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WHAT does the Lib Dem’s 2010-2015 coalition with the Tories tell us about the party? The Lib Dems say they were trying to blunt the Tory axe, defending people from their worst cuts. But is this true?
Confronted with her own votes for benefit cuts during the Tory-Lib Dem coalition on the election BBC Question Time Special, Jo Swinson apologised, saying “we did not get everything right.”
Swinson has apologised before. On becoming Lib Dem leader in 2018, she said “We lost too many arguments” with the Tories because “when they fought dirty, we were too nice.”
But was Swinson and the Lib Dem support for austerity a “mistake”? Did Swinson “fight” and “argue” with the Tories on cuts?
Not according to her own words as they appear in Hansard, the record of the House of Commons.
In 2010, in the early days of the coalition, responding to George Osborne’s announcement of cuts, Swinson told the Commons: “I want to see cuts in our public services. I accept that they are, sadly, necessary to deal with the huge deficit that is Labour’s legacy.”
Swinson the cuts enthusiast was at that point a backbencher, not a minister. She was free to say what she wanted, without disturbing the Lib Dems’ place in the coalition. And she chose cuts.
The only qualification Swinson gave was that she was not quite as keen on cuts as Tory right-wing backbencher Peter Bone, who said in the same debate that Osborne had the “guts” to push his “policy of shrinking the size of the state.”
Bone is on the hard right of the Tory Party, so not being quite as enthusiastic on cuts as him leaves a lot of room for punitive policies.
Backing cuts wasn’t a mistake, it was the Lib Dem plan.
When the financial crisis hit in 2008, then Labour prime minister Gordon Brown responded by nationalising the banks. He pumped “quantitative easing” money into the financial system to stop it collapsing.
Brown launched a “stimulus package” of tax cuts and government spending to stop the financial crash turning into a recession. It wasn’t perfect, but it worked.
The loss of tax revenue in the crash and the rescue package increased government debt. However, with the financial system stabilised, David Cameron Tories decided the most vulnerable should pay for the bailout. They ran the 2010 election saying “austerity” and public-sector cuts should be used to lower the debt raised in saving the system.
Swinson backed this plan, because all the Lib Dems wanted to balance the budget on the back of the poor.
The 2010 Lib Dem manifesto followed the Tory lead, arguing: “Public borrowing has reached unsustainable levels, and needs to be brought under control to protect the country’s economic future.”
Their manifesto said: “We must also be bold about finding big areas of spending that can be cut completely.” They offered cuts like “restricting tax credits” and a “pay rise cap for all public-sector workers” for at least two years.
The Lib Dem-Tory government then made the public sector pay rise cap go on for years longer.
Benefit cuts went deeper and wider.
Swinson, and Vince Cable and Ed Davey and all the other Lib Dems involved in the coalition were throwing away the ideas of one of the most famous Liberals, economist John Maynard Keynes, who argued the government should be willing to spend to stimulate the economy.
Instead the years of “austerity” led to stagnation and a shrinking of the economy. The coalition reduced the “deficit” — the amount the government “over-spends” every year, but thanks to the smaller economy, didn’t really reduce the cumulative debt.
The Lib Dems’ enthusiasm for public-sector cuts fed into their other reactionary Lib Dem policies in the coalition.
In a 2010 debate on Employment Law Ed Davey — now Jo Swinson’s deputy, then a coalition minister — said his government would be “taking a more robust approach to employment law” because “private-sector jobs are where we see the big growth happening as we tackle the budget deficit.”
That “robust approach” included charging sacked workers over £1,000 to make claims for unfair dismissal at employment tribunals. Charging workers for justice at tribunals was so illiberal and discriminatory that the High Court declared it illegal.
Because his government was slashing public-sector jobs, Davey also slashed workers’ rights, in the hope this would increase private sector jobs.
In another ugly moment, in 2013 Labour MPs said austerity and benefit cuts were driving the growth of foodbanks. Davey waved away their concerns just like the most arrogant Tories, arguing: “It is completely wrong to suggest that there is a statistical link between the government’s benefit reforms and the provision of foodbanks. It is good that people are helping others. I hope the hon. gentleman supports that.”
When she became a minister, Swinson attacked Labour for claiming that austerity was falling harder on women than men. Swinson said Labour’s claims about cuts hitting women “had something of the fairy tale about them and a bit of a reality bypass. Underlying the speeches was the suggestion that we can somehow wish away the deficit and avoid the difficult decisions that are necessary to get our economy back on track.”
But the claims were true, austerity did weigh hard on women, while her promise that austerity would boost the economy is a less convincing story.
The Lib Dems’ involvement in austerity is not just a warning from the past. In an effort to get a reputation as the “party of sound finance,” Davey has been claiming that not only are Labour’s spending plans too big, but that Boris Johnson’s electoral promises are also over-generous. He claims both Tory and Labour spending plans make “Santa Claus seem like Scrooge.”
Davey wants to put the Lib Dems to the right of the Tories on spending and has promised the Lib Dems will back a “structural surplus in current spending equal to 1 per cet of national income,” a policy which could hardwire austerity into a government with Lib Dem involvement.
Read Solomon Hughes every Friday in the Morning Star.
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