Putting the Autumn Statement, with its decisions by Nick Clegg and Danny Alexander, under the microscope – and discovering what Christmas present Simon Hughes got for party members. That’s what you got with Liberal Democrat Newswire #42 when it hit email inboxes last week. You can now also read it in full below.
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Liberal Democrat Newswire #42: What the Autumn Statement means for the Lib Dems
Welcome to the 42nd edition of Liberal Democrat Newswire. This time the Autumn Statement is under the spotlight, including the section that Simon Hughes felt was so important that he handed out copies of it at his local party’s Christmas bash.
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Over Christmas I’ll start planning 2014’s editions, so do let me know your views and what you would like to see more or less of in future editions.
Thanks and best wishes,
In this newsletter:
A Christmas present from Simon Hughes
“I have a Christmas present for you all. It’s a photocopy…” declared Liberal Democrat MP Simon Hughes shortly after his (late, naturally) appearance at his local party’s Christmas Party.
The present handed round to all (well, nearly all – attendance was so high some people missed out) was a photocopy of the housing section from the Autumn Statement. He had a serious point to make with his unusual choice of Christmas gift.
Although the headline government housing policy (Help to Buy) is more naturally associated with the Conservatives, and is as controversial amongst Liberal Democrats as it is amongst economists, the full section contained some distinctively Liberal Democrat influences on the government’s approach to housing.
In particular, letting local councils borrow an extra £300 million in 2015-17 to build more affordable houses, the introduction of capital gains tax on the sale of homes by non-UK residents (a particularly big issue in London given the high level of purchases of properties by non-residents which are then left empty in order to preserve their resale value) and “a review into the role local authorities can play in supporting overall housing supply”.
The vagueness of those words cover everything from a damb squib to a series of radical reforms in addition to the Budget’s promise of a feasibility study into land auctions. It is a review which Simon Hughes and other Lib Dem MPs are expecting to deliver much.
The politics of housing is a curious one. Just try saying to someone that homes are easy to find and cheap to get… Yet for all the frustration and personal stories such a comment would unleash as you dash to hide under the table from the responses hurled at you, housing rarely comes out highly in poll questions asking what issues are most important to people.
That lack of priority assigned to housing is reflected (not unreasonably, in a democracy) in the rather muted priority politicians often give it. One poll last week however was one of the exceptions. Asking Londoners which three areas should be a priority for the Mayor, YouGov found housing come in at number two, just behind transport and well ahead of policing, economic development and public health. No wonder Simon Hughes chose housing for his Christmas present.
Making work pay: carrot or stick?
Mostly overlooked so far is one Autumn Statement detail that is deserving of at least a brief stay in the limelight – making it easier for people in social housing to move when they have a job opportunity.
Currently the welfare system is putting great pressure on out of work people to find jobs, but if the job is not near to their current home, moving to be near the job can be hugely difficult. However, having to commute a distance instead is often expensive and the transport options unreliable.
The Autumn Statement has promised a consultation on giving social housing tenants the right to move for reasons related to employment.
Politicians love talking about making work pay. Often that means the stick – cutting benefits or adding extra conditions to them. However measures such as this are about the carrot – making it easier for people to take a job by removing obstacles in their way.
So too, of course, is the favoured Liberal Democrat policy of cutting income tax, helping low paid people keep more of their income. It is no coincidence that the party is also looking at supporting the living wage more widely, especially in the public sector, and at further increasing the income tax allowance so anyone on a full time job earning the minimum wage would pay no income tax.
With the latest research showing that more than half of people living in poverty are in a household where at least one person is in work, expect to hear much more about making work pay by making work pay more.
On the horizon: a surplus spotted
One thing can be said with certainty about the Autumn Statement’s projected £2bn surplus in 2018-19: it won’t happen.
Such are the vagaries of economic forecasting, let alone the number of Budgets, Autumn Statements and party conference speeches between now and then that we can be sure the world will not turn out like the neat table of numbers printed last week by HM Treasury.
The broader picture, however, is relevant. On current policies, at some point in the next Parliament it will become practical to start thinking about a world in which the deficit has been tamed.
That poses tempting dangers for the Labour Party and its struggle to regain economic credibility: will the distant sight of a surplus tempt it away from fiscal responsibility?
The Liberal Democrats face danger too, for the current combination of cutting the deficit and cutting income tax for millions has wide support across the party. It subsumes potential tensions between those who instinctively would prefer to raise public spending and those who would prefer more tax cuts. A heavy emphasis on income tax cuts in the party’s 2015 manifesto has already gained widespread acceptance across the party, even amongst those who took part in the mini-rebellion before 2010 on the party’s then emphasis on income tax cutting.
Unless the economy goes badly off the rails again, at some point in the next Parliament those tensions will once again start tugging the party in conflicting directions. Further tax cuts, increased infrastructure investment or more money into popular frontline services? It may be a more fun juggling act to get right than cuts, but it won’t be any easier.
Tuition fees: the politics may be toxic, but the policy is working
The Autumn Statement confirmed that the proportion of young people from disadvantaged backgrounds applying to university is up.
Despite all the predictions of gloom when the tuition fees policy was introduced in 2010, the impact has been far better than even the keenest supporters of the policy predicted: applications from the most disadvantaged are up and the gap between the most advantaged and most disadvantaged has fallen.
This all explains why the Liberal Democrat debate on tuition fees at the party’s last conference was not the showdown predicted by some. Rather, the party avoided falling into the tuition fees trap. With the politics of the issue so troublesome for the party yet the substance of the policy working out, it is an issue best left alone for the time being.
An extra 30,000 places at English universities are also to be created in 2014-15, as a prelude to abolishing the cap on place numbers the year after.
Danny Alexander buries the popular news
Danny Alexander emailed Liberal Democrat party members after the Autumn Statement arguing that, “setting the Tory Marriage Tax break to one side, the Autumn Statement is packed full of Liberal Democrat ideas”.
One of the most popular with the public measures was however buried rather deep into his email – freezing fuel duty, again.
For all that the public (and indeed Lib Dem leaning voters) like fuel duty freezes, many party members and Parliamentarians are not keen on the repeated freezes.
Parties being keen to hide away unpopular policies is common. Being coy about your popular policies, rather less so.
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Other Lib Dem policies of note
Four other areas in the Autumn Statement saw a strong Liberal Democrat influence, and help explain (in addition to the poor performance by Ed Balls) why the mood amongst the party’s Parliamentarians afterwards was positive:
And announced the day before by Danny Alexander: an extra £25 billion of investment in infrastructure projects from six major insurers.
‘Tis the season for repeats
Christmas is the time for repeats on the television, so why not also revisit some of the previous editions of Liberal Democrat Newswire?
Here is a sample of the best that are still very relevant:
101 Ways To Win An Election
101 Ways To Win An Election is available from Amazon (paperback and Kindle editions).
For Apple fans it is available on iTunes as an iBook for iPad, iPhone and iPod.
Users of Kobo readers are also catered for with the Kobo ebook version.
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