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Lib Dems' big test

Nick Robinson | 20:11 UK time, Monday, 21 June 2010

"It will be a difficult budget... it will be controversial... one of the hardest things we will ever have to do."

So says Nick Clegg in an e-mail to his party members on the eve of the Budget.

His only words of comfort to them are to insist that "the alternative is worse - rising debts, higher interest rates, less growth and fewer opportunities" and to assure them that "we have taken the difficult decisions with care and with fairness at their heart."

Tuesday will, in many ways, be a bigger test for Nick Clegg and the Liberal Democrats than it is for George Osborne and the Conservatives. For the first time, Lib Dem members will learn the true extent of the pain to come, the limits on their ability to protest about it and the unpopularity that comes with being in government.

The Treasury is making clear that both Danny Alexander as chief secretary to the Treasury and Nick Clegg as deputy prime minister were consulted about all the key measures in the chancellor's speech - a level of consultation unheard of when Gordon brown was chancellor. I'm told that Vince Cable was also able to discuss the broad Budget straetgy with George Osborne whilst other Liberal Democrats were kept informed by their leader.

The Conservatives concede that this Budget will be more progressive than it might have been thanks to pressure from the Lib Dems. In particular, they have argued successfully for a bigger increase in income tax allowances than Team Osborne originally wanted.
Even more striking then that, in Nick Clegg's own words, this will be "one of the hardest things we will ever have to do".

Comments

  • Comment number 1.

    Nick

    This is the big test for the Lib Dems. These cuts, if as deep as predicted, will I feel be too much for many LDs to bear. The strain on the party will be immense, electorally fatal and I can see history repeating itself.

  • Comment number 2.

    "... this Budget will be more progressive than it might have been ..."

    Nick

    'Progressive' means moving forward, advancing, improving. Why do you and others in the political world use it as shorthand for 'more left-wing' ?

  • Comment number 3.

    Will George wheel out a Lib Dem to read out the budget?

  • Comment number 4.

    It will be a very interesting budget, and my impression is that it will be very radical compared to recent times

    Less than 24 hours to go!

  • Comment number 5.

    First the banks stold the money, then the government decided that it would be unseemly for the wealthy to lose at gambling so the taxpayers would simply refill their wallets and now the people must pay for it. It is not all that complicated...there are those on the top and than there is everyone else....what are you going to do about it. Remember the old days with the Lord of the Manor.....nothing has changed except rather than put a sword to you if you complained they now have PR men, politicians and media types who will do their bidding. Difficult cuts....difficult for who??

  • Comment number 6.

    The reaction of the Lib Dems to this budget is crucial. Clegg has already lost all credibility, but if they follow like sheep then the party is lost for a generation. We won't forget their broken promises.

  • Comment number 7.

    Isn't it strange how some people are predicting that the Conservative-Liberal cuts will be too much for the Liberal Democrats to bare?

    If the Liberal Party cannot take making tough decisions then what on earth is their purpose as a political party?

    It is a given that the Conservatives have a mind to cut the Deficit and cut the UK's Debt. They polled 2 million more votes than Labour so they have more mandate to cut than Labour wanted to maintain the status quo.

    The liberals under Clegg have had their input (and as Nick writes, they have probably inserted more tax relief into the Budget than is to the liking of the Conservatives) but, at least, Nick Clegg and his fellow MPs ARE participating in government.

    If his political party renounces Clegg's participation in the Coalition then the party is basically saying to the country, "Don't bother voting for us ever again as we don't really like the pressure of actually being in charge and influence the decisions; we like sitting in Opposition where we can criticise but not be held accountable and cannot make any difference!"

    If I were a Liberal Democrat voter I would be pleased to see my party in the Government. I, like many people, probably won't like everything that is included in the Budget but at least I know it will be as fair and equitable as MY party could make it and I will think that it is more fair BECAUSE of Liberal Democratic values than it might have been otherwise.

  • Comment number 8.

    "The Conservatives concede that this Budget will be more progressive than it might have been thanks to pressure from the Lib Dems."

    That's good then.

