A MESSAGE FROM VINCE CABLE

Next Wednesday, the Chancellor of the Exchequer, Philip Hammond, will present his Budget to the House of Commons.

He will attempt to balance demands to increase public sector spending with the Government’s own strictly imposed fiscal rules.

Their ideological commitment to constraining capital spending on much needed new infrastructure threatens jobs and the country’s long-term prospects.

With incomes squeezed, prices rising and an unacceptable increase in the number of working families struggling to cope, the Conservatives can no longer call themselves the party of economic credibility.

In a speech to entrepreneurs last week, I set out a Lib Dem economic strategy to deliver a modern, forward-looking, outward-facing economy which will offer opportunities to young people and higher living standards for everyone.

Underpinning this vision is, of course, our belief that Britain should remain a member of the European Union and that the hard Brexit being pursued by Theresa May’s Conservatives can only deliver damaging results for our economy.

A Liberal Democrat budget would commit to the following:

  • Increase capital spending, particularly on transport infrastructure and large-scale housebuilding. Borrowing to finance productive investment at very low-interest rates is financially responsible and good for the economy.
  • Put a penny on each pound included for income tax to raise £6bn a year for the NHS
  • Introduce a lifelong learning endowment to enable every 18 year old to fund their own training and professional development
  • Reform business tax and clampdown on tax havens; including through a public register of beneficial ownership for Overseas Territories

I believe that these are essential actions that we need to take right now to address the weaknesses in our economy and to prepare us for the future.

To give hope to Britain, a serious strategy for growth and prosperity is needed. In today’s politics only the Liberal Democrats are offering it.

Vince: Only Lib Dems offer strategy for growth and prosperity

Pre Budget Speech by Vince Cable

As Leader of the Liberal Democrats, it is one of my responsibilities to give a serious Lib Dem analysis of the economics around the Budget, and to present an alternative.

I have recently been returned to Parliament from exile.

One of my regrets, however, is that the previous competition between the parties on economic competence no longer exists.

The likes of Gordon Brown, George Osborne, Ed Balls and Oliver Letwin were all serious players and thinkers even if I often disagreed with them.

Now, the economy – pivotal still to people’s lives – has been relegated to the margins of political debate.

The June election produced minimal discussion of economic policy.

The Conservatives didn’t produce any economic numbers in their manifesto.

Labour did, but as the IFS caustically pointed out at the time, there was a strong element of fantasy.

My Party did much better than our rivals at the hands of the IFS and serious commentators at the FT and The Economist but few noticed. And, now, economic debate is drowned out by the politics of Brexit and an unstable government.

Yet this is an unusually important and difficult budget.

The Chancellor has foresworn the use of a second budget, traditionally used to correct the mistakes in the first.

And the potential for a massive, if unquantifiable, economic shock from an unsatisfactory deal – or, even, ‘no deal’ is palpable.

Brexit hangs over the forecasts.

The environment of radical uncertainty is already spooking business investment and depressing growth, including the growth in government revenue.

I want, then, to set out some analysis of where we are and some ideas for where the Liberal Democrats think Britain could and should go.

Our focus is on freeing up capital spending to build the homes and infrastructure the country needs, on reviving the NHS with a targeted injection of cash, and on giving a leg up to young people with a learning account as they begin their working lives.

To do all this, we need a Government which prioritises economic competence over political dogma.

Neither the ‘no deal’ Brexit extremism of the Conservative Party nor the ‘socialism in one country’ dreamed of by Labour will deliver a successful economy.

Fiscal Rules
I have long held the view that governments must subject themselves to the discipline of fiscal rules which have first, sufficient independent, non-political, oversight to prevent arbitrary and populist tax and spending policies and, secondly, which dovetail with independently managed monetary policy. 
In the last two decades, however, good intentions and consistency have been undermined by the massive shock and dislocation caused by the 2008 banking crisis and by the temptation of successive governments to redefine and politicise the fiscal targets while paying lip service to them.

Gordon Brown introduced two rules which were broadly accepted as sensible: to balance the current – ie non capital – budget over the economic cycle; and to permit borrowing for investment subject to meeting a rule that government net debt to GDP should be under 40%.

To complicate matters the Government also shadowed the Maastricht target of an overall deficit (current and capital) of 3% GDP subject to a (gross) debt ratio of 60%.

