Autumn Statement: the good, the bad and the ugly

So, the Chancellor has given his Autumn Statement. Liberal Democrat reaction is likely to be at best mixed. Will people feel that the balance of tax and benefit measures is sufficient to support our claims that we are making the system fairer?

Osborne painted a fairly gloomy economic picture. The growth forecast is under 3% for the next 5 years. Austerity will continue way beyond the next election. It's in that context that his measures must be judged.

Let's take a brief look at the key points from a Liberal Democrat activist's point of view:

The good - Lib Dem gains

Steve Webb's Pension Triple Lock has ensured a 2.5% rise in the State Pension, more than earnings and inflation.

The tax threshold edges closer towards £10,000 as a further £235 rise is given from next April.

No removal of Housing Benefit from under 25.

No plan to remove benefits for the third and subsequent child.

Fuel duty rise planned for January cancelled. Environmentalists won't like it, but it's the only fair solution for rural areas where you have no choice but to drive because public transport is as good as non existent.

The bad

Benefits will rise by only 1% for the next 3 years. If the reports in the press were right, the Tories wanted to freeze them. I am not sure cutting the spending power of people who have nothing is justifiable, particularly as higher rate tax payers will get the benefits of the extension of the tax threshold.

The rise in the tax threshold has to be taken with the effective cut in tax credits, which only rise by 1%. Tax credits are payable to poorer people who are in work, so cutting them does not seem to be consistent with the aim of making work pay.

No Mansion Tax. Osborne's justification, that it would be intrusive, expensive and, get this, might encourage a future chancellor to bring in more properties to its scope, was greeted with Nick Clegg rolling his eyes and grimacing to indicate disagreement.

Departmental budgets cut, but this is to include more digital engagement. That requires technology that many poorer people may not have access to.

The ugly

I expect many Liberal Democrats will be squirming at the language used by the Chancellor to describe benefit claimants. He talked about people getting up in the morning to go to work, while their neighbour on benefits is in bed. People are bound to feel that this language encourages scapegoating and resentment. It is to be hoped that no Liberal Democrat will use this form of language. Tim Farron has promised that he won't, but then I wouldn't have expected it of him anyway.

The rest

Other measures in the Statement include:

• a cut in the Corporation Tax famously not paid by large corporations such as Starbucks, Google and Amazon
• action at an international level to try to change the way such corporations pay their taxes
• £3 billion extra for schools, roads and infrastructure investment (the Scottish Government will receive £331 million in Barnett Consequentials)
• Ultra fast broadband extended to 12 more cities.

It's a very mixed bag for Liberal Democrats. What do you think?

Autumn Statement gloom.....

I never look forward to George Osborne getting up on his feet in the House of Commons. It's not entirely his fault, and I do know that he's not getting to give the statement that he would like to because Liberal Democrats won't let him, but the economy is still incredibly fragile and there's every chance of a triple dip recession. 

We know that Osborne would love to taking Housing Benefit from under 25s, or restricting benefits to large families. He won't be doing these things because Nick Clegg has put his foot down. That doesn't mean, though, that I'm going to like everything Osborne is going to come out with. 

Stephen Williams MP emailed Lib Dem members last night and his message was one of compromise which smacked of us being prepared for things we don't like. Williams said:

I can’t yet reveal to you the contents of the Chancellor’s Autumn Statement.

But I do want to share with you the context in which the discussions around the statement have taken place.

Both parties in the Coalition agree that delivering a strong economy and growth is the top priority right now. 

We also agree that Britain needs to balance its books so we don’t saddle future generations with a debilitating national debt.

But it’s no secret that when it comes to balancing the books, the Liberal Democrats have different instincts to most Conservatives.

Let’s be clear, there will be some difficult decisions in tomorrow’s statement. That would be the case no matter which party was running the country right now.

Nick Clegg and Danny Alexander have been negotiating hard with David Cameron and George Osborne to get the best possible deal for ordinary families across Britain.

