Three cheers and three boos for Nick Clegg

The press and the impartial BBC were wetting themselves with excitement yesterday at the boos mixed in with the welcome applause for Nick Clegg from the Crucible snooker crowd.

See this just proves, they might have said, that the Liberal Democrats don't enjoy support from 100% of voters.

What we really want to see, they might have said, is party leaders speaking only to tame hand-picked audiences, like the other two do all the time.

The fact that there is any surprise at a party leader receiving a mixture of boos and applause just shows how rarely they face real audiences. Kudos to Nick for having the gumption. I wonder if either of the other party leaders would dare.

And it was all applause at the end.

Put the boot in harder, and aim better

It is difficult to put the boot in, to demand prosecution of expenses fraudsters, when you are in a grey area vulnerable position yourself, and the whole house is being condemned for the normal use of expenses, as if that were the same kind of thing as fraud. It is bothering me now that the frauds - of whom there have been a handful - are getting lumped together with those who are merely making use of the allowances they have been given as part of their job.

However I am not in a grey place so I can spell it out.

Having an allowance for buying TVs, hiring cleaners, etc, and using it is not fraudulent or corrupt. Asking whether you can buy item X on expenses and doing so if you are told you can, is not fraudulent or corrupt. If the allowances cover moats, swimming pools and chandeliers, then they are stupid, but that does not make using them fraudulent or corrupt. Waiving your expenses is a superogatory act, not a moral duty.

However claiming for a mortgage you have already paid off is fraud. An MP couple claiming 2nd home allowance on both their homes is fraud. "Flipping" to maximise allowance spend is fraud. Telling the tax office something different to the fees office is fraud.

These MPs should be expelled from their parties, deselected, and prosecuted, in no particular order. So far Labour have "suspended" two, and the Tories merely kicked one off the front bench. Luckily no frauds in the Lib Dems, so far.

The rest of them are not frauds. But giving yourself an allowance system more generous than it ought to be is corrupt. So judge them not by what they claim, but whether they voted to reform it or not. Whether they voted for transparency - or for the exemption to the Freedom of Information Act. Large numbers have voted both ways on this, but even those who voted the wrong way, may honestly think the package is not too generous.

People of similar seniority in the private sector are on 6 or 7 figure salaries, with bonuses and expense accounts that will make your eyes water. MPs could vote through the same for themselves, but they don't. Because it would be corrupt.

So this is what I want to see from the party leaders. Rather than being caught between trying to defend what is reasonable and condemn what is wrong, let's throw the handful of fraudsters to the lions, condemn the system, and condemn those who have voted to keep it secret and unreformed. And three cheers to the Telegraph, and the Freedom of Information Act for making reform possible. And shame on Cameron and Brown for ignoring the big money spinner of property speculation on the back of subsidised mortgages.

The Nick Clegg interview

I've been well scooped on this by Charlotte, but I don't mind at all. Sharp and lithe, she said I was and I still can't decide which is the more gratifying. Charlotte was smoking like a chimney - with carbon capture and storage - throughout on her e-cig, and none of us noticed. Ditto in the cafe afterwards, until she 'fessed up. It looks like technology has thoroughly solved the problem of nuisance smoke. But I digress.

So, given the chance to grill Nick Clegg, what I wanted to do was deal with some of the recent criticism, not all from enemies, that our policy of tax cuts for people on low and middle incomes doesn't stand up to scrutiny so well after the latest phase of the financial crisis - or at least that it is no longer so clear exactly what we are proposing. I was hoping to steer the conversation towards how we might restore the discomfort our policy had been causing the Tories, but it didn't turn out like that.

So here it is, and I'm working more or less from Charlotte's transcript, so thanks for that. Nick is in italics.

If you go back to before the latest tranche of the financial crisis, our policy of tax cuts for the poor was causing all sorts of discomfort for the conservatives and their policy of the cupboard was bare was looking a bit foolish. I don't think that's working quite so well now. A lot of people are saying you can't offer tax cuts to people at the moment, and the osbourne attitude to business appears to be picking up a bit. is that fair? is it harder for us now to capitalise on teh position we had?

