More confusion over when Clegg flip-flopped over the deficit

The question of when exactly the Liberal Democrats u-turned over the speed of tackling the deficit reared its head again today when Bank of England Governor Mervyn King appeared before the Treasury Select Committee in Parliament.

The question of when exactly the Liberal Democrats u-turned over the speed of tackling the deficit reared its head again today when Bank of England Governor Mervyn King appeared before the Treasury Select Committee in Parliament – in particular Nick Clegg’s claim that he had changed his mind after a personal warning from the Governor.

As Paul Waugh reports, King was unhappy Clegg had used his conversation with him as an excuse. Responding to questioning from Labour MP Chuka Umunna, he said:

“I don’t think central bankers ever feel comfortable when they are drawn into comments by politicians.”

Adding:

“I said nothing that wasn’t already in the public domain. My position hadn’t changed.”

Watch the exchange:

During the election campaign, the Institute for Fiscal Studies examined whether the Liberal Democrats were “planning to be more ambitious than Labour in reducing the deficit”, concluding:

If anything the manifesto implies the opposite: it says that a Liberal Democrat government would carry out a Spending Review over the summer and autumn ‘with the objective of identifying the remaining [our italics] cuts needed to, at a minimum, halve the deficit by 2013-14’.

“At face value this might suggest a less ambitious plan to reduce the deficit overall than that implied by the forecasts in the Budget. The Budget predicted that the deficit (total government borrowing) would be down to 5.2% of national income in 2013-14, whereas halving it means that it need not be reduced below 5.9% of national income (half the 11.8% forecast for 2009-10).

“But the Liberal Democrats tell us that this promise to “at a minimum, halve the deficit” should be taken as shorthand for matching the deficit reduction path set out in the Budget. So, overall, they are no more or less ambitious than the Government.

Indeed, in January Vince Cable had said:

“My party takes the view that the government’s eight-year plan, with a four-year halving of the deficit, is a reasonable starting point…

“The time to start cutting the budget deficit and its speed must be decided by a series of objective tests which include the rate of recovery, the level of unemployment, the availability of credit to businesses and the government’s ability to borrow in international markets on good terms.”

Of course the Lib Dems now support an additional £32 billion of spending cuts above and beyond Labour’s plans in this parliament; as Waugh points out, Clegg initially put this down to a the result of a private conversation with the Governor, telling The Observer:

“He [King] couldn’t have been more emphatic. He said: ‘If you don’t do this, then because of the deterioration of market conditions it will be even more painful to do it later.'”

After the Forgemasters debacle, we know all he likes to change his mind, but what excuse will he use this time to justify his decision?

36 Responses to “More confusion over when Clegg flip-flopped over the deficit”

  1. Steve Jones

    RT @leftfootfwd: More confusion over when Clegg flip-flopped over the deficit: http://bit.ly/d5vrlI #ConDemNation #FalseEconomy

  2. Carl Hunter

    RT @leftfootfwd More confusion over when Clegg flip-flopped over the deficit: http://bit.ly/d5vrlI #ConDemNation #FalseEconomy #condem #FAIL

  3. Shamik Das

    RT @leftfootfwd: More confusion over when Clegg flip-flopped over the deficit: http://bit.ly/d5vrlI #ConDemNation #FalseEconomy

  4. Ell Aitch

    RT @leftfootfwd: More confusion over when Clegg flip-flopped over the deficit: http://bit.ly/d5vrlI #ConDemNation #FalseEconomy

  5. Andy Sutherland

    RT @leftfootfwd: More confusion over when Clegg flip-flopped over the deficit: http://bit.ly/d5vrlI #ConDemNation #FalseEconomy

  6. Mr. Sensible

    Shamik, there’s only 1 answer. They changed their position for a seat in power. They took 22 jobs at the expense of thousands of others.

