The Conservative-Liberal Democrat Coalition in the United Kingdom: May 2010-February 2011

Bill Jones^*

Party outcomes

During Friday 7th May, the exhausted principal players in the election drama must have surveyed their respective positions with an admixture of feelings. All must have been disappointed, though Labour must have felt a complex combination of emotions. Since mid-2009 most Labour people, apart from the congenitally naive or optimistic, had expected the coming election to end in defeat. Pessimistic supporters feared a wipe-out, Labour perhaps destroyed for a generation. To return 258 seats was a substantial reassurance that the party was still in business.

The Conservatives, conversely, had long expected to cruise grandly into office, with a tidy or at least workable majority. To end up in a hung parliament therefore appeared a disaster to some, and a condemnation of the Cameron and Osborne campaign strategies to others. The decision to allow televised debates when well ahead in the polls was especially the object of derision by some disaffected Conservatives, most of whom tended to be of the more traditional variety who thought Cameron’s ‘Big Society’ theme had sounded impractical and impossible to sell on the doorstep.

But maybe it was the Liberal Democrats who were most keenly disappointed. After steady but unspectacular progress after 1992, the party had played very much a peripheral role in British politics, seeking hard to make an impact and leaning mostly towards support for Labour. Their expectations however had been electrified by the televised debates. From being a 20 per cent polling element in a ‘two and half party system’, they suddenly were an equal part of a three-way contest. Of course the voting system would not deliver them power unless they won over 40 per cent of the vote - almost unthinkable - but a 30 per cent plus share would have given them a slew of additional seats and a more powerful moral case to demand crucial voting reform. The end result however revealed that ‘Cleggmania’ had delivered virtually nothing: only one per cent more of the vote than in the 2005 election and several seats lost besides. It was ‘so unfair and undemocratic’ many party members must have raged. But the arithmetic of the election had created a number of intriguing possibilities.

Constitutional rules

In the event of a ‘hung’ parliament, where no party has an overall majority, the rules drawn up, based to some extent on the last time when this occurred – the election of February 1974 - lay down that the prime minister remains in office while he seeks to form a government which can command the House of Commons. In practice this means the PM tries to do a deal with another party which will facilitate a majority in the House. In 1974 Edward Heath, who, having polled more votes but was four seats short of Labour’s total of seats, tried to persuade Jeremy Thorpe’s Liberals to add their weight. Thorpe was interested but, when his party insisted on voting reform as a condition, Heath backed off and Wilson took over at the head of a minority administration. Gordon Brown, therefore, accused of ‘squatting’ in Number 10 by the Sun was in fact performing his proper role to the letter. But, as he pondered his quandary, the numbers did not look promising for Brown.

The Post-Election arithmetic

The figures ended up as: Conservatives 306; Labour 258; Liberal Democrats 57; Others 29 (Plaid Cymru - 3, SNP 6, Greens 1, DUP 8, Sinn Fein 5, SDLP 5, Alliance 1). This meant that, with no overall majority available to any party, several options offered themselves including: an agreement to form a pact not to vote down major bills, or full coalition. There was also the option of a minority administration in which the Conservatives, as the largest party, would seek to pass their major measures, while daring the other parties to precipitate a second election in which they might be punished by the voters for bringing down the government. This feat had been achieved by Harold Wilson in 1974 - his minority government had held on until the autumn when a second election delivered him a small majority of six.

Coalition options

Conservative-Liberal Democrat

This one was easily envisaged as both sets of MPs added up to a comfortable 363, easily able to survive all but the most massive backbench revolts. On the plus side Clegg and Cameron, both public school and Oxbridge, seemed to get on famously well personally; both believed in robust approaches to dealing with the deficit; and both shared antipathy to Labour’s record on human rights. Against it however was a formidable list of disadvantages: Lib Dem and Conservative activists, whilst they cooperated on some councils, were frequently at daggers drawn over bitterly-disputed local issues. Most of the former were naturally closer ideologically to Labour, and many Lib Dem MPs had been elected only through persuading Labour voters to vote for them in order to keep Conservatives out, not to put them in.

Moreover, Lib Dems feared a coalition might absorb their smaller party via a new realignment of centre-left and centre-right as had happened to the National Liberals in 1931 when they supported the Conservatives. In addition, the Conservatives were mostly opposed to the European Union while Lib Dems were essentially committed to it. But the crucial bone of party contention was reform of the voting system. Once again the ‘third party’ had done badly, garnering nearly a quarter of the votes yet less than 10 per cent of the seats. Lib Dems were desperate to achieve a more proportional system of voting while the Conservatives, aware that some 60 per cent of voters were left of centre, feared that such a system would lock them out of power possibly indefinitely.