I think it's exactly the reverse. The one thing people instinctively know you can't do as you head into a recession is jack taxes up. If you look at the number of now serious commentators in the press, who are now saying that if you want to stimulate growth, which is something you desperately need to do if you're heading into a very serious recession, one of the ways, not the only way, but one of the ways is by cutting taxes. in a way - and this is the crucial caveat - in a way which can stimulate spending. Every economist will tell you that if you provide top down tax cuts to people at the top as the tories have done with their only tax proposal on inheritance tax, it doesn't help the real economy because they just salt away the difference. bottom up tax cuts do, they're socially just, they're clear and so helps stimulate spending on the hight street because people on low incomes can have the money to spend it, so the economic logic has got greater. Meanwhile people like [?] saying that tax cuts are now necessary, that puts us on the right side of the argument. 

Look at the Tory position:I think the Tories have backed themselves into a disastrous cul-de-sac. There's no evidence that the Osbourne thing is filtering though. They've plummeted in the polls in terms of economic competence - hardly evidence of a message getting through to the public. What they're doing, which I think is a fascinating but from their point of view a disasterous strategic decision,is they have basically said to themselves, clearly, that their only purpose is to blame it all on Gordon, and that to do that they need to constantly go and on about how's he's spent too much in the past, therefore that allows us no flexibility to do anything now. I think it is a disasterous solution - firstly it's economically illiterate, because they're going on about government debt when the real issue in the British eoncomy is astronically high levels of private debt. I'm not pretending it's easy to make that distinction in public debate, but if you want to get down to the economic fundamentals - and you can argue it's a couple of percentage points to high or too low, but comparitarively speaking it's approximately 40%, it'll probably shoot up to 60% because of the automatic stabilisers and because of the bank bailout thing. Italian debt, if you want an extreme example is above 100%, French and German debt is about 20% higher and it's much, much lower than American debt. It's only, as any columnist will tell you - Government debt is - a compariative science. How are you compared in your Government debt to other government debts is often the crucial thing, because that's what leads to runs on currencies. So I think they're wrong economically, they're picking the wrong target, they're fighting over the wrong bone - government debt. The real problem is private debt. People have got themselves into terrible, terrible trouble. One of the ways you help people get out of debt is putting money back in their pockets.

Why this has been such a strategic disaster, is because their strategy is one of blame and inaction. They have no proactive menu to give the british people. they've got nothing to say on tax cuts, they've got nothing to say on interest rates. They say piffling stuff on small business, council tax - it's all smoke and mirrors and not serious. so i think they've got themselves into serious trouble. They can't do that for the next two years. "It's all your fault and there's nothing we can do" That council of despair is not going to work with the voters.

This is breathtakingly good stuff, and I am somewhat thrown off course by it all. Go back and read it again.

On a specific aspect of this, they're saying you shouldn't loosen fiscal policy at this sort of time...

They're not even saying that! Osbourne's remark was that he accepted borrowing going up.

The Keynesian line is that you do loosen fiscal policy because it keeps things going. I can see why they're trying to [oppose] that [loosening], because they're trying to reclaim a reputation for being sensible on the economy, which they'd lost to Labour.

I'm not sure about the transcript here, but what I am getting at is this. Osborne seems to be saying (I caught the first 5 minutes of one of his recent speeches), that you shouldn't loosen fiscal policy beyond the automatic stabilisers, because this does more harm than good to eventual recovery. So I am looking for our response to this specific point.

My feeling is that Osborne's point is over-simplified. There is a danger that if you expand the state to make up a shortfall in economic activity during a recession, then there will be no slack for the private sector to expand into, and so the recession will grind on. But to say that there should be no intentional expansion of state activity makes sense only if you do - as Osborne seems to - regard all state activity only as a deadweight drain on the productive economy; whereas if the state also has, through infrastructure, education and security for example, a positive effect on the private sector economy, then some expansion here, during a recession, seems much more reasonable. 

Of course, as Nick has said, tax cuts for the poor are also an effective fiscal stimulus, and one that boosts the private not the public sector.

Anyway, onwards...