After almost a decade of sustained growth the Labour Government claimed that it was still meeting the fiscal rules, though it was widely believed that this was achieved by defining the cycle in a statistically convenient but economically dubious manner.

The collapse of the banking system destroyed the fiscal framework.

Enormous temporary deficits (with overall government borrowing of 10% in 2009) made the current deficit and overall debt rules meaningless.

There was a massive structural rather than cyclical deficit.

I wrote about these issues in both my book The Storm and its sequel, After The Storm.

The Coalition set the fiscal objective of eliminating the structural current deficit ratio over the first four years of the 2010-2015 Parliament.

The Office of Budget Responsibility was set up to provide independent monitoring.

But the four year objective was allowed to slide to five, then seven, years and attempts to separate the structural and cyclical became increasingly difficult.

Gradually, Osborne’s objective became one of simply eliminating government borrowing – current and capital – over a specified time period.

The present objective is to balance the overall budget by the end of the decade (followed by surpluses).

In practice, this means running a surplus on current spending by the end of the decade.

The justification for doing so is to build in resilience in the event of a future shock.

What it does not acknowledge is how challenging reaching a surplus position may be, and the other risks it poses to economy – particularly if capital spending continues to be constrained.

The current position as set out in scenarios proposed by the IFS, is that the Government may come close to achieving the OBR estimate of ‘structural’ borrowing of under 1% of GDP in 2019/20 in a “moderate” benign environment,  falling further in subsequent years (from 3% in 2017/18).

But it is also possible that in a “very poor” environment the ‘structural’ deficit could fall to only 2% in 2019/20 and then rise again to over 3% in 2021/22.

In the latter case, government net debt could rise to over 90% in 2021/22 as opposed to falling below 80% in the benign environment.

The IFS concludes that a firm commitment to running a budget surplus from the mid 2020s (for resilience reasons) “is no longer sensible”.  I agree.

What should be done?  The public is tiring of “austerity” though the Government is some way short of realising its targets, which may well have to be allowed to slide to accommodate the clamour for spending on health, schools, welfare reform, policy, defence and prisons; lifting the public sector pay cap; and accommodating Brexit contingencies.

The IMF (like the IFS) recommends a “gradual” approach to reducing the deficit.

Our priority now must be to prioritise capital spending.

One damaging practical consequence of the Government’s existing, unachievable targets is that productive investment is being squeezed, choking off the prospect of the long-term economic benefits it brings.

Despite this month’s rate rise, government borrowing can be financed very cheaply at present, with continuing very low interest rates available to us on long term debt.

My preferred model would be to return to the Golden Rule which will be more credible now there is an independent OBR.

There also needs to be an independent check on the economic impact of government financed capital projects.  I discuss how this can be done in a recent paper for the LSE.

In parallel with a reform of fiscal targeting I would want to see a reform of the monetary policy framework.

I was a strong supporter of the MPC set up and continue to defend its independence.

But post-crisis economics has made its role in setting interest rates of secondary importance and also deeply confusing not least to itself: a ship with defective radar, damaged steering and ancient maps.

It would make more sense to give the MPC the role of targeting (nominal) GDP, which is what it has appeared to do in any event and also to have some agreed rules around QE including variants which merge into fiscal policy since this is likely to be the main policy mechanism in future recessions.

Economic Fundamentals
Underlying the more pessimistic forecasts for economic growth and the budget are negative assessments of UK productivity performance.

UK productivity in terms of output per man hour and total factor productivity lag well behind other Western economies such as Germany and France.

Moreover, productivity has stagnated since the financial crisis: the flip side of a positive story of rising employment and falling unemployment.

The two sides of this phenomenon come together in the form of stagnating real wages.

The budget cannot solve the productivity problem but it can address it properly and point to the steps needed to counter it.

The first is the need for increased business investment which incorporates innovative technology and better work practices.

However, a long-standing dearth of investment is now compounded by the radical uncertainty surrounding Brexit.

Long term studies by the LSE have shown that the two main determinants of poor UK performance on productivity are lack of innovation (R&D as opposed to basic science where the UK is strong) and low levels of skills.

The former problem is being addressed by R&D tax credits and by the work of Innovate UK, in particular the Catapult network, which Liberal Democrats launched in government as part of the Industrial Strategy.

The latter is a far less tractable problem and despite the progress we made in the Coalition in raising the number and quality of apprenticeships, especially Higher Apprenticeships, the programme is now slipping backwards largely because of clumsy implementation of the apprenticeship levy and the neglect of careers advice and guidance.

