Monday, June 21, 2010

Nick Clegg and the Budget of Doom

I really wasn't looking forward to tomorrow's budget anyway. If you can find one person in the country who is, I'd be very surprised.

Actually, though, I expect Labour are rubbing their hands with glee. They see this budget and the cuts that have to be made to clear up their mess as the key to their revival.

They are gambling on the fact that people will just remember the pain as they go to vote in the Holyrood and Welsh elections next year and not Labour's culpability for it. Nor their promises made with money that just wasn't there, like the Forgemasters loan in Sheffield.

Since the forming of the Coalition Government, I've been very impressed at the way in which Nick Clegg and other Cabinet Ministers have kept Liberal Democrat members informed about what's going on. In fact, Tavish Scott and MSPs, you could learn something here.

A few minutes ago, I received this e-mail from Nick Clegg, obviously trying to soften me up for what's to come tomorrow. It's worth reading to find out where we're coming from. Nobody wants to have to make cuts, but if we don't, our economic future will be pretty much stuffed. Well that's what the man says - and, frankly, I believe him.

I don't expect to be 100% happy about this Budget and I am concerned that not enough Liberal Democrat policy will have found its way into it - especially on the tax allowances vs capital gains issue. I'm concerned that tax credits will be cut by more than people will gain and that this will badly affect people who are currently struggling to get by. I'll be really pissed off if, as expected, VAT goes up, too.

Having said that, I guess we have to take the long view about this government - this is its first Budget and we have four more to go.

I expect what will make me angrier than anything is the sight of Labour having a go with such sanctimony and cynical opportunism that I'll want to lock them up in the Pandorica with the England team.

Anyway, here's Nick's e-mail.

Dear Caron,

Tomorrow, the coalition government will deliver an emergency budget to bring order back to the public finances. It will be a difficult budget - but remember, as you hear it, why we have to do this.

Labour left our country with a mountain of debt. Every minute that goes by the government spends a staggering £80,000 on interest, that's over £800 million a week. If we don't take action now, the markets will force us into even more drastic measures as they have in Greece and Spain.

Without action on the deficit, we will carry on racking up unaffordable debts our children will have to pay off. We will carry on spending more money on debt interest than we do on our schools. And we will undermine the economic growth needed to create jobs and opportunities for all of us. There is nothing fair, liberal or progressive about any of that.

Of course, the Labour party will say that these decisions are not justified. They will say the budget creates risks for our economy and that Liberal Democrats have sold out to go along with Conservative cuts. They are wrong.

Every time you hear Labour say that, ask them why they covered up the details of the £44bn of cuts they themselves had planned. Ask them why they racked up so much debt that we could end up spending £70bn a year just on debt interest. And ask them why they created this fiscal bombshell in the first place by refusing to take action against the reckless banks even when Vince Cable warned of the risks they were taking.

Until Labour accepts the blame for the mess we are in and comes up with a plan for getting us out, they cannot be taken seriously.

We have always argued that cuts would be necessary, but the timing should be based on economic circumstances, not political dogma. The economic situation today means that time has come.

A lot has changed even in the last few months. The crisis in the Eurozone and the problems in Greece and Spain have put huge pressure on us. The new Office of Budget Responsibility has shown that the structural deficit is bigger than we thought. And in government, we have discovered billions of pounds of unfunded spending promises Labour had made, cynically raising people's hopes when they knew the coffers were bare.

So cuts must come. We have taken the difficult decisions with care, and with fairness at their heart. You will see the stamp of our Liberal Democrat values in tomorrow's Budget. But nonetheless, it will be controversial. This is one of the hardest things we will ever have to do, but I assure you, the alternative is worse: rising debts, higher interest rates, less growth and fewer opportunities.

Sorting out Labour's mess will be difficult but it is the right thing to do.

Best wishes,

Nick Clegg MP
Leader of the Liberal Democrats & Deputy Prime Minister

3 comments:

dougf said...

Forget what Labour says or does. It is an irrelevancy. I direct your attention to a new ICM poll just published at the Guardian site.
Were I labour that poll would have me crying in my beers as there is NO good news anywhere within it for the obsolete class warriors.

All the LibDems have to do is keep your nerve. Surely that can't be all that difficult a task, can it ?
The PEOPLE want CUTS instead of taxes because they understand even if just instinctively that as long as taxes can be raised, no efforts at all will go into cutting anything. The why of that is self-explanatory.

Keep your heads down and the weeping and wailing to a bare minimum, and in 5 years, the LibDems might actually be a REALLY 'serious' Party with something to offer to the voters. The LibDems needed to 'toughen up'. The Coalition is boot camp.

Mrs Rigby said...

Caron, I've copied the email and posted it on my site, with a link here. Is that okay?

If not, please let me know and I'll edit the post to show just an extract.

Caron said...

That's no problem, Mrs R. Thanks.

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