Libdems start to back away from austerity too
9:00 am - August 16th 2012
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The Financial Times has published a significant article today.
Put aside the economists who have changed their mind on the advice they gave Osborne: this time the Libdems are wavering.
John Pugh, an MP who helped write the Lib Dems’ economic policy before the 2010 election, has called for ministers to return to the plans set out by Vince Cable, the business secretary, when he was the party’s Treasury spokesman.
Mr Pugh said: “We need to look again very carefully at the implications of the sharp reduction we have seen in capital expenditure.
“There are a fair number of people who think that if we returned to the plans as conceived by Vince Cable . . . we would be in a slightly healthier position than we are.”
Mr Pugh admitted this would be difficult for the chancellor, given it would be widely interpreted as a U-turn on his central policy of not breaking the spending pledges made in 2010 and effectively adopting a plan B. But the Lib Dem MP added: “The situation is serious enough now for people not to be bothered about what you call the plan.”
Annette Brooke, another Lib Dem MP and former economist, agreed with Mr Pugh. She said: “It is really important that we should be focusing on boosting growth. Even though a lot of really good ideas have come out of the government, they all tend to have involved small sums of money.”
John Leech, MP for Manchester Withington, said: “An easy way to take the construction industry out of recession would be to spend a significant amount of money building some housing very quickly. Even if we borrowed to do so in the short term, it would pay for itself in the long term.”
A senior economic adviser to the party said: “We may have to resort to emergency measures to stimulate demand. We have already let the timetable on eliminating the deficit slip: we may have to do that again.”
If the Libdems lose faith in the deficit reduction strategy too, the Coalition really is doomed.
But it is rather startling that it has taken over two years for the Libdems to realise that austerity isn’t working, and to demand a change a change in strategy.
Better late than never I suppose. But unless the stimulus is large and powerful enough – it won’t have much impact.
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Sunny Hundal is editor of LC. Also: on Twitter, at Pickled Politics and Guardian CIF.
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Reader comments
I don’t think it’s a case of being blind before hand… The two Johns have been critical before this point.
It’s severe and they’ve broken ranks. About time, but I don’t buy that they went into govt. believing in Osborne’s strategy!
Looks like a degree of license has been given to the minions to be critical about government policy ahead of party conference season.
Can’t see it ammounting to anything though. Sadly.
Sunny, surely you know by now that the LDs will say all this but STILL vote with Dave & co.
Until they start speaking with their feet & have a wander through the ‘no’ lobby, all this is just hot air.
I know that, you know that but more importantly, Dave knows that so the tories will carry on doing exactly as they please & the LDs will step into line behind them every step of the way.
With margin4error on this one, pre conference bluster for the demoralised troops.
I suspect that the concept of electoral demise might (rather like hanging) concentrate the mind but what do they do about it?
I don’t know the details of the Lib Dem economic policy in 2010, but their public statements were much closer to Labour than Tories (i.e. be careful about cutting too much). The ‘startling’ thing was how quickly they changed their position after the election. Unlike other policies this wasn’t a pragmatic coalition trade off – austerity is what keeps them together. So keen to show they are a serious party of government, they’ve ended up screwing up the economy trying to prove it. And now they are considering going back to what they originally said they’d do – perhaps they’ll start discussing tuition fees next.
Also agreeing with margin4error and kb32904
Austerity for the ordinary people only and outright cruelty to the sick and disabled. This rainbow coalition led by Zippy and Bungle are an outright disgrace. They should be tossed out on their necks and told to go and find work that they might manage. Litter picking……. They are responsible for the mess. Thank heavens that tories and lib dems are considered vermin up here in Scotland. Both parasites by nature.
Capital expenditure has nothing to do with deficit reduction.
The government can simultaneously cut the structural deficit and boost capital expenditure. I think they are daft not to given that the government can currently borrow at negative real interest rates.
