Liberal Democrat Economy Motion: There is a Different Way

The Lib Dem Conference this September in Glasgow was interesting.  I managed to speak in both the education and economy debates.  I have a slightly different view to the party leadership as to how we should be handling the economy, in the best interests of ordinary citizens.  The text of the speech I gave is below.


The British economy is still 3.3 percentage points smaller than it was in 2008, FIVE years ago.   Had we acted differently in 2010, would the devastating impact on real people’s lives been different? ABSOLUTELY

There is enormous unused capacity in our economy so the problem is not a supply one.  The problem is clearly one of low aggregate demand. This is created, in part, by great uncertainty both from households and from businesses who are unsure of spending and are effectively holding off on all but the essential purchases and necessary investment.  It is also caused by the fact that we still have an unacceptably high number of people who are either unemployed; under-employed; or earning wages which do not afford an acceptable standard of living.  Another major factor impacting on the issue of low aggregate demand is the fact that many of our major trading partners in the EU are also pursuing similar policies of austerity to our own Government, meaning that everyone is using deficit-reducing tactics and no-one is trying to stimulate growth in a concerted fashion.  The good news is however, that there are things that the biggest actor in a nation, the government, can do to counter the effects of low aggregate demand.

Our PRIMARY concern as Liberal Democrats must be the effect this is having on the people of this country?  This is MY single concern, and I would argue that it should be the over-arching concern of any democratic government.

Not only has the economy reduced in size.  During this time, our coalition government has:-

–Laden our students  with increased debt at the beginning of their productive working lives.

–Reduced the benefits for those out of work or in poor-paying jobs-impacting the most vulnerable in society

–And allowed changes in the job market – I’m talking zero-hours contracts here at the extreme – meaning that many people now get by on a cocktail of part-time jobs, affording them little time for family life and giving them precious little disposable income.

I am a councillor in one of the wealthiest boroughs in the north – Harrogate.  In August I attended a seminar on food banks in Harrogate.  There has recently been a report commissioned into food poverty in North Yorkshire.  Here is a stark quote:

Over the last year there has been a significant growth in the number of individuals and families who have a house (either rented or owned) that are skipping meals because they cannot afford food. This trend was reported across North Yorkshire. There are three main reasons why individuals and families are experiencing food poverty in North Yorkshire in 2013: a benefits payment was late or delayed (this includes benefits sanctions); the rising cost of living left an individual or family with no money to buy food; and homelessness.

The facts are that food banks have grown at an alarming rate in Harrogate over the past few months, with literally hundreds of people making use of them every week.  And that is in Harrogate!!  There has also been a significant rise in homelessness.

Who in this room is comfortable with the idea of food banks, and let’s remember that these are being used now by people in work!  I also learnt that local food banks are having to expand what they provide to families.  Guess the number one item in request?  Nappies.  I’m sorry, but…

But moving on from food banks, could we have acted differently, using a different set of priorities, so that less pain could have been inflicted.  I am convinced that the answer is “yes”, and that is why I am asking you to vote against the motion as a whole.  We need to take a different tack soon.   We cannot ignore the pain that has been going on for years in normal people’s lives, especially as the longer it goes on the more it will impact on their future prospects as well.

The fact is that we have been too focused on the wrong things.  Principally, the credit rating agencies and the confidence of the markets. As has been shown time and time again – in the USA and Japan and here, a downgrading from triple A does not mean higher interest rates and soaring inflation.

We can act over the longer term to bring down the deficit, whilst focusing on how we can act and invest to improve people’s lives and livelihoods.  There’s never been a cheaper time and as large a workforce (currently sitting idle, though no fault of their own ) available to build much needed housing and transport infrastructure, which, through the multiplier effect, will give a much needed boost to our local and national economy.

At a time when many debtors are trying to save more and pay down debt, it’s important that someone do the opposite, spend more and borrow – with the obvious someone being the government. We CAN get the infrastructure we deserve and that is fit for the 21st century.

We have lived with large debts and deficits in the past – and survived and gone on to prosper, and in current times, once aggregate demand has recovered, that is the time to bring government deficits  and debt levels down. Not now.

I am asking you in rejecting this motion to think about what we as Liberal Democrats would do if we were in charge. This motion seeks to condone the current coalition policy – austerity.  But I would argue that this is not the only way.  Would we really have left so many people struggling to get by for several years?  Would we really have made deficit reduction our priority over bringing down unemployment?

Governments are here to act in exactly these circumstances to alleviate misery, whilst acting in the long term economic interest of the country.  If we cannot do this, then what is the point of government?

We can show people today

– at our conference,

– our Liberal Democrat conference,

– our party conference—no-one else’s party conference,

that we continue to put people first and that if they hold their trust in us we will do right by them.  Please send out that message by rejecting the motion.