3 August 2010

I disagree with Nick

The Lib Dem leader has to come clean about his U-turn on spending cuts.

When did Nick Clegg change his mind on spending cuts? It’s a simple question but after much flip-flopping we are none the wiser.

On last week’s BBC documentary Five Days that Changed Britain, the Deputy Prime Minister told Nick Robinson that events “between March and the actual general election” triggered his Damascene conversion to Conservative economic thinking: he, too, thinks deep and immediate spending cuts are necessary.

So did he change his mind before or after telling the electorate in March that “merrily slashing now is an act of economic masochism” and that “of course” he would not compromise on this in any coalition negotiations?

Did he change his mind before or after telling Jeremy Paxman in April: “Do I think that these big, big cuts are merited or justified at a time when the economy is struggling to get to its feet? Clearly not.”

Or did he change his mind less than a week before polling day when he said to Reuters on 1 May: “My eight-year-old ought to be able to work this out — you shouldn’t start slamming on the brakes when the economy is barely growing. If you do that you create more joblessness, you create heavier costs on the state, the deficit goes up even further and the pain with dealing with it is even greater. So it is completely irrational.”

Since the election, the Deputy Prime Minster has been less than forthcoming about what he thought and when he thought it.

On 12 May he concluded the coalition agreement with the Tories — his new partners in fiscal retrenchment — and promised a “significantly accelerated” deficit reduction plan, referring to “immediate cuts”. On 6 June, in an interview in the Observer, he acknowledged that his view had “shifted”, citing as reasons the events in Greece and a conversation with the governor of the Bank of England around the time the full coalition agreement was being finalised.

So far as Clegg’s Greek defence is concerned, the governor told the Treasury select committee in February that “I do not think you can compare the UK with Greece”. In fact, Clegg himself had claimed in March that “the guaranteed way” of producing Greek-style unrest would be “macho”, deep, immediate spending cuts.

As for their big conversation, Mervyn King told me last week at a hearing of the newly constituted Treasury select committee that he had given Clegg no new information on the debt situation during their chat. Indeed, the day after our hearing last week, it was revealed that Clegg had changed his mind before the election — an election in which he sought votes on the basis set out in his manifesto:

If spending is cut too soon, it would undermine the much-needed recovery and cost jobs. Our working assumption is that the economy will be in a stable enough condition to bear cuts from the beginning of 2011-12.

So, having disposed of the reasons cited by the Deputy Prime Minister for his change of position, we are left with a far more serious question: why did Clegg not tell the electorate that he would follow Conservative economic policy before 6.8 million people cast their votes for him on 6 May?

Did Clegg not think the British people deserved to know what they would be voting for? According to last weekend’s Sunday Times, Clegg had not even informed his Treasury team — Vince Cable included — of the line he would take once the polls shut. A full and frank explanation is needed, otherwise the electorate, never mind his MPs, will be entitled to ask: How can we trust anything you say?

Chuka Umunna is the Labour MP for Streatham and a member of the Commons Treasury select committee.