    VAT is interesting. It's an easy way to raise a few quid and is loved by tories (why it's known as the "tory tax"); thus a slam dunk to go up, right? Wrong, because if Cameron is about redrawing politics, confounding expectations, demolishing old stereotypes etc, here is a perfect opportunity. By NOT raising VAT - either now or in the future - he will wrongfoot people (sceptics) who doubt whether there is anything "new" about either him or his political vision. So let's see which way he jumps.

  • Comment number 9.

    The prediction that local councils will be badly hit is very bad news. They are already starting to warn the many voluntary organisations that provide valuable services very cheaply, that they cannot rely on funding even for the rest of the current financial year.

    So much for David Cameron's "big idea".

  • Comment number 10.

    6

    What broken promises?

  • Comment number 11.

    From what I have read and heard the public sector is going to get a hammering and this is going to include pay and pensions.
    I have read that there may be an increase of 2.5% on the pension contributions made by the public sector workers across the board.
    There are lot of people who think that all of the public sector get their pension for free by just working in the public sector, how wrong they are.
    Now I work in the public sector and I already pay 11% of my wages towards my pension. Increase this by 2.5% and that’s 13.5% of my wages, which is outrageous. My pension contributions are high enough as it is without increasing it further. Who else pays 13.5% or even 11% pension contributions from their wages???

  • Comment number 12.

    Now is the opportunity for the LibDems to show they are willing to take responsibility and show that a coalition can work. I am sure they have done their best to water down the more radical Tory policies - can they present a divided front - or will Kennedy and Campbell be unable to hold their silence?

    It will certainly be interesting.

  • Comment number 13.

    The big payday for the Government will be when it sells its shares in the nationalised banks.This will repay a significant part of the debt which was incurred in the bail out. It is likely that the government will make a profit on the sale. Until then we will enjoy the Libdems having to squirm as the Tories push through the cuts and increase the level of VAT. The election was a good election for labour to lose.

  • Comment number 14.

    I said it when it happened that I think the Lib Dems going into coalition with the Tories is going to cost them big time. The Lib Dems are a "left-wing" party, in many ways more left-wing than Labour, yet are going to be part of the government that is wielding big cuts and regressive VAT rises. Many Lib Dems rely on Labour votes to get seats particularly in Tory-Lib Dem marginals in the South West and they are going to lose much support. I think looking at the faces of the Lib Dem backbenches is going to be particularly interesting tomorrow as Osbourne reads out the 2.5% rise in VAT. Remember this is a party that campaigned AGAINST a lot of measures that they are going to be supporting and "circumstances have changed" is not going to cop it as an excuse. Let's also not forget about the government's pledge to introduce "free schools", tax breaks for married couples and university tuition fee rises that is going to also hit core Lib Dem voters hard.

    I said all along the Lib Dems should go with "confidence and supply" for the Tories, they would still have substantial influence in shaping policies without the association of being responsible for these unpopular cuts and maintaining opposition on areas where there are fundamental differences between them and the Tories. If Labour move ever so slightly to the left, they will scoop a significant number of Lib Dem voters.

    Nick Clegg, I feel, may just do a Lloyd-George. Siding with the Tories for power with the consequence of wiping the Liberals off the political map for half a century!

  • Comment number 15.

    I thought the cuts in 2010 would be limited to cutting "wasteful" spending by the previous administration? Sounds like we're in for huge idealogical cuts to suit a Tory political agenda.

    Thanks to all you mugs for voting for them.

    On Nick Clegg, I fail to see how he can sleep tonight in the knowledge of what he's put his name to.

  • Comment number 16.

    Problem is, according to the OBR figures, is that getting the deficit down to zero within the next five years is heavily dependant on 2-3% economic growth next year. With slogans like "You'll all be worse off" and 44% of households fearing the worst, that figure seems awfully optimistic. And that's assuming we don't double-dip!

    Can't help feeling George is talking us into a double-dip recession, so much for being a cheerleader for the economy.

  • Comment number 17.