Labour-Liberal Democrat

The realignment possibility described above made it very dangerous for Labour to sit back and watch it happen, with the chance that it might become permanent; especially as Blair and Ashdown had both wanted such a ‘progressive alliance’ in 1997 but had been vetoed by senior figures in Labour’s Cabinet. At the end of election night, thirteen years on, something similar was to happen: a number of Labour Cabinet ministers, like Mandelson, Hain and Johnson, were openly suggesting that a deal could be done on voting reform. The Lib Dems knew that Labour was more sympathetic but were wary of a number of factors. Clegg had declared that he did not think he could work with Labour as long as Brown was their leader. A number of Labour’s influential figures like Ed. Balls were not happy about voting reform (Brown, in addition, was believed to have been the main opponent back in 1997), and both parties disagreed on things like ID cards. But the biggest disadvantage lay in the arithmetic.

To assemble a majority, Labour would need to construct a ‘rainbow’ coalition comprising themselves, the Lib Dems, plus the nationalists and the Greens, to achieve anything like a very slim and probably unworkable majority. The DUP might have been persuaded but their natural allies lay in the blue not the red corner. Hard-headed realists on both sides doubted if such a coalition could be sustained for long. The Scottish National Party would be likely to demand a high price and any major reform of the voting system might have led to revolts in the Labour ranks. Finally, a referendum cobbled together by such an assorted collection of forces might have been perceived as opportunistic - ‘a coalition of the losers’- and voted down.

The End Game

The day after a desperately close fought election campaign must have left Nick Clegg exhausted. And he must have been hugely disappointed when viewing the wreckage of his hopes for a massive increase in seats which turned into a net loss of five. But, so baffling and confusing had the whole process been, that he suddenly found himself the much-courted centre of a bidding war. Gordon Brown, still prime minister in Downing St remember, announced that he would offer a referendum on the Alternative Vote (AV) system and seats in the Cabinet to Clegg’s party. He said that he was prepared to talk to the leaders of ‘all parties’ and provide civil-servant support for any negotiations.

Cameron countered by announcing a ‘big, open, comprehensive offer’ to the Liberal Democrats, recognising the differences but emphasising the common ground plus an ‘all-party inquiry into electoral reform’. Clegg had said before the election that, if he held the balance of power after it, he would talk to the party with the biggest mandate. Clearly the Conservatives were this party and negotiations ensued with William Hague as spokesman on the Conservatives side. The media interest was intense with 24-hour news channels receiving constant attention. Rumours abounded that the EU and voting reform were proving to be sticking points but Hague and other Tory voices spoke of great goodwill and a substantial meeting of minds.

The next day the right-wing press was aghast to hear that Clegg had been talking secretly to Labour on Sunday. This was followed by Brown’s final attempt to keep Cameron out of his home for the past three years: he announced his resignation as Labour leader, offering to step down after a period of five months once a new Labour leader had been elected by the party. It was rumoured that senior figures had urged Brown to stand down with dignity, having effectively lost the election. Clegg thereupon announced that he would enter into negotiations with Labour, while the country waited on tenterhooks. The day before the Observer had followed the likes of Polly Toynbee in Saturday’s Guardian in urging the negotiation of a ‘rainbow coalition’. ‘To seize this Historic Moment, the Lib Dems Must Turn to Labour’ cried the Sunday’s editorial, backed up by columnists Will Hutton and Nick Cohen.

Labour’s resolve soon broke down however, with both sides blaming the other of not really wanting to come together and an extraordinary series of attacks on the proposed deal by a number of senior Labour figures including John Reid, former Home Secretary, Lord Falconer, Andy Burnham, Diane Abbott and several others. Their objections ranged from an opposition to changing the voting system to a strong sense that a coalition of the losers would be unstable, undemocratic, short-lived and against the party’s long-term interests. Clegg and his colleagues fled to new discussions within the open arms of their first suitor.

Perhaps stung by the thought that Labour might still capture the prize, Cameron upped his offer on voting reform to a promise of a referendum on the AV system. Shortly afterwards a new coalition - a Conservative-Liberal Democrat government - was announced. Gordon Brown came out of 10 Downing St to resign with dignity and walked off with his wife and family to return to Scotland before beginning a new life, presumably not so focussed on politics. David Cameron followed Brown to the Palace to ‘kiss hands’ and become Britain’s 52nd prime minister. On Wednesday 12th May Cameron and Clegg appeared at a joint press conference in the garden of Number 10 Downing St, displaying an almost indecent degree of enthusiasm - on the verge of homo-erotic according to some journalists - for each other and for the new coalition.

