Dear Simon Hughes
First congratulations on your election as deputy leader. I hope you see one of your functions as being to keep the social liberal flame, and our Keynesian traditions, alive.
I am increasingly concerned that, as Seumas Milne put it in the Guardian (For the Lib-Cons, this is an excuse to shrink the state,17/06/10) “cuts have become, like light touch financial regulation before them, conventional wisdom” and that this view, which I believe to be profoundly mistaken, appears to be unchallenged by Liberal Democrats in government.
The view that cuts now are inappropriate and unnecessary is held by many distinguished economists, including David Blanchflower, Matin Wolf, Giles Radice , and Paul Krugman, who all argue that Britain’s public debt is not dangerously high, that the risk of a downgrading of our debt rating is minimal, and that cuts before the recovery is assured pose a great danger of a double-dip recession. In his article on Monday 14th June the Guardian’s economics editor, Larry Elliott wrote: "The determination to cut budget deficits in (the present) circumstances does not show that policymakers of probity and integrity have replaced the irresponsible spendthrifts of 2008 and 2009. It shows that the lunatics are back in charge of the asylum." (my emphasis).
I’m strongly of the opinion that the Liberal Democrat Party, heir to the party of Keynes and Beveridge, should be opposing the current policy of immediate deficit reduction. I understand that we are the junior partner in the coalition and cannot impose our views on the major partner. However, we needn’t be heard supporting them in public. After all, it is part of the coalition deal that there should be reform of the electoral system, but David Cameron has reserved the right to campaign against that. If Liberal Democrats in government are not, under the terms of the coalition, similarly able to campaign openly against these economic follies, then they should be doing so privately. But there is little evidence of this, in fact the opposite. Both Nick Clegg and Vince Cable claim to have been converted to the necessity of immediate cuts. I feel that this has damaged our credibility and perhaps our integrity as well.
In addition to trying to avoid, or at least ameliorate, economic policies which are both unnecessary and likely to cause pain and distress to thousands of our fellow citizens (especially the poorest 20%) we should remember that our party is supposed to have retained its independence and will fight the Conservatives in by-elections and the next general election. In these campaigns we need to be able to claim credit for our policies, especially of constitutional reform, which we have gained as a result of the coalition, and dissociate ourselves from the economic follies which are against our tradition, our stance in the election campaign and our reason.