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Saturday, September 22, 2012

Revitalised Clegg puts his foot down

According to today's Independent Nick Clegg has returned from conference contrite about tuition fees but also with a renewed determination to fight for Liberal Democrat values within the coalition government.

The paper says that the Liberal Democrats leader will veto George Osborne's demands for a two-year freeze in most state benefits from next April and a further £10bn of welfare cuts.

The Deputy Prime Minister revealed he will block the Treasury's demand for more cuts before the 2015 election to compensate for lower-than-expected growth. "Not a penny more, not a penny less," he declared.

He disclosed that he will limit the scope of the government-wide spending review due next year to a single financial year, 2015-16, a shorter period than the Treasury wants. He will approve "no cuts" for the post-election period unless Mr Osborne brings in a wealth tax or mansion tax on homes worth more than £2m.

Interviewed on the eve of the Liberal Democrat conference in Brighton starting today, Mr Clegg:

l backed a move at the conference to censure the Chancellor for obstructing the drive towards green energy, saying the industry needs more certainty from the Government to attract investors;

l demanded the Chancellor announce in his Budget next spring that the threshold at which people start paying income tax will rise from £9,205 to £10,000;

l vowed to block the Conservatives' plan to bring in regional pay for public sector workers if, as he expects, it would "widen the north-south divide".

Mr Osborne wants to announce a blanket two-year freeze on state benefits from next April in his autumn statement in December.

Mr Clegg's intervention means this cannot happen, although the Liberal Democrat leader did not rule out an extended freeze on child benefit, aleady held flat for three years.

He said: "You cannot fill the remainder of the black hole from the wealthy alone. But that is where you start, and you work down. You don't start with the bottom and then work up. That is just wrong."

The Liberal Democrat leader said: "It is not realistic to assume you cannot have any further cuts and savings. Where they fall is an entirely different matter. "The Conservatives appear to be saying they want it all to fall on welfare. That's totally unacceptable to me. They are not going to take all of that £10bn out of welfare.

"I am not saying you can leave welfare untouched, because it is a third of total public spending.

"But the idea that you ask welfare to take all of the strain is something I will not allow to happen," he added.

Such an approach will have a lot of support within the party.
Shouldn't the heading for this post read 'Clegg puts his foot in his mouth again'? Everything he is saying completely contradicts the main objetcive of the Coalition agreement which was to eliminate the deficit by 2017. In reality, of course the Coalition because of a lack of Plan B is borrowing more than ever. As the IPPR pointed out only this week in order to eliminate the deficit by 2017 the Coalition would have to find another £14 billion in cuts on top of the £10 billion in welfare already proposed. I'm afraid that no one is listening to Clegg or the Liberal Democrats and you are heading for the politics equivalent of the Battle of the Little Big Horn in 2015. History will then repeat itself as some of your leadership join the Tories as the National Liberal did in the 1930s. As for the rest of the rump party it will be interesting to see who becomes the new Clement Davies!
With a crystal ball of that quality Jeff I am surprised you are not rich. Two years is a long time in politics. Don't write us off yet. But a couple of points: firstly you are making the classic error of confusing the deficit, which has been halved, with debt. They are different things.

Secondly, you may not have noticed the change in emphasis on coalition policy recently, with announcements of huge spending on infrastructure projects with more to come. That is precisely the sort of Plan B Labour have been calling for.

Thirdly, recent signs indicate the beginnings of a recovery for the UK economy. Combined with the tax cuts for the lowest paid coming in next year thanks to Lib Dem influence that could be a real game changer.
How exactly does Nick propose to fairly introduce higher rates for those "sitting on a fortune". I have worked hard all my life and earned (and already paid tax) on every penny of my modest savings pot which is now my only source of income. Nick's ill thought through ramblings put people like me in the firing line for having their nest eggs unfairly snatched. Taxing capital will backfire. If this policy every gets implemented anyone with a few bob behind them will be queuing up to emigrate.

