TUC LibDems A report submitted by the Social Market Foundation.

SMF-Logo The Social Market Foundation (SMF) hosted its first keynote address with Oliver Letwin MP, Danny Alexander MP and Brendan Barber – General Secretary of the TUC – at the Liberal Democrat Party Conference last night.

SMF brought together key decision-makers that will determine the shape of our economic recovery over the coming years – the Government and the Unions. Our event was the first time a Conservative Cabinet Minister has spoken at a Liberal Democrat Party Conference. Letwin was warmly received by Liberal activists, which will no doubt confirm – Letwin chuckled – what his critics in the Tory party have always thought: he's a soggy liberal.

It was a constructive and civilised but straight-talking debate, reinforcing our position as the leading think tank where ostensibly opposing ideologies and actors can come together, with the belief that credible solutions can be found. SMF believes that it is vital in these difficult times that the Coalition listens to and adopts the recommendations of others to ultimately ensure our troubling budget deficit is tackled and recovery ensured in the most effective way.

So with that strong belief in co-operation and cross-party working, we will host this same discussion with Letwin, Alexander and Barber at the Conservative Party Conference on Sunday 3rd October 2010, 7:30-9:00pm (DETAILS).

Alexander did not stray once from the Government line, special advisers watching closely from the back of the room. TINA, There is No Alternative, reared her head again: cutting the public deficit must happen now, and rigorously, or we will witness rising interest rates and taxes that will make economic recovery less likely.

But the cutting will be fair, echoing Clegg's assertion that this won't be a re-run of the 1980s. Regions more reliant on public services will be able to access growth funds. And the long-cherished Lib Dem principle of decentralisation will ensure there will be positives for public sector workers:  they will have more control over the services they deliver. At least for those still in jobs.

Strangely, Letwin was more popular, winning the crowd with his courtesy towards other speakers and his self-deprecating humour. Alexander was a pleasure to work with, he said. And these Lib Dems have policies they push strongly in Government; they're not just propping up the Tories.

As expected, Letwin intellectualised the Coalition Government agenda:

  • Shift power from the centre to the local – "Personalising and localising budgets generates more efficient results".
  • Shift in horizon to thinking long-term rather than tomorrow's headlines – "We're running a Government, not a magazine".

But Brendan Barber from the TUC warned that the economy was heading towards bad times and we could get "less for less" from our public services. He accepted the deficit had to be tackled, but there was still opportunity to debate the timing of when services are cut and the extent spending cuts should contribute to the reduction plan as opposed to higher taxes.

We at the SMF, in our Axing and Taxing paper, have argued for an alternative to the Coalition Government model: the deficit should be reduced by 60% public spending cuts and 40% tax rises, rather than the 80%/20% split currently proposed. Among numerous other policies, we argue for tough decisions: middle-class benefits should be reduced, road pricing introduced and better-off patients charged for visiting their GP.

We hope the Government will keep listening and adapting to the changing economic climate. So we look forward to the continuation of this discussion between Coalition partners and the TUC in Birmingham next month.

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