Liberal Democrat Leadership: A chance to breathe progressive energy into a party sorely in need of a fresh start

Last month Tim Farron chose to resign as leader of the Liberal Democrats. This article won't focus on that, other than where it affects the way forward. However, his resignation does present the party with an opportunity.

The party has been on a rollercoaster, from their first experience of government in decades to a catastrophic loss of public trust that resulted in an electoral collapse that lost the party all but eight seats in the Commons.

Under Farron, who had no part in the Coalition, it appeared that things were turning around. Recoveries in council elections, and the remarkable by-election upset in Richmond Park, suggested that the pro-European party would do well at a general election.

The results were, by most measures, disappointing. Yes there were gains, with some of the party's bigger names returning - even as others departed. But the party went hard on one issue and it didn't land. And there were also unhelpful distractions.

With yet another election unlikely to be far away, the party is at an impasse. There was no election surge and the party has no resonating message. It now has no leader either.

Contenders

The next leader has to grasp these challenge quickly and get on top of them. There can be no room for looking inwards. When nominations close in a week's time, the contenders putting themselves forward must give the party moving forward.

At the outset, it seemed like there would be an a list of experienced contenders to debate just how to do that. The favourites included the experienced former ministers Norman Lamb, Ed Davey and Vince Cable.

But the strong favourite was Jo Swinson. Not only would she have have been the party's first female leader - an important statement in itself - the party would have had in Swinson a liberal feminist at the helm outspoken and capable.

The biggest difficulty barrier ahead of her candidacy, it had seemed, was her time as a minister in the Coalition. Yet her early Parliamentary career was so tangled up with Cabinet collective responsibility, that her voting could only really be seen as representative of the Coalition as a whole.

That gives Swinson, in her return to the Commons, something near to a fresh start. A chance to establish her own agenda and to define herself, and her party, anew.

However, despite being labelled the favourite (by a wide margin), Swinson chose not to stand. She was promptly elected Deputy Leader, however, so her voice will not be missed at the head of the party.

Her choice not to stand would become a trend. Soon after, Ed Davey and Norman Lamb both announced they would not stand either. With no challenger yet coming forward, Vince Cable is at present the only candidate to become the next leader.

Renewal

Over the years, the liberal parties in Britain have found themselves caught between two movements. The free marketers have been pulled rightward by the Conservatives and the social liberals have been pulled leftward by Labour.

And yet, the Liberal Democrats seemed to be making inroads as an alternative progressive party to Labour until the 2010 general election. In longstanding liberal tradition, the party announced it would respect pluralism and go into coalition with the party with most seats and most votes.

That decision, that led to Cameron and Clegg announcing the Coalition in the Rose Garden, ultimately proved wildly unpopular. It hangs over the party two years on. As the presumptive next leader, Vince Cable needs to address weaknesses like these.

To his credit, Cable has already taken steps to head off those concerns that more collaboration with the Tories awaits in the future. Cable described working with the Tories was like mating with a praying mantis - not something you're likely to survive twice.

It helps that the party has been clear that it won't be making any deals and in the election campaign, even Nick Clegg spoke of the need to work constructively with Labour in the aftermath to oppose the Tories - a clear sign that there is no going back.

The break from the past could bring with a fresh start on policy too. At the centre of the their 2017 campaign was the call for a second referendum. But it didn't really get traction. It was a policy that seemed to have missed a change in the public mood.

There is a growing sense that people have accepted that Brexit is going to happen and are focussing now on the future - a mood that makes the Lib Dems position seem nostalgic, or even conservative.

There is, perhaps, a need to draw a line under staying in - following what might be considered two defeats - and to realign thinking toward the future. Not to stop being pro-Europe or even pro-Remain, but to think about what these mean going forward rather than trying to undo the past. Three points to consider would be:

• to scrutinise and campaign for the least damaging Brexit,
• to support the right for individuals to retain their EU citizenship,
• and, to start talking about pathways back to European cooperation in the future.

The key is to start taking the initiative and look forwards, not backwards. To get back to basics, like questions of individual's rights. That idea doesn't just extend to policy on Europe.

Perception

At the heart of being forward-looking in developing policy and taking stances is public perception. For smaller parties it is a difficult, and sometimes perilous, tightrope to walk. But at it's heart, there are practical limitations these parties face and they must tailor their message to that reality.