Tomorrow we will see the results of those negotiations and the compromises they reached in the Autumn Statement.

Our key objective was to ensure the burden of clearing up Labour’s mess is shared fairly. Everyone needs to make a fair contribution, and that must include the richest too.

Whether they have done enough remains to be seen. I really will be furious if benefits aren't raised in line with inflation, for example. I also want to see more measures put on the wealthiest, individuals and companies, to ensure that they pay their fair share.

While Williams' email unsettled me a bit, Tim Farron was a bit more reassuring when he spoke to BBC News this morning.

He talked about our "battle with the Tories" to make sure that those on the lowest incomes are protected. He said that the figures today weren't going to be  glorious but it was important not to over-react in either direction, demanding either deeper austerity or an end to austerity. He said that economically the things that matter moving, if slowly, in the right direction in that we have low interest rates and falling unemployment.

He said there was a need for demand led measures which matter to people - like building schools, and he hoped to see some today. That's been trailed in the media so I suspect that he's on a safe bet there. I doubt he'd allude to something that definitely wasn't going to happen. Tim does not like to disappoint.

We'll know in an hour or so exactly what we're looking at. I'm not expecting to hear anything that lifts my mood, though.

Lib Dems stop Tories from taking Housing Benefit from the Under 25s

One bit of very good news on welfare front - the Liberal Democrats have held firm and told George Osborne where to shove his ridiculous plan to take Housing Benefit away from under 25s, according to yesterday's Observer. Nor is he getting to freeze benefits as he would have liked.

The piece has a great quote from Greg Mulholland, Liberal Democrat MP for Leeds North West who says:

The Lib Dems would not stand for cutting housing benefits for under 25-year-olds which would not only be unjust and unfair but would have unacceptable consequences for many young people. Neither do we think a freeze in working-age benefits is acceptable.

He went on to say a phrase which made me cringe a little "having spent the last year making sure that benefits are directed to those who really need them most". Actually, we have taken them away from people who really do need them. Ok, it's been as bad as it would have been had the Tories had free rein, but I really wish we wouldn't say self-justifiying things like that because they aren't true and they don't wash.


Whenever George Osborne is due to get up on his feet, there are understandable nerves throughout the Party. There's inevitably going to be stuff in the Autumn Statement that we as a party don't like. The Social Liberal Forum has issued a statement today making it clear what it thinks - no more welfare cuts, and no agreement on spending plans after the next election. I can't see much to disagree with in what they say.

The Social Liberal Forum would not support a Government that takes regressive spending decisions, on the welfare budget in particular, that will go beyond the term of this Parliament.  There is no basis for taking such decisions in the policy of the Liberal Democrats, nor in the Coalition Agreement.  With living standards already squeezed and with the considerable uncertainty associated with the introduction of the Universal Credit – a measure that needs to succeed and will inevitably have consequences that will require adjustment – it would be irresponsible for further such steps to be taken.

It is therefore up to the Government to produce an overall spending package that is functional, that will not further hold the economy back, and that is fair. Senior Liberal Democrats have always clearly stated that addressing a widening deficit through further spending cuts, not least those that harm the spending power of the poorest, would lead to an unacceptable downward spiral of low growth and higher deficits. If the state of the economy leaves the Coalition with a choice between investing in future growth by easing the deficit reduction programme and cutting support to the most vulnerable people in society, it can only choose the former.

We can't put our name towards any further benefit cuts. We've already gone too far in that direction. Nor can there be any slacking in the raising of the tax threshold. At the other end, I want to see more being done on taxing the wealthiest. A mansion tax would be great, but I'd take anything that actually works that means that the well off feel a bit of the pinch. I say that as someone who had to stop claiming Child Benefit today. I am not whinging. It was only fair that I do so. It's a bit of a shame that the only time that my husband has been a higher rate tax payer in his entire working life coincides with the time Child Benefit is being cut, especially as he's had just 6 years' notice that he'll have to wait an extra year before he gets his State Pension. But, the point is, we can deal with it. We are not going to suffer in any sense and it's only right that we should do our bit. There are plenty wealthier than us who could do with digging a bit deeper, too.

