If Theresa May truly wanted to end austerity, she’d give voters the option to stay in the EU

Public finances are being put under considerable stress by the economic slowdown accompanying Brexit, but a Final Say vote could change that

Vince Cable
Sunday 07 October 2018 14:43
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£20 billion extra needed for Government to end austerity, says IFS director Paul Johnson

Congratulations to Theresa May and her team of spinners. At the Conservative conference she jumped the low bar of expectations. Bopping on stage to the sound of “Dancing Queen” was an effective stunt and showed a capacity for self-deprecating humour that was previously well hidden and was quite endearing.

More important, the tone of comments about the EU was conciliatory, unlike the ghastly Soviet metaphor from Jeremy Hunt and the rabid demagoguery from Boris Johnson. May almost managed to take the focus away from the deep divisions in the Conservative Party that had otherwise been exposed during conference week.

Theresa May declares 'austerity is over' after decade of cuts

The Tory Brexit civil war is deepening even as we approach the crucial EU summits that will define our future. The prime minister is desperately hoping that her enemies within the Tory party are so desperate to get Brexit over the line that they will vote for a modified version of the Chequers deal which will be repackaged with the help of EU negotiators in the next few weeks. If the gamble fails, other options are on the table.

What the dance routine masked was how often May referred to the possibility that the public could be given the final say on any Brexit deal. This is an acknowledgement of how real the possibility of a People’s Vote has become.

The Labour frontbench moved a tiny fraction at their conference, acknowledging that there may be certain circumstances that could see the party backing us all to have that Final Say. This is only a chink of light, and the leadership is still as wedded to delivering Brexit as May.

But particularly after the endorsement of the People’s Vote by Francis O’Grady of the TUC there is a groundswell of support in the Labour movement which the leadership cannot ignore.

The People’s Vote is far from delivered. Jeremy Corbyn and Nicola Sturgeon will have to move their positions in the coming weeks if we are to have the parliamentary numbers to succeed, but we can now say with confidence that Brexit is not inevitable and that there is a way out of the mess.

But getting a vote is not the goal – it is the winning of it. And to do so, we must be able to describe a positive picture of Britain’s future within the EU. That’s why I used my conference speech to set out a vision for Britain that addresses the frustrations of the “left behind” and also has a plausible plan to raise wages and living standards through increased productivity.

Bringing British education at school and for life, training and retraining up to the standard of the best in the world must be a central objective. But, as we saw from all the investment in the Blair/Brown years, this is not an easy task.

We also need to spend heavily on infrastructure which would prioritise housebuilding and improve rail networks, which would breathe fresh life into the fading notion of a “Northern Powerhouse”. This requires public borrowing, but is economically sensible when capital spending brings a return. Inside of the EU, the country will be more able to easily retain the strong credit rating that allows us to continue to borrow at ultra-low, long-term interest rates.

All too often the Treasury has resisted capital spending, unnecessarily treating borrowing for productive investment in the same way as day-to-day spending.

I have been raising the issue about how best to realise the benefits of emerging technologies while effectively regulating the big data companies. My deputy, Jo Swinson, and I have set up a commission to examine how best to direct public policy so that we can use emerging technologies to benefit our society, from the potential of robotics in care homes to blockchains that can enable huge clinical trials.

The most striking soundbite to emerge from May’s speech at the conference was the promise of an end to austerity. The promise is heroic since the public finances are being put under considerable stress by the economic slowdown accompanying Brexit, and the starting point is one of high levels of public debt. The simple truth is that if the end to austerity means a relaxation of public spending controls and a better pay deal for public servants then there will have to be higher taxes to pay for it.

My party explicitly acknowledges the necessity for some additional tax revenue, and revenue from the many, not just the few.

That is why we advocate a penny on the pound on income tax to meet the immediate pressures on the NHS, but we need a long-term solution too, involving earmarked taxation.

Fundamental to achieving a meaningful end to austerity is that the country retains its economic strength and fiscal base by staying in the EU.

Sir Vince Cable is the leader of the Liberal Democrats and MP for Twickenham

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