David Laws should have burnt Liam Byrne's letter

Embed from Getty Images

The infamous letter which Liam Byrne left for his successor as chief secretary to the Treasury is in the news. (You can read it in the photograph above.)

David Laws, who made it public after coming to office in 2010, is receiving demands that he hand it over from both the Treasury and the National Archives.

I am all for preserving our national heritage, but I can't help feeling it would have been better if Laws had burnt it when he first saw it.

First, there is an established tradition of ministers leaving joking notes for their successors. For instance, in 1964 Reginald Maudling left a note for Jim Callaghan (his replacement as chancellor) saying "Good luck, old cock.... Sorry to leave it in such a mess."

In the light of this, the decision to publish Liam Byrne's note is not an easy one to support.

Second, the publicity given to the note encouraged Liberal Democrat parliamentarians to hammer away with the message that Labour had maxed out the nation's credit card, Once Danny Alexander had replaced Laws, we seemed to have little more to say on economic policy.

This helped produce a political climate that was favourable to the Conservative message and made it harder to suggest an alternative approach.

Third, it came back to haunt us - and David Laws in particular.

Hover over the photograph and you will see that Byrne's letter is being waved by David Cameron and he is doing so in an election meeting at Norton Sub Hamdon - a village in Laws' Yeovil constituency.

There were plenty of seats we lost in 2015 where the splintering of the Lib Dem vote was more a factor than any swing to the Conservatives, but in Yeovil the Tories gained more than 5000 votes between 2010 and 2015.

So there are three good reasons why David Laws should have burnt that blasted letter.

The nonsense of Labour's welfare policy

I am with the Liberal Democrat MPs who rebelled over the one per cent cap of benefit increases after yesterday's debate.

As Caroline Lucas said:

The Secretary of State brandishes the figure of a 20 per cent increase in benefits in the past five years. In cash terms, jobseeker’s allowance has gone up from just £59.15 in 2007 to £71 in 2012. In other words, in each of those past years JSA has gone up by just £2.50.

And as David Miliband said of the politics behind this move:

The truth is that this rancid Bill is not about affordability; it reeks of the politics of dividing lines that the current Government spent so much time denouncing when they were in opposition in the dog days of the Brown Administration. It says a lot that within two years they have had to resort to that dividing-line politics. We know the style: you invent your own enemy, you spin your campaign to a friendly newspaper editor, you “frame” the debate. But the enemy within in is not the unemployed; the enemy within is unemployment.

But what really struck me about the debate was this complaint from Liam Byrne:

Some 40,000 soldiers, 300,000 nurses and 150,000 primary and nursery school teachers will be hit by this Bill.

But why are such people receiving money from the government at all? A common complaint about welfare systems is that they use public money to subsidise bad employers, but here the government is using it to subsidise a perfectly reasonable employer - itself.

Worse than that, the last Labour government had no great appetite for making the rich pay tax. And even if a government does have that ambition, it turns out to be rather hard to do.

The result is that the tax credits for soldiers, nurses and teachers have to be financed by people in reasonably but not highly paid jobs. People like soldiers, nurses and teachers, in fact.

In other words, the whole system is a complicated way of leaving people pretty much where you found them.

The Coalition has the right idea in cutting tax rates for lower paid workers and reducing the reach of the tax credit system. They should use some of the money they have saved to protect the poorest of all from inflation.