There is an immediate need to ensure that the apprenticeship levy rebates reach the supply chains of larger companies.

The industrial strategy is the right framework.  After I introduced it in 2011, as a way of cementing long term decision making, there was a revival of confidence in industries as varied as cars, aerospace, creative industries, and railway supply chains.

With the current uncertainty over Brexit and doubts about the durability of the government, that confidence has begun to evaporate.

Yet a budget built around the industrial strategy, prioritising education and skills, R&D and infrastructure would, at the very least, send the right signals.

Lib Dem priorities

Given the constraints surrounding the budget I would advocate the following:

  1. A freeing up of government capital spending, separate from decisions around the day-to-day budget.Two main areas suggest themselves. One is greater operational freedom for Network Rail and devolved transport authorities like Transport for London to finance their investment programmes, where they can raise capital cheaply.

That would mean faster decisions to press ahead with projects like Crossrail 2, and the potential to move on bringing about a rail revolution in the North with HS3.

The second is to use the Government’s balance sheet to finance large scale housebuilding by a government agency operating on the Development Agency model, used in different ways in the Docklands and Liverpool and for the New Towns.

The Communities Secretary has partially backed a plan originally put forward by Respublica for a £100bn programme over ten years, to build homes for sale or rent.

Such a programme could be complemented by greater freedom for councils to borrow to build, and by assisting smaller private builders by boosting the small builders’ credit scheme operated by the British Business Bank.

One way of improving the overall economic effectiveness of public investment would be to channel it through our independently managed institutions on the lines of the Green Investment Bank (now, regrettably, privatised).

If Brexit happens, Britain will need to replace the admirable European Investment Bank, based loosely on the model of the German kFW.

A British Investment Bank would have responsibility for selecting and, then, overseeing public investment.

  1. There is an urgent need for additional funding for key public services but this must be financed on a tax neutral basis.
  2. My party’s policy is to raise 1p in the pound on each rate of income tax, to provide an extra £6.5bn for the NHS and social care.This proposal has the dual merit that it addresses the immediate gap identified by NHS professionals and the NHS Chief Executive (though not the longer term issue of funding sustainability) and acknowledges explicitly that revenue has to be identified to pay for spending commitments.

There are other current spending priorities and, in particular, to relieve the harshness of welfare changes notably arising from the freezing of benefit levels, especially housing benefit, and the introduction of the universal credit.

The June Lib Dem manifesto explains how those could be funded:essentially by cancelling several tax cuts since 2015, notably to Capital Gains Tax and Inheritance Tax.

  1. By common consent, young people have been left behind for too long.  There now has to be some form of redistribution between generations to restore the implicit contract in every society between young and old.In ours, the spiralling price of property has radically shifted the balance making home ownership unaffordable for large numbers of younger people.

Taken together with diminished job security, pension availability and the costs of post-school education, an issue of intergenerational equity has arisen.

A better proposal than populist gestures like cuts in tuition fees and freezing rents is to create an endowment or learning account for young people on their 16th or 18th birthday which they can draw down at any time in life all to pay for further and higher education (a post graduate course, for example), reskilling and adult learning, as they choose.

The Director of the IFS has written favourably of this approach.  The principle of intergenerational transfer would be sustained by the imposition of a modest tax on personal wealth.

Let us consider, notionally, a generous and ambitious learning account of, say, £18,000.

This would cost just over £14bn per annum for each new age cohort.  This is worth roughly 1/3 of 1% of net household financial and property assets.

It is not difficult to see how a modest tax on personal net wealth, above a certain threshold, could generate substantial sums.  We shall investigate how best to do this.

Wider Tax Reform
My party, in coalition, promoted one of the more far reaching tax changes in modern times by radically lifting the threshold for basic rate income tax, lifting four million people out of income tax altogether.  We also promoted an aggressive approach to tax avoidance, leading to the introduction of the General Anti Avoidance Rule.Now I want us to apply that same radicalism to land values, to business taxation and to tax avoidance.
First, led by the entrepreneur, Andrew Dixon, we have a group investigating the feasibility of Land Value Taxation.

Authoritative analysis of the British tax system, notably the Mirlees Report, makes it clear that the taxation of land is the most economically efficient and rational form of taxation, the least open to evasion and avoidance and the most relevant to contemporary needs such as better utilisation of land for housing.