How on earth will you distinguish between "unearned wealth" and capital growth from earned money? Will the Lib-dems proposed one off taxes on pension pots? How will the value of share save schemes be determined? What assessment will be made for the value of private company shares? How will someone with a valuable property but no income be expected to pay a tax without selling up? Will negative equity be taken into account?

These are all the types of questions that Nick should be thinking through before opening his mouth.
Peter I've always admired your loyalty to your party. But we are heading for the deficit greater than either Greece or Spain. Clegg's apology for the tuition fee fiasco shows as today's polls show that most voters see him as a fool. Looking at him perform in the Commons I'm reminded of Jimmy Maxton's famous comment about another coalition politician , Ramsay MacDonald. " Sit down man, you're a bloody tragedy". As a Party you've gained votes in the past from both the Tories and Labour through a combination of ruthless street politics in which anything goes and a holier than thou attitude. You are right to argue that no one can foretell the future but time is rapidly running out for the Liberal Democrats. If UKIP was included in all the polls you would be the fourth pary in the UK. Those who voted Liberal Democrat impressed by Clegg's performance in 2010 will in 2015 either return to the mainstream parties or vote for minor parties. If Clegg is still your leader in 2015 his performance in the TV debates will produce hoots of laughter. I'm afraid the game is up and we are back to the 1950s political question of 'What is the point of the Liberal Democrats?'.
Jeff, it is nice to see you sticking to the party line for once but you are still confusing deficit with debt. The structural deficit has been halved by this government. That is the reason why we are not paying the punitive interest rates that Greece is subject to on our debt.

This is a five year term so you really need to calm down. Mid term opinion polls are precisely that and at present Clegg is performing well despite the personal grief Labour are giving him.
Public borrowing is £7.3 billion higher in the first four months of the fiscal year than at the same point in 2011-12. Fact. Total public borrowing in 2012/13 is heading to be £11.1 billion higher than the previous year. Fact. Your whole strategy was based on the economy recovering to the extent that by the last budget of this Parliament you could offer some goodies to the electorate . It ain't going to happen I'm afraid. In 2015 those electors who are worried by the return of Labour will vote Tory. Those who want a change will realise that on so many issues Labour is beginnng to think again - just look at David Miliband 's article in this week's Times on education- will vote Labour. It's Labour at a UK level that is beginning to think outside the box and begin to address the crisis that is confronting western capitalism. I believe that there are individuals in the Liberal Democrats who realise this. Some Liberal Democrats who are in the UK Parliament given their performance over the past two years as Tory poodles have no choice but to go down with the Tory Titanic. Others who are on the left have a choice and that choice is to leave the UK coalition and the let the Tories run a minority government. A difficult choice if you have got used to the salary and the minsterial car but what are you going to do when in the European elections of 2014 you are seen by the electorate as an irrelevance as political pundits debate the the potential UKIP performance?
Yes, Jeff, you keep looking into your crystal ball and leave
Lib Dem strategy to us. You really do need to read what I am saying. You are still talking about debt when the Government is concentrating on eliminating the structural deficit. Also there are signs that the economy is starting to recover.
As a graduate of the LSE I do understand the difference between dbet and deficit. Last month the defict was £14.5 billion which was the worst result for any August on record. In the first five months of 2012-13 it is up 21% on 2011-12. Osbourne argued in the budget that he expected the deficit to fall by 4% in the current financial year. Keep whistling in the dark Peter
The structural deficit has been substantially cut and that is why we ate able to sustain the borrowing necessary to meet the demands on the UK Government's budget posed by the recession as well as invest substantial sums into infrastructure. This is precisely what Labour have called for so I am not sure what you are complaining about Jeff.
Capital investment in 2014-15 will be 60% lower than 2010-11.
Pay attention Jeff, there are tens of billions of pounds being put into infrastructure projects through government guarantees and other innovative funding methods.
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