Editorial EDITORIAL: EIGHT YEARS SINCE THE ORANGE BOOK: HAVE THE LIBERAL DEMOCRATS ‘RECLAIMED’ LIBERALISM?ecaf_2166 2..5 Thomas Papworth The Orange Book, Reclaiming Liberalism, was an Steve Webb and Jo Holland on ‘Children, the intentionally challenging publication that family and the state’ and Christopher Huhne proved controversial among Liberal on ‘Global governance, legitimacy and Democrats. Its central message, as one of the renewal’ were in line with both Liberal co-editors, Paul Marshall, explains in his Democrat and government policy at the time, article in this volume, was ‘the importance of and would have found few critics even within using economically liberal means to deliver the (then-ruling) Labour Party. Nick Clegg’s socially liberal ends’. Its title deliberately chapter on Europe, which proposed very echoed and challenged that of The Yellow Book, minor shifts of responsibility between nation the Report of the Liberal Industrial Inquiry states and Brussels and a revival of the (Liberal Party, 1928), which had heralded a much-ignored European principle of major shift within the Liberal Party towards subsidiarity, can only be seen as challenging state intervention, and the cover portrayed a in the context of a party all-too-easily young woman painting out the yellow that caricatured as ‘doctrinaire, fanatical, was associated with the collectivist approach foot-soldiers of the European cause...’ with the orange of liberalism. Edward Davey’s chapter on localism proposed The Liberal Democrat leader, Charles genuine and radical changes to local and Kennedy, who contributed the Foreword for national government, but was decidedly the book, was (as Sanderson-Nash explains in within the Lib Dem mainstream. Susan her article) nervous about the potential for it Kramer’s chapter on ‘Harnessing the market to prove divisive. This concern reflects the to achieve environmental goals’ may have fears of earlier Liberal1 leaders: in his paper, included some innovative ideas at the time, Stephen Davies cites Herbert Asquith’s but looks quite unremarkable when viewed response to Francis Wrigley Hirst’s Essays in from 2012. Both Mark Oaten’s chapter on law Liberalism, in which he worried that it would and order and Paul Marshall’s on pensions be seen as ‘a declaration of war against that made novel proposals, but they contained section of Liberal opinion, which has of recent nothing that should have caused Liberal years gravitated towards modes of thought Democrat readers – even reactionary ones – and fashions of speech which are called particular concern. “Collectivist”.’ The social democratic wing of Without doubt, the real challenges to the the party certainly reacted as though it was a Liberal Democrat old guard came in the declaration of war: many activists condemned chapters by Vince Cable and – especially – both specific policy proposals and the general David Laws. Laws contributed two chapters to thrust of the book, with its belief in the the book: one on health policy, and the efficacy and morality of markets and its signature essay and first chapter, ‘Reclaiming willingness to forego command and control Liberalism: a liberal agenda for the Liberal interventions in pursuit of ‘socially liberal’ Democrats’. It was this chapter that defined ends. It spawned a counter-publication the book and set its tone; it was the views set entitled Reinventing the State (Brack et al., out in this chapter that came to be associated 2007) that gave primacy to ‘non-market with the ‘Orange Booker’, a term used outcomes’. And it sparked a factionalisation of occasionally by modernising Lib Dems of the party that continues to proliferate to this themselves and more frequently by collectivist day. Lib Dems of those who favour market And yet, for all that, it is not by any means mechanisms and classical liberalism. clear that The Orange Book was a consistently Laws’ second chapter, on health policy, radical tract. Some chapters, such as those by was undoubtedly the most radical and – for a © 2012 The Author. Economic Affairs © 2012 Institute of Economic Affairs. Published by Blackwell Publishing, Oxford iea economic affairs june 2012 3 Liberal Democrat audience (and probably those outside the David Laws, the other co-editor of The Orange Book, argues party as well) – the most challenging. Laws was unflinching in in his article that it did indeed make a direct impact, marking his criticism of the National Health Service (NHS) and proposed instead a National Health Insurance Scheme. ‘the beginnings of a re-assertion of the role of economic liberalism Vince Cable’s chapter on ‘Liberal Economics and Social within the Party. The book is also seen to have helped pave the way for Justice’ called for ‘a wave of regulatory reform’ involving the the current coalition between the Conservatives and Liberal Democrats, use of sunset clauses, a greater use of ‘self-regulation by moving Liberal Democrat policy “to the right” on economics, tax and reinforced by statute’, the use of markets rather than public services.’ quantitative regulations, and ‘a satisfactory and independent system for regulatory impact assessment, to ensure that Sanderson-Nash confirms this point. Laws also identifies regulatory action is proportionate to the size of the problem the book as the trigger for the formation of CentreForum. His and the costs of regulation’. He advocated the use of vouchers description of the reaction, both in the parliamentary party for further and vocational education and a plurality of (not yet bolstered by three new Orange Book MPs) and in the providers in many public services including in the NHS. Cable wider membership shows just how radical the ideas were. argued that ‘Penal rates of tax destroy...freedom’and Laws explains that The Orange Book gave him and Marshall proposed that marginal rates never exceed 50% and that the the opportunity to express their concern that overall size of the state should not exceed 40% of GDP. Indeed, his call for ‘a fully independent Fiscal Policy ‘the Liberal Democrats had moved too far away from the small l Committee...toevaluate budget assumptions and “liberal” inheritance of the party, particularly in relation to economic outcomes . .’, six years before the establishment of the Office policy and our attitude to public service reform. Bluntly, we believed for Budget Responsibility, and his observation that ‘a small that the Lib Dems were not sufficiently liberal...theparty’s well and expensive army of financial regulators ticking numerous meaning attitudes in a range of policy areas was leading to a “nanny boxes...currently seems totally blind to the dangers state liberalism”... presented by unrestrained debt promotion and spiralling personal debt’, four years before the financial crisis, has led to In short, we wanted to see a Lib Dem party which would champion him acquiring something of a reputation as a prophet. economic, political, social and personal liberalism. We wanted our In the articles in this volume, the six contributors review policy solutions to be firmly grounded in liberal principles, rather than different aspects of the context and impact of The Orange Book in unanchored political populism.’ since its publication eight years ago. Emma Sanderson-Nash challenges the traditional view that Laws’ criticism of party thinking echoes that set out by the significance of The Orange Book lies in its ‘rightward’ shift Tom Papworth in his article – indeed, the similarity between in the party’s positioning, and instead suggests that it marked Laws’ statement that ‘choice was too often regarded as a dirty a change in the way the parliamentary party wanted to operate right-wing word’ and Papworth’s statement that ‘competition, and to be perceived: in effect, a shift towards professionalism. deregulation and tax cuts are viewed as a dirty Tory plot’ is This is not to deny its real and important ideological uncanny, as neither had previously read the other’s article. significance: Laws emphasises the obsession amongst Lib Dems of devolving power to local government rather than to ‘It marked a new phase of ideological development for the party in individuals and communities ‘in spite of strong evidence that which its authors aimed to “reclaim” the party’s classic liberal this wasn’t working for the majority of people’. Replacing roots...itignited a lively discussion within the party and beyond Whitehall with the Town Hall is not sufficient. about classic (or economic) and social liberalism, and what these things In looking to the future, Laws rightly observes that ‘we’ (by mean in the context of the Liberal Democrats...Forapartyoriginally which he might mean ‘the Lib Dems’, but might equally mean positioned in the centre, but which had apparently shifted to the left of ‘society as a whole’) Labour and back again, many felt this was a debate long overdue.’ Rather, Sanderson-Nash argues that both commentators and ‘must keep the faith with economic liberalism, notwithstanding the members tend to focus upon shifts of policy, while ignoring problems in the global economy since 2007 ... the equally significant move to professionalism. Yet it is this move towards increased choreography, bolder and more and that independent moves by the leadership, and a willingness to present the Liberal Democrats as a plausible party of ‘Government’s role should remain focused on creating the right government, that led not just to unprecedented electoral conditions for growth – economic stability, good infrastructure, low success in the decade after 1997, but