If only the Government had listened to the Lib Dems on the economy... (Wantage and Didcot Liberal Democrats)

Wantage and Didcot Liberal Democrats <info@wantagelibdems.org.uk>

If only the Government had listened to the Lib Dems on the economy...

April 9, 2009 9:30 AM

Vince Cable MP, Liberal Democrat Shadow Chancellor of the Exchequer

Prime Minister Gordon Brown was quick to claim credit when it looked as if the British economy was doing well. He repeatedly dismissed Lib Dem warnings that the amount of personal debt was unsustainable, and that the house price boom was bound to end in tears. Now that the economy is in crisis, Brown blames a "global" crisis in every sentence that he utters - and he refuses to apologise for having miscalculated so badly, in particular over the need for strong financial regulation.

The Labour Government has been doing some of the things the Liberal Democrats proposed, but mostly too late, and without the necessary resources to make sure they succeed. Some of the things the Liberal Democrats called for first, and which have since been taken on board by the other parties, include:

1. Northern Rock nationalisation - it was clear to the Lib Dems that this was unavoidable in November 2007. It took the Government until February 2008 to act.

2. Independence of the Bank of England - a longstanding Lib Dem policy. First Labour implemented it, over Conservative opposition. Now even the Conservatives support it.

3. Recapitalisation of the banks - Lib Dem shadow chancellor Vince Cable was the first politician to call for this. Three days later the Chancellor of the Exchequer announced that this would be going ahead.

4. Tackling the bonus culture - in May 2008 the Lib Dems put forward proposals for tackling the harmful bonus culture in the financial sector. By autumn 2008, Labour ministers and even the Conservative Party leadership had realised the situation was indefensible and agreed with Lib Dem proposals.

5. Regulation of 'sale and rent back' agreements - this was part of the Lib Dem '7 point plan' for dealing with personal debt launched in September 2003. The Government announced on 22nd October 2008 that they were finally looking into this.

6. New court guidance to make repossession a 'last resort', obliging lenders to exhaust all alternatives first - another measure announced by the Government last October that the Lib Dems had been calling for for more than six months.

7. Changes to capital adequacy laws to require banks to hold more capital in periods of boom and less in recession - the Lib Dems called for this back in January 2003. It was called for by the Conservatives in 2008 and appeared in the G20 Communiqué in April 2009.

8. Ban on short selling of financial stocks - Vince Cable urged this on September 16th (having also raised the issue in July). The Government did not act until three days later, once the Americans had announced restrictions.

9. National network of financial advice centres - since 2003 Lib Dems have been calling for a network of local financial advice centres, particularly for those on lower incomes, funded by a levy on the financial services industry. In 2008 the Conservatives announced their support for this too, using almost exactly the same language.

10. Curbs on irresponsible lending - a commonplace sentiment now, but the Lib Dems called for "the publication by the Government of strict measures for responsible lending, which lenders must be required to observe" back in September 2003.