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Beneath the tedium of the Lib Dem conference is an ideological battle between social democrats and classical liberals

Liberalreformlogo3By Harry Phibbs
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Watching the Lib Dem conference it is easy to sneer.

There is the self importance - which despite being a Party of Government still feels absurd as the tedious procedural amendments are deliberated upon.

There are all the contortions as speakers praise the Government but attack the Conservatives. There are all those speakers combining earnestness with eccentricity. There is something about the Lib Dem Party Conference which makes the jokes especially painful and indignation especially vacuous.

Yet beneath the surface an ideological contest is taking place which - curioiusly enough - the liberals seem to be winning.

The majority of activists still lean towards state control rather than free markets. But the classical liberal fight back continues. It began with the publication of the Orange Book essays in 2004 and was boosted by the coalition agreement with the Conservatives in 2010.

This year it has been given further impetus with the publication of Coalition and Beyond: Liberal reforms for the decade ahead. It includes a mildly encouraging foreward from Nick Clegg.

It is full of radical proposals. For example Nick Thornsby calls for a regional minimum wage as "setting an artificially high minimum wage in the poorest areas, where business activity already tends to be limited, makes workers in those areas less attractive still to businesses looking to recruit: it weakens their comparative advantage."

Alison Goldsworthy calls on the state to go on "a progressive diet" slashing welfare payments to the rich including Child Benefit and the Winter Fuel Allowance.

Lib Dem MP Stephen Lloyd urges his Party to back the Work Programme and a further emphasis on reducing benefit dependency and to present this in positive terms.

The Lib Dem councillor Tom Papworth calls for the repeal of the Town and Country Planning Act and to replace it with a greatly liberalised and highly localised regime.

Sam Bowman of the Adam Smith Institute has a piece on "bleeding heart libertarianism" including drug liberalisation, freer migration and negative income tax.

SlflogoIn the opposing camp are the Social Liberal Forum. This is the faction for the egalitarian, social democrats.

They like to talk a lot about William Beveridge implying (surely falsely) that he would resist scaling back of the welfare state from the extraordinary size it has reached. Their council includes the Lib Dem MPs Julian Huppert, Adrian Sanders, John Pugh and Andrew George.

Last year the SLF published a paper with a foreward by Will Hutton claiming that free market capitalism was "dead" and that a "Plan C" was needed. They were quite clear that economic growth would not be achieved otherwise:

"Because it focussed narrowly on direct measures to reduce the deficit and did not attempt to address the underlying causes of weak growth in jobs and output. The precipitous falls in tax receipts during and since the recession will continue unless a stimulus that outweighs the austerity and the ‘automatic stabilisers’ such as increased welfare spending is forthcoming."

Only a "significant departure" from the spending cuts being undertaken would allow growth to return. This was due to "the effects of spending cuts themselves – including job losses, increased welfare spending and reduction of aggregate demand."

Another paper they produced declared that "competition as a driver for school improvement" was being pursued "through costly structural changes to schools in England." The paper said there was no evidence it would have "impact on overall pupil attainment...Yet competition can increase stakeholder anxiety, impact negatively on teacher morale and pit school against school."

As the ideologists continue there argument the disadvantage for the SLF crowd is that events are proving them wrong. The policies they opposed are ones that have produced achievements for the coalition government of which their party is a member of. The spirit of William Gladstone and Jo Grimond is being revived.