TOUGH ARGUMENTS OF OUR TIME: WHY I STILL THINK NICK'S THE RIGHT LEADER

My thoughts on the thorny issue of the leadership are fairly simple.  I still think Nick's doing okay and should continue to be supported.  Before they come for me, here's why.

Nick should still be leader of the Lib Dems in 2015 and the increasing calls for him to resign just miss the point entirely.  Seriously, if Lembit says something you've got to be reassured if you disagree.  The phrase 'lost the plot' just doesn't do his present state of mind justice.  However, others with greater control of their faculties have said this, so it needs to be considered.

Nick should be supported because he gets it.  The Tories are working with us but it is rather like sharing a pit with a python.  You might help each other to get out but never take your eyes off it.  They will attack us as soon as they think the time is right and it seems to me that Nick recognises this.  He appears to know that this is a long game and he is playing it cool.

Come 2015, those vipers (I know, different snake) will strike and we need to react and hit them back hard.  If we can show that we tamed them for 5 years and did the good stuff like cutting taxes we might just do well.  If.

What could a Tim Farron or Simon Hughes bring to the party beyond further antagonising the Tory right.  Great guys both but not right for the job at the moment.  And any calls for the Blessed Vince to step up to the plate are likely to fall on deaf ears as Vince is clearly unhappy in the coalition and he just doesn't seem to want the leader's job.

All those calling for Nick's head need to answer two simple questions: who would replace him and where would they take us?

I've been on the doorsteps in the past few weeks and I've had the arguments.  The strange thing was that most people were willing to listen. They may not agree but I got a good impression that we can still connect.  We won two seats here and we held and achieved good results in many areas around the south.  That is small comfort for other areas but it shows that our arguments still work.

We should not ditch the pilot before we are sure he's the problem and that there is a replacement pilot eating peanuts in business class.  At the moment I'm not sure there is.

HERE COME THE LIB DEMS - FINALLY

It's starting to get a whole lot more encouraging in London - or more precisely, Tottenham. Having endured around 14 months of Hell at the hands of the grubby media, this could be the moment Nick Clegg begins his rehabilitation as he steps into the limelight and confirms his role as the Minister for Doing the Right Thing.

His support for Vince and their joint call for banking reform to happen now, not when Dave and George's chums in the City want it, is what we fought the last election for and what the prophetic Vince has been demanding for an embarrassing (for the other parties) number of years. Nick's firm backing for Vince is what we want to hear and he needs to square up to Dave and make sure the Tory leader doesn't weasel out of this. Any compromise on this fundamental issue should be met by loud Lib Dem condemnation. Banking reform is solid gold, not blue...

His return to Tottenham yesterday to reaffirm the government's commitment to helping the area after the looting is also good, a clear sign that the Lib Dems don't just move on to the next story. Nick's visit appears to have been welcomed by people in Tottenham and even by the local Labour MP.

Nick has done more for his reputation in this one day than in the past 14 months of coalition government. I called yesterday's brief comment 'reasons to be cheerful' and for one of the few times since we went into coalition with the Tories, I am smiling. As I've said before, I don't envy our Lib Dem MPs their job of working with the Tories but I do admire them for it.

Lots of people - usually on the left- have bleated about the Lib Dems in coalition, some asking what the Lib Dems are for and praying for some kind of revival of their fortunes as we decline. Well, it has been a difficult time for us but the answer to that existential question is here. This is what the Lib Dems are for: doing stuff, delivering on our promises, keeping the Tories in check, reforming the banks, sorting out the mess left by Labour.

In three years' time we can go to voters and show them that we have actually done stuff in government. I'm no expert but I reckon people will quite like that.

REASONS TO BE CHEERFUL

The Independent headline today is 'Osborne and Cable at war over bank reform'. Why does this make me smile broadly before I have read a single word of the article?

ALL WATCHED OVER BY MACHINES OF LOVING GRACE

The BBC2 documentary 'All watched over by loving grace' chilled the blood with its description of the clear link between a 1940s philosophy of individualism and US economic policy in the 1990s and 2000s, as directed by Alan Greenspan.

I'm not one for conspiracy theories but the writer's description of this link, as well as the connection between the Asian economic boom and bust in the 1990s and the 2008 bust in the 'West' was quite surprising. I'll reserve judgement as I plough through the rather weighty book I am reading on the great Keynes and I want to revisit Vince's masterly description of the 2008 crisis but the programme was certainly food for thought.