Mind you, a sure fire way of making sure the country was rolling in money would be a tax on journalists' whinges about how Leveson is the end of a free press and how they're all being suppressed like it's North Korea... I have never heard such a load of self-serving, petulant nonsense in my whole life.

Nick Clegg on Andrew Marr this morning - Eurozone, human rights, immigration and vested interests

Another superb performance from Nick Clegg on Andrew Marr this morning. As befits someone who was there when the Euro was born, working for then EU Trade Commissioner Sir Leon Brittain, he showed that he really knows his stuff on the decisive reforms needed to sort the crisis out.

I did for a moment think that I'd have liked him to say that we wouldn't put up with any stupid Tory ideas to curb immigration, but his take on this was to try to calm the "breathless hysteria" of the press. Picking a fight with Theresa May on live tv maybe wasn't the best way to accomplish that. I have confidence that he'll allow common sense to prevail.

Other highlights were a very clear statement that he didn't think a free vote on equal civil marriage was necessary as religious people weren't being asked to sacrifice anything and an attack on vested interests in politics and how 2 years in Government has made him even more convinced of their pernicious influence.

He didn't say that much about the demo outside his house yesterday. He really just said that he and Miriam had decided that their kids should have as normal a life as possible and that's why they hadn't gone and moved into a Government flat when he became Deputy Prime Minister. For what it's worth, I think UK Uncut went too far. Politicians' houses should be off limits. Yes, they have a right to peaceful protest, but they should exercise it with some responsibility.

Anyway, here are my tweets from the interview, as is my custom, in a wee Storify thingy. Hope you find them useful.

Only comfort from gloomy Autumn Statement - Lib Dem win on benefit rise

I look outside and see nothing but gloom and darkness and wildness tonight. I could be George Osborne looking out at the economy.

No, scrub that. I could never be George Osborne. But there seriously isn't much to take any sort of cheer from in what he said today.

The only thing that we can be sure of is that Osborne alone would not have seen any reason to uprate benefits in line with inflation - but that idea was kicked into touch, as has been widely reported, by the Liberal Democrats.

It's an important thing.

Unfortunately, tax credits are not getting an inflation busting increase. That really makes me annoyed. I literally  hate to be taking money away from the poorest families under any circumstances. We can talk until we're blue in the face about the mechanics of tax credits vs streamlining of the tax/benefits stuff vs citizens' income, but in the end of the day, those families will just know that their money will go even less far next year. When I see that in conjunction with a rise in the bank levy just to get what they expected to get, I feel that more could be done.

I would not have been averse to a further, even modest but not necessarily so, rise in Capital Gains Tax so that the high earning city fat cats feel a bit more pain.

The Government is facing a pretty horrific set of economic circumstances. Apart from the legacy of Labour splashing cash for years, there's all the daily, gloomy headlines from the Eurozone - our main trading partners. Sure, we're in better shape than Greece, Spain, Italy and Ireland.

It makes me very sad to read that an extra 290,000 people will lose their jobs in the public sector, though. Nobody should ever feel good about effectively putting a large city on the dole queue when we all know the private sector isn't going to replace those jobs, or there won't be a match in skills in the few they do pick up.

So, Danny Alexander is right to send party members an e-mail telling us what the Liberal Democrats have achieved - but he's not right to tell us that we can feel proud of what we've done. Slightly relieved is as good as it gets at the moment. It could be an awful lot worse if the Tories were governing alone - that much gets clearer every day. It still doesn't make it easier to see people made unemployed, and other, poorer folk having more reason to struggle.

My heart is heavy tonight.