Progress of the Coalition

By August the coalition’s position was not looking too bad.

One thing one can say about the Coalition: its PR was good, a tribute perhaps to the wiles of Cameron’s controversial press director, Andy Coulson. Anyway, the verdict of the Economist (14th August 2010) on the government's first 100 days could scarcely be improved upon. Indeed a reforming incoming administration in 1997 would have been delighted with such an accolade. It's obvious that the journal did not regard the enforced (then) imminent assault upon the city walls of Labour's public expenditure as an altogether unalloyed disaster. Under Gordon Brown the United Kingdom became the Napoleonic home of dirigisme. A chart in the Economist article showed spending by central government at 70% of all government spending as second only to New Zealand and above Germany (20%) and France (35%). It declared:

”Labour ran a deficit even during the boom years, and stuck to its expansive three-year spending plans after recession hit. Fiscal stimulus on top of this took the deficit to a record high of 11% of GDP in 2009-10; the IMF forecast in May that it would be the biggest this year among G20 economies. Whoever won the election would sooner or later have to slash the deficit”.

The Chancellor of the Exchequer, George Osborne, aims to pay off the deficit by 2014-15, less demanding than some EU countries like Ireland or Greece but a ‘big ask’ by any standards. But the journal praised the radical energy of both parties in their desire to shrink the state. 'Decentralisation has now found a home'. Education, the police and healthcare face major restructurings to make them more accountable to their local communities. Whilst aware of the dangers of precipitating the collapse of a fragile recovery, the Economist offered a warm round of applause:

“Yet with all these caveats, the new government’s vision of a looser state, and its determination to reform virtually all the public services at once, is boldly outlined. Add in the even more daring plan to cut the fiscal deficit, and Britain is in for a breathless and convulsive few years. Now and then, British elections are epochal, setting the tone for other countries, too. One such took place in 1945, when the modern welfare state got going. Another, in 1979, loosed Margaret Thatcher on a waiting world. By producing a ruling coalition that is as radical in redefining government as it is in cutting it, the election of 2010 may prove another turning point”.

Policy areas

Banking and Business:

The Lib Dems wanted to split retail from investment banks but the Tories were sceptical of this move. The result was a commission to examine the options. Banks are still not lending enough. Vince Cable, the Liberal Democrat Business Secretary, is willing to fully privatise the post office.

Deficit Reduction: Conservative plans dominated though the tax-free increases as proposed by the Lib Dems were accepted. Otherwise the latter have abandoned their earlier manifesto position of not cutting too deep too fast. Eradication of the ‘structural (as opposed to the ‘cyclical’) deficit’ in four years is something which the Lib Dems still feel nervous about. The Comprehensive Spending Review (CSR) of 20th October saw the proposals of Chief Secretary to the Treasury, the Lib Dem Danny Alexander, advocating wholesale spending reductions. The big risk is that such cuts will slow the economy and expert opinion is still strongly divided on this point. This risk attracted much criticism from various sources at home and abroad but Osborne refused to resile from his plan of severe cuts by 2014 -15. The June Budget, moreover, was criticised by the respected Institute for Fiscal Studies for being ‘regressive’ while the coalition claimed it was ‘fair’.

Political Reform: Deputy Prime Minister Clegg was placed in charge of this, the key measure being the referendum on AV scheduled, according to the promoting bill, for May 2011 together with provision for the equalisation of constituency boundary sizes (The Lib Dems are not happy about ‘mere’ AV but the Tories plan to campaign against it. Labour have expressed unease about it too). In addition there are proposed bills on fixed-term parliaments and an elected House of Lords (by the end of year) plus one or two other items. The AV referendum required enabling legislation in February 2011 but Labour peers mounted a desperate delaying campaign against it which won some concessions from the Coalition. Some pundits speculated that the referendum would end up as a vote on the popularity of the government itself, which in the early months of 2011, following the loss of the Oldham and Saddleworth by-election (which the Lib Dems should have won), did not look good. While the Conservatives’ rating hovered around three or four points behind Labour in the high thirties, Lib Dems were bumping along disastrously with scores in single figures.