Duncan – does this ring a bell?
http://news.bbc.co.uk/1/hi/uk_politics/8565722.stm
Reactions: Twitter, blogs
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sunny hundal
More significant than the economists – Libdems start to back away from austerity too http://t.co/GpYRtq3S
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sunny hundal
More significant than the economists – Libdems start to back away from austerity too http://t.co/GpYRtq3S
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Simon Barrow
More significant than the economists – Libdems start to back away from austerity too http://t.co/GpYRtq3S
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Simon Barrow
More significant than the economists – Libdems start to back away from austerity too http://t.co/GpYRtq3S
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kiranstacey
More significant than the economists – Libdems start to back away from austerity too http://t.co/GpYRtq3S
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kiranstacey
More significant than the economists – Libdems start to back away from austerity too http://t.co/GpYRtq3S
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Jon Burke
More significant than the economists – Libdems start to back away from austerity too http://t.co/GpYRtq3S
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Jon Burke
More significant than the economists – Libdems start to back away from austerity too http://t.co/GpYRtq3S
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David Traynier
More significant than the economists – Libdems start to back away from austerity too http://t.co/GpYRtq3S
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David Traynier
More significant than the economists – Libdems start to back away from austerity too http://t.co/GpYRtq3S
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Toby Youell
More significant than the economists – Libdems start to back away from austerity too http://t.co/GpYRtq3S
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Jason Brickley
Libdems start to back away from austerity too http://t.co/qxTDoKi2
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leftlinks
Liberal Conspiracy – Libdems start to back away from austerity too http://t.co/3c9K9YMi
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salardeen
“@sunny_hundal: More significant than the economists – Libdems start to back away from austerity too http://t.co/IAQKdX8B”Spineless Lib/Dems
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Tim Easton
More significant than the economists – Libdems start to back away from austerity too http://t.co/GpYRtq3S
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Martin Steel
More significant than the economists – Libdems start to back away from austerity too http://t.co/GpYRtq3S
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country supper
More significant than the economists – Libdems start to back away from austerity too http://t.co/GpYRtq3S
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Tony Gray
More significant than the economists – Libdems start to back away from austerity too http://t.co/GpYRtq3S
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Dave Trew
"@leftlinks: Liberal Conspiracy – Libdems start to back away from austerity too http://t.co/u5zttRfn" Too little, too late.
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Liberal Demolition
Some LibDem MPs seem to have finally realised Plan A isn't working. It only took two years. http://t.co/u98YNf6A
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Colin-Roy Hunter
Some LibDem MPs seem to have finally realised Plan A isn't working. It only took two years. http://t.co/u98YNf6A
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Compass
Libdems start to back away from austerity too | Liberal Conspiracy http://t.co/8i7C6sfu via @libcon
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Colin-Roy Hunter
Libdems start to back away from austerity too | Liberal Conspiracy http://t.co/8i7C6sfu via @libcon
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Peter Durant
Some LibDem MPs seem to have finally realised Plan A isn't working. It only took two years. http://t.co/u98YNf6A
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Robert Beard
Some LibDem MPs seem to have finally realised Plan A isn't working. It only took two years. http://t.co/u98YNf6A
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Andy Birss
Some LibDem MPs seem to have finally realised Plan A isn't working. It only took two years. http://t.co/u98YNf6A
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Dean Reeves
Some LibDem MPs seem to have finally realised Plan A isn't working. It only took two years. http://t.co/u98YNf6A
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Colin-Roy Hunter
Libdems start to back away from austerity too | Liberal Conspiracy http://t.co/q1MDhr9V via @libcon
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ManchesterLabourLeft
More significant than the economists – Libdems start to back away from austerity too http://t.co/GpYRtq3S
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Brian Tomkinson
More significant than the economists – Libdems start to back away from austerity too http://t.co/GpYRtq3S
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Bonnie Greer
More significant than the economists – Libdems start to back away from austerity too http://t.co/GpYRtq3S
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Mark McCormack
More significant than the economists – Libdems start to back away from austerity too http://t.co/GpYRtq3S
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Sally Brooks
Libdems start to back away from austerity too | Liberal Conspiracy http://t.co/8i7C6sfu via @libcon
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AJ
Libdems start to back away from austerity too | Liberal Conspiracy http://t.co/DYsFO04N #UK
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Zoroaster
Libdems start to back away from austerity too | Liberal Conspiracy http://t.co/JP1DcPg5 via @libcon
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Matthew Shakespeare
Libdems start to back away from austerity too | Liberal Conspiracy http://t.co/yZMMgyFa via @libcon
Good, but unlikely to happen eh?
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