Tavish Scott's 30 day business boosting plan

It probably shouldn't take me two posts to write about one leader's speech to conference, but I thought that this part was so important that it deserved its own star billing.

The election takes place on 5th May. By my daughter's birthday on 5th June, this is what Tavish expects that ministers in a Liberal Democrat government will have started to do.

1.    Reform to the support we give to enterprise, to set up the development banks, to get money to thousands of small businesses who have been let down by their banks.

2.    A stronger role for local colleges to deliver skills, training and investment shaped around the needs of the area.

3.    A reform bill to allow local companies access to a fair share of government contracts;

4.    Change to regulation to free up business to grow and create jobs. That’s worth ten thousand new jobs. So that’s what we’ll do.

5.    Build the digital, transport and language links we need for a new target on exports;

6.    A renewed commitment to renewable energy to capture the prize for Scotland and the jobs that come with it.

7.    We will give local communities and councils a real incentive to support business in their areas by letting them keep the extra rates that come from growth.

8.    We will examine the potential for business rate holidays for the tourism industry aimed at keeping Scotland open all year round. We’ll keep the small business bonus and look to extend it to help other businesses too.

9.    And we will guarantee that all businesses get rates relief whenever the national government signs off a tax hike. Never again will a hotel in Argyll or a restaurant in Peebles face a rates increase of 120 per cent – as they had to under the SNP.

I'm exhausted just reading that list, but it certainly seems like a fairly comprehensive plan to boost economic growth and create the secure, skilled jobs that Scottish people need. No doubt the manifesto will have more of the detail of how that will be achieved, but those 9 points show the areas where a Liberal Democrat government would seek to boost business and create jobs - and they are a lot more holistic than anything suggested by the other parties.

Talking of them, Tavish spoke of his willingness to work with other parties to get this plan into action after the election:

Whatever happens on the fifth of May, Scotland needs action on jobs. So I will work with others on our 30-day plan. I ask that the other parties commit to action with us on Scottish jobs. Scotland needs the best of what we can all offer.

To put party politics before the needs of our people in these times isn’t right and we just won’t do it.  

If we are going to create jobs, we need to make sure that we can have a suitably skilled workforce to do them. Tavish spoke at length about education. Giving kids high quality education that challenges and inspires them and squeezes every ounce of potential out of them is something he's always wanted to achieve. He talked about freeing up teachers from bureaucracy and interference from the centre, and giving them the chance to be inventive and innovative. And he was also prepared to look beyond the traditional school model to ensure that kids had other options which may suit them better:

Jim McColl has asked ten schools on Glasgow’s south side to offer 14 year old boys and girls a new beginning in a new college. A whole new kind of education. It will be very practical, inspirationally led, focused on vocational and technical skills. With the motivation of a job at the end for those who stick it.

Clyde Blowers, BAE and other major companies will invest. It’s a win win. It gives kids with little to look forward to, hope. And it gives employers needing people ready for work, people who can. That’s an approach of innovation and initiative all of Scotland could do with, and with the Liberal Democrats it will happen. 

It seems to me that it's about providing an education that suits the child rather than a suffocating bureaucracy. It's about recognising that kids are individuals and not an amorphous blob. A one size fits all approach fails too many of our kids.

I feel the Scottish Liberal Democrats are approaching this election with a much stronger, value driven programme than we did four years ago.  Tavish and the team have developed a thoughtful, innovative, honest programme that's rooted in our cherished values. It's a programme that gives power away from the Scottish Government and towards local people, that champions quality education and looks to the long term. I'm bound to find something to grumble about somewhere - and if equal marriage isn't in our manifesto, I'll be grumbling loud - but I was impressed not just with the ideas that came out of Tavish's speech and the Conference but with the narrative that linked them together.

Nick Clegg rounds off good week with positive speech on the economy

Our Nick Clegg has had a very good week. Some of it was his own making - like the fantastic announcement he made on mental health the other day. It was so refreshing to see a politician actually getting what was needed on this - and to present it in such a passionate, unembarrassed way helps smash the stigma associated with mental illness.