The Lib Dems are committed as a first step to replacing business rates with site value taxation.

Secondly, a group of tax specialists, on our Corporation Tax Panel, has been reviewing business tax.  Its interim conclusions are that the system is over complicated and full of unintended incentives.  They suggest:

  • A stable and predictable corporation tax reform with a competitive rate of around 20%.  Britain should not be aiming to be a corporate tax haven.
  • All companies bidding for government contracts must be clearly seen to be subject to tax in the UK and preclude the use of offshore tax havens.
  • Rapid progress on limiting tax deductibility of corporate interest
  • Recognising the special problems presented by digital companies which currently find it easy to shift profits to low tax jurisdictions.  One argument for “exit from Brexit” is that the European Commission is currently an effective enforcer.
  • The complex capital allowances regime must be reformed to incentivise and not penalise capital investment.

Thirdly, The ‘Paradise Papers’ scandal underlines the scale of systematic tax avoidance.

In fact, the introduction by the Coalition of the General Anti-Avoidance Rules and an open register of beneficial ownership put the UK among the tighter jurisdictions and the estimated ‘tax gap’ between actual and potential receipts is now one of the lowest – 6% of revenues.  This still, though, amounts to a large sum.

One necessary step is firm action against dependent territories and crown colonies which encourage aggressive tax avoidance. This should include the blacklisting of firms which utilise abusive schemes operating from those territories and the reserve power of direct rule.

There are precedents for such action. The Turks and Caicos Islands were subject to direct rule because of corruption in 2009.

Conclusion
Getting this Budget right is more important than the Chancellor realises.

Disillusionment with our current economic performance, and the model which underpins it is acute.  Any Brexit would make the problem worse, and a ‘no deal’ Brexit would cause severe destabilisation .
The danger is that this provokes a further growing appetite both for populist fiscal policy – sometimes described as the magic money tree – and for retreating to a much more state controlled and inward looking model.

Both could be catastrophic for our country.

So what is needed is a serious strategy for growth and prosperity, and in today’s politics only the Liberal Democrats are offering it

 

 

CONSTRUCTIVE AMBIGUITY (WE DO NOT HAVE A CLUE)

Brexit Secretary Davis has claimed that lack of clarity over the Government’s Brexit plans was a deliberate attempt at “constructive ambiguity” as part of the negotiations.

You will find it difficult sometimes to read what we intend. That’s deliberate. I’m afraid in negotiations you do have constructive ambiguity from time to time.

Brexit Secretary, David Davis

Proposals for new custom arrangements in the paper include “new innovative facilitations”, “technology-based solutions” and an “innovative and untested approach.”

It’s clear that ‘constructive ambiguity’ is code for ‘we don’t have a clue.’

The government has effectively narrowed down its options to having a hard border, or staying in the Customs Union but calling it something else.

This paper has more abstract nouns than an A-Level English essay. Who knew there were so many ways for the government to admit that they don’t have a clue what they’re doing?

David Davis should spend less time with a thesaurus and more time looking into the chaos at our borders that would be caused by an extreme Brexit.

The only way to guarantee free and easy trade with the EU is to stay in the Customs Union and Single Market.

SIX QUESTIONS FOR THE GOVERNMENT

Today, Vince Cable challenged David Davis to answer six questions over plans set out on future customs arrangements after Brexit.

The government is offering two ways forward but won’t tell us which it prefers. That’s no doubt because cabinet ministers can’t even agree amongst themselves.

These plans are more concerned with papering over the cracks within the Conservative party than protecting our economy.

All those industries that depend on membership of the customs union, from the car industry to aerospace, still have no clear idea what is coming down the track.

All they know is that instead of jumping off a cliff in 18 months, the government now wants to do so in a few years’ time.

The government must come clean over the real costs of these plans for British businesses and consumers.

These are the six questions that David Davis must answer on the Customs Union:

  1. The government has outlined two future approaches, a streamlined customs arrangement or a new customs partnership. Has the government decided which would be its preferred outcome, and if so why was this not specified in the paper?
  2. How does the government expect to be able to negotiate new trade deals with non-EU countries before the terms of any future deal between the UK and EU are known?
  3. The government says that in the case of a ‘no deal’ scenario, it would treat trade with the EU as it currently treats trade with non-EU countries and customs duty and import VAT would be due on EU imports. Have ministers modelled what the potential costs of this scenario would be for UK consumers and businesses?
  4. Has the government considered the impact that lowering environmental and consumer standards, e.g. the ban on imports of chlorinated chicken, could have on future customs arrangement with the EU?
  5. Has the government estimated the financial cost to taxpayers of setting a new streamlined customs arrangement and how long these will take to put in place?
  6. Can the government confirm that every member of the cabinet, including Liam Fox, has endorsed this paper?

