Former Leader of the Liberal Democrats and Secretary of State (2010-2015)
Daniel Howell
Author, entertainer and comedian
Your book is called How to be a Politician. Isn’t the real question, why be a politician?
I start with Billy Connolly’s quote, “The desire to be a politician should bar you for life from ever becoming one.” And those surveys IPSOS did in 23 countries showing that, for trustworthiness, politicians came bottom everywhere. I guess it comes from the nature of democratic politics. To get elected, you have to raise hopes, make promises, and in office you have to deliver. Which invariably means disillusioning people. I always make a distinction here between priests and plumbers. Priests are the ones with soaring oratory, like Barack Obama. At the bottom is Jeremy Corbyn. But the plumbers unblock decision-making problems. Their patron saint would be Lyndon Baines Johnson: a thoroughly unpleasant individual with no taste for oratory who got vast amounts of stuff done. Similarly, Michael Gove isn’t everybody’s favourite, but as a minister he delivered and was concerned with the practicalities of policy.
What advice would you give an aspiring politician?
First, that a high percentage of political careers are determined by luck. If you’re a politician in the right place, in the right party, on the right day, you can break through. Second, if you’re serious, you need stamina and persistence. It took me 30 years and I got in at the fifth attempt. Third, the relationships: having people with you who’ll stick by you through thick and thin. I’ve been married to two wonderful women. My late first wife, Olympia Rebelo, kept me going during the bleak years. And I recently brought out a book with my second wife, Rachel Smith: Partnership and Politics in a Divided Decade (The Real Press).
What’s your proudest achievement from your time in the coalition government?
Establishing the British Business Bank, which kept funding businesses during the pandemic. And the Catapults, innovation centres that have done pioneering work in fusing advanced technologies into medium and small-scale companies. Then there’s the relaunch of apprenticeships. I also helped scupper the takeover of AstraZeneca. But some things are unplanned. I often cite a letter I received from Stefan Smith, a human rights lawyer who explained that British companies had a world monopoly on the poison used in executions in America. By exercising that power, some states stopped killing people and it stirred up the whole capital punishment debate in America.
You were the oldest leader of a political party in the UK since Churchill. Do you empathise with Joe Biden?
Yes, I do. I mean, he’s clearly not too old for office. He seems the most likely Democratic candidate for running again in two years’ time.
Which living economists do you read or admire?
The ones I really admire are dead, particularly Adam Smith. On the one hand you have his set of economic laws and principles in The Wealth of Nations, and on the other hand, his earlier The Theory of Moral Sentiment underpins it, showing how ethics and philosophy can’t be separated from economics. I do admire Amartya Sen, the great Indian Nobel Prize winner. And I’m interested in the new generation who integrate economics, politics and behavioural psychology.
How would you rate Liz Truss as PM on current evidence?
She got off to a terrible start, but I wouldn’t underestimate her. She’s very well organised, unlike her predecessor. She seems reckless, but she may get lucky, and has the qualities to take advantage. I was in government with her for several years and take comfort that even on the big strategic decisions she’s capable of doing U-turns. As a teenager she was a hard-left Labour activist, then she was a Lib Dem, then a Cameroon, and then she was a Boris Johnson whatever-they-are. I can see her flipping if things don’t work out.
If we’re going to get sustainable public finances, there needs to be an increase in general taxation. No political party wants to say that, but it’s the ugly truth for the next year or so
As an economist, what do you make of Kwasi Kwarteng’s mini budget?
I wrote a slightly provocative blog on it asking: “Is sterling now a toilet-paper currency?” One problem is the incoherence of having one foot on the accelerator, the other on the brake. Then there’s the lack of transparency: an unwillingness to test the policy against the Office of Budget Responsibility. A third point I’d make is that the independence of the Bank of England can no longer be taken for granted. Apparently, Kwarteng has twice-weekly meetings with its governor. What on earth are they talking about? It can only be to pressurise. Finally, you can’t just generate growth by pushing a button and cutting taxes. It’s primarily driven by business investments and overall productivity, which are necessarily long-term. As a country we must have higher levels of tax. We’ve been living in this fantasy world for years: that we can have American levels of tax and European levels of social spending. You just can’t.
