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The right move for the Lib Dems Samuel Brittan: Financial Times: 10/09/04 In 1928 the Liberal party published a study known as the Yellow Book on ways of reducing unemployment. Lord Keynes’s own opposition to the return to gold at the pre-World War One parity was worth much more than all the rest of the proposals put together. Nevertheless he was on the committee that produced the volume and wrote an encomium called Can Lloyd George Do It? Most of the proposals for state intervention were modest by today’s standards. But this book was the beginning of a long road which took today’s Lib Dems well to the left of the Blairite Labour party where they tried to attract votes from disaffected collectivists. This was understandable in the early years of the present government when Gordon Brown began by sticking fiercely to the first two years of public expenditure limits which the Conservatives had left behind. But since then his expansion of public service spending and the stealthy climb of the tax burden has reduced the mileage that a third party can gain from this approach. It was highly likely that some Lib Dems would conclude that the party had more to gain from going back to the free market roots of Liberalism. This was especially true as the Conservatives so clearly lack courage in this direction. In higher education for instance they are trying to bribe their middle class supporters by going back on the fees for higher education. So much for their understanding of markets and the price mechanism. This leaves their main distinguishing marks hostility to immigration and enthusiasm for prisons. A new Orange Book, Reclaiming Liberalism (ed. P Marshall and D Laws, Profile Books, £8.99) marks a start for the Lib Dems on the long road back. The best policy chapter is by Nick Clegg, who has much experience both as a euro MP and as a Commission official of Brussels, tries to pull his party back from its previous extreme commitment to EU institutions to a more realistic attempt to bring back to national authorities functions which there is no need to carry out on a supranational basis - and which are often left to individual states in the US. The Orange Book proposals will certainly not be a walkover. Many rank and file Lib Dems cherish their position on the so-called left and already rumbles have been heard that the contributors are attempting a Blairite takeover of the party. But maybe the fact that the Lib Dems can be as divided as the two main parties is a sign that they are at last taking themselves seriously as a political force. It is at any rate a refreshing change from the pavement politics with which they have so long been associated. They still have a long way to go. The authors try to paper over the divide which emerged between economic and social liberalism at the end of the 19th century by saying in a Blairite way that they are in favour of both. The almost insuperable temptation for any politician faced with a choice is to replace “either/or” with “both/and”. They too easily accept the charge that economic liberalism is merely negative. But the role of government is to a large extent negative. The task of finding a role or purpose in life is up to individuals and voluntary associations. As Harold Macmillan once said, if people want uplift they should look to the archbishops (or in the Lib Dem’s case non-conformist ministers too) rather than to the government. An area of timidity is the social services. The furthest that the most reformist leaders of all three parties are prepared to go is to countenance a mixture of public and private providers, but they are not prepared to challenge the doctrine of “free at the point of delivery“, as has been urged for instance by my colleague John Willman in his book A Better State of Health (Profile Books 1998). Yet unless the user has to pay in some way there is no real market internal or otherwise. The “social insurance“ envisaged by the Orange Book contributors does not solve the problem. There are lots of well known difficulties about medical insurance, which is all very well for one-off episodes such as a broken leg or an appendisectomy but much less useful for continuing difficulties, as I know to my cost. The authors try to get round these by insisting that insurance companies should not be permitted to discriminate on the grounds of age or medical records. In that case they would become simply paid agents of the state. Another glaring deficiency of the Orange Book is immigration where the authors have not had the courage to overthrow the prejudices of the two main parties and are not in the least ready for my suggestion of a five-year experiment in free migration in which a distinction between refugees and economic immigrants would be shelved. This is even though the idea unites the ideas of economic freedom with those of personal freedom in which the historical roots of the party lie. I can just hear the authors saying that it would be political suicide. A less excusable example of timidity is in local government. It is fashionable now to argue for more devolution. But this is not going to happen so long as local government is dependent on central government subventions for 75 or 80 per cent of its revenues. The furthest the Lib Dems are prepared to go in this direction is to flirt with a local income tax. They have not yet woken up to the attractions of a land tax which is well rooted in the thinking of liberal political economists both a small and capital “l“ and which Lloyd George was contemplating before the First World War took him to supposedly higher things. But however timid the Orange Book, at least it moves in the right direction. The problem with Gordon Brown’s vision is that he sees the welfare state frozen in aspic; and he envisages a market economy in the private sector side by side with a Gosplan of detailed targets and tests in the public one. So alas does Tony Blair with the five-year plans he has swung on his rival. But the main problem with Tony Blair’s vision of social democracy is outside the economic sphere. The prime minister is too innocent of abstract thought to see the importance of procedures such as trial by jury and habeas corpus which have and developed so over the ages as a protection for personal liberty. His instinct if he sees teenagers lounging around is to impose a curfew or an instant fine. Jo Grimond once had the courage to say that “Much of what Mrs. Thatcher and Sir Keith Joseph say and do is in the mainstream of liberal philosophy.“ He said this in 1980 long after he had ceased to be Liberal leader. But unthinking revulsion from everything the former Tory leader did is a symptom of so much that is wrong with the third party and with bien pensant thinking in general. The Lib Dems will only have come of age when they are as likely to form a coalition with the Conservatives as with Labour. “As likely, not more likely”. For too long they have been stuck with a left-right framework dating back to the seating of deputies in the French revolutionary Convention where everybody tried to be at the left of everyone else. When the 1974 election resulted in a hung parliament and the then Liberal leader Jeremy Thorpe held talks with Edward Heath, the negotiations were brought to an abrupt halt not by issues of substance but because of masses of telegrams to Thorpe from all over the country protesting at what he was doing. The secret of the German Free Democrats is that they are equally prepared to link up in either direction.
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