When he resigned, Tim Farron drew a link between his decision and questions that arose in the election campaign suggesting a conflict between faith and politics. Farron portrayed the conflict as only the perception of an intolerant illiberal secularism.

Now, it certainly isn't incompatible for someone to be personally conservative and yet politically liberal, open and tolerant of others, and respecting their right to live their own lives.

But it is a hard stance to hold as the leader, as the figurehead, of a liberal movement. When asked to assuage doubts about his stance on LGBT and abortion rights, Farron failed to offer reassurance - focusing instead on himself.

Politics is a game played in soundbites and shorthands. The grand rhetoric and inspiring thought absolutely matters, so very much, but it isn't the gateway - the access point. Image and perceptions matter.

For the smaller third parties - for whom taking symbolic stands are one the few opportunities they get to show the public who they are - the leadership has to be a beacon of the values of that party, without equivocation.

The Coalition interfered with the Liberal Democrats' ability to make themselves distinct. The comedown from the personality politics that grew up around Nick Clegg has tarnished their image, along with the links to the Tories.

The party's long held commitments to plurality, to compromise, to democratic cooperation and serving the national interest above the party interests are all worthy. But little of it ever makes it to the public eye and is rarely interpreted as intended.

The party also seems to have struggled to establish what it is for, pitching a stance of 'equidistance' under Clegg that didn't really change under Farron. While there is nothing wrong with Centrism, it shouldn't be confused with just splitting the difference.

As a small party, the Lib Dems can't afford those confusions. It needs a clear message. For a good example, consider the party's 1997 manifesto. It called for active government that would strengthen liberty, promote prosperity and widen opportunity. There is what liberalism is supposed to stand for, summarised in three words: Liberty - Prosperity - Opportunity. Hopeful words that focus on the future, not just management of the mediocre present.

Foundation

The 2017 general election established a Liberal Democrat baseline and perhaps new foundations. Even with just a dozen MPs, the party still have the ability to put forward a capable frontbench team, with recognisable names associated with positive progressive campaigns.

From Vince Cable, with a long history as a treasury spokesperson and minister, and an economics expert; to Ed Davey, who was minister for energy and the environment; to Norman Lamb, who was a minister in the Department of Health, is an outspoken advocate of parity of esteem for mental health and now also chair of the Science and Technology select committee; there are strong credentials. In addition, both the returning Jo Swinson and the brand new Layla Moran are MPs who look like future party leaders.

There Lib Dems survived their mistakes and have decent foundations to build upon. But there are decisions to be made if the party wants to make it back from the brink - for the second time in it's history. But do so, the party needs to be much more self-aware and it needs to be clear.

There is still a place for liberalism under a broader progressive banner, but it has to commit. Even standing as centrist, with its cherished value of inclusivity, can be progressive. But the centre is not to be found halfway between Labour and the Tories.

Vince Cable, increasingly likely to be the next leader, has made positive steps in that direction. He has affirmed the "no deals" stance, with particular venom towards the Tories, supported the Compass campaign for a Progressive Alliance over the past few years and received cross-party backing in his own seat of Twickenham.

The last liberal recovery was founded in localism, campaigning and standing as a progressive party. The 2017 manifesto showed that the core of those ideas remains unchanged. What the party have lost their identity. It must be the new leader's priority to get it back.

Theresa May and the Brexit cause, stuck with each other, face being unravelled by a common threat: Few things in politics hit home harder than a rise in the price of food

As prices threaten to rise, Theresa May, pictured in her time as Home Secretary, is faced with the same challenge that took down the plans of her hero Joseph Chamberlain. Photograph: Rt Hon Theresa May MP, Home Secretary, at 'The Pioneers: Police and Crime Commissioners, one year on', by the Policy Exchange (License) (Cropped)

Joseph Chamberlain's vision for Britain was an Empire behind a wall of protectionist trade tariffs - literally taxing imports in order to force the use of domestic and colonial resources. Chamberlain's campaign was ultimately defeated when it became clear that protection also gouged prices, increasing the cost of basic necessities like food.