You wrote The Storm to explain the factors that shaped the world economic crisis in 2007/8. Do you see any parallels now?
Well, no, the financial system is much more secure. But more worrying than Kwarteng’s budget are the things the government’s been promising about improving the “competitiveness of the city”. Such an innocuous, nice-sounding, policy. But actually it’s about reducing some of the measures George Osborne and I introduced in response to the financial crisis. I’d be very surprised if they don’t take an axe to measures like the ring-fencing of banks, which are crucial to the stability of the system. The real reason they’ve done it is to give a bung to the guys in the city. Which, at a time of hardship, shows tin-ear sensitivity. There were two insights I offered in The Storm which I think stand the test of time. Firstly, you have to look to economic history. Financial crises are not unique events, they come when governments, regulators, drop their guard. We must not abandon the measures that are introduced after a financial crisis to secure the system. Secondly, if you have a crisis that leads to recession, the result – after a lag of several years – is extreme political populism. I read about some of the financial crises in the eighteenth and nineteenth centuries, and after the Southsea Bubble there were populist riots in London. A lot of today’s politics can be traced back to the impact the 2007 financial crisis had on real incomes.
Do you think we could see civil disruption in this country?
The government are being very reckless. Fixing the average price [of energy] was basic common sense. But they’ve not done anything on universal credit and the kind of things that are desperately important for people at the bottom of the scale.
Any economic forecasts for the year ahead?
If we get through the winter, with all the uncertainties we can’t predict, such as the Ukraine war, what’s looming is a situation where you get rising levels of government debt coupled with public spending that can’t be reduced any further without causing enormous damage. The health service is struggling, schools have suffered cuts over years, local governments have been hollowed out. So the logical conclusion is that if we’re going to get sustainable public finances, there needs to be an increase in general taxation. No political party wants to say that, but it’s the ugly truth for the next year or so.
How do you expect the next election to pan out?
As of now, the most likely outcome is Labour as the largest party, but without an overall majority. That’s where smaller parties like the Lib Dems come into play. It’s possible that we could be in a 1992 situation [Conservative government], although I don’t see Ms Truss being like John Major. I can’t see how 1997 [when New Labour took power] could happen because of Scotland. As long as Scotland is under the SNP, there’s no way we’ll get an overall Labour majority.
How would you define success for the Liberal Democrats?
I think Ed [Davey] has set out a realistic agenda in terms of seats, which is the key issue. If we get up to 30, we will be doing very well.
Do you think Proportional Representation is a realistic outcome?
I hope so. The Labour party has agreed in principle to support it, but is huffy. The problem – as we discovered in 1997 – is if they win big, they don’t need it and they tend to forget that eventually the Tories will get back in power for another fifteen years. Starmer isn’t prioritising it. Understandably, he doesn’t want to give the impression that he’s more concerned about political manoeuvring than people’s cost of living crisis. But any tacit support from the Lib Dems must be based on having PR front and centre.
If you had to choose a non-Lib Dem talent cabinet, who would you include?
I had a lot of admiration for some of the Tories I used to work with: Michael Heseltine was one of the big influences behind the industrial strategy. I’d like Ken Clarke. Then there are the people who somehow got lost with Change UK and joining the Lib Dems: the Heidi Allens of this world. On Labour’s side, there are some very good people. I like Rachel Reeves and her deputy Pat McFadden, they’re very competent. Joshua Reynolds, the business guy. Of the current Tories: David Gauke and Rory Stewart.
How would you reform the House of Lords?
I’d get rid of it. I’d propose an elected body appointed on a non-political basis, based on expertise and their ability to scrutinise legislation. The present situation is utterly intolerable, with people buying peerages. It’s crude political patronage.
You’re vice president of the European movement – is there any path back to the EU?
Yes, but it involves having a long-term horizon. The big question is whether there’s a path back to being involved in key European structures like the single market. The problem is we’re on a burning platform because, as we speak, the Rees-Moggs of this world are tearing up institutional ties with the European Union, regulatory arrangements that had a European origin, making it more and more difficult to return.