Of course you need to be fiscally responsible. But you do that over the cycle. As we're heading into what might be the worst recession in a generation, it is recipe for masochism and greater recession if you spend all the time fighting over actually miniscule differences in government debt. You've got to get growth going. If you don't, there's no revenue there, [...]. That is a priority now. I think what's interesting about the Tories is that they don't understand the enormity of what we're up against. They certianly don't understand the enormity of the knock to the legitimacy of their own prejudices in favour of deregulated financial services and so on, and the don't undrstand the risks of their 'do nothing' strategy - which is what they are, in effect, advocating.

I change tack at this point

Well, Labour on the other hand have already spent all of our £20 billion, therefore we had a policy that was agreed before the latest crisis. To carry on, seemingly unchanged, seems like we're not accepting what's happened, that in two years we're going to have to start again.

First of all, you don't rewrite every pound and pence of your public spending plans in the middle of a vertical decline in the national econonmy. Clearly That's something you resolve, finally, when you go the country before the general election. Whether you like it or not it's a moving target - it's part of the art of politics. what you can do, and what we're rightly doing, is saying at precisely the time when how you spend pulbic money is more important than ever before, because in addition to value for money, and accountability to the taxpayer, you've also got to work out how the money you spend on behalf of the public is helping to stimulate the economy or not.i think we are quite right in saying that in those circumstances, the arguments we've always levelled against certain forms of public spending, 5 billon on id cards, 13 on nhs it system which doesn't work, 2 billion on a whitehall inspection regieme, 12 billion on a new it survilance scheme, that is not intelligence use of money. we object to those allocations of money on reasons of principle and policy, but they are especially daft at at time when you are hoping public is going to stimulate the economy, and so should be spent in different ways. 

I think this is a very important point. Some people who didn't particularly like Make it Happen (pdf),  were saying that it should be thrown out as soon as economic circumstances seemed to change. But the same arguments would apply to any spending policy they did like.

And I think this is a good answer to some of the complaints that we are not clear enough. Any package will have to be adjusted to point in the economic cycle we find ourselves in at election time - not the point we find ourselves in today - but that by making our views on fiscal policy clear, we can indicate today what kinds of adjustments those will be in a recession - largely that the spending/tax cut side will be maintained, but that revenue side will not be expected to fully deliver yet.

Nick senses what I have been groping for 

There's a slightly wider argument lurking behind your question - is public spending the right way to stimulate the economy? It is one way to stimulate demand, but it's not the only way, and crucially it's a delayed way of doing it. It has a chronology to it. The idea that brown should be become a latter day Anglo-Saxon version of Francois Mitterand , creating huge public projects around the country and this'll put us on the economic straight and narrow is a nonsense. Clearly public spending plays a role, borrowing goes up as the automatic stabilisers kick in, tax revenues go down, benefit payments go up.. i think what we need to do is maintain, as I tried to encapsulate in this week's prime minister's questions, that at precisely the times when millions of British families are tightening their belts, how government spends our money should be subject to even more scrunity than before. They need to be spending it on the right kinds of things. That seems to me more valid now than before. 

Oh, so I was just asking the usual Keynsian v Austrian kinda question. Bit of a wasted opportunity perhaps. In the back of my mind there was a particular political angle to this, some way to pin down what the Tories actually stand for on something. Is Osborne a hardline Austrian, and would this be politically damaging? But Nick, in full flow, is a force of nature, and we didn't get there. Perhaps just as well as I was sitting next to a renowned libertarian who is probably sympathetic to the Austrian school.

Jonathan, Charlotte, Alex, Mat and Millennium Dome himself went on to ask their questions. I needed a rest.

In defence of trickle-up economics

Today saw a great speech from Nick Clegg at the Lib Dem conference, arguing for tax cuts for low and middle income earners to help meet rising food and fuel costs. The left don't like this because it doesn't involve veneration of the state, and the right don't because they focus their occasional tax cutting efforts at the better off - which is not to suggest that they cut taxes overall in the long run.

The left shouldn't object of course, because they should recognise that fuel and particularly food are even more basic and important than public services like ID cards and wars. But now I want to address why the right shouldn't object either, because this policy will benefit the rich too in the long run.

According to trickle-up economics, what happens when the low and middle income earners have more money in their pockets is that they go out and buy more of the things they need, so that money eventually gets recycled into executive bonuses, dividends, and so forth. So tax cuts for the poor benefit us all in the long run.