    " The Treasury is making clear that both Danny Alexander as chief secretary to the Treasury and Nick Clegg as deputy prime minister were consulted about all the key measures in the chancellor's speech - a level of consultation unheard of when Gordon brown was chancellor. I'm told that Vince Cable was also able to discuss the broad Budget straetgy with George Osborne whilst other Liberal Democrats were kept informed by their leader."

    Lordy, Lordy, Nick! consultation don't you mean dictation and then again Clegg has all the attributes of an old styled conservative.

    Well! i'll give the Bank of England until Aug before interest rates increase. You heard it here first.

    Carry Mr Robinson..........."Look around you all you see are sympathetic eyes"

  • Comment number 18.

    What did Liam Byrne of 'there's no money left' fame say before the election?

    Labour were planning expenditure cuts that would be worse than those of the Thatcher government in the 1980's.

    And Vince Cable said that the Lib Dems had put more substance on the nature of the cuts needed than the other two parties.

    Why is this such a divisive issue - Nick Clegg is right - the alternatives would be worse?

    The Labour Party hasn't aired any credible debt reduction policies so there isn't much to discuss.

  • Comment number 19.

    Is it yet possible that the grass roots lib dems will wake up and save their party from the trap it has been led into by Nick Clegg?

    Since the election the Tory polling figures have risen to 39/40% - the Lib Dem figures have fallen to 18/19%.

    Personal details on two of the other four Lib Dem big guns have mysteriously found their way into the press wrecking the marriage of one and forcing the other to resign.

    Vince Cable, Lib Dem economic superstar has been side-lined and resigned the deputy leader position. Danny Alexander has been put in a role for which he has little experience and will be painted as the man responsible for the cuts.

    The Lib Dems have been persuaded that it is somehow in their interest to support a bill that will allow the Tories to continue for another five years as a minority government should the coalition suddenly break up.

    The Lib Dems are being asked to make many, many sacrifices - the only one I can see the Tories making is to find Nick Clegg a safe seat when he crosses the house having sold the Sheffield steel industry down the river.

    Far from furthering the cause of electoral reform that so many in this country want, the demise of the Lib Dems will leave the country with a two party system for generations to come.

    Is it yet possible that the grass roots lib dems will wake up? Please, please, please!

  • Comment number 20.

    Nick, you say "in many ways, be a bigger test for Nick Clegg and the Liberal Democrats than it is for George Osborne and the Conservatives"

    I don't think Clegg will have much to complain about. The Conservatives have given him everything he wants including the ill-considered hike in capital gains tax.

  • Comment number 21.

    5. At 9:31pm on 21 Jun 2010, ghostofsichuan wrote:
    First the banks stold the money, then the government decided that it would be unseemly for the wealthy to lose at gambling so the taxpayers would simply refill their wallets and now the people must pay for it. It is not all that complicated...there are those on the top and than there is everyone else....what are you going to do about it. Remember the old days with the Lord of the Manor.....nothing has changed except rather than put a sword to you if you complained they now have PR men, politicians and media types who will do their bidding. Difficult cuts....difficult for who??

    Ghost,

    I seem to recall the Governor of the Bank of England saying that, if banks engaging in high-risk activities were bailed out at the expense of the tax-payer, they would have avoided the "Moral hazard" that should come when any company does something stupid.

    BP has got itself into a rather bad situation. Financially exposed.
    So should we, as tax-payers, cough up money to bail them out?

    Not sure. But Brown decided that Northern Rock - a company with a rediculous business model that happened to be within a core Labour voting area - should be bailed out and made "viable" at tax-payers' expense.

    And Brown decided that normal "Competition Commission" investigations should not apply if his mates in LloydsTSB took over HBoS - and failed to establish as a public fact that HBoS was only "solvent" because the government pumped in BILLIONS which were never referred to in the LloydsTSB statements about their takeover.

    It's sick, isn't it?

    Are any politicians subject to the legal process that could attach to PLC directors? Nah.

    Any chance that we could see Brown or Treasury officials serving time because they conspired to hide the massive loan to HBoS that allowed it to be absorbed as a "going concern" by LloydsTSB? Nah.

