing repeated real-terms pay cuts – cannot afford for the party to be so aloof.

Because if you’re a homecare worker earning less than the minimum wage with no respite in sight, you need an end to austerity and a Labour government.

If you’re a nurse working in a hospital that’s constantly trying to do more with less, you need an end to austerity and a Labour government.

And if you’re a teaching assistant, social worker or local government administrator you desperately need an end to austerity, and an end to this divisive government.

That can only happen through a Labour party that’s winning elections. That has always been the position of the union movement, and the Labour party as its parliamentary wing. 

While there are many ways in which we can change society and our communities for the better, the only way to make lasting change is to win elections, and seize power for working people.

That is, and must always be, the Labour party’s cause. Let Copeland be our final warning, not the latest signpost on the road to decline.

Dave Prentis is Unison's general secretary.