Prime Minister Theresa May seems set to emulate her hero. In the past few weeks, just the fear and uncertainty of a future Brexit alone has been enough to upset investors, which restricts the access to the credit needed to get things done; to decrease the value of the pound, and therefore its purchasing power; and to start squabbles between suppliers and retailers over the price of food.

That is not a great early sign for the May Ministry. Nothing is likely to threaten the long term longevity of a Government than sharp increase in the cost of food. Most policy can be abstracted or explained away with excuses. But little hits home more directly than it being more expensive just to eat. Having hitched her leadership to the abandoned Brexit wagon, their success and failure now appear entwined.

Remain and Leave

Now, unlike during Chamberlain's days, in terms of how the arguments were made, the debate between keeping EU membership and leaving the EU was not supposed to be a straight contest between free trade and protection. Rather, the two sides were in theory presenting different ways to go about free trade. Supporters of the European system saw a free trade area gradually pushing back barriers, while its detractors saw rules and regulations preventing business exploiting opportunities with the emerging economies beyond Europe.

Yet what looks to be an increasingly drastic withdrawal from Europe looks set to have much the same impact as throwing up a wall of import taxes. Withdrawal from the Single Market, as now seems to be on the cards, would put Britain on the outside of Europe's own tariff barriers. That would in essence subject Britain to all the negatives of trade barriers without any of the benefit of recouping tax receipts, since it would be British exports to Europe facing taxes, not the other way around.

And there is little that could be more damning for the Leavers' approach than driving up prices. If there is one thing that free trade offers, through the opportunity to operate at scale, its a reduction in the cost of doing business and therefore, theoretically, a reduction in prices.

Free Trade and Free Movement

When Richard Cobden and John Bright led the Anti-Corn Law League campaign against tariffs, it was to fight the protection it afforded to landowning aristocratic that drove up the price of bread. Keeping down the price of food was one a core group of goals for the free traders of mid-nineteenth century. They also saw in free trade the chance to build a lasting peace between European nations.

The Single Market, formerly known as the Common Market, was the realisation of a century of efforts by Europe's free traders to realise those possibilities - to bring Europe together in peace with a vast barrier-free trade area.

But building that barrier free area has required a massive regulatory reform process. Some on the Right have portrayed those efforts as a nightmare of expensive and restrictive bureaucratic red tape. Yet to the crafters of the free trade area it has been an essential effort to match up the trading standards, on everything from packaging to safety, in all of the member countries - so that no product or service is faced with expensive and restrictive internal barriers.

That process of taking barriers led one of the biggest, most profound and most controversial removals of internal barriers: free movement of labour. As of the vital resources of business, labour has received the same treatment as other barriers to trade, from the standardization of rights to free movement across traditional borders - allowing labour to be where it is needed most and rewarded best.

Freedom and Fear

It is also the change most provocative to what has become the established European order. Europe that went from being divided between lords to being divided rigidly between nations. It still does not seem ready for the prospect or reality of no dividing lines.

To be clear: it is absolutely right to review trade policy. The free traders of the nineteenth century sought to break open, for the general benefit, a state protected cartel of aristocratic landlords. But today's economy is very different and what might have broken one cartel could easily feed another.

The European system is certainly not without issues. The area itself was formed through technocratic standardization rather than purely through the removal of restrictions on business - enough alone to provoke an argument over the definition of 'free' trade.

However. Going back to a world of trade barriers, of tariffs and protectionist import taxes, opens again the box of vested interests being subsidised by the state and of endless trade treaties that it will take never ending public vigilance to keep in check. And pursuing any path motivated by fear, to throw up barriers and restrictions and take away liberties out of arbitrary discrimination, is dangerous.

The Path Ahead

Europe's social fabric is fraying and the walls between nations are going back up. Fears over living standards, paucity of secure housing and lack of opportunities - fueled by years of austerity's chronic denial of public investment - are closing off the EU's member states one by one and turning them inwards.

In the midst of this, Theresa May has bought into the Brexit cause. She has taken it on as her mandate. Her hero Chamberlain saw his efforts thwarted by free traders pointing out an inconvenient truth: that food was too expensive because of a grain cartel his policies supported.

May's Government has inherited a fragile economy in which food prices are just beginning to threaten a rise. Will the Prime Minister be able to act fast and head off the threat? Or will her government go the same way as the protectionist Conservative & Unionists of her idol?