Some of it was as a result of journalists being crass and trying to suggest he was lazy - a claim so easily shot down in flames and easily laughed off on BBC Breakfast the other day.

Today he's made a speech in the economy that helps to alleviate my fears a bit. He's candid about the state we're in, but talks not only about getting rid of the deficit but also of building a more sustainable economy, one that's not based on the excesses of the debt fuelled financial sector. Sustainability is what we Lib Dems are all about. The first General Election manifesto I can ever remember, in 1979, talked about making sure that we got the economy on an even and sustainable footing. 

Here are some snippets of what he's saying:

On the state we're in

I want to make some remarks about the Government’s approach to economic growth - and of the kind of economy we want to grow. This is of course a topical question in light of last week’s disappointing figures for GDP growth. We are under no illusions in the Government about the difficult economic circumstances that we inherited from Labour. The Chancellor and the Governor of the Bank of England have said that recovery from the recession is likely to be ‘choppy’ for some time. The Prime Minister and I have both said that the nation faces a long, hard road back to prosperity.

It is worth saying that there are also some strongly positive signals in the economy. During the course of this week, we have seen the publication of three sets of important economics indicators on manufacturing, construction and services – all moving in a positive direction. Things are difficult, but it is not all doom and gloom.

 Beyond the deficit....

So the Coalition Government is determined not only to eliminate the deficit, and to restore economic growth. But let me be clear: paying off the deficit is a means, not an end in itself. We are determined to foster a new model of economic growth, and a new economy – one built on enterprise and investment, not unsustainable debt. We seek nothing less than a new model of sustainable growth.

Paying off the deficit is vital part of our plan for growth. Necessary for restoring confidence in Britain, necessary for keeping down the cost of borrowing for families and business, necessary to avoid paying extra interest to the bond markets. Necessary  –  but not sufficient. If the Coalition Government simply pays off the deficit, but leaves the underlying economy unchanged, we will have failed.

We are not in Government simply to clean up Labour’s mess. We are in Government to lay the foundations of a better, stronger economy. People want their politicians to be leaders, not accountants.

Growing the Economy

It is vitally important to be crystal clear about the problems we are addressing. Most people know that we inherited not only a crippling deficit. But perhaps it is not yet clear enough that we also inherited a failed economic model. The model of economic growth fuelled by debt and based on financial services is broken for good. So the Coalition is undertaking two very difficult tasks at the same time – dealing with the deficit and building a new model of economic growth.

Let me say too that as Government, we are determined to get this right. It is very tempting in a time of economic difficulty for governments to churn out initiative after initiative, in a desperate attempt to stimulate the economy or – all to often – to try and give the appearance of doing so. And politicians can sometimes fall prey to the myth that somewhere there is a lever they can pull to generate growth, and that they should simply pull as many as possible in the hope of finding it.  

 That is why the Government is currently conducting a growth review, consulting with business and experts to ensure that our approach is grounded, evidence-based and properly thought through. Some have expressed concern that we haven’t published it yet, and that we are waiting for the Budget.  I do not think we should apologise But we need to be clear about the fundamental factors that drive economy growth; clear about the areas in which government can effectively play a role; and clear about the interventions than make the most difference.

What's all this rebalancing about then? 

We need, in short, a grown-up approach to growth based on hard-headed analysis - in place of the ‘pick and mix’ approach that has characterised too much recent government activity, grabbing at instant initiatives rather than taking the big decisions that really count.

Today I want to highlight four key elements  of the new economy:

-          Weaning ourselves off debt-financed growth, and onto investment-led prosperity

-          Investing in the infrastructure that underpins growth, both the ‘hard’ infrastructure such as transport and the supply of skills and education, ‘soft’ infrastructure businesses need

-          Boosting competitiveness by reducing the regulatory burden and opening up markets

-          Balancing regions and sectors, instead of putting all our economic eggs in one basket

Interesting stuff - and it all sounds very grown up. There's obviously still loads more to come on detail, but Nick's words show that long held Liberal Democrat philosophy is becoming an integral part of the Government's thinking.

