Deceit over UK public debt – nail the lie

The public are being led to believe that the UK’s public debt is somehow worse than anywhere else. This is a barefaced lie. George Osborne says the UK was “on the brink of bankruptcy” when the coalition took over and that “we have the largest budget deficit in the developed world”. Sounds apocalyptic doesn’t it? And of course if his assertions about government debt were true it would help Osborne to argue for ‘savage cuts’.

But the truth is very different. Look at the USA. Last Friday the Washington Post said ‘Total U.S. government debt exceeded 84 percent of gross domestic product (GDP) in 2009, and most observers expect that percentage to keep growing.’ In Britain it’s just over 60%.

The truth is that many countries have a far higher government debt as a % of their GDP. Take Europe …

The following European countries have a higher debt level (as % of GDP) than the UK:

Netherlands;
Austria;
Ireland;
Spain;
Germany;
Hungary;
France;
Belgium and
Italy

Measures of the annual ‘structural deficits’ of different countries as opposed to their total accumulated debts, suggest that the UK is indeed in a poor position, but it is by no means the worst of all the developed world as Osborne implied on the Andrew Marr programme on BBC 1 yesterday. In fact recent analysis by the IMF shows that the United States’ structural deficit is far worse.

Budget deficits are split into structural and cyclical elements by economists. They estimate that a part of the deficit will be corrected as an economy grows and tax revenues roll in. This is the ‘cyclical’ portion. But there’s also a ‘structural’ portion to the deficit which won’t be corrected just by growth. Of course lots of assumptions have to be made in order to make the estimates of the two different portions of the deficit.

A Warning from Hungary

One thing is clear – if the coalition’s austerity measures stifle growth (as is pretty certain) or worse still if they tip us back into recession, then we could well go the way of Hungary and Ireland – the economic situation will get a LOT worse and the coalition will be to blame.

This warning appeared in a report last week by Eversheds International ‘Hungary acts as a warning for others now considering how quickly to reduce their deficits. It was in an austerity-induced slump in 2007, even before the global downturn, and since being rescued from insolvency by the EU and IMF in 2008 it has been forced to renegotiate budget targets with them because it found that the spending cuts and tax hikes pushed its economy into much deeper recession than expected.’

Savage cuts will weaken the prospects for economic growth, leading to less tax revenue and weakening the ‘cyclical’ portion of the equation. That’s the main reason why the coalition’s economic plans are so flawed.

A Positive Alternative

There is an alternative approach comprising much more modest cuts in government spending; maintaining and significantly increasing major infrastructure projects; massive investment in green technologies (which could in time create hundreds of thousands of jobs) and international action to levy a ‘Robin Hood Tax’ on the banking sector. Before we all get locked into the madness of ‘savage cuts’ let’s consider these alternatives and take heed of the warnings coming from the economic disasters of Ireland and Hungary where ‘savage cuts’ have bled their economies dry.

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This is to help voters in Farnham Godalming Haslemere and SW Surrey villages decide

After our successful campaign to save Farnham’s Water Meadows we have launched a new ‘Protect Our Greenspace’ campaign in Badshot Lea

• You will get a fresh voice at Westminster

• I will challenge the political establishment on behalf of ordinary people

• I will speak up for those who cannot speak for themselves

• I will work to bring real reform to our political system

• I will live in the constituency, not in London & I will commute to work

• I will not claim for a ‘second home’

• I will work full-time as your MP

What I Stand For

Here’s a summary of my main campaign themes and how I’ve tried to fulfil them over the last 12 months:

I have four campaign themes which dominate my political philosophy:

Speaking up for Ordinary People

• I have spoken out against the plans for the Key Site development in Godalming and fought for affordable housing on the site.
• I have used my position to publicise the plight of Dan Eley, a young man from Godalming who used to work with street children in South America but suffered a broken neck and was left paralyzed, and stuck in Colombia. The Lib Dems put out 14,000 leaflets which publicised Dan’s situation.
• I have been outspoken in respect of the affairs of the standing MP Jeremy Hunt. Hunt has suffered the embarrassment of having to repay over £12,500 of his MP’s expenses claims, after I raised questions at a public meeting in May 2009.