    Any chance that RBS people will spend a few years breaking rocks? Nah.

    Any chance that banks who raised money via "rights issues" when they knew that they were in serious trouble, but failed to disclose it, will be hammered? Nah.

    Under whose "light touch" regulation did this stuff happen?

    Gordon ("You can find me in the gazebo") Brown.

    Shame that there is no legal responsibility on elected folk that equates to people in private or public companies. That would make the people think a bit before they spent OUR money...



  • Comment number 22.

    Sagamix @ 8.

    Interesting point. And don't forget the Lib Dems election posters warning of the Tory VAT tax bombshell...they will be uncomfortable with any increase.

  • Comment number 23.

    Tomorrow will be a black day for the British economy.

    It will be the start of higher unemployment, lower growth and the removal of services and benefits from the most needy in our society.

    It will herald a further reduction in our ability to compete with other high-tech developed countries.

    There will be no great outcry.

    No great surprise.

    After the axe has fallen tomorrow, just like a decapitated chicken, our country will continue oblivious to the fact we are bleeding to death.

    Bleeding jobs, bleeding social problems, bleeding services, bleeding growth, bleeding competitiveness.

    Then the chicken will drop dead.

  • Comment number 24.

    So who will the Eton boy blame tomorrow...There must be a Lib Dem somewhere who he can shuffle the blame onto...one of these days the Cameron- osborn- cleggs will have to start taking the blame themselves or will they now start blaming the public because we were consulted !! prior to the cuts..well I was not consulted and I do not see the reason for massive cuts whilst we are currently in a position where the country is coming round from a major international crisis we are going to be knocked right back into a second wave crisis and we are going to see massive civil strife which may put us into a third wave of crisis..The CON libs will surely have to accept the blame then

  • Comment number 25.

    #19 Spot on Prof.Wonder how they'll get Cable out - they won't want him digging around in the murky twilight world of tax evasion/avoidance.

  • Comment number 26.

    @Brian_NE37 (#2) - the answer is that when discussing Tory politics, "more left wing" is overly imprecise. About the only thing "more right wing" of the Tory party is the BNP; conversely almost everything on the political spectrum is "more left wing" than the Tory party, except for the BNP.

    Therefore, to identify where on the rest of the spectrum these policies sit, another name is required. Progressive seems to be the going term for centrist. As distinct from the far left (socialist).

    As for the budget... good luck to 'em... in the immortal words of Paul Keating... this is the recession we had to have.... (with a budget to suit)

  • Comment number 27.

    I do fear for the libdems if this goes as badly as we all think it will,Clegg I've no doubt will be a full fledged Tory party member by the next election but whatever s left of the party he's in charge of now could be decimated and that's not a good thing for British politics.

  • Comment number 28.

    Its too late for the Lib Dems already as far as I'm concerned. The strutting of the Lib Dem 'ministers' is just too painful.... they can hardly restrain their glee at suddenly being allowed to sit at the big boy's table and seem willing to say and do anything they are asked. I feel sick if I see or hear them now. Thay have been revealed not just as power hungry hypocrites but worse, as painfully stupid. I am ashamed to have ever voted for them.

  • Comment number 29.

    ARHReading wrote
    "The Labour Party hasn't aired any credible debt reduction policies so there isn't much to discuss".

    And yet the OBRs report is based on the Labour governments spending/reduction policies, and clearly shows that this would have been successful in the objective to halve the deficit over the course of the parliament. You can read it here

    https://www.hm-treasury.gov.uk/data_obr_index.htm

    You will also note that the OBRs pre budget forecast clearly sets out the degree of uncertainty that exists in trying to forecast growth and spending over the longer (2nd, 3rd and 4th years) term.

  • Comment number 30.

    2#

    Why indeed.....

    11#

    Think yourself lucky you've got one, Bomber. Most of us who have worked in the private sector have had our pensions completely sh*gg*d by Brown and Geoffrey Robinson. I, for one, without my Armed Forces pension, will be completely sunk, if I live that long!

  • Comment number 31.