Ok, I'm scared about the economy now - Lib Dems need to watch this carefully

There is no pretending that today's news of an unexpected contraction of the economy is in any way good. I'm no economist, but there's I didn't come down in the last shower either, so I don't buy George Osborne's airy reassurances that it was all the fault of the snow. Nor will I take any nonsense from Labour about it being all the fault of the Government when their spending cuts haven't kicked in yet.  In fact, if we didn't get our normal Christmas boom, isn't that going to have a knock on effect for the rest of the year?

There's a bit of me that's fearful that this is as good as it's going to get for a while and that there might be a call for the Government to moderate its deficit reduction plans to ensure that we don't end up putting loads of public sector workers out of jobs when there aren't any in the private sector for them to go to, and when there are more unemployed people that the public sector needs to efficiently support.

I get the argument that the deficit needs to come down. I've never been sold on why it needs to be quite as fast. What the Government can't do, though, is stand by and watch the economy sink without taking action to help stimulate it.

Those of us around in the 80s remember how awful it felt when Margaret Thatcher came out with things like "the lady's not for turning". It seemed very callous in the face of mass unemployment and it kind of felt that the Government was throwing us to the wolves.

I expect our ministers to be taking a close look not just at the figures on a sheet, but on the human effect of what they mean and do their best, within the Government, to ensure that people aren't abandoned. I don't know enough about the ins and outs of it all to say exactly how that should happen, but I don't want to see - and I can't imagine - a Government with Liberal Democrats in it being as intransigent as the Tories were in the 1980s.

I don't want to get too Cassandra like because from what I hear these men in pin-striped suits in the city are sensitive types who lose their confidence quite easily (such a sensible foundation for an economy, really) so I don't want to suggest that we're all doomed, but we might be if the Government gets this wrong. No pressure then, Nick, Vince and Danny...........

Update: The Elephant, who actually does understand about the economy, has some good advice for the Government. I am still scared, but maybe there is a way out of it. I took the word creative out of what I thought our ministers should be. Maybe I should put it back in.

Avoiding a new North South divide

Today's unemployment figures continue to make depressing reading for those of us living in Scotland.  It's worrying to see the trend of the last year or so continuing with Scotland's unemployment rising while it's falling in the UK overall. 34,000 more people are unemployed this year than in the same period last year. Those figures don't even include me because I'm not claiming benefit or looking for another job, as I'm fortunate enough to be able to stay at home with my daughter and my blog for a while.

The Holyrood and Westminster Governments are going to have to manage this disparity very carefully. I know that the Liberal Democrat/Conservative coalition at Westminster is determined that the whole country should share in the economic recovery.

In the 1980s we saw how the south east of England prospered while jobs in the north and Scotland were decimated. That can't be allowed to happen again and I'm glad to see that the coalition has always been committed to ensuring that the benefits of economic recovery are shared out over the UK.

With such a high proportion of jobs in Scotland in the public sector, spending cuts could have a much bigger impact here than south of the border and will need to be matched with help in job creation opportunities.

One thing I was pleased to see, though, was Liberal Democrat Secretary of State for Scotland acknowledge that the figures in Scotland are disappointing, and outline what the coalition government at Westminster is doing to help:

"The government's measures to achieve our priorities of tackling the record deficit and achieving balanced economic growth for all parts of the UK will encourage the necessary investment to create new jobs."

I wasn't chuffed to see in the Emergency Budget that VAT was going up while Corporation Tax was going down - but I said at the time that if you're going to cut public sector jobs, you need to make the conditions attractive and competitive for the private sector to create them.

