Over the last few weeks an awful lot of energy and angst has been consumed by the debate within the Liberal Democrats over the new position towards tax cuts. Yet while that debate was being held in our bubble in Bournemouth the economic storm has been swirling around outside. While the votes were being counted the global financial crisis was washing away the ground from underneath us.
I was struck while listening to the discussion on Radio 4's Beyond Westminster programme this Saturday just how far reaching the political impact of the global financial crisis will be. The policies and approaches of all the main parties have been developed based on a set of assumptions about the economy and public finances that no longer hold true. They all, in their different ways, will have to adjust. How successful they are at making that adjustment will be critical in determining the politics of the next few years.
The Labour Party throughout their period in office have enjoyed a stable economy which has enabled and shaped the nature of the New Labour project. This is now shredded. Their record of economic competence, the "end to boom and bust", has been hollowed out. So where do they go next?
The shifts in language that Brown used in his speech at their conference, the criticisms made of the city and the "no time for a novice" line, is an early sign of their attempts to adjust. But as one pundit on the radio commented, they "haven't had to think about the economy" for years. So there are huge questions over their ability to develop a convincing new story. Will they develop a more interventionist approach to the market, a critique of the City, and "anti-fat cat" rhetoric and risk being seen as shifting to the left? Will the Blairites be able to accept this new emphasis? How will this feed into the all ready raging internal civil war? No easy answers there.
The Conservatives are probably even worse placed to respond. They lack any proper analysis of the situation with which to do so. They have had to quickly work to change the tone of their Conference, adapting the agenda, and George Osbourne was today trying out some language indicating "tough love" for City bosses. But will they be able to find a way to square their pro-market and anti-regulation beliefs with the new context? This is a really tough challenge for Cameron. The salesman in him will recognise that a new approach will be needed so as to respond to the feelings of the public. Yet I suspect that they will lack the intellectual capacity to develop policies that will contain sufficient substance. Then of course they is no guarantee that he will be able to take his Party with him in this new direction.
But before we Liberal Democrats get too comfortable - this is also a huge challenge for us.
It is true that we have foreseen many of the current problems. It is also true that many of the policies we have advocated, if adopted, would have helped to protect the economy from what it now faces. Bournemouth saw an awful lot of the politics of "I told you so". Vince Cable was the darling of the conference. The twinkle toed superhero and soothsayer who was given a standing ovation. But in heaping praise on Vince we are in danger of resting on our laurels.
This is something we have done before. We got the judgement right over the war in Iraq. Our reaction to that conflict was proved to be correct and we saw the benefit of that electorally. Our spokespeople could answer many a question or win round an audience just by saying that we were against the war in Iraq. We had an enormously strong political position but I believe we failed to fully seize the opportunity that this gave us. We didn't do enough to build upon it. Crucially we failed to take the position towards the Iraq war and build around it a robust critique of Western foreign policy and develop proposals of what to do about it that were clearly identified with the Party. We didn't back up our good judgement with a wider political argument.
We are in danger of doing the same thing with Vince Cable. I am beginning to hear spokespeople for the Liberal Democrats, when asked a question about the economy, waving Vince Cable at people as if he was a lucky charm. Yes, Vince has done an outstanding job as our shadow chancellor and is a huge asset to our party. But the answer to the economic crisis is not one man, however talented. We cannot make a fetish of Vince Cable. Our response to difficult economic challenges cannot be to just stroke the Vince shaped lucky rabbits foot.
We may have been right in the past about the dangers, but we also need to be coming up with convincing arguments about what to do next. We need to respond to the global financial crisis with some new policies, or at least a new emphasis based on our existing policies. The ground has shifted under our feet as much for us as it has for the other parties and we have to very sure footed in our response. It is an opportunity, we can make the criticisms of the Government that the Tories are unable to make, but I don't think we are ready to take advantage of it.
And by the way, this also means that the issues that concerned those involved in the tax debate, on both sides of the argument, have already been overtaken by events. Both Nick Clegg's desire to shift the Party's focus towards tax, and those concerned to preserve our social democratic credentials, have been developing their arguments in a climate far sunnier than the stormy one we now have.
Politically, the Liberal Democrats are best placed to respond to the new agenda. We have Vince and a very strong economic team, we have a philosophy capable of adapting to the new demands, and we have a record that should give voters confidence. But we need to do some hard work and some difficult rethinking in order to get that response right.
We have got our mojo. But we also need some analysis that is equal to the challenge of the times.
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