Why Paddy can spend, spend, spend

The Liberal Democrats' leader is hot on political reform, but fails to see a link to the taxation dilemma

We live in a nation which desperately needs political reform. We are close to a time when we might get it. In his speech yesterday Paddy Ashdown made himself, one way or another, an indispensable part of that. If he shares power after an election, he will be the hot breath on Labour's nape, urging it always on. If he doesn't, he will be Labour's most damaging critic.

Given the cramped confines of modern political discourse, this was a surprisingly left-wing speech. Mr Ashdown will not like the description; it causes him trouble in the South-west of England. He would prefer something easier on the ear, like radical or progressive. But "left-wing" is clearer - and truer. And because of the angry mood of the country, it may also be better. I have not heard such a passionate and incautious cry for change from a party leader.

In its contempt for the centralised, failing political culture of these islands, this was an extremist speech, and rightly so. There was no flinching about the "rotten political system", about "smug, self-satisfied" and failing Westminster, or about the need for electoral reform. On the latter there was a shrewdly aimed and venomous barb returned to Tony Blair, who had reiterated his support for a plebiscite on voting reform earlier in the week: "It is not leadership to ask others to decide when you won't decide yourself. Holding a referendum is not an alternative to holding an opinion."

Yes, and after 1992 Neil Kinnock can confirm the cringe-making difficulty of temporising about how far reform should go.

I believe Ashdown has always been a leftish politician and that his abandonment of pretended neutrality as between Labour and the Conservatives has freed him to say what he feels. Here in Glasgow he is daring to be utterly and completely himself. Some Labour people will look at the result and feel jealous at Ashdown's exhilarating outspokenness, praying for more of the same when they meet at Brighton.

He asked, for instance: "Of what benefit is it to the country if a public utility like RailTrack makes a huge profit, but its stations are so deserted and unmanned after dark that no woman dare go near them, and if the people who could staff those stations are left rotting on the dole because there are no jobs?"

If that sentence, or a very similar one, is not already on the floppy disks of a few Labour leaders, it ought to be.

This sense of a revivalist leftism from Yeovil was only heightened by his peroration, when Ashdown referred to the spirit of 1906 and of 1945, calling for a third and final 20th-century transformation. The 1906 government was indeed a Liberal one, and Liberal thinkers were very influential in the Attlee years. But 1945 is the central year in Labour folk memory; to invoke it so passionately here was to execute a war-dance on Labour's tribal burial-grounds.

And both Ashdown's examples were, of course, of fundamentally big-state revolutions. Which brings me to what Ashdown is proudest of and what Labour reformers will rightly regard as the speech's greatest weakness - its unequivocal commitment, at a time when the British electorate is very heavily taxed, to taxing it more. This is paraded as the central example of Lib-Dem honesty and straightforwardness. I am not so sure.

Ashdown argued that British education is underfunded and requires more taxpayers' money. After Gillian Shephard's leaked memo, this is hardly controversial, even among Conservatives desperate for tax cuts. But at fringe meetings it is clear that the party wants to spend far, far more than the pounds 2bn cited by Ashdown.

Even in his own speech there was ambiguity. He cited three commitments - pre-school education, training for 16 to 18-year-olds and adult retraining. Yet a few moments earlier he had said: "Go to a school where there are more than 35 kids in a class because of the government cuts, and tell me that money's got nothing to do with it." This implies more money for teachers' salaries, which is important but isn't part of the costed commitment. And the general impression in the speech was that more spending is urgently needed almost everywhere.

The really tough, brave thing would have been to explain where old-fashioned Liberal self-reliance was still applicable. Where, if anywhere, should the state be doing less? What wasn't a priority? Instead, the sole, brief note of hesitation about higher state spending was that familiar stand- by: "We will wage war on waste."

Yes, so do all modern governments. So would John Redwood. Unspecific promises to cut waste are the last resort of populist economics. No, a shrewd taxpayer, scanning Mr Ashdown's speech, would undoubtedly conclude that it implied a party that would let tax rise well beyond the extra pounds 2bn.

Many on the left would cheer and are unapologetic about the politics. There is, they remind us, polling "evidence" that most people would be happy to pay more. This is tosh, another minor but eye-catching example of our national hypocrisy, which is particularly glaring whenever we're confronted by women with clipboards who appear to have some connection with authority.

People think they ought to be happy to pay higher taxes, for sound Judeo- Christian reasons, but don't actually vote to do so. Some think they are already struggling so hard to make ends meet that "higher taxes" must mean higher taxes for somebody else; whereas in fact, to make a substantial difference, it would have to affect very many people in work.

Labour knows about this, however bitter the knowledge tastes. The Lib Dems, it seems, don't. Having suggested higher income tax at the last election, and done reasonably well, they conclude that the policy is popular. Again I say, tosh. No one went to the polls in 1992 thinking that the Liberal Democrats would provide the next Chancellor.

So yes, it is cheering that somebody somewhere in British politics is prepared to stand up as Ashdown did and state the simple truth that "taxes are the subscription charge we pay to live in a civilised society". But when he goes on to attack Blair and Labour for not being frank about the need for higher taxes we should be, at best, only half-convinced. For oh, it is easy, so easy for the Liberal Democrats, chirpily heckling away. It is much harder for Labour, a party with a high-tax reputation seeking to regain power at a time when ordinary Britons already feel overtaxed and cheated by the Conservatives.

It is a chicken-and-egg dilemma for all reformists; the same cynicism about the British political system which Ashdown spoke of reinforces the natural reluctance of most people to hand more of their money to that system. This contrast between the Liberal Democrats' fierce crusade for political reform - about which Ashdown is deadly serious - and his less convincing muscle-flexing on taxation, defines the limits of the left revival we have experienced at Glasgow. For it depends on a Labour victory, and the truth is that if Blair had made Paddy Ashdown's speech, the spending implications would have been instantly unpacked and used as ammunition against him - damaging ammunition in a real political war, not a phoney one.

And if Blair fails because of tax, then the political reshaping our country needs, and about which Ashdown is so convincing, simply wouldn't happen.