Chancellor quietly drops yet another target, but Labour infighting means chance to pitch positive alternative case will be missed

Under Chancellor George Osborne's stewardship, the Treasury is going to miss another of its fiscal targets. Photograph: Pound Coins from Pixabay (License) (Cropped)

On Friday, at the quiet end of the week and under the cover of the Labour and Conservative leadership wrangling, Chancellor George Osborne announced that he was relaxing the fiscal rules demanding that the government deliver a budget surplus by 2020 (Ahmed, 2016).

Paul Johnson of the Institute of Fiscal Studies immediately stressed that the measure, though it would allow for more borrowing and so less spending cuts or tax rises to cover the shortfall caused by the post-Brexit downturn, would not mean the end of austerity (BBC, 2016).

On Sunday that was confirmed when the Chancellor announced his intention to further accelerate the reduction of the Corporation Tax rate down to a new low of just 15% (Monaghan, 2016) -  a move entirely consistent with Chancellor's M.O. of managing the economy by creating seductive conditions for major firms.

With targets being quietly missed and dropped, and sweetened tax deals for major corporations being announced, it is disappointing that Labour MPs are too busy completely embroiled in their own mess to take the opportunity for a big public 'We Told You So'.

Labour are also in no position at present to step up the argument for seizing this opportunity to push for the much needed public investment plan that Shadow Chancellor John McDonnell has argued the Chancellor's fiscal rule did not allow for (Treanor & Allen, 2016).

While the first announcement was buried beneath other news on a Friday, where missed targets are often hidden, it was a move that brought the policies of Osborne and Tory leadership candidate Theresa May into alignment - as May said in her campaign announcement that she would put aside the aim to get a surplus by 2020 so as to avoid disruptive tax rises (The Independent, 2016).

While suspending the fiscal rule aligns with May's position, the decision to cut Corporation Tax may have a more complicated effect on the Tory leadership contest. Brexiter candidates have been keen to downplay the negative economic impact of the vote to leave and will seize upon any sign that life goes on as usual.

The Chancellor using the new freedom for a tax cut rather than as the first in a package of measures that include the rise in taxes that he previously warned might follow a vote to leave, could play into the hands of the Brexiter candidates. The idea that Britain still has room to manoeuvre, to make a pitch to international businesses that it is still a place to invest, will likely embolden Brexiters who accused the Remain camp of 'Project Fear'.

However, the reality is that public revenue in the UK is already tight and suspending fiscal rule only confirms the fact. Public spending is still in deficit and key benefactors like the NHS still suffer from shortfalls. Abandoning the rule means an admission by the government that only by borrowing more can it now keep up with spending demands - for now.

The big question remains as to whether borrowing, for public investment, or limiting and even eliminating borrowing, cutting public outlays and seeking private investment to cover instead - ie austerity, represents the sounder fiscal policy. Which will help produce growth and revenue?

From the OECD to the IMF (Elliott, 2016; Summers, 2014), the argument that the UK needs to borrow and increase public investment, because boosting public investment can drive the growth that delivers the tax receipts (Stewart & Asthana, 2016), has strong support. The economists who have joined John McDonnell on his New Economics tour have also made broadly the same case.

The argument from the Left is that the Chancellor's focus is on entirely the wrong part of the economy with his tax cuts, benefiting the richest in the hope that they see past their short-termist to invest with a longer view (Sikka, 2016). They also warn against the short term focus of austerity, which looks for gains by selling off parts of the government to would be rentiers, as flawed and likely to only increase problems in the longer run (Mazzucato, 2016).

The alternative is to instead start directing investment into ordinary people - whether that be through education, in skills through apprenticeships and training, through jobs repairing roads and other transport infrastructure or building thousands of much needed new homes - with every penny spent multiplying in value as it boosts the economy.

These are all long term projects, aimed at providing a stable and prosperous future. A progressive economic alternative needs to do more - from reforming welfare towards a compassionate Basic Income and improving workers' say and stake in the work they do - but public investment is the starting point.

The Chancellor has taken a step back but the pressures of austerity are not yet relieved. Progressives have to overcome their divisions so they can start building the arguments for a more prosperous future with the common good at its heart.