This is why the BBC is pre-eminent in the world, without equal. I wonder if such a programme would have been produced by, say, a satellite broadcaster reliant on consumerism.

Food for the brain.

WHY NOT SACK THE CHAIRMAN OF RBS

Given that we own 83% of RBS, can the government not simply sack the Chairman when he starts bleating about paying full UK tax on his absurdly huge bonuses and threatening to move to Shanghai?

He won't, most of his overpaid colleagues won't and most of the banks won't move out of London, which remains one of the most attractive trading environments in the world.

So George, Vince, whichever of you packed the big stick, wield it, why don't you, and hear the joyous cries of approval ringing across the UK.

CAPITALISM? FINE BUT LET'S SECURE THE REINS BEFORE WE LET IT GALLOP OFF

What an absurd comment from the Director General of the CBI, who said of Vince's criticism of corporate behaviour that he looked forward to hearing Vince's proposals for an alternative to capitalism.

Well, listen up, Mr Lambert, (he always reads my blog, natch...) because capitalism has always been moderated by a healthy dose of common sense ever since companies started riding roughshod over the interests of individuals and communities. Indeed, that is the mark of a civilised society developed over centuries and while few of us would question the value of free markets, equally few of us outside a Mercedes or a hideous mock-Georgian pile in Surrey would demur from the obvious notion that some degree of moderation is needed in any system.

Capitalism is great but so is civilisation and a fair society, equality, international law and the right to privacy - so viciously attacked in this country almost daily by the champions of capitalism in the press. It rather puts you in mind of the old saw about democracy - that it is the worst system of government, apart from all the others.

Grow up and get a sense of historical perspective. Robert Peston has.

'GOVERNMENT UNPOPULAR' SHOCK - A NATION YAWNS

According to the newspapers the LDs' poll rating is slipping as more people say they do not know what we stand for any more. Well, if you've been an activist for a few years you'll know that this is a standard refrain and its not really anything to worry about.

Well, we're part of a government which is making bigger cuts to the public sector that any since the 1930s. We're in bed with our one time mortal enemies (some of us are still keeping a revolver under the pillow...) and we seem to be jettisoning our principles. Its therefore hardly surprising that we're not exactly racing in the polls.

There is no question that the coalition has been a shock for our traditional supporters - including me - but there is also no doubt that by signing up to this agreement the Lib Dems are actually achieving stuff, like a referendum on voting reform, which we have been going on about for decades. We have a commitment to fixed term parliaments, a promised reform of party funding, a commitment to reduce the number of MPs in Parliament and a long delayed - by Labour - reform of the House of Lords. We campaigned on all these issues at the election and they are now being introduced. Tell me, where's the beef?

We have got the tax threshold raised, as we promised at the election. We have a commitment to restore the link between pensions and earnings, which the Labour Party failed to do for 13 years. We have a commitment to greater freedoms for teachers and health workers to do their jobs, fair compensation for Equitable Life pensioners.

We have Vince Cable as Business Secretary, Chris Huhne as Energy Secretary, Norman Baker responsible for Transport. People who know what they are doing - LD people - are in the right jobs. We must give them time to effect real change.

The 'but' is that they are part of a coalition, which requires compromise. I don't suppose that Chris Huhne ever imagined that he would be declaring his support for nuclear power in Parliament but he is a pragmatist and he knows that if he wants to deliver LD changes to our energy policy he must compromise. That's the real world of politics which we must get used to.

The key for us is that in five years' time, assuming that the date for the next election is honoured, we will be able to enter an election telling voters that Lib Dems have been in government, we have demonstrated our ability to work with other parties, we have demonstrated that we can actually get things done and that for the first time in almost a century a Lib Dem vote can be clearly, unequivocally demonstrated to be anything but a wasted vote.

Courage, mes braves. Its a long road, a rocky one but the destination might just be worth it.

HELP, I SUPPORT THE GOVERNMENT!

I have a huge problem with the coalition government. My problem is that, notwithstanding some of the measures in the budget, like the dodging of a meaningful capital gains tax increase, I find myself agreeing wholeheartedly with much of what is being done. This is a difficult position to be in when I want to maintain my independence and critical faculties.