LIB DEM QUESTIONS IN THE COMMONS w/e 7/7/17

The following contributions came from Lib Dem Mps this week.

 

Jo Swinson  intervened on Emily Thornberry to make a point about the recognition of Palestine.

I am interested in and listening with great care to what the right hon. Lady is saying about recognition of Palestine, and particularly about what the Government’s position was some years ago. Does she share my concern that, given the Minister’s comments today, it seems that that position has moved and that recognition is being ruled out until the end of talks on a peace process rather than being something that the Government would be able to do at any time?

She was also able to question Sajid Javid meticulously on domestic appliance safety in the wake of the Grenfell Tower disaster – because she had commissioned a review when she was Minister – and the Tories had kicked it into the long grass:

The safety of domestic appliances is a vital element of fire safety in tower blocks—and, indeed, in all homes. This horrendous fire started with a fault in a fridge, so will the Government revisit the decision of March last year to dismiss or delay many of the recommendations of the Lynn Faulds Wood review into product recall, which I commissioned in 2014? In particular, will the Secretary of State recognise that funding for the enforcement of safety regulations through trading standards is inadequate and must be urgently addressed?

She also tried to intervene in the WASPI debate.

Norman Lamb, however, succeeded, making an important point:

I am very grateful. Is it not part of the problem that all those women who have given up much of their adult lives to caring responsibilities then face real discrimination when seeking work at this age? They are therefore left in unacceptable poverty.

Norman also asked a question on social care:

I hope the Minister will agree that these widespread failures of care are intolerable in a civilised society. Does he share my view that we will have to confront the need to increase taxes to ensure that we have an efficient, effective and compassionate system, and will he embrace a cross-party approach to come up with a long-term settlement?

We’ll not hold our breath waiting for the Tories to do something so sensible.

And he also intervened to ask about seasonal agriculture workers and what on earth we’d do post Brexit.

I am sure that the hon. Gentleman would agree that the soft fruit industry in this country is a big success story. One of the major producers in my constituency is 77 staff short at the moment. That means leaving fruit unpicked. There is a real risk that this major success story could be undermined unless we get a good new seasonal agricultural workers scheme deal in place for the post-Brexit situation.

Wera Hobhouse made two interventions on different days on the Grenfell Tower disaster. On Monday she asked Sajid Javid:

Given what the Grenfell Tower fire has exposed about the combustibility of external cladding in the UK, can the Secretary of State confirm that appropriate tests are being conducted at non-high-rise as well as high-rise buildings?

And she asked what was being done to build trust with the families:

Does the Minister agree that the uptake of temporary accommodation by only 14 families is disappointing? If he thinks that this is to do to with a lack of trust rather than the quality of the housing, will he tell us what is being done to build that trust?

Alistair Carmichael made a number of points

You know, Mr Speaker, that I do not often hanker after the days of Tony Blair, but if we had reached this state of affairs under his premiership, we would have seen not just involvement by the Prime Minister, but active leadership, and he would probably have made the statement to the House. With all due respect to the Secretary of State, it is a matter of regret that the Prime Minister is not here today.​

The Secretary of State is right when he says that we need greater transparency on political donations, but he must be aware that the House has already expressed its view on that matter. The Northern Ireland (Miscellaneous Provisions) Act 2014 set the relevant date as being 1 January 2014. Why is he now seeking to change that?

Later he asked about the NHS workforce post Brexit given the fall in doctors and nurses:

The Secretary of State will be aware that that figure represents in excess of 5% of the total workforce in the NHS. This matter will have to be addressed, engaging with the recruitment sector, the employment sector and, indeed, the devolved Administrations. Is that how he will handle it

He also found time for a Westminster Hall debate on renewable energy in the islands:

I am delighted to serve under your chairmanship, Sir David, and I am pleased to welcome the Minister to his new role. He is one in a fairly long line of Energy Ministers during my tenure in the House—I am not entirely sure how many I have seen—but he brings with him a reputation for being a diligent and effective Minister, and I wish him well in his time in the Department. It is the convention on these occasions to say how pleased we are to have secured the debate. Although I will keep my tie on, I will break with convention by saying that I am not particularly pleased; I have been around this course for the past 15 years and I am immensely frustrated that debates of this sort are still necessary.