Education: Michael Gove, the Education Secretary, made the running with his plans for more academies and for allowing groups to set up ‘free’ schools. However, in both cases, the number of serious take-ups has been very disappointing. The Lib Dems think along similar lines and both agree on ‘pupil premiums’, a scheme to give additional funds to schools taking on disadvantaged pupils so that they can be supported additionally. However, a conflict about university tuition fees has been narrowly averted, having caused major strains in the coalition and brought about public demonstrations with violent elements. The Lib Dems had made an election pledge to oppose an increase in fees but the Tories wanted them to rise much further. A report by Lord Browne, which had been commissioned by Labour, supported an average rise in tuition fees to £6000. Business Secretary Cable, a little shamefacedly, said he agreed with the main recommendations. The proposals which went through Parliament in December 2010 made some concession to Lib Dem concerns by extending loans to part-time students and raising the earnings threshold at which students must start repayments. This measure was the single most important reason for the party’s awful showing in the polls. Before the election, several of the party’s leading figures had made public pledges never to accept increases in tuition fees. Their volte face was ridiculed in the press and provoked furious demonstrations in London by angry students and lecturers.

Foreign Policy: The Lib Dems are less keen on the Afghanistan war than the Tories are but they manage to say that they are ‘critical supporters’ of it. Both support President Obama’s ‘surge’ and promise to withdraw troops by 2012. The Prime Minister also wants to withdraw troops by the time of the next election. Obama welcomed Cameron warmly when he visited in July 2010 so it seems as if both allies are agreed on pulling out troops by 2015. Either way, opinion in the UK is less than enthusiastic about a war which seems to have little relevance to national interests and keeps causing deaths to young British soldiers.

Defence: Trident replacement was a big issue with the Tories in favour, despite the £20bn cost, but the Lib Dems won the right for alternatives to be considered. Replacement will be delayed until the deficit has been removed, certainly until after the 2015 election. Service chiefs fought to minimise cuts and Liam Fox, the Defence Secretary, was openly not happy about the imminent defence review. Simon Jenkins, the influential columnist, had called for the total abandonment of the defence budget and dismissed it as ‘posturing’ (7th September 2010, Guardian).

Europe: The Lib Dems had launched biting attacks on the Tories before the election on their leaving the mainstream EU grouping in parliament for a right-wing one allegedly racist and homophobic. The Tory right was also acutely sensitive on this issue so it is potentially very divisive. The Tories abandoned any attempt to rewrite EU treaties - as their right-wing wishes - as part of the coalition agreement. Cameron has made it clear that he wishes to cooperate with his EU partners and, while this has pleased the Lib Dems and the EU partners, it has infuriated right-wingers.

Welfare: The earnings link has been restored for pensioners as the Lib Dems wanted but public sector pensions were closely scrutinised for savings and affordability. Universal benefits have already been eroded by withdrawal of child benefit for higher-rate taxpayers - a policy which has won public support but enraged Tory supporters. Iain Duncan Smith, the Secretary for Work and Pensions, plans to introduce a new credit system which will not penalise those on benefit who return to work, though there is scepticism about its practicability. The Lib Dems are keen to retain Labour’s ‘Sure-start’ provision for helping problem families bring up their children. Incapacity benefit, which ballooned under New Labour, is to be made accessible only via a more stringent medical test.

Home Affairs and Civil Liberties: The Lib Dems claimed in the autumn of 2010 that 14 of the policies in this section of the coalition agreement have been ‘actioned’. The Tories have won an annual immigration cap for non-EU workers though Business Secretary Cable has objected to this. ID cards are being scrapped to the delight of the Lib Dems. Ken Clarke, Justice Secretary, seems liberal on sentences and wants more, stiffer community ones and less shorter prison ones.

NHS: This policy has effectively been ‘surrendered’ by the Lib Dems to the Tories who have introduced a big reorganisation whereby commissioning of health services will be taken from primary health-care trusts and devolved to committees of GPs. Many doubt that GPs will be able to administer such a big task - spending £80bn buying medical services for their patients from hospitals - and expect that private companies might have to be called in. In January and February 2011 substantial opposition was voiced against the plan including the majority of the medical profession itself. Andrew Lansley, the Health Secretary, held the health portfolio for seven years in opposition but this has scarcely strengthened his credibility in the eyes of his critics. To launch such a huge top-down reorganisation to a much restructured institution at a time when it is being forced to save £20bn by 2015 seems to many to be an unlikely winning formula.

