Nick Clegg and Nigel Farage during the LBC debate on EU membership. Photograph: Getty Images.
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Clegg and Farage both got what they needed out of this debate

Audiences called the debate for Ukip but the Lib Dems are happy to have established their leader as the man who dares defend Britain's EU membership.

The instant YouGov opinion poll of the audience awarded victory to Nigel Farage. 57% thought the Ukip leader performed better; 36% called it for Nick Clegg. The rest didn’t know.

That may well reflect the underlying suspicion of the European Union that seems to be an immovable feature of British public opinion. In that respect, Clegg had the tougher gig in defending the “in” cause – standing up for a proposition endorsed by a despised political establishment. Farage needed to articulate popular resentment of the EU. His strength was in expressing that view with a degree of measured authority. He didn’t, for the most part, come across as foam-flecked maniac. He came close on a couple of occasions. (And his assertion at the end of the debate that the EU has “blood on its hands” in Ukraine stands out as a moment of intellectual depravity. Taking the Kremlin line verbatim is not a good look for any leader of a British political party.)

Clegg got off to shaky start. That was chiefly because the first question was the toughest one he had to face – why not have a referendum and why not have one now? Farage won that exchange by making the simple assertion that many pro-Europeans don’t like to ask voters the big question because they are afraid of the answer. And that, of course, is sadly true.

It was only once the Lib Dem leader got into the economic arguments and the question of cross-border policing that he got into his stride. His strategy was to ram home the line that jobs would be at stake if Britain “pulls up the drawbridge” and to keep the debate for the most part technical – his refrain about “sticking to facts” seems deliberately calibrated to steer the conversation away from emotional rhetoric. He knows on that level the pro-EU case is much harder to make in a way that resonates. He allowed himself a touchy-feely excursion on gay marriage and the democratising power of EU enlargement and those were some of his strongest moments.

It seemed to me that, taken as a whole, Clegg had more pace and poise during the debate, while Farage had moments of great effectiveness punctuated by sweaty and intemperate interludes. But the audience verdict was less generous to the deputy Prime Minister.

Still, the Lib Dems I’ve spoken to so far seem genuinely pleased with the outcome. They wryly point out that Clegg hasn’t polled 36% in anything recently, so he goes home a winner in that respect. It is worth noting that in his closing statement, the Lib Dem leader quite explicitly asked pro-Europeans to lend him their votes in May’s European parliamentary election. This, ultimately, is the point of the exercise. His message: you may not like me or the Lib Dems but in this particular race we are the only way to express support for Britain’s EU membership. (I looked into Lib Dem thinking on this point in more detail here.)

For Farage, the purpose of the exercise was to establish Ukip as a significant player in national politics whose leader debates on equal terms with top government ministers. He needed to retain some of the irreverence and forthright language that makes voters think of him as an outsider, while also presenting sufficient substance when standing next to the Deputy Prime Minister. By and large, he pulled that off. There will have been a few Tory MPs watching and listening tonight, asking themselves why David Cameron can’t bring himself to say some of the things the Ukip leader was saying. The main message that Farage’s team wants to project is that their man put himself “at the head of the Eurosceptic movement” in Britain. And he probably did; just as Clegg effectively projected himself as head of the pro-EU side of the debate. That’s what they each wanted. In all likelihood, very few minds were changed yet both sides go home satisfied.

Rafael Behr is political columnist at the Guardian and former political editor of the New Statesman

Photo: Getty Images
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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