Lib-Dems back more cuts

by Daphne Liddle

THE LIBERAL Democrats began their conference in Brighton last week by promising to fight for a wealth tax and ended by pledging to support further swingeing cuts in welfare and public sector.

Nick Clegg began by making a dubious apology for reneging on his election promise to oppose any rise in student fees — only he did not apologise for supporting a rise in fees of up to £9,000-a-year — only for making the promise in the first place.

The apology was immediately transformed into a You-Tube hit, accompanied by music. If the makers of that piece had hoped to shame Clegg they were mistaken; he welcomed it as a lighthearted diversion from the desperate and divided state of his party.

Opinion polls show that support for the Lib-Dems is now running at just half of what it was at the general election so the leadership and the delegates were well aware that their dalliance with a semblance of political power will not last much longer.

Clegg could still make a name for himself in history if he dissolved the Coalition and forced a general election — saving the vast majority of people in this country from the pain of yet more cuts that will further cripple the economy.

But he sees his future in another direction. He was part of the Orange Book faction in the Lib- Dems that was always very close to the Tories. And Tory London Mayor Boris Johnson has described Clegg as “a natural Tory”. No doubt there are lucrative directorships and other appointments awaiting him to assure his place within the one per cent went he retires from politics.

Business Secretary Vince Cable touted a feeble version of a “business bank” that Chancellor Osborne will keep hobbled because he acts on behalf of the big banks, who don’t invest in small businesses because they make bigger profits speculating and playing silly games on the global money markets.

Danny Alexander, the Lib-Dem man at the Treasury, faced a lukewarm welcome at the conference as he tried to justify backing more cuts.

He claimed credit for the plan to raise the income tax threshold to £10,000 and pledged to fight for it to be raised to £12,500. It sounds like a favour for the low paid but it actually benefits the highest paid most; as threshold levels rise, a greater proportion of their wealth is taxed at lower levels. Lowering VAT would be of much more benefit to those on the lowest incomes.

He also promised a new purge on tax dodgers, warning: "we are coming to get you and you will pay your fair share”.

But while he vowed to continue to push for some form of wealth tax, he also said that the Lib Dems would have to sign up to more welfare cuts in 2015- 16.

"At £220 billion, welfare is one third of all public spending — and despite our painful reforms it is still rising. We will have to look at it," he said.

It is obvious that welfare costs will rise during a depression and rising unemployment caused by public sector job cuts. But if he really wanted to cut the welfare budget the best way to do it is through putting a cap on rented accommodation.

This would cut the housing benefit bill without making anyone homeless. It is private landlords who benefit most from housing benefit.

Likewise raising wage levels would reduce the numbers needing tax credit top-ups, which ultimately benefit bosses by allowing them to pay dirt-poor wages.And the way to raise wages is to remove the shackles placed on the trade unions by the Thatcher and Major governments.

Even so, it is no disgrace for a civilised country to spend on welfare. The Tories’ great hero Winston Churchill once said: “There is no finer investment for any community that putting milk into babies.”

Alexander went on to praise Osborne’s failing economic policies. And he attacked a version of Keynesianism that is being peddled by Labour leader Ed Miliband under the policy name of “predistribution”.

On the final day of the conference Clegg tried to rally his dispirited troops by explaining that the hatred and vilification the Lib- Dems are getting from the general public is inevitable because they are now a “grown-up party” and players in the big league.

Well he has a sunny future to look forward to, even if they don’t.