    23#

    "Bleeding jobs, bleeding social problems, bleeding services, bleeding growth, bleeding competitiveness."

    Bleeding whinging plastic socialists being the worst of it, especially the ones that led us to this point, eh VoR? God, you're bitter....

  • Comment number 32.

    11

    Don't believe rumours, then you won't be worrying

  • Comment number 33.

    14

    Confidence and supply would have led to another general election within 12 months, so it was just not realistic

    It was what we have, or another election in October

    The Lib Dems might be left wing overall, yet there is a sizeable part of the Lib Dems which is LIBERAL, and hence quite similar to the Liberal part of the Conservative party in many ways

    Your point...

    If Labour move ever so slightly to the left.....

    Is interesting

    However, moving ever so slightly to the left will not attract anyone. Cameron has very much taken the centre ground, and Labour will have to move quite a lot to the left to differentiate, or face being seen as a pale copy of the Coalition

    Cameron has shown leadership, vision and political courage so far, and this will become recognised by more and more people in time

    In the short term the budget and necessary actions to reduce the deficit will hurt him.

    However, AS LONG AS IT WORKS in the medium term Cameron will benefit hugely

    He will then reap the political rewards.

    I agree that the Lib Dems are in a vulnerable position in many ways, although I am less certain as to the effect on them politically

    There is a big difference between their numbers in the three main polls at present

    The biggest losers in this are Labour, and those Labour supporters thinking this was a good election to lose, may get a nasty shock

  • Comment number 34.

    17

    When the base rate has been 0.50% for 16 months, predicting a 0.25% rise in August, is hardly 'a shock'

    My view is rates will remain at 0.50% until 2011

  • Comment number 35.

    21

    I agree with your banking analysis

    Darling would not let Lloyds buy NR, yet talked them into buying HBOS ...disgraceful

    Still under the circumstances, RBS are a BUY, and the shares will double in 5 years, in my view, so one way of making a few quid out of the wreck left behind by Labour

  • Comment number 36.

    19

    The Daily Telegraph did for David Laws...a highly respected, and very capable politician

    Chris Huhne is not the first, nor the last middle-aged man to split from his wife, and get involved with someone he met at work...it is a non-story...a much disliked politician...bright, yet smug

    The Lib Dems have to decide whether they want the responsibility of being a part of the Government, or not

    Whether they wish to criticise from an idealogical side-line, about what they would do in power, knowing it will never happen, or whether they can 'grow-up'

    Maybe the left of the Lib Dems will get together with a more left wing Labour Party, and the Liberal part of the Lib Dems will join the Conservatives, and the right wing of the Conservatives will splinter off

    I would imagine the political church of the Lib Dems covers the widest spectrum of the three main parties, and what precisely do you want them to do if they 'wake up' as you implore?

  • Comment number 37.

    22. At 10:42pm on 21 Jun 2010, craigmarlpool wrote:
    Sagamix @ 8.

    Interesting point. And don't forget the Lib Dems election posters warning of the Tory VAT tax bombshell...they will be uncomfortable with any increase.

    None of the three main parties would rule out a VAT increase, yet only two attacked the Conservatives, for 'planning to increase it'

    Pretty pathetic, don't you think?

  • Comment number 38.

    23

    Bleeding Gordon Brown more like...

    He WAS like a headless chicken, yet as opposed to being dead, he is now financially set-up for life

    That is the injustice i would be focusing on....

    He should hang his head in SHAME at the mess he caused and left behind

  • Comment number 39.

    25. At 11:13pm on 21 Jun 2010, Billythefirst wrote:
    #19 Spot on Prof.Wonder how they'll get Cable out - they won't want him digging around in the murky twilight world of tax evasion/avoidance.

    In case you didn't realise, ALL Lib Dem appointments in Government, need to be replaced by a Lib Dem

    This is why David Laws was replaced by Danny Alexander.

  • Comment number 40.

    29

    Good point, missing only ONE KEY THING

    Labour said how much they would CUT, yet not where the cuts would be

    Instead, they criticise ALL Coalition CUTS, as if they would not have made them, yet refuse to detail where Labour cuts would have been

    Typically sordid stuff from the most sordid Government in the history of the UK

  • Comment number 41.