You’re a former chief economist for Shell. What did you learn?
Far more then than in my previous jobs in academia and government and think tanks, because I was in the planning department and we did scenario planning for the world. I did a lot of work on China and India and Russia, also Nigeria. It meant keeping an open mind about the world and not being carried away by trends. I think that method stayed with me. I wrote a book called The Chinese Conundrum because I refuse to be drawn into the “are you for or against China” bunfight. Just set out some probable futures and relate to them in a sensible way. Oil companies are not popular in the environmental movement, but when I was with Shell in the early ’90s, they were already thinking about global warming and what it means for an energy company. You could criticise them for not following through, partly because politicians weren’t interested until very recently. But I do bridle a bit when I see: “We can solve all our fiscal problems by imposing windfall taxes on Shell.” First of all, most of their profits are not earned in Britain. Secondly, they have become a big renewable energy company; the biggest wind farm in the North Sea is Shell-owned.
What is your view of the Commonwealth?
I worked for Sonny Ramphal in the days when the Commonwealth was a serious political forum because of apartheid and I went to about four CHOGMs. It was a great privilege. I saw Indira Gandhi, Kenneth Kaunda, Bob Hawke and all these people in full flow. Great characters of post-colonial history. But I think some Brexiteers are making a big mistake in assuming that the Commonwealth can be mobilised as some economic block, which is absolute nonsense. It works as a networking organisation that’s non-confrontational and gives a voice to small states.
Do you think the Commonwealth will shrink?
It’s getting bigger. There are countries joining with no connection to Britain at all. Like Toga, Rwanda, Cameroon. The Commonwealth is always bottom of the list of government foreign office pronouncements, but to the late Queen it mattered, and it played an important role in making the transition from empire, and in Britain becoming a multi-racial society.
Your father worked for Rowntree, your mother for Terry’s. What’s your favourite chocolate snack?
Well, I still enjoy a KitKat. But the history of the York factories is very sad. Terry’s, where my mother worked on the production line when I was very young, closed in 2005. The company’s now owned by Kraft and their products made in Strasbourg. Rowntree is owned by Nestlé. All that Quaker, caring capitalism has been quietly forgotten.
What was it like dancing on Strictly?
It was a wonderful experience. I was in the Cabinet at the time and my colleagues were green with envy. George Osborne admitted as much. But it was traumatic in other ways because of a drama that broke during the rehearsals, when somebody had a hidden microphone in a conversation where I was being rather damning about Rupert Murdoch. At that time, I was making a decision about whether to refer Murdoch’s bid for Sky to the competition regulator. When I meet people now they only vaguely remember that I was a cabinet minister, but do remember Strictly. And I was only on one show. I got a ten from Len which is top of my life’s achievements. And from Craig as well.
What would your last dance be?
I’m doing a competition in a hall in Basildon in two weeks’ time, so I’m working on a foxtrot and a jive.
Who has had the most influence on you?
I think my father did, but not in a conventional way. He was a very right-wing conservative. And racist actually – pathologically opposed to my first marriage. A great supporter of empire and all those things. But he also had very fine qualities and was phenomenally hard-working, ambitious, and he translated those qualities for me. I suppose I learnt how to debate by arguing with him as a teenager. So I owe him a lot, even though our values massively diverged.
Does anything keep you awake at night?
Not now, no. I’m contented with my lot. But when I was in office, getting to sleep was very difficult. I always had a thriller on the go to read before bedtime: Robert Harris, Le Carré, that sort of genre. And Scandi Noir. After half an hour of that, you’re getting into somebody else’s mind and it takes you away from worrying about what somebody’s going to say in parliament.
Which political quote do you repeat the most?
It’s a variation on something Disraeli once said: “It’s better to keep your mouth shut and be thought stupid, than to open it and confirm it”.
What would you like as your epitaph?
I worked for John Smith and went to see his grave in Iona. It has this quotation from Alexander Pope, that “an honest man’s the noblest work of God”.
