Ensuring Fairness in a Time of Austerity

Speech delivered at Liverpool Conference 2010

Fellow Liberal Democrats• We have been, to put it mildly, living in interesting political times.• And one of the things that is most interesting about those times, is the size

of the opportunity that we have – as members of a democratic party of government – to influence those times.

• It’s exciting. It’s challenging. It’s occasionally a bit disconcerting..• But the next five years are, by far, the biggest opportunity of our political

lives to date to see Liberal Democrat ideas implemented. • To see our commitment to freedom. To fairness. To the environment.

Implemented. Making a difference to the lives of people in this country.• But it’s been an up and down journey.• Mid-May wasn’t the best time of my life, but I can still remember the sense

of delight when I read the coalition agreement for the first time. When I saw how many of the things I’d fought the General Election on were now in the programme for Government.

But it hasn’t all been easy

• But one of the more difficult lesson we’ve had since then is that not everything is covered in the coalition agreement

• Some of the decisions outside the agreement have felt decidedly uncomfortable.

• And they won’t necessarily be the last ones. Decisions will have to be taken, budgets written, cuts made, that unavoidably lie outside what was agreed in early May.

• And this motion is a response to that.

At the heart of it lies the idea that the deficit is not the only challenge that the country faces

• We fought the election on the basis that we were facing not just a:– Financial crisisbut an– Environmental crisis– Political crisis– And a crisis of social justice and inequality

• Our ministerial team is doing great work across all these areas, but this motion unambiguously seeks to strengthen our commitment to tackling the evils of poverty, social injustice and inequality

• Hard to do at the best of times. But even harder in a time of austerity.

Tackling social justice

• Because we’ve seen huge increases in youth unemployment and the risk of a ‘lost generation’, it puts forward a commitment for investment in training and education – and reforming higher education funding.

• Because we have a housing, environmental and employment crisis, it reinforces our commitment to green affordable housing

• Because our financial system has proved itself not fit for purpose, it encourages the establishment of credit unions, mutuals and regional stock exchanges to support small business – and reinforces Vince’s plans to reform the banks

• And because of the continuing evil of child poverty, it deliberately puts it front and centre of our policy priorities for this Government.

Office of Budget Responsibility• But it also seeks to build on the experience of the first few months, on

the way we’ve sometimes seen the Government’s claims to fairness and social justice challenged – and to the shared Conservative and Liberal Democrat commitment to openness and transparency.

• The Conservatives deserve credit for the idea of the Office of Budget Responsibility. Particularly after years of claims from Labour and Gordon Brown that just didn’t stack up

• But not everything about the idea has been perfect and we seek to build on that idea. Give it, if you will, a Liberal Democrat twist, and to extend its remit to look at the socio-economic impact of Treasury policy – not just the effect on the deficit.

• Not just statistics. But people. The effect on women and on men. On old and on young. On able-bodied people and disabled people.

• This is a critical commitment. We face hugely difficult times. It’s vital that the people with the broadest shoulders take the heaviest load. This proposed change puts that commitment under the greatest scrutiny and at the heart of Government policy.

Wealth• But no policy programme that is serious about social justice can fail

to look at inequalities and taxation of wealth.• We still live in a country where the richest 20% own nearly 2/3rds of

the country’s wealth. And the poorest half have only 9%.• Wealth taxation isn’t just right. It’s responsible. A recent OECD report

made clear that wealth taxes are the least harmful to growth compared to all other ways of raising money.

• But introducing them is now always straightforward. The transitions can be difficult – particularly on property and land taxation.

• But if we’re thinking differently. Thinking for the next election. Thinking what we can achieve before the next election. We need to start now – and this motion calls upon our ministers to get the work done to get the cool, dispassionate look at taxation on wealth – instead of other taxes – as a way of closing the deficit and paying for our public services.

Close• Not all of this motion will be loved by our coalition partners. Although

they have shown quite a capability an ability to surprise us.• But we’re deliberately putting forward measures that put our

commitment to social justice firmly on the table in our discussions with our coalition partners.

• We want to add a new frisson to the relationship. To strengthen our ministers hands. Ensure that there is creative tension, not just consensus and compromise

• But most of all, we want it to be that when people look back on the 2010 coalition Government, they don’t just say that it fixed the deficit, fixed the political system and made huge progress in greening our economy and our society,. But that the 2010 coalition Government became a Government that made a real difference. A big difference. In tackling the evils of poverty and social injustice. And becomes a Government that we can all say we were proud to support and be part of.