Clegg leads the fightback
Peter Hoskin 9:15am
On Monday, I wrote that the question of whether the Budget is fair or not will "pursue the coalition more doggedly than any other". Yesterday, we saw just
how dogged that pursuit will be. But there's no need for the coalition to panic as Mark Hoban did on the Today Programme yesterday. Instead, with policies from welfare reform to low taxes for
low-income earners, they have built a firm redoubt from which to stage a counterattack. They can put the chase to their opponents.
It is encouraging to see Nick Clegg do just that with an effective article in the FT today. He was bluntly
dismissive of the IFS report yesterday, calling the organisation's work "partial". Here, he is more measured, developing the first point that I raised on Monday – that the graphs
don't show the whole picture. The Deputy Prime Minister is worth quoting, at length, on this:
This is an important argument which comes at a defining moment. As James said last night, Labour cannot have a monopoly on words such as "fair" and "progressive" – and neither can it be allowed to define what they mean in policy terms. After all, the Labour position is hardly consistent. If redistributional graphs are the be all and end all of policymaking, then where does that leave their stance on middle-class benefits? Restricting universal benefits is likely a "progressive" measure if you judge these things simply on how much money people are getting."But there is a bigger problem with the [IFS] analysis: it measures the impact of the Budget solely on the basis of how much money people could be receiving from and giving to the state at a single moment. This is a definition of fairness championed for the past decade and a half by the Labour party. It led Gordon Brown, as chancellor and as prime minister, to set statistical tests, based often on somewhat arbitrary measures, so that all government policy was dedicated to shifting people from just below to just above a line on a chart, sometimes only by a couple of pounds, with little evidence that it made any difference to their long-term chances in life.Distributional analysis of the impact of taxes and benefits has an important role to play; we were the first government to include such analysis in our Budget. But we recognise that it only tells part of the story. In the real world, things are more complex than that.
Imagine a workless couple living on £5,000 a year in benefits, currently categorised in the bottom decile. If we increase their benefits by £5 a week, they are £5 a week better off. In the language of the IFS, this counts as fairness, because overall the bottom decile has a little more money, and clearly it is a good thing that the couple have an extra £260 a year.
But imagine the government helps that couple find work. Now they have a shared income of £20,000 a year and fit into the fourth decile. This, in IFS-speak, is not fairness, because the government has not changed anyone’s taxes or benefits. The fact that this couple’s lives are better disappears from the statistics the very second those improvements happen.
You cannot measure poverty with a snapshot because people’s lives last longer than a single second. If you want to measure genuine fairness, the question to ask about government policy is what its dynamic effects are, particularly across the generations. How does it change the future course of people’s lives? How does it increase their opportunities? Will it unlock the poverty trap or deepen it?
This government is having to make difficult choices in order to cut the deficit. But over time, those changes will help the economy to grow and create opportunities that would be destroyed if we allowed borrowing to continue unchecked. There is nothing fair about ducking decisions and burdening the next generation with debt."
The government helped prime this trap by placing so much stock in its own version of the IFS analysis at the last Budget. These graphs were treated not as one useful measure among many others, but as the measure above all others – and the result is the battle we see today. But at least the coalition has responded decisively and with some degree of intellectual self-confidence. The question now is whether that is enough to persuade the public.
Previous
Tarka the Rotter
August 26th, 2010 9:24am Report this commentFightback??? Already??? Led by Mr. Clegg???
Oh please...........
Alex
August 26th, 2010 9:33am Report this commentA very sound analysis by Nick Clegg. It goes to show the Conservatives can benefit from working with the "Orange Book" tradition in the Liberal Democrats. The coalition needs to have more belief in what is doing and explain in plain English why it will help people as Clegg does in this article.
normanc
August 26th, 2010 9:37am Report this commentA nice response from the Deputy PM, reminds me of the old conservative maxim 'A rising tide lifts all ships'.
Stop spending so much, stop taxing so much, the rest will take care of itself. This is the message the coalition must get out, even if they are afraid of being branded the nasty party's.
TrevorsDen
August 26th, 2010 9:38am Report this comment'Labour' have not been saying very much. The media have been running with what is in effect a planted story.
Will they run with Cleggs eminently sensible argument?
denis cooper
August 26th, 2010 9:41am Report this commentBut I was under the impression that pre-coalition the Liberal Democrats agreed with the definition of "fairness" championed by the Labour party, their principle complaint being that the Labour government hadn't done enough about it. Clearly I got muddled on that one.
joe mc
August 26th, 2010 9:55am Report this commentAnother major problem (one of many) of Clegg's argument here, is that his and the government's policies are likely to lead to an increase in unemployment. By the criteria of this 'new' version of fairness, they will also fail.