Seeking a Fair Deal for the Vulnerable

• I strongly support the Royal British Legion’s Campaign for better care for returning veterans, having worked with army veterans through the YMCA.
• I am supporting the Act for Justice group in Haslemere, campaigning against human trafficking.

Campaigning for a Sustainable Community

• I chaired the successful campaign to save Farnham’s Water Meadows
• I am now fighting the proposals to double the size of Badshot Lea village
• I raised strong objections to the TAG flights proposal which involved the expansion of Farnborough Airport

Investing in our Children and Teenagers

• Seeking to help and empower young people is key to my agenda, as I have worked with them for many years in my role as a CEO of the YMCA.
• I strongly support the Lib Dems’ plan to phase out University Tuition fees. It’s too late for my own children, but I don’t want to see generations of young people saddled with huge debts just as they start out in life.

Sick of politics? Let me briefly say why I think it matters for Farnham Godalming and Haslemere

Vince Cable wrote to the voters of South West Surrey – his letter is reproduced below my YouTube video

Vince Cable kindly wrote this letter urging voters in South West Surrey to support me on Thursday:

Dear Elector

This election is not decided. The British people have a real decision to make at the polls and, for the first time in a long time, you have real power to make a change that goes beyond the choice between two bickering parties. Most importantly it is a choice about how to ensure economic recovery that is sustainable.

The MPs’ expenses scandal has been a disaster for UK politics. But by exposing those with their snouts in the trough, it empowers the public to make a choice. It creates a wake-up call about the frailty of the present voting system, where MPs believe that have a job for life and that they can ’milk the system’ and get away with it.

I have always argued that we need to go further than reforming MPs’ expenses; we need to elect MPs totally committed to wholesale reform. Your Liberal Democrat candidate Mike Simpson will be a strong voice in Parliament. He is a man committed to challenging the political establishment and he has all the right credentials for such a role.

The opinion polls suggest that people are rightly unhappy with the Labour Government yet have no real confidence in George Osborne and the Tories. The choice presented to the electorate is to lurch from incompetence to inexperience. I think you deserve more. To get the economy back on track requires the best minds, working effectively together. It requires fair taxes and common sense that you can trust. The Liberal Democrat Party is committed to sound economics. Our priority is to secure the long term financial viability and vitality of the economy.

Do not let anyone try to persuade you that a balanced parliament will be detrimental to our country. Far from it. A parliament balanced with a strong, Liberal Democratic presence will result in a House of Commons composed of true representatives of the electorate and sound, sensible policies brought about by discussions and consensus and not by political dogma.

Vote for your Liberal Democrat candidate Mike Simpson, and help create a government capable of rebuilding our economy and our political system.

Yours sincerely

Vince Cable

Will election win be a poisoned chalice? How much pain is coming? #GE2010

The Lib Dem Team of Clegg and Cable is the best choice for Britain

Vince Cable, the Liberal Democrat finance spokesman warned this week that Britain risks sliding into a Greek-style fiscal crisis unless the next government takes drastic action to cut borrowing.

Taxes must rise sharply over the next decade to bring down borrowing, according to the National Institute of Economic and Social Research. They suggest that taxes will have to rise by the equivalent of a 6p in the pound on income tax! They also said the UK economy faces sluggish growth and rising unemployment this year.

The Governor of the Bank of England governor Mervyn King is reported to have warned that “Whoever wins this election will be out of power for a whole generation because of how tough the fiscal austerity will have to be.”

Who would want to take the economic reins of power in such a scenario?

I ask another question – ‘In such dire circumstances who will be best suited to reduce the government debt, oversee a much needed restructuring of the banking sector, whilst protecting the vulnerable from cuts in vital government services?’ It will not surprise you that my answer this question is Vince Cable, Nick Clegg and the Liberal Democrats.