I used to feel insulted month after month when Labour Ministers hailed the drops in unemployment across the UK but resolutely refused to tackle the rises up here. Predictably, today, Labour are putting the boot in, failing to acknowledge their part in creating the mess we're in or their inaction during the recession in Scotland. They may be lamenting the loss of the Future Jobs Fund but it didn't seem to be having much of an impact up here.

I'm concerned too, that young people are going to bear the brunt of this, especially as Mike Russell has failed to sufficiently increase college places  and not everywhere, meaning that there will be less opportunity both in education or employment for this year's school leavers.  Action by the Scottish Liberal Democrats ensured an extra 7500 places in training and skills in this year's budget, but even that isn't enough to meet the demand.

We have to think of the 223,000 households who are facing the impact on unemployment, and the 34,000 who have joined them this year. I know how it feels. When Bob was made redundant from British Coal, at the age of 43, in 1994, he wasn't expected to get another job. Imagine that - being thrown on the scrap heap at the age I'm at now.  It took him 10 months and literally hundreds of applications before he found something else - with two job offers coming in in the same week. It was a really difficult time for him.

What really helped him, though, was an organisation called British Coal Enterprise which was set up in Mansfield. They had trained staff on hand to help him with each application that he made, to give him coaching for the interviews, to debrief afterwards. They provided him with a desk and a computer and he essentially treated it like another job - he went in there every week day. By the time he went for his 6 monthly interview at the Job Centre he had two full lever arch files of applications which he took with him. The person who was interviewing him didn't even want to look at it, which was a bit soul destroying, especially given the tone of the letter summoning him, but he was't making the applications for her sake anyway.

I think these sorts of facilities are going to be essential in the years to come, along with a bit more flexibility in the training opportunities provided by the Department of Work and Pensions.  They are quite prescriptive in the sorts of training they will fund. I've seen people with job offers being turned down for funding for training courses they need to take them up which seems to me to be crazy. In one case, funding the training would have saved the Department a load of money, but instead, they ended up paying out more than double that amount in benefit.

The Westminster and Holyrood Governments both have their roles to play in reducing unemployment. Sometimes they will need to work together. Let's hope they don't let us down.

"There is no money left" jokes Labour's Byrne as Lib Dem laws promises social justice

I saw via Twitter this morning that there was something going round saying that Liam Byrne, Labour's former Chief Secretary to the Treasury, had left a note for his successor saying starkly and simply "Dear Chief Secretary, There is no money left."

Not having seen a news report, I just assumed that this was some internet joke going round. Not for one minute, until I saw the news and saw new Liberal Democrat Chief Secretary to the Treasury David Laws actually tell the story himself, did I think that anyone could display such crude callousness.

It all brings to mind the Spitting Image sketch from 1992 where the Tories led by John Major are forced, by dint of getting an overall majority, to return to a trashed number 10 knowing that they have to clear up the mess they made. In this case, though, Labour manage to leave their mess for the new coalition to deal with.

So, not only have Labour walked away from the chance to stay in Government, presumably in the knowledge that this gives them the chance to jump up and down and make a huge fuss about the action needed to clear up the mess they've made, but they're also all having a good laugh about it behind the backs of the British public. It's quite extraordinary that they think it's so funny. We've all resorted to dark humour to keep us going, but to write such a thing down to a successor is just immature and unpleasant.

Every time Labour criticises, they should be reminded of Liam Byrne's words.

I was hoping that the coalition takes on the Liberal Democrat ideas to include Labour in a sort of commmittee on deficit reduction so that all the politicians together could pool ideas and work together. I'm not sure that Labour are capable of approaching that task with the sort of maturity required.

In contrast, David Laws sent out a message to Liberal Democrat members today giving his personal guarantee that the tough decisions he will make will have social justice at their heart. His whole message is reproduced below. The bold is mine.