I think it will be helpful for those who might be watching our proceedings from elsewhere to be quite clear not only what the debate is about but what it is not about. It is not about individual projects that may be under consideration; there are a number in my constituency, including in Orkney and with Viking Energy in Shetland. To say that we need a strategy to unlock the potential of renewable energy generation is not to say that any individual project in itself is right or should go ahead, nor is it to be confused with the consultation currently being undertaken by Ofgem on replacing Shetland’s power station with a 278 km, 600 MW high-voltage direct current cable. That is exciting some comment at the moment, but it is a proposal of which I remain to be convinced; having been around this course for many years, I do not regard it as quite so difficult or challenging for that particular project to get a cable on the seabed.

The debate is about how Government and the forces of government can unlock the potential for renewable energy generation that we all know is there within our island communities. A study commissioned jointly by the then Department for Energy and Climate Change and the Scottish Government in 2013—the “Scottish Islands Renewable Project”—estimated that the Western Isles, Orkney and Shetland could between them supply up to 5% of Britain’s total electricity demand by 2030. That is a quite significant prize and it is within our grasp. However, it is something that we already know will only happen if we can get everybody working together.

In that connection, I welcome the intervention this morning from Councillor Donald Crichton, chair of the Sustainable Development Committee in the Western Isles Council, calling for cross-party consensus building on this. As he said, the Conservative party’s manifesto commitment at last month’s general election to “support the development of wind projects in the remote islands of Scotland, where they will directly benefit local communities”

is an important and welcome step. Similarly, I also place on the record my appreciation of the efforts of Lord Dunlop of Helensburgh, who, in his time as a junior Minister in the Scotland Office and before, did a lot to push this particular issue.​
That manifesto commitment was welcome, and I am pleased that it has survived the cull of so many other commitments from that unfortunate document. However, we are looking to the Minister for some outline of what the commitment will actually mean in practical terms. If you will forgive me, Sir David, there is quite a history here, and it is important that we remind ourselves of some of it. A lot of the issues that underpin this history come from the fact that Ofgem—for reasons that are understandable in relation to non-renewable technologies—has for some time adhered to a system of locational charging. For renewable projects, far from the centres of populations and the ultimate points of consumption, that does not necessarily make the same sense, so we have looked for different ways around that over the years.

Back in the days of the late Malcolm Wicks, we tried the idea of a cap on transmission charges. That was brought in by him and the then Labour Government, and was then extended by Chris Huhne when he was Secretary of State for Energy, but that in itself did not provide the solution we had hoped for. We then moved on to the new contracts for difference regime, and within that it was suggested that we could have a dedicated islands strike price. Unfortunately, at the point that that was being submitted to the European Commission for state aid approval, it was felt that it could be delayed by the islands element, so it was removed for later submission. It was resubmitted at a later stage and went through the pre-approval application process, which concluded some time around the end of 2015.

In the meantime, we had a general election, and the Conservative Government that came in in 2015 had a manifesto commitment to have a moratorium on onshore wind developments. The point at which the Government decided to go ahead with the CfD auction round that we are currently part of, without any provision for the islands, sticks in my memory for two reasons. First, it was the morning after the American people had elected President Trump, and secondly, I remember very clearly taking the call from the Secretary of State on my mobile phone while I was going through Edinburgh airport. However, a consultation period followed, which should have ended in the early part of this year and to which we I think we still await the Government’s formal response.

I remind the House of that history at this point because it is germane to the debate. Although the commitment in the Conservative party’s manifesto from last month is new, the issue is not—it has been within the machinery of government for some considerable time. Although we hope that that commitment will be given the green light, it is far from the case that the work needs to start from scratch. What is now needed is the degree of political commitment to implement the commitment and to tell us exactly what it means, because time is not in plentiful supply.

If provision for the islands of Scotland is to be included in the next round of CfD auctions, we are looking at something that has to go through the machinery of government and possibly even the state aid consent procedures in order to be in place by the end of next year, so there is a need for some degree of urgency in the approach to this. When the industry hears from the Minister later, it will be looking for a degree of clarity. We are not looking for the blueprint on everything that ​is meant by the manifesto commitment, but we want to hear some sort of outline or framework through which this can be turned into a reality.

