Richard Baum

Liberal Democrat Shadow Chancellor Vince Cable set out the Liberal Democrat plans for the economy today, is a speech to Demos. The full text of the speech can be read here (if you want to read it all, I’d recommend setting aside a chunk of time!), but Vince Cable was clear about the policies which mark out the Lib Dems as the only party of genuine economic reform.

Mr Cable set out key Lib Dem policy commitments designed to sensibly reduce the deficit whilst protecting public services wherever possible. These included:

• A tougher public sector incomes policy, limiting any pay increase to a maximum £8 a week, and requiring discipline over two years, initially. And scrapping bonuses.
• The first steps in fundamental reform of public sector pensions, which could have an early impact through contributions rates; though this is a complex area requiring an independent review along the lines of the Turner Commision.
• Some cuts in welfare spending: tax credits for higher earners and scrapping future Child Trust Fund contributions.
• Axing much of the superstructure of the centralised British state from the command and control system overseeing local government and NHS administration.
• Cutting much of the RDA budget.
• Serious and substantial reductions in defence procurement: in the long term for Trident and for shorter term choices, axing Eurofighter and instigating a rapid defence review – within strict financial constraints – to determine priorities.
• Scrapping expensive Home Office projects like ID cards and the intercept modernisation programme.
• Rejecting arbitrary targets for universities and over expansion with an emphasis on alternatives in vocational training in FE colleges that are more helpful in achieving employability, as well as cheaper.

Mr Cable went on to contrast Lib Dem policy towards the economy with the policies of the other two main parties, who I see as being less than up-front about the scale of the problem or their likely reaction to it. The Tories make great noises about protecting the NHS, but are never specific about how they will pay to do this, or what services they will cut to reduce the deficit. Labour meanwhile, the architects of the policies which led to recession, have responded feebly and only last week did nothing to stop the takeover of Cadbury despite forming the government which largely owns the bank paying for it.

Vince Cable has led the way in his response to the economic crisis. If only more people had listened before it happened! If you get a chance, read the speech as I have done and see what you think.

Rick