  7. winston k moss

    RT @leftfootfwd: More confusion over when Clegg flip-flopped over the deficit: http://bit.ly/d5vrlI #ConDemNation #FalseEconomy

  8. Martin Johnston

    Sick of Clegg RT @leftfootfwd: More confusion over when Clegg flip-flopped over the deficit http://bit.ly/d5vrlI #ConDemNation #FalseEconomy

  9. Justin B

    RT @leftfootfwd: More confusion over when Clegg flip-flopped over the deficit: http://bit.ly/d5vrlI #ConDemNation #FalseEconomy

  10. Will Straw

    How @ChukaUmunna exposed Clegg's economy with the truth over Mervyn King's advice http://bit.ly/bjr5yS

  11. Paul Sandars

    RT @wdjstraw: How @ChukaUmunna exposed Clegg's economy with the truth over Mervyn King's advice http://bit.ly/bjr5yS

  12. David Baines

    RT @wdjstraw: How @ChukaUmunna exposed Clegg's economy with the truth over Mervyn King's advice http://bit.ly/bjr5yS

  13. R Gordon

    RT @wdjstraw: How @ChukaUmunna exposed Clegg's economy with the truth over Mervyn King's advice http://bit.ly/bjr5yS

  14. Anon E Mouse

    Shamik – During the election no one knew how bad the fiscal situation in our country was. Soon as the coalition was formed all bets were off.

    I go off the last Labour Treasury chief who said there’s no money left. He knew.

    As for holding people to election pledges why aren’t you up in arms and screaming about the fact Labour no longer supports AV? I despair when I hear things like this after the fuss over AV that Labour made.

    As for the last part of your article calling Forgemasters a debacle that is only in the eyes of the Labour Party, still crying over losing the election.

    It seems to me that Labour really need to start from where we are rather than still fighting the election they so comprehensively lost.

    Elsewhere on this fine blog I linked to this from 1985 and it seems more and more valid as the days go on…

    http://www.youtube.com/watch?v=bWLN7rIby9s&feature=related

    You may not agree with what he said but you KNEW he meant it. Labour needs to get its heart back and silly nit picking over basically nothing just makes the party look petty and infantile…

  15. TeacherTalks

    RT @wdjstraw: How @ChukaUmunna exposed Clegg's economy with the truth over Mervyn King's advice http://bit.ly/bjr5yS >>extraordinary stuff!

  16. Labour42010

    RT @wdjstraw: How @ChukaUmunna exposed Clegg's economy with the truth over Mervyn King's advice http://bit.ly/bjr5yS

  17. Nathon Raine

    RT @leftfootfwd: More confusion over when Clegg flip-flopped over the deficit: http://bit.ly/d5vrlI #ConDemNation #FalseEconomy

  18. Andy Sutherland

    RT @wdjstraw: How @ChukaUmunna exposed Clegg's economy with the truth over Mervyn King's advice http://bit.ly/bjr5yS

  19. Mr. Sensible

    Mouse, a lot of that we’ve heard before.

    1. In fact, the Office for Budget Responsibility said that, before Osborne’s Budget, the deficit was not expected to be as bad as Darling predicted. And the OBR have predicted that the economy will grow slower under Osborne’s plans than under Labour’s.

    2. I don’t really support changing the voting system myself, however I think Labour does in principle. What they object to is twofold; they object, as do some Tories to the date, and they also object to the way in which the boundary review is being conducted.

    3. As a general rule, if you have to come up with several different justifications for doing something, 1 after another, you’re in trouble. For this, read nick Clegg and Forgemasters. First the director was unwilling to dilute his shares, which he was of course willing to do, and then it was a question of affordability. What next?

  20. Anon E Mouse

    Mr.Sensible – The deficit wasn’t as bad but what does that have to do with it? The last Labour Treasury Chief said the money had all gone BEFORE the OBR was invented – how could they know before it had reported?

    Why aren’t you annoyed the last government didn’t have a comprehensive spending review?

    The voting system is Labour using any excuse to oppose without thinking before they do. They either support AV like they said or they don’t – it’s straight forward hypocrisy and the public aren’t stupid.