Now it should be said that not everybody agrees with trickle-up theory. Some argue that it is just spin for the doctrine that what is good for the poor is good for the country, a doctrine that should be resisted because, er, they aren't poor, or something. 

But seriously, "supply siders" argue for cuts in taxation on profits to encourage investment. But as post-tax profits drive investment, these can also be boosted by boosting pre-tax profits, by leaving ordinary people with more in their pockets to spend. The difference is who gets the direct benefit and who merely gets trickled on, er, or trickled under.

Reinventing the State Chapter 19: Tackling Terrorism: A Liberal Democrat Approach

In this chapter, Nick Clegg

"seeks to move beyond the infantile stand-off between those who see terrorism as an expression of multiple grievances and those who regard any engagement with extremists as a form of appeasement, towards a policy of 'critical enagement'."

In a nutshell he nails the two wrong positions between which this debate is typically polarised. While grievances make good recruiting sargeants, this is about ideology - we face terrorist threats from those who reject democracy, human rights, gender equality, the non-violent contest of ideas, constrained government, the liberating potential of science and the separation of church and state. While some on the left would like to blame it all on the USA, I will suspect that they are not too committed to these values themselves. The right (eg Melanie Phillips), often happier to recognise the ideological angle are shown no mercy:

"But winning an ideological battle is not possible if the battle is not joined in the first place. That is why it is so curious that those who have rightly sought to delineate the nature of the ideological threat have then advocated a highly introverted strategy in which the sole purpose of public policy appears to be to ignore, exclude and ostracise those individuals and organisations who might provide some insight into the threat we face."

So, we should assert liberal values and not lapse into relativism. Liberalism is what the terrorists are trying to destroy: belligerent political rhetoric and 90 days detention in Siberia, are short cuts to giving them victory on a plate.

And here is the challenge:

"how to divorce the widespread grievances of large numbers of large numbers of British Muslims from the activities of Islamist extremists, in order that the former can actively help to expose and defeat the latter"

Some key elements to our response to this challenge are laid out. We must engage with specific communities, not "the Muslim community" which does not exist as a single entity.

We must engage with 'fence-sitters', and listen to their grievances.

"An unholy alliance of Tony Blair's stubborn refusal to admit any errors in his decision to invade Iraq, and the breathless accusation of appeasement bandied about by hardline commentators against anyone prepared to acknowledge ommunity grievances, has led to a self-defeating defensiveness in government. Instead, a self-confident government should have the strength of purpose to listen, and where justified, refute the ... grievances of many mainstream Muslim communitites."

And we should recognise the divisions, typically generational, within some Muslim communities: that young men in particular are most at risk of radicalisation, and we might look for ways we could help community leaders (and parents?) deal with this challenge. This is perhaps my only question mark on the whole chapter - I am a little wary of deference to community leaders, it seems to deny the huge diversity of views within any community, and may reinforce a position of authority that might not be popular or deserved. But it would have been a digression for Nick to have gone into this.

These three themes, and another three I didn't mention "are by no means exhaustive". But they add flesh to the policy of critical engagement, indispensable to starving extremists of the support of their non-violent neighbours.

Nick goes on to talk about more structural issues, MI5, MI6, the police, an integrated border force and securing the ports. All good stuff we should be familiar with. And finally, under the heading of legal reform, rather than ever more draconian detention without charge, Nick advocates reforms to give us an effective process without abandoning judicial oversight. The threshold test allows a suspect to be charged in the expectation of further evidence coming to light. Post-charge questioning would remove one of the obstacles to charges being brought early. Admission of telephone intercept evidence would bring us into line with almost the rest of the world. None of these are simple quick fixes; each must be done with care. But they show that there is scope for increasing the effectiveness of the fight without trampling on liberty.

"In the past the government has appeared to hasty in side-stepping due process in a rush to meet the terror threat, whilst overlooking a host of practical reforms... As the national debate on terrorism matures, our aim should remain steadfast and simple: to protect both our lives and our liberties"

Supporting Nick Clegg

Having maintained this blog as a beacon of untopicality for some time now, I am going to mention the leadership election. I have so far resisted doing this. Although I have supported Nick from the beginning, I'm not the sort to present my conclusions at the beginning of a campaign and expect other people to follow them. It is better form to be undecided for the duration of a campaign, follow the debates, and decide at the end. I don't live up to this standard myself, so crucify me.