    #29 Rebecca R10t wrote:
    " And yet the OBRs report is based on the Labour governments spending/reduction policies, and clearly shows that this would have been successful in the objective to halve the deficit over the course of the parliament."

    I think halving the deficit was an objective rather than a plan.

    If by a plan one means a series of actions leading to an objective we can say that Labour had no plan at all. We will never know how Labour would have made 44 billion pounds of cuts because they didn't and haven't told us, and almost certainly they didn't know themselves.

  • Comment number 42.

    40 and 41- both spot on. For Labour to tell the country that the deficit would be halved, but at the same time refusing to provide any real indication of how that was to be done, was simply an insult to the intelligence of any voter. I am surprised they got as many votes as they did, in the circumstances.

  • Comment number 43.

    Nick, it may be true that the Conservative Party are happy to use the Liberal Democrats as their "fall guys" in government. We do, however, look to the BBC for a more balanced portrayal of political events. I should be grateful if your blog would provide that; in my opinion, this article and indeed your General Election coverage, has failed to do so.

  • Comment number 44.

    George Osborne delivered an outstanding budget

    We had been told that CGT was a hot potato....result 28% for HR tax payers, fair, and they pay more

    HR tax relief on pension contributions...Osborne has listened and said, I need £3.5bn a year revenue, happy to consult as long as I raise that

    VAT....not increased until the 15% to 17.5% rise is out of the inflation snake...(as I hoped)

    Public sector pay freeze...2 years...those below £21K given a rise (as I hoped)

    Child benefit frozen....to means test would cost more than it saved..COMMON SENSE and fairness

    Capital allowance for business...fairness..

    Corporation Tax reforms...Fair, sensible, and gradual

    Housing benefit...reform...DLA...reform...

    Ending children's tax credits for those earning more than £40K..sensible and fair

    Cider tax...CANCELLED

    Capital programmes PROTECTED

    ALL VERY FAIR AND SENSIBLE

    Back into surplus by reducing expenditure over the 5 years of this parliament

    Saving huge amounts on debt interest payments

    Encouragement for the UK outside of the sensible and prosperous SE and E, to set up businesses

    WELL DONE GEORGE

    Response from Harwitch?

    Pathetic....When will Gordon Brown turn-up? He is currently drawing an MPs salary on false pretences

    To say that this budget is regressive is absurd

    Labour are a lost party after the lost decade of their government

  • Comment number 45.

    "Response from Harwitch? Pathetic ..."

    It's your infantile sexism which is "pathetic".

  • Comment number 46.

    45. At 5:06pm on 22 Jun 2010, sagamix wrote:
    "Response from Harwitch? Pathetic ..."

    It's your infantile sexism which is "pathetic".

    Satirising the stand in Labour, who claims to be pro-women, yet gets her HUSBAND on an all women shortlist, is neither infantile or sexist

    IF you had any morals or principles, you would agree that a MAN appearing on an all women shortlist is somewhat corrupt

    So, you may disagree with my satire, yet it is not infantile or pathetic

    By the way, do you know where Gordon Brown is?

    He is claiming an MPs salary, yet is nowhere to be seen........

  • Comment number 47.

    I find this whole situation disgusting in that David (now orange) Cameron behaves as if they were given a mandate.The only way that mandate could be acheived was to buy the support of a group , who in themselves, were unelectable as a majority government. They were voted in on a specific agenda which they have now sold down the river for transitory glory.Whilst we say "sold" the price paid by the conservatives to gain this position is so low it was virtually gifted. As someone , in the past who has successfully voted for alib Dem to keep the standing tory out I would feel that these "jumped up public schoolboys" have made a total mockery of our electoral system. Why do we not have the right to demand a re election on the basis that our human rights have been so abused. Finally,looking at the disgusting sight of selfsatisfaction on the nodding head of Nick Clegg one wonders if he can be considered in future as anything but as true blue tory. Perhaps this is what was intended all along!

 

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