What are we looking at here? Are we revisiting the idea of an islands strike price, or are we looking at something that might, somehow or another, find a mechanism for including onshore island generation with offshore wind? I do not know just how doable that would be, or how workable it would be from the point of view of the industry, but those are some of the ideas that have been floated. Alternatively, does the Department have some new mechanism that is going to be brought forward?

In any event, when in all those processes will the work start in order to obtain state aid approvals? I understand that the Government will proceed on the basis that, regardless of what happens with Brexit, state aid regulation compliance remains a feature of our regulatory landscape for the foreseeable future. Is it the Government’s aspiration that any projects that would be brought forward under this new scheme would be eligible for the next round of CfD auctions? If that is the case, will the Minister at this stage consult within Government to get a commitment that the next auction round will not go ahead unless and until this scheme is in place and island-based projects are able to compete?

Tim Farron managed to get an assurance from Jeremy Hunt about his local hospital:

The boundaries of the sustainability and transformation partnerships are bound to cause concern about the future of A&E and other acute departments given the nature of them. My area, south Cumbria—relatively sparsely populated and rural—is lumped in with Lancashire, which is largely urban. Will the Secretary of State confirm that the voices of rural communities will not be dwarfed by those of the larger urban ones, and in this week, as we celebrate the 25th anniversary of Westmorland general hospital, will he give guarantees that it will not be closed and will indeed not receive any downgrading as a result of the STP process?

 

Hospital waiting lists to rise above 5m – Lamb responds

Norman Lamb has responded with anger to reports that more than five million people could be waiting for NHS treatment within two years, according to confidential documents reported in The Times.

Liberal Democrat Health spokesperson Norman Lamb said:

This is further evidence of a health service facing impossible challenges.

The inevitable consequence of growing waiting lists is that those with the money will pay to go private, and
who can blame them? But others will be left waiting often in desperate pain.

We are developing a two-tier system, based on ability to pay and not need.

This is what the Conservative stewardship of the NHS means for people up and down the country.

Lib Dem response to Institute for Government report on free movement

The Institute for Government today (Thursday) have released a report urging the Prime Minister to accept the continuation of the free movement of people as part of a transitional arrangement. Commenting on the news, Liberal Democrat leader Tim Farron:

The Conservatives have no plan. They paint a picture of competence but this report shows that their vision is unrealistic and potentially disastrous.

Theresa May was the Home Secretary during the referendum campaign and it is now becoming clear that she failed to plan for a leave vote.

This hard Brexit government is intent on pulling us out of the EU in the most brutal way possible – damaging our economy, jobs and public services. This election is your chance to change the direction of our country and get an opposition that will stand up to the Conservatives and get a better deal for you and your family.

Olney responds to Brexit research warning

Responding to the results of a survey about the impact of a hard Brexit on research and development conducted by the Academy of Medical Sciences, the British Society, the Royal Academy of Engineering and the Royal Society, Lib Dem Richmond Park candidate Sarah Olney said:

Our country has always been a world leader in research and innovation, but hard Brexit threatens to destroy that reputation by making cross-border collaboration too costly, too complicated and too bureaucratic.

Instead of scoffing at experts, the Conservatives must engage with these esteemed national academies to ensure that leaving the European Union does not damage their vital work.

Farron: May must not rush into unilateral military action in Syria

Responding to reports Theresa May plans to push through a vote to bomb Syria if she wins the elections, Liberal Democrat Leader Tim Farron said:

The idea that after months of disinterest and inaction Theresa May would back military intervention against Assad in Syria outside of a wider diplomatic strategy and without UN backing is deeply worrying.

Assad is a brutal dictator, and the use of chemical weapons is indefensible.

The action taken by Donald Trump earlier this month was a necessary and proportionate response to the horrific use of chemical weapons. However, we were absolutely clear that we disagreed with the way in which he conducted it- unilaterally, without allies, outside of a wider strategy.

That is why the UK must not rush headlong into supporting further unilateral military action in Syria by Trump. Undermining international law and rejecting international cooperation has the potential to create instability on a global scale – seen all too clearly by the illegal invasion of Iraq in 2003.

May would be wise not to use Syria as a campaign tool in this election. This would come across as calculating, unconsidered, and without the best interest of the Syrian people at heart.