Lib Dem rebellion over cuts highlights post-2015 dilemmas

The decision by Tim Farron and four other Lib Dems to rebel against local government cuts is a reminder of the more open debate needed about the austerity to come.

Largely unnoticed, there was a small but significant Lib Dem rebellion over cuts to local government last night. Party president Tim Farron, former defence minister Nick Harvey, Andrew George, Stephen Gilbert and Adrian Sanders all voted against this year's funding settlement. Harvey, who led the rebellion, warned during the debate: 

The whole model of local Government funding is now so fundamentally broken that there needs to be a cross-party endeavour to rebuild something from scratch on a blank sheet of paper. The situation that we are in now is untenable. Somehow or other, Whitehall convinces itself that by putting this degree of hardship on to local government, the public anger at seeing some of the services that impact on their daily lives most directly will miraculously be focused solely upon the local authorities that send out the bill. I say to my right hon. and hon. Friends that I simply do not believe that that is a sound political calculation. The public are not stupid and they will see the difficulties that local government, regardless of the party running any particular council, is facing at this time, and they will hold central Government to be responsible for it.

He is right to highlight both the undesirability and the unsustainability of the huge cuts to local government. By the end of 2015-16, the budget of the Department for Communities and Local Government will have been reduced by a remarkable 60.6 per cent, with several years of austerity still ahead. On the current timetable, publicly-funded libraries, swimming pools, youth centres, museums and parks will soon cease to exist in parts of the country. 

The rebellion last night, then, is a reminder of the far more open debate needed over the pain to come after 2015. Vince Cable has long argued that it is untenable to ring-fence some areas (the NHS, pensions, schools, international development) from austerity, while cutting others (local government, working age welfare, universities, the police) to the bone. As he said last March, "You get a very unbalanced approach to public spending. I went along with the overall ringfencing approach in this parliament – as part of the coalition we have had to work as a team – but I think as a long-term approach to government spending, it isn't very sensible." But we have heard little from him, or any other major Lib Dem figure, on this subject recently. 

With the party set to back the triple lock on the state pensions, it is worth asking whether it will take the same approach to the NHS, schools and international development. Back in 2010, Nick Clegg declared: "We’re not entering into this dutch auction about ring-fencing. Good outcomes aren’t determined by drawing a redline around government departmental budgets." But more recently he has argued: "I am absolutely convinced that at a difficult time like this, protecting our NHS spending, protecting spending on schools and honouring our international obligations to developing countries around the world was a big decision, was a controversial decision but I think was the right one to take."

The alternative, of course, to cuts to protected departments is greater tax rises. But none of the measures proposed by Labour and the Lib Dems to date, such as a mansion tax or the reintroduction of the 50p tax rate, even come close to bridging the fiscal gap. As the IFS has warned, around £12.5bn of tax rises are required merely to keep departmental cuts at their current pace. One left-wing economist, speaking very much off-the-record, recently told me that the parties ultimately may need to discuss openly the possibility of raising the only taxes that reap reliably large revenues: the basic rate of income tax, National Insurance and VAT. But that is the kind of genuinely "tough choice" that all sides seem desperate to avoid before May 2015. 

Liberal Democrat president Tim Farron was one of five Lib Dem MPs to vote against cuts to local government. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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PMQs review: Jeremy Corbyn bids for the NHS to rescue Labour

Ahead of tomorrow's by-elections, Corbyn damned Theresa May for putting the service in a "state of emergency".

Whenever Labour leaders are in trouble, they seek political refuge in the NHS. Jeremy Corbyn, whose party faces potential defeat in tomorrow’s Copeland and Stoke by-elections, upheld this iron law today. In the case of the former, Labour has already warned that “babies will die” as a result of the downgrading of the hospital. It is crude but it may yet prove effective (it worked for No to AV, after all).

In the chamber, Corbyn assailed May for cutting the number of hospital beds, worsening waiting times, under-funding social care and abolishing nursing bursaries. The Labour leader rose to a crescendo, damning the Prime Minister for putting the service in a “a state of emergency”. But his scattergun attack was too unfocused to much trouble May.

The Prime Minister came armed with attack lines, brandishing a quote from former health secretary Andy Burnham on cutting hospital beds and reminding Corbyn that Labour promised to spend less on the NHS at the last election (only Nixon can go to China). May was able to boast that the Tories were providing “more money” for the service (this is not, of course, the same as “enough”). Just as Corbyn echoed his predecessors, so the Prime Minister sounded like David Cameron circa 2013, declaring that she would not “take lessons” from the party that presided over the Mid-Staffs scandal and warning that Labour would “borrow and bankrupt” the economy.

It was a dubious charge from the party that has racked up ever-higher debt but a reliably potent one. Labour, however, will be satisfied that May was more comfortable debating the economy or attacking the Brown government, than she was defending the state of the NHS. In Copeland and Stoke, where Corbyn’s party has held power since 1935 and 1950, Labour must hope that the electorate are as respectful of tradition as its leader.

George Eaton is political editor of the New Statesman.