EdwardT
August 26th, 2010 10:28am Report this commentWell said Mr Clegg! He may be a Lib Dem but he's smart and has hugely impressed since entering government.
Bobigb
August 26th, 2010 10:34am Report this commentThere is no defence for clegg or this condem bunch
Amateur osbourbe always queted the IFS as his source when critisising Labour and they were his financial Gods
Now they are totally wrong...this condem lot do more Uturns than grand prix racers
Still not to worry they will be history soon!!
TomTom
August 26th, 2010 10:37am Report this commentTimes are hard and we must cut our coat according to our cloth, Redundancies are inevitable among welfare recipients, the scheme only worked so long as a minority were claimants, but now we are even importing claimants so the equation is unbalanced.
Just as Speenhamland had to be reformed in 1834, so now the decline of Western Europe in the global economy means it is unsustainable for those on welfare to be employing Chinese to manufacture their consumer durables and live of credit from those Chinese producers.
Holly
August 26th, 2010 10:42am Report this commentSSDD?
Bob Hill
August 26th, 2010 10:46am Report this commentclegg is not believed by most people in this country..he is an opportunistic turncoat..who would sell his grandmother for any power cameron deins to give the clown
He has singlehandedly destroyed the libdems as a political power and will beremembered for just that...he is an unfunny clown
Bob Hill
August 26th, 2010 10:49am Report this commenthe words Sensible and clegg
should never be muted in the same article
turncoat and liar are surely more appropriate
Andrea Gill
August 26th, 2010 11:02am Report this commentI bet that Mr Clegg never thought he'd end up for the FT again and it would say "the writer is deputy prime minister" at the end! :)
Cameo Parkway Kid
August 26th, 2010 11:29am Report this commentPlanted story?? I'm afraid you lot down at the Kensington Command Post cant have your cake and eat it and pick and choose what the IFS states. Get over it, the cats out of the bag, Osborne's figures don't stack up, and unless you're in about the top 6% paywise, you're gonna get well and truly shafted (and the further down the pay scale the worse off you'll be). God help the old and infirmed. Just goes to say, like a leopard, a scumsucker never changes its spots.
Mark Pasola
August 26th, 2010 11:56am Report this commentClegg will be welcome in The Conservative Party when Lib Dems split. In the meantime the Cameron-Clegg axis is doing a fine job of planting government policy in the centre ground and detoxifying the Tory brand.
In order to win the intellectual argument and prevent the Labour/Guardian/BBC axis appropriating words like "fairness" and "progressive" as their own, the Tories and Orange Bookers must first ensure that they are being listened to. Clegg here makes a coherent point that any Conservative (indeed anyone not a partisan leftie) could agree with.
shorney
August 26th, 2010 11:58am Report this commentIts about time it was made worthwhile for people to work, I for one have had enough of living in the same street as people who don't bother working yet have a far more luxurious lifestyle than the true hardworking class.
More to the point its about time the door was closed on labour's benefit trap! NO longer must people be able to shy away from the world and have everyone else bail them out, I understand that NI is needed but only a few people truely need it many just can't be bothered to either, get off the drugs find a job (there are plenty of jobs out there people just don't want to do some of them there is a reason why you don't see many immigrants struggling they are the ones who still have a work ethic!)
Tracy
August 26th, 2010 12:11pm Report this commentThis is great. Nick Clegg speaks a lot of sense if people will just give him a chance and listen instead of jumping on every single word or action and trying to make it into a fail for the coalition. GIVE HIM A CHANCE. He's not stupid!
Rosa
August 26th, 2010 12:21pm Report this commentWell done Clegg- I didn't think you had it in you ! Remember the saying' Give a man a fish and you feed him for a day- teach him to fish and you feed him for life'. We need to adapt that saying , in the UK, to encourage people to fish. That is what this budget is making a start on.
Magiric
August 26th, 2010 12:22pm Report this commentI see the trolls are out in force today; illiterate and irrelevant.
Chris
August 26th, 2010 12:29pm Report this commentThe trouble is that even if Clegg got that entirely correct analysis into a 20-second soundbite, the Beeb would put it in a context that favoured their 'Coalition heartless bastards' meme. Several hundred words in the FT versus the lying lefty snippets of Al-Beeb? No contest.
Paul Hawkins
August 26th, 2010 12:40pm Report this commentCameo Parkway Kid - remind me under which party the gap between rich and poor widened over the past 13 years?
Worse still,any ambition those on low incomes may have had has been eroded by state benefits.
A fine monument to socialism but hardly a platform for you to criticise others for the same thing
seanyprawny
August 26th, 2010 2:03pm Report this commentHmmm...dodgy argument from Clegg. If the Coalition Budget has increased the gap between the bottom decile and the top decile then it is regressive. It does not matter if a few individuals move from one decile to another - the bottom decile remains disadvantaged because the Coalition is ditributing money away from it.
