Clegg & Cable spell out Lib Dem public spending cuts to fund education priorities

by Stephen Tall on February 9, 2009

In his 2008 conference speech, Nick Clegg promised the Liberal Democrats would soon spell out exactly how the party would fund its policy priorities – new spending on Lib Dem policies, including tax cuts for the vast majority of citizens:

I want this to be the most progressive – most redistributive – tax plan ever put forward by a British political party. Using just a little of the money the government wastes every day. To help people in their everyday lives. That doesn’t mean cutting help for the poorest, of course. It doesn’t mean stopping vital investment in hospitals and schools. It just means taking a cold, hard look at all government spending and asking a basic question: Is it working? We believe that tax is a means to an end and government should not take a penny more than it needs. We believe returning money to people who need it is fair, liberal, and right.”

Today, Nick has started the process of proving that its target of saving £20 billion of current public spending is achievable, and not just the kind of thing the Lib Dems can say because we won’t win a majority at the next election. You can find full details at the party website here. The first tranche of identified savings focus on education:

Over the last 6 months, the Liberal Democrats have been carrying out a thorough and painstaking review of all central government spending. We have identified items of current expenditure that we believe are wasteful, wrong, unnecessary, or of low priority that in total would provide £20 billion to be reallocated to Liberal Democrat priorities. Those priorities will be spelled out in our manifesto.

We will release the full details of our spending review in the run up to the general election; the partial list in this paper, however, comprises the first part of that review. We are publishing this list in order to underline the importance that we attach to investing in the future of Britain’s children.

It will also serve to demonstrate that our purpose in identifying these savings is to reallocate funds to other priorities. Gordon Brown’s continued allegations that we would cut net spending overall by £20 billion are totally untrue.

Taken together, the cost of these proposals would amount to £6.6bn by year three of a Liberal Democrat Government (the point at which we would hope to bring in 20 hours free childcare for all children 18 months and over). The savings identified to meet potential costs on this scale would direct an additional £4.6bn into education spending from savings in other departments, with just over £2bn of current education departmental spending also redirected to Liberal Democrat education priorities. Full details of the proposed policies in these areas will be released in the coming weeks and debated at our Spring Conference in Harrogate in March.

The announcement has gained decent coverage, notably in the Telegraph and on the BBC website.

The benefits of this approach are evident. First, it focuses media attention on the Lib Dems proving that the party’s policy commitments are funded. Secondly, it provides for more than one bite at the publicity cherry, intead of announcing all £20bn of savings at one go. Thirdly, it entrenches the Lib Dem commitment to properly funding education.

There is a clear downside, of course. By specifying exactly which programmes will face the Lib Dem axe, the party opens itself up to targeted attacks, with Labour and the Tories focusing their direct mail attacks on the Lib Dems at those who will lose out from the party’s plans (just as the Tories did, to some effect, with local income tax at the next election, using the ‘teacher-and-policeman married couple will lose out’ example). They won’t of course publicise the other ways in which they will gain under the party’s plans; that’s politics. This was just the problem that Labour encountered in 1992 with John Smith’s shadow budget, widely credited with helping John Major’s Tories to victory. Notwithstanding the campaigning risks, it is in my view still the right thing to do: to show that the party is prepared to make real tough choices, and not just talk about them in the abstract.

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6 comments

Nice that you finally got round to reporting this. I mean, interesting and important though Lembit Opik’s religious experiences undoubtedly are …

Anyhow, maybe I’m stupid or something, but I can’t see any detail about the savings on the party website.

Here’s what I pieced together earlier from various press reports:

“The savings mentioned are:
(1) Over £3bn “by removing higher earners from tax credits altogether”
(2) £510m by scrapping the child trust fund
(3) Around £1bn by “shelving 90 per cent of the major motorway and trunk road building programme”
(4) £1bn from various savings in education, including not raising the school leaving age to 18, abolishing the National Teaching Strategy and paring down the National Curriculum.

Presumably there’s another billion and a half in smaller savings elsewhere.

Only another £13bn to go …”

And I still think that if these £20bn savings have really been identified (which I very much doubt), it would be far better to release the bad news about where the money is coming from all in one go and to split the good news up into as many separate stories as is deemed best.

Rather than accompanying every bit of good news by a bit of bad news, as the plan seems to be so far.

by Anonymous on February 9, 2009 at 10:16 pm. Reply #

Thanks Anonymous. Well, I’m just grateful that at least some sort of fist has been made at identifying real savings, at last. Just two grumbles (you’d expect me to, wouldn’t you?):

1 – on the party website, there are three buttons to click for costed details of the spending plans. The fourth one is labelled “detailed costings” and refers to the savings side – but it doesn’t provide any details of the savings! This leaves us wide open to (unjustified?) ridicule.

2 – your savings items 1 and 2 are both simply money transfer items – they are reductions in the amount of tax revenue that government hands straight back to citizens in cash form. So effectively, these savings might be described, not entirely unfairly, as a form of stealth tax.

Now, personally I wouldn’t have a problem in saying that if we want better education, we have to pay for it. But then, that all fitted in nicely with our old “penny on income tax” type of policy. It sits rather awkwardly alongside our new message about “big permanent tax cuts”!

by David Allen on February 10, 2009 at 12:06 am. Reply #

I generally welcome this as another small step away from some of the cheaper populism that seemed to sweep the party after Henley. A few quibbles.

1. Interesting rhetoric on Child Tax Credits. Right that we should focus help on the poorest but then why design Incopme tax cuts that benefit 90% of people. Quite a complex message to tell middle income earners that they get too much to deserve tax credits but at the same time they should benefit from big, permanent, fair tax cuts.

2. Halving class sizes for 5 to 7 year olds is laudible per se but as the Social Mobility Commission report concluded its very early years where the damage is done.

The report seems to have sunk without trace and acknowledges that it would be very expensive to fund but its findings certainly don’t seem to have been at the top of the queue for far for Funding.

|I’m realistic enough to know that our pledges have to attract some actual votes but even so..

by Another Anonymous on February 10, 2009 at 1:56 am. Reply #

Find savings of £20billion and then waste it somewhere else.

Still a statist party then.

by Bishop Hill on February 10, 2009 at 9:15 am. Reply #

I must say that tax credits is the prime example of something which may technically be expenditure, but which most people will perceive as just a factor in calculating their tax liability.

On that view, the party’s plans could be seen as leading to an increase in overall taxation and spending, rather than a reduction. Not that I think there’s anything wrong with that in itself …

by Anonymous on February 10, 2009 at 9:17 am. Reply #

This is a very strong package overall because it makes it very clear that spending extra money on tangible improvements in education are our priority but that we are also realistic that we have to find the money from elsewhere to pay for them.

It also makes it clear that we are looking for more fairness from the system overall.

Lots we can campaign on. Yes we will face some targeted attacks because of some of the things we want to cut – we just need to be a bit more robust in claiming credit for the upside.

by Liberal Neil on February 10, 2009 at 9:52 am. Reply #

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