The next government could make the situation a lot worse. We need sound financial judgement if we are to recover and not sink into a second recession. Vince Cable and the Liberal Democrats have consistently got the analysis right over the economy. We must tackle government debt without choking off the economic recovery

We cannot afford to take a leap in the dark with Osborne and Cameron. Many people are fearful of the mass job losses and VAT increases likely to follow a Conservative win. Cuts and tax increases will be needed but who will bear the brunt of these?

Vince says, “The public will accept austerity for a time if the burdens are fairly shared”.

Vince Cable and the Lib Dems are determined to make our tax system fairer and we would raise the tax threshold so that nobody earning less than £10,000 would pay any income tax. This would be paid for by a tax on mansions worth over £2million, closing tax loopholes and making airlines pay for the pollution they cause.

Raising the tax threshold will benefit the average tax payer by £700 per year, but it will also have the added benefit of greatly increasing the incentive to work rather than languish on benefits.

Our manifesto sets out a carefully costed plan of cuts and spending commitments that would result in a £10billion cut in the deficit. Much more needs to be done and that will include hard choices about benefits and public sector pensions for example.

Nick Clegg proposes a ‘Council on Financial Stability’, involving representatives of all parties, the Governor of the Bank of England and the Chair of the Financial Services Authority. We face the kind of dire circumstances that require all Parties to work together if we are to avoid major social division when cuts and tax rises are implemented.

A strong Liberal Democrat presence in Parliament will ensure a wise, prudent and compassionate approach to the crisis we face.

Local Businesses slam Digital Economy Act #DeAct – Farnham Godalming Haslemere

I have been struck by how many local small business people are outraged by the foolish and illiberal digital economy act which Labour rushed through Parliament with support from my opponent Jermey Hunt. I wrote an open letter to Mr Hunt on 5th April about this.

On 11th April I called for the Digital Economy Act to be repealed.

I have been delighted to receive strong support from the local E-Commerce community. Here’s one comment:

“As a local businessman who voted Conservative in every election to date I’m changing to vote for Mike and the Lib Dems. I’m very impressed with the Lib Dems strong pro-business policies, in particular their balanced and sensible approach to E-commerce and the digital economy.” James Firth

And it’s not just the Act that is a problem in Farnham. Read this comment by local film and television producer Jack Jewers who I met recently:

“Britain’s digital infrastructure is seriously under-developed and it really does hurt us. In most of Farnham, broadband access comes down old copper phone wires (rather than fibre optic cables), so the average broadband speed is barely 2MB. That makes the internet slow and unreliable. I’m a filmmaker by trade and have recently moved two businesses here from London because I want to support my home town. However I may be forced to move back to the city because I cannot get the reliable, high-speed web access I need. There are wider implications of this too. Imagine if the thousands of people who live in our area could commute digitally, what a difference it could make to the environment, not to mention to our crowded trains. Given all of this, I simply cannot understand why, when Britain lags so far behind Europe and the wider world on digital infrastructure, Parliament chose to pass a bill (the Digital Economy Bill) that limits digital growth instead of one that improves access. I fear we’re going to be left behind, and that companies like mine will find it hard to compete with better wired businesses elsewhere in the world.”

Lib Dem Manifesto policies you may have missed

There’s been so much concentration on the TV debates that you may have missed some of our best policies as set out in our manifesto!

So I thought I would list a random collection:

We will introduce a Banking Levy on bank profits, so that banks pay for their tax-payer guarantee.

Bring in step-on-request for night buses, so that you are let off the bus as close to your home as possible.

Launch an ‘Eco Cash-back’ scheme for the first year of the new government. This will give you £400 if you install double glazing, replace a boiler or install micro-generation.

We will uprate the state pension annually by whichever is the higher of growth in earnings, growth in prices or 2.5% whichever is the higher.