"Dear Caron,

My Labour predecessor, Liam Byrne, left me a note saying 'Dear Chief Secretary, There's no money left.' He may claim this is joke, but sadly it is all too true.

Labour have left the nation's finances in an utterly ruinous state and we face a colossal task ahead of us. That is why today the Chancellor and I announced the creation of the Office of Budget Responsibility as well as the date for the emergency budget in six weeks time on 22nd June.

It is also why over the next week I will be working to identify £6bn of wasteful government spending that we can save in order to start to pay down the disastrous deficit left to us by Labour.

In addition to this, every new spending commitment and pilot project signed off by Labour ministers since the turn of the year will be individually reviewed in a bid to find additional savings. This is simply due diligence by the new coalition government in relation to some of the irresponsible decisions we have inherited.

I would like to give you my personal guarantee that whilst the decisions ahead will be tough I will always put social justice as their heart. I have, and I will continue to reject any proposals which would damage key services or put at risk those on lower incomes.

This is not merely a coalition of competent accountants. The challenge we face is how to address the deficit while protecting the quality of key services, making this a fairer country and ensuring that those on the lowest incomes are protected as far as possible from the actions that are necessary.

This will not be easy. But there is more chance of it being achieved with Lib Dem presence in HM Treasury than without it.

Best wishes,

David Laws MP
Chief Secretary to the Treasury"

I hope that history records that it was the Liberal Democrats who took on this enormous challenge when Labour walked away.

What I think we will see from Labour is some fairly vicious scaremongering, like they have been in Fife and Edinburgh as Councils now run by Lib Dems in coalition with the SNP try to deal with the financial mess they left. Every time they do that, they should be reminded of Liam Byrne's gloating note.

Celtic Tiger licking its wounds

The Irish economy is suffering even more than most at the moment. It's forecast to contract by a staggering 8% this year. I'm not convinced that the Irish Government's harsh approach to public spending is the right path, particularly when all their neighbours are taking the opposite approach. Time will tell, but it would make sense for the Irish as well as us to be investing in green jobs and infrastructure and try to get their economy on a more sustainable footing for the future.

Two stories relating to Ireland catch my eye at the moment. Apparently we have been overpaying the Irish by a good £135 million in 2007. The Irish Exchequer will be getting 200 million euros less than it expects for 2008, which given the precarious state of their finances, is not helpful. This isn't great news for us either, and we need to look at why our tax and NI system is so over complicated and rubbish that it makes so many mistakes. We all know how so many families are being pursued to repay overpayments of tax credits which were paid to them in error through no fault of their own - and now it seems that over a hundred million pounds has been overpaid to another Government. All this at a department Gordon Brown controlled with his clunking fist for 10 years.

The Irish Government might have been able to bear this shortfall a bit better had it collected the same taxes from foreign artists in Ireland that other countries take off Irish acts on tour on their patch. Apparently if they had implemented these taxes, the Irish Government would have been 200 million Euros richer.

I don't know whether they chose not to - and they had the chance to introduce the legislation to do so as part of the emergency budget this week - to encourage foreign acts to play in Ireland when they would otherwise not have done so, but at first glance it does seem to have lost them money.


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Misogynist of the Week

No, not Mr Eugenides, to whom I owe the hat tip, but Newton Emerson, an Irish journalist and satirist who has this rather biased view on the cause of our current economic difficulty.

Obviously I take a different view.

That's the trouble with bad things happening - everyone is out to find a scapegoat, be it foreign workers (forgetting that the UK has far more of its citizens working across the EU than EU citizens working here) and now women. I bet it won't be long until someone seriously suggests repealing the equality legislation that has been so hard won over the years.

The premise of the article is clearly that men have more of a right to participate in employment than women and that women's careers are expendable, and a luxury that should only be allowed when the economic circumstances allow. Someone needs to find this man and drag him into the 20th, let alone the 21st century!

It would, of course, be mean to mention that the key players in the political and banking world who got us into this mess are almost exlusively men..........

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