When a British government owns up to the fact that prison doesn't work you have to cheer. It is easy for the nay-sayers to climb onto their tired bandwagon and mention the need to incarcerate rapists and murderers while ignoring the fact that the overwhelming majority of people in prison are there for petty crimes - unpleasant for the victims and annoying for society but not necessarily meriting imprisonment at huge cost, both financially and in terms of their lives and the lives of relatives and children. Alternatives can be considered for some people - not everyone - and it is quite shocking to have heard this honest assessment from a Conservative government minister. When Michael Howard opposes it, you know in your heart it must be the right thing to do.

As a reminder of how much of a shift this is for the Tories, the ridiculous Ann Widdecombe was on the radio this morning arguing the very point that restorative justice, which has had demonstrable, measurable results in Scotland and Northern Ireland, will not work in every situation. Well, what a stunning revelation that is and what a pleasure it is to remember that Widdecombe is no longer an MP.

When a Liberal Democrat minister, the exalted Vince Cable, announces a policy for a graduate tax to head off calls from a tiny number of rich universities who want to manage entrance to their hallowed halls through a crude financial mechanism of higher fees, instead favouring a system which will ensure that people from all backgrounds can study if they are up to it, you have to cheer. The fact that this proposal was welcomed by the notoriously left-wing NUS offers a pause for reflection about whether this is the right way to go but fundamentally this is a Liberal Democrat proposing to ensure that people can have a decent, affordable education. Cable has also been honest enough to accept that not everyone will be able to go to university and that some universities might close. Labour screech like banshees on the sidelines but they cannot avoid the simple truth that Cable is being honest, acknowledging that this is not where the LDs wanted to be but we live in the real world of coalition compromise. How deliciously refreshing.

When another Tory minister proposed abolishing tiers of NHS bureaucracy and putting control of the NHS into the hands of the people who work in it, I almost fell off my chair. This policy is entirely validated when the likes of the execrable Ed Balls and the ineffectual Harriet Harman rail against it. The policy announced of GP commissioning is radical, it will have problems - let's be honest, it might not work - but it is at least an attempt to address the rising costs and bloated bureaucracy of the NHS while trying to maintain standards and, to repeat, giving more control over the service to the people who work in it. I fought the election on that principle and it is wonderful to see it being applied. This particular path will not enjoy a smooth progress but it is at least a step in the right direction, in the humble opinion of this blogger.

Finally, it is delightful to see Nick Clegg speaking passionately about liberal principles and how he wants to see the country change fundamentally and become more liberal in the hoped for five years of the coalition. That's been one of my key problems with our party for years: we don't shout from the rooftops about how we want to change society. What is nice about this government is that we are, here and now. What's not to like?

Well, George Osborne, obviously but him aside things do seem to be going very nicely. That said, a moment's reflection reassures you that even having Osborne in Number 11 Downing Street is 'A Good Thing'. The Tories have tried desperately to deflect blame for the budget on to the Lib Dems but in the end Chancellor Osborne has stood out from the crowd as the sallow, inexperienced man at the heart of the really bad decisions which Lib Dems have gone along with as payment for some of the things we want, like the raised tax threshold.

So here's to the good times - while they last. We have Tories displaying principles most of them were unaware they had, Lib Dems in government doing stuff, rather than talking about it and Labour in total disarray with no prospect of a revival any time soon, given their choice of leadership candidates.

VINCE CABLE ON BANKS

A survey by the Institute of Directors has shown that nearly 60% of businesses seeking bank finance in 2009/10 were rejected by their bank, and that 20% are financing their businesses to some extent with credit cards.

Liberal Democrat Shadow Chancellor, Vince Cable said: “There is a huge gap between what the banks tell us and the experience of companies on the ground. This evidence confirms that large numbers of small and medium sized businesses are still having difficulty in getting credit on reasonable terms. The nationalised and semi nationalised banks owe their existence to us, the taxpayer and they must make good on their commitments to increase lending at reasonable rates. Instead of paying themselves large bonuses, the money should instead be used to strengthen balance sheets and to provide commercial lending to sound and solvent British companies who have a vital role to play in our economic recovery.”

Vince saw the credit crunch coming, he saw the need to nationalise some banks which were on the verge of collapse to save the British finance system and he also saw through Gordon Brown early on. He's got an impeccable record and he'd make an ideal Chancellor. If the global economy works on confidence, who could possible be better to manage the country's economy?