Invest £400 million in refurbishing shipyards so that they manufacture offshore wind turbines and other marine renewable energy equipment.

Allow Mums and Dads to share parental leave between them, introducing much greater flexibility.

Phase out University tuition fees over 6 years, helping to reduce the appaling burden of debt being loaded onto young people.

Legislate to end unfair bank and financial transaction charges so you cannot be charged more than the costs incurred.

Give a pay rise to the lower ranks of the armed forces so that their pay is brought into line with the starting salary of their emergency service counterparts.

Impose maximum interest rates for credit cards and store cards following consultation with the financial industry and consumer groups.

Scrap ID cards and use the savings to pay for 3,000 more police on the beat.

Make Network Rail refund a third of your ticket price if you have to take a rail replacement bus service.

Abolish the Infrastructure Planning Commission and return decision-making, including housing targets, to local people.

Scrap ‘home information packs’ for when you buy a home saving you money.

Save BBC from Tory hatchet

There is growing support for our campaign to Save The BBC I am standing against Jeremy Hunt, the Tory’s Shadow Culture Secretary. If I beat him it will be a major blow to the Tory plans for the Beeb. And it looks like I can win, given the huge swing to the Lib Dems across the country.

Leading actors are today calling for voters ‘to protect the BBC on polling day’.

And across the country other groups are setting up to fight for BBC independence which is threatened by Tory plans. I wrote to the Tory Shadow Culture Secretary Jeremy Hunt about his own position some months back.

It’s clear that the Murdoch press are desperate for a Tory victory as they would have much to gain from Tory plans. Nick Clegg’s rise could lock Murdoch out of UK politics for years.

Another very good reason to vote Lib Dem!

Wise investors will buy the Pound because of Hung Parliament likelihood!

In case you missed this –

Goldman Sachs says buy the pound as there’s little to fear from a hung Parliament

Check out the Daily Telegraph (!) piece here

Tories try to scare people with talk of market chaos

The Tories are getting desperate. As the Lib Dems surge in the polls and look like spoiling the Tory (premature) election celebration party, the knives are out for Nick Clegg. All the Tory press are in full assault mode today.

One of the most ridiculous attacks is to say that the financial markets and the value of the pound will collapse if the people of Britain dare to vote for anything other than a resounding Tory majority. Actually for a month we have been looking at a hung parliament as a likely outcome and the markets know it. Markets don’t wait to see what happens. They seek to predict what is going to happen. So they have done just that.

I don’t rule out some market volatility before and after election day BUT the current state of markets reflects what traders predict will happen and that is a hung parliament.

Surprise surprise – The result is not financial Armageddon.

A month ago the FTSE 100 share index of leading companies was valued at 5650 points. This morning as I write this it is on 5732 points.

A month ago the £ was worth $1.51. This morning it is worth $1.54. The increase in the value of the pound against the Euro is even greater.

So much for the nonsense of the Tory scare stories.

The Lib Dem Green New Deal for Farnham, Godalming, Haslemere and villages

Nick Clegg today launched plans to stimulate a green economy

This plan represents a great opportunity to green our economy, our businesses and our homes. And we will create 100,000 new jobs in the process.

One aspect of the Lib Dems’ plan is to give subsidies to people who improve the energy efficiency of their homes (our £400 ‘Eco Cash-back’ scheme). I support local initiatives such as Greening Godalming aimed at greening our homes and cutting our carbon footprint.

I have also fought to protect our green environment from inappropriate development and that’s why I led the campaign to save Farnham’s Water Meadows, alongside Jo Aylwin.

After our successful campaign to save Farnham's Water Meadows we have launched a new 'Protect Our Greenspace' campaign in Badshot Lea - the Tory controlled Council are considering doubling the size of the village!

The latest threat to our environment in South West Surrey is the Tory plan for Badshot Lea. They are considering doubling the size of the village.

The great thing about the Water Meadows campaign was how the whole community got behind it. I hope everyone will come together to stop the crazy plans for Badshot Lea as well.