Lib Dem liberalism


In a speech at Policy Exchange yesterday, Nick Clegg said:

When Labour came to power in 1997, the Government took three hundred billion pounds a year in tax. This year the Government will take nearly double that. They take one thousand seven hundred million pounds of our money every single day of the year. That’s more than £18,000 a second.

Indeed – and isn't that a great way to put it? The whole speech is pretty interesting actually, as it marks a definite departure from the tax and spend, social democrat stance of the party – which characterized its last two general election campaigns – and a shift towards old-fashioned liberalism. Clegg says he wants to break the consensus on ever-higher spending and claims he " would not be interested in spending a single penny of people’s money unless I knew it was going to give a greater benefit than leaving it in their pockets". Which is excellent.

But while I don't doubt Clegg's conviction – it's always been clear that he is much more free market than most Lib Dem activists – I suspect this speech is more the result of a political realization than an economic one. The Lib Dems know that most of their key election battles in 2010 are going to be against the Conservatives, and are positioning themselves accordingly.

In either case, this is good news for British politics. When the Lib Dems position themselves on the left, it drags the centre of political gravity in that direction, pulling the terms of debate with it. Hopefully the Lib Dems' explicit embrace of freer markets, lower taxes and greater decentralization will have the opposite effect.