First let me say that Chris is a capable candidate and would make a fine leader. His desperation to make the contest about policy was right up my street - I am the sort of person who would be happy to talk about nothing but policy. That it drove him to invent differences was unfortunate, but perhaps it was worth trying. As I have an interest in environmental policy, I particularly appreciate Chris's input and sharp elbows in that area. We disagree on a few details, but if we damned people for getting any policy details wrong, we would end up praising only those who say nothing about policy at all. On the other hand, if you make policy detail your selling point, you really ought to get it right. Perhaps this is a reason not to make policy detail your selling point.

And yet, even on this core issue Chris doesn't appeal to me more than Nick. As I said in the comments at the People's Republic of Mortimer

Chris, the charge isn’t that we aren’t scoring higher than other parties on our environmental policy.

The point here is that the environmental narrative is stuck in a rut - of too much that is small and symbolic, and not enough that will make a big difference - and frankly the preference for hair shirts and gloom over optimistic determination.

Now the zero carbon paper was quite good on these points, although I do have my problems with it, and I don’t think the measures proposed would add up to zero.

I think part of the environmental fatigue is down to governments passing the buck back to individuals, when there are a few simple, if expensive, measures that could be taken to significantly reduce carbon emissions, and that it is not individual sacrifices, but successful low carbon economies that will persuade the developing world to follow suit.

A well developed message along these lines will persuade more people to vote for the party with the better environmental policies.

This is much closer to Nick's position, when he talks about the frustration people feel when they try to do their bit, and government doesn't pull its weight.


What more could we ask of a leader than that he is like us, shares our interests, and advances our ideas more capably than we can? Doesn't Chris fit this mould best? I think it would be self-indulgent to prefer Chris to Nick. Yes, Chris is like us, but not always in the best way. Similarity to oneself has a halo effect on our judgement of people. Nick, on the other hand, is less like me, and more like what I aspire to be. He doesn't let his inner politician entirely take over his brain. He really listens, really thinks, and really engages. This is better (honestly) than fishing out a relevant quote from some US president or liberal philosopher. I think - and maybe this is a quirk of my personal philosophy - that it is a slight misapplication of values to always ask "how do my settled beliefs and values tell me to respond in this situation"?

To put it another way, Mill does not justify what we say in a political discourse. Rather, what we say should be justifying Mill. The former style ossifies our beliefs, and creates a distance between us and an interlocutor. Part of Nick's magic is breaking down that distance. While I've not discussed the finer points of this angle with either candidate, I find Nick's approach far more satisfying and refreshing than Chris's.

And where policy differences have appeared, I find myself agreeing with Nick. A pupil premium, yes. Effectively take that premium away from those presently most ill-served by giving it to everyone? No. As an aside, I wonder which of these policies is supposed to be the more left-wing. Nick's which explicitly addresses unfairness, or Chris's which just spends more public money overall. While obviously more money for education would be good, budgeting is difficult, and it would add more heat than light to a leadership debate for candidates to start promising more for this cause or that.

Don't renew Trident now? Yes. Develop a new nuclear weapon? No. I am still waiting for somebody to explain to me why developing a new nuclear system is better than buying one off the shelf, or, if you are buying one off the shelf, why you would tell the salesman in advance that you are not buying some alternative. If you are going to make an issue of a disagreement you have with party policy, I would expect it to be on something a little more substantial.

I doubt policy will have much impact at the end of the day on this contest; there are some differences, but no clear water of any colour. What I suggest makes a compelling reason to vote for Nick Clegg, and for that matter, to vote for the Liberal Democrats, is the chance to reach out and build a coalition around liberalism. I quite like the talk about "British liberalism", this is in many ways a very liberal country. When we see a schoolteacher in Sudan arrested for how her children wanted to name a teddy bear, this should remind the whole country of the vital importance of liberalism, and we need to be up there with the rallying cry. It is under attack, from Labour, from the Greens, from Conservatives, from tyrants and protectionists worldwide. This is where we stand and fight.