Vince Cable and Nick Clegg, two of the most senior Liberal Democrats, were quick to make their voices heard in response to the Autumn Statement and to the Conservative push for more cuts during the next parliament. The essence of their narrative was simple: the Lib Dems believe that austerity has been pushed as far as it can or should go.
Cable was quick off the mark with a letter to the Office of Budget Responsibility, which called for the OBR to make a clear a distinction between the future policies of the Conservatives and the Liberal Democrats (Wintour, 2014). Clegg followed in his wake by stressing that the Tory determination to cut tax was not matched by available funds (Marr, 2014) - meaning more public services would have to go.
The economic analysts seem to agree with them. The analysis released in response to the Autumn Statement stressed that public spending would have to be reduced drastically if the Conservative path was to be followed (Johnson, 2014). And this week the OECD (Organisation for Economic Cooperation and Development) announced that its research had shown that inequality is bad for economic growth, and that a redistributive economy is far more conducive to economic success - not to mention beneficial to social welfare (Elliott, 2014).
So what would the Lib Dems do differently?
Well, Clegg says that they are not ashamed of the role they have played in arresting public spending (Mason, 2014), but the party has expressed disagreements over the way forward. While the Conservatives want more and deeper cuts, the Lib Dems think that the realistic plateau has been reached. Instead of more cuts, they want a rise in tax that is controlled to protect the poorest (Lansdale, 2014).
While serving as a practical challenge to the Conservative narrative pushed by the Tories and UKIP, people are unlikely to be inspired by ideas aimed at just keeping a sinking ship afloat. People want an opportunity to make things better - and there are liberal ideas, more radically progressive, that the Lib Dems could push.
Though the modern Lib Dems have been focussed on the idea of reducing the state - with a Gladstonian commitment to capitalism, in opposition to the state - when the old Liberal Party began to modernise in the early twentieth century, the new social liberalism it had embraced opened the party up to the idea that there was a role for the public sector to play, though still with the proviso that it should be reduced wherever possible.
Those deep rooted liberal tendencies have produced ideas, beyond simply reducing state influence, that are more conducive to creating a new era of reform. In the 1920s, Liberals under the guiding hand of John Maynard Keynes produced an in depth report of the British economy that included in its recommendations co-operatives, and democracy in the workplace (Yellow Book, 1928).
'The worker's grievance arises from a sense of the inadequacy of their reward, of their insecurity of livelihood and tenure, and of their lack of information as to the financial results of their work... The present ownership of industry is unduly concentrated and should be diffused as widely as possible among industrial wage-earners. Such diffusion, tending towards the popular ownership of industry, may be effected partly by progressive taxation and restrictions upon the inheritance of large fortunes, but more directly by the stimulation of employee-ownership under schemes of profit-sharing and investment by employees, by the encouragement of popular banking and investment, and by the creation and development of investment trusts. All these processes should be encouraged and, where necessary, regulated by the state.'
These ideas are still woven into Lib Dem policy proposals. Nick Clegg has previously called for a move towards a 'John Lewis Economy' (Clegg, 2012), with companies embracing workers holding shares, and party members have argued that co-operatives should be at the forefront of the Lib Dem economic policy (Donaldson, 2013) - as they are in the preamble to the party constitution.
Now could be the time to start bringing those ideas to the forefront. Co-ops represent a huge step forward, giving people more autonomy in their working lives and spreading the profits of their labour more equitably. If the Lib Dems are to see the aims of the authors of the 1928 Yellow Book report fulfilled, to ensure that individuals may enjoy life more abundantly, co-operation is going to play a key role in achieving them.
References
Patrick Wintour's 'Vince Cable asserts Lib Dem economic independence after autumn statement'; in The Guardian; 3 December 2014.
Andrew Marr's Interview with Nick Clegg; on 'The Andrew Marr Show'; on The BBC; 7 December 2014.
Paul Johnson's 'Institute for Fiscal Studies: Autumn statement briefing, 2014 - Introductory remarks'; for the Institute of Fiscal Studies (IFS); 4 December 2014.
Larry Elliott's 'Revealed: how the wealth gap holds back economic growth'; in The Guardian; 9 December 2014.
Rowena Mason's 'Nick Clegg: I’m not ashamed of the autumn statement'; in The Guardian; 4 December 2014.
James Lansdale's 'Lib Dems seek centre 'gap' as Tories and Labour shift'; on the BBC; 5 October 2014.
'Yellow Book' or 'Britain's Industrial Future: being the Report of the Liberal Industrial Inquiry'; Ernest Benn Ltd, 1928. [Buy Now]
'Nick Clegg calls for a 'John Lewis economy'' on the BBC; 16 January 2012.
Iain Donaldson's 'Opinion: Liberal Democrats have a unique position on co-operatives. We should use it.'; on LibDemVoice.org; 22 September 2013.
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