    Finally the justification for not lending a private company money directly is because that’s what the banks are for. Banks to do banking. Governments to do governing….

    Did you enjoy the link btw? that was REAL Labour in action where people weren’t at risk of arrest or being smeared if they disagreed with the party…

  21. Sean

    watch flip flop today over retirement at 65
    bosses will get opt out

    just wait and see

  22. Gez

    go away mouse
    troll off to you own site
    bye
    not wanted here

  23. Terry

    Someone check his IP address

  24. Anon E Mouse

    Gez – Typical left wing control freak attitude. Never challenge or debate or try to prove a case just smear and lie about peoples character.

    Nice to see the student debating society in action.

    Terry – Check away. How do you know I’m not female?

  25. Guido Fawkes

    Did they actually contemplate going even faster? Back in September 2009 in a pamphlet “Tackling the fiscal crisis: A recovery plan for the UK” Vince Cable identified nine specific areas of potential spending cuts to start to a radical programme of reform.

    http://www.reform.co.uk/Research/ResearchArticles/tabid/82/smid/378/ArticleID/950/reftab/56/Default.aspx

    The main proposals are:

    > Zero growth overall for public sector pay (saving £2.4 billion a year), a 25 per cent reduction in the total pay bill of staff earning over £100,000 and a salary freeze and end of bonuses for the civil service (saving £200 million a year).

    > Tapering the family element of the tax credit – saving £1.35 billion.

    > A radical review of public sector pensions with the view to moving to higher employee contributions and later retirement ages. There is currently a £28 billion subsidy to unfunded schemes.

    > Scrapping several major IT systems including the ID card scheme (£5 billion over 10 years), Contactpoint (£200 million over 5 years), the NHS IT scheme (£250 million over the next 5 years) and the proposed “super database” (£6 billion).

    > Curbing “industrial policy”, including scrapping Regional Development Agencies (£2.3 billion annually) and EGCD subsidies (£100 million annually) and reducing (by at least half) the Train to Gain and Skills Councils budgets (£990 million together a year).

    > Reforming the National Health Service, by reducing the centralisation and over-administration – starting by scrapping Strategic Health Authorities (£200 million a year) – by strengthening commissioning and with “supply side reform” – in particular tariff reform could save around £2 billion a year.

    > Curbing the centralisation in education, by cutting national strategies and scrapping quangos – saving around £600 million a year.

    > Reducing the amount of waste in the defence procurement process, including scrapping the Eurofighter and Tranche 3 (£5 billion over 6 years), the A400M (total cost £22 billion), Nimrod MRA4, the Defence Training Review contract (£13 billion over 25 years) and the Trident submarine successor (£70 billion over 25 years).

    > Examining possible future public sector asset sales, including some aspects of the Highways Agency (land value of £80 billion) and intangibles such as spectrum, landing rights and emissions trading.

  26. Liz McShane

    Gez – it would be rather dull and pointless if we all agreed with each all the time. At least Anon generates some energetic debate and points for us to challenge vigorously!

  27. Now Clegg claims he changed mind on deficit before the election | Left Foot Forward

    […] Mervyn King’s appearance at the Treasury select committee yesterday, in which he distanced himself from Nick Clegg’s claim that it was only after meeting him he had changed his mind on the […]

  28. Mike

    CLEGG – LIAR

    The new type of politics

  29. Mr. Sensible

    Mr Mouse, the OBR have specifically said that the deficit was not as bad as Osborne is making out.

    And on Forgemasters, as I have told you before, these are the same banks who Cable says are ripping people off.

    The job of government is to help the economy to grow and create jobs.

    And that is correct, Liz; I think I would find this quite boring if we agreed all the time. Look at the debate we had on Tuesday about the police.

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    ♻ @wdjstraw: How @ChukaUmunna exposed Clegg's economy with the truth over Mervyn King's advice http://bit.ly/bjr5yS

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