Richard of York
August 26th, 2010 3:58pm Report this commentSo it is Oik's budget but Clegg has to defend it.
The Tories hiding behind the cannon fodder Lib Dems....perfect plan let the muppets take the hits and sit on the hill commanding the troops safe from the fray.
Tory cowardice .....why should I be surprised?
London Calling
August 26th, 2010 4:24pm Report this commentSadly the poor cannot fight back…and now the Human Rights Commission (EHRC) has said it might censure the government unless ministers can prove they met a legal requirement to consider the impact of cuts on the poor.
http://www.guardian.co.uk/society/2010/aug/25/nick-clegg-budget-cuts-watchdog
Is the IFS and the EHRS run by trolls? or has coalition been cornered, the evidence of which has been presented by the lack of the coalition in answering any direct questions on the subject, the reality of which is those on low incomes will feel the full force of cuts, when promised they would be protected and would benefit. Cleggs not fighting back, he wiggling his way out on the most important issue to hit the fan since this coalition formed and if they have got it wrong they will have to explain themselves with more clarity and justification or alternatively face an army of trolls who along with the public will question whether the truth has been axed to accommodate a lie…this is not radical or tough love, it’s evidence of the coalitions runaway budget train… and someone has to put up a stop sign where necessary, its called healthy debate and a democratic responsibility to protect the vulnerable…
Cameo Parkway Kid
August 26th, 2010 5:23pm Report this commentI am aware of the Labours pretty dismal attempts at protecting the more vulnerable Mr Hawkins - probably why I stopped paying my subs to the Labour Party after 30 odd years. That said, two wrongs don't make a right and therefore I think I can criticise a sneaky and pretty government (cash for access anyone) as much as I want - especially when it increasingly appears to most that this budget, as Steve Bunce would say, 'is a wrong 'un'. As I said, those of a blue hue were wetting themselves last Sep (and this Mar) when Mr Chote put the boot into Messrs Brown and Darling. And rightly so. Likewise, after crossing the i's and dotting the t's, he's rightly putting it to Georgie Boy for the right old Eton Mess he's getting us into.
yank
August 26th, 2010 8:06pm Report this commentI don't think Mr. Clegg was "bluntly dismissive" of the IFS' work, Mr. Hoskin. I think he recognizes it for what it is... a scorekeeping exercise. He's merely pointing out that it doesn't tell the whole story.
And no doubt that an impartial scorekeeping exercise is an important story. The sovereign debt problem isn't going away, as the impartial scorekeepers tell us. They'll also tell us the flow of cash from/to the various income quintiles, particularly the lower. We have need for this info, too.
It's up to Clegg to flesh out the other portions of the story, which he well did here. If you ask me, and you didn't but I'm going to tell you anyway, this is the best output I've read from this new coalition, and this Clegg guy just put Dave to shame. I'm sure it's as rare there as it is here, but this is what good governance sounds like:
"This government is having to make difficult choices in order to cut the deficit. But over time, those changes will help the economy to grow and create opportunities that would be destroyed if we allowed borrowing to continue unchecked. There is nothing fair about ducking decisions and burdening the next generation with debt."
Simon Stephenson
August 26th, 2010 10:53pm Report this commentCameo Parkway Kid : 5.23pm
"Likewise, after crossing the i's and dotting the t's, he's rightly putting it to Georgie Boy for the right old Eton Mess he's getting us into."
I appreciate that, to you lefties, Eton is just about the boo-word of all boo-words, and also that St Paul's isn't in the same league as Eton for stirring up emotional class envy. However, the fact remains that George Osborne did not go to Eton - he went to St Paul's.
Knowing what sticklers you Labourites are for accuracy and truth, I'm sure you won't mind me pointing this out to you.
Hay Quaker
October 22nd, 2010 1:16pm Report this commentNick Clegg's biggest fight must be with his conscience.
les
October 22nd, 2010 1:20pm Report this commentCameo whatever your name is
Chote still with the IFS then?
appointmetotheboard
October 22nd, 2010 4:30pm Report this commentMr Clegg's argument is good as far as it goes. Certainly good for Mr and Mrs Now-We-Have-A-Job.
Does this mean that the Coalition are promising 100% employment and a living wage? Those are splendid pledges, that I can definitely support in full.
However, if there is a chance that some people will still not have gainful employment, then the benefits that they receive are still worth measuring.
Simon
October 22nd, 2010 4:35pm Report this commentClegg's argument is invalid.. how can he measure fairness by taking an example of one couple? for each couple that gain work, another will lose theirs.. at least while unemployment is on the rise, which it is. he has to take an average view.
his argument only has some validity in a growth enconomy with new jobs being created.. and i don't see that happening any time soon.
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