The 20th October Cuts Package

This eagerly-awaited and to some extent dreaded event lived up to expectations. Briefly, the cuts (to which should be added those announced earlier) are as follows:

Measures taken before 20th October

Taxation

October 2010 Spending cuts

Future prospects of Coalition

Liberal Democrats: Several commentators have predicted doom for the Lib Dems. Simon Jenkins is by no means a left-winger, despite his weekly Guardian slot, but he had nothing but woe to predict for Nick Clegg. He starts off, amusingly, by describing Clegg as being 'in love' with Cameron: ”You scurry early to the office, practising the phrase that will please him, the gesture he will notice. When you first see him in the corridor … you can't help it. The knees go. He is adorable. Unfortunately there is an angry family at home waiting to call you to account for your philandering behaviour”(17th November 2010).

Jenkins praises the coalition as a 'coup' by Cameron 'worthy of Walpole', inventing a majority via a party which would die in consequence. The key question is: “How can the Lib Dems fight the Tories at the next election when they will be defending a joint record?”

The question is rhetorical of course. Clegg will have to forestall this fear at his conference... but how? A merger of the two parties possibly looms and it is anticipated, lip-smackingly, by some Tories. Jenkins suggests that the coalition was a step too far. He should, he says, have agreed to stay independent and support what measures his party thought fit. By doing so he would have kept the party's integrity pure. Instead, he chose the big office, the car, the red boxes: the intoxication of power. He'd better enjoy it as it won't last for ever. As Jenkins grimly notes: “As leader of the Liberal Democrats, he has booked a ticket to oblivion”.

Jenkins is a little too hard on the Lib Dems maybe. In May 2010 the country faced an economic crisis, made worse by the euro crisis climaxing in Greece. The election was inconclusive but the chance to form a government lay with the Lib Dems. If they had shirked it, they would have lost credibility. They feared and argued that they had a duty to step up to the plate. Maybe they will pay a heavy price but, according to this view, they had no choice, even to commit ‘suicide’. At their Liverpool conference the Lib Dems seemed happy to be in government and they will have to lose much more support than they have lost so far for oblivion to beckon.

Tories: As for Cameron and the Conservatives, the future is perhaps a little less unsure. It is all dependent on two hugely important factors. First is public reaction to the Comprehensive Spending Review. There has been an odd kind of ‘phoney war’ since the emergency budget of 22nd June last but that ended after the 20th October announcement of the cuts package. In the autumn of 2010 polls showed the Conservatives standing at around 38%, Labour at 34% and the Lib Dems at anything from the low teens to a mere 10%. Given the shrill reaction within Tory ranks to the withdrawal of child benefit for upper-rate taxpayers, not to mention the big student demonstration against tuition fees complete with its dash of violence, the reaction to the cuts package could prove to be stunningly negative. Athens saw violent street demonstrations and such things might be mirrored on streets in the United Kingdom during 2011 though Ireland has survived more severe measures without, so far, such a the dislocation.

Second, it depends on the economy. So far the recovery is fragile and some authorities have reckoned the chance of renewed recession is high. Keynesian economists, like Nobel Laureate Paul Krugman, have wondered at UK’s cavalier reduction of demand through impending expenditure cuts. Labour suggested a less drastic route to cut the deficit at about half the rate favoured by George Osborne. If public opinion fastens onto the idea that the cuts of the present magnitude were not necessary (and might indeed be counter productive), the coalition could very soon be ‘toast’. The figure below shows UK debt in 2010 as substantial but not as large as that of some other countries. However, the battle to convince voters that the deficit is ‘Labour’s’ fault and that it is essential to reduce it quickly was won by the Conservatives at least during the early months of 2011. Labour’s new leader, Ed Miliband, faces an uphill struggle to reverse this impression - crucial to who will win the next election - but the replacement of the affable but ineffective Alan Johnson in January 2011 by the more aggressive Ed. Balls should make this attempt more possible.

Debt 2010

Cameron as Prime Minister

Even his mortal enemies would have to admit that Cameron has shaped up very well to the job of being Prime Minister. Clearly his Eton background - born to rule and all that - has stood him in excellent stead. But his success has not been without rumbles in his own party, unhappy that he muddied campaign waters with his vague ‘Big Society’ theme and worried that he seems too liberal and too pro his coalition partners:

The right’s grievances with David Cameron are not only about policy. They have long regarded the prime minister’s leadership style as aloof and cliquey, and have neither forgotten nor forgiven his failure to win a general election which they believed was eminently winnable. He aggravated this anger by retaining almost all the advisers responsible for the election campaign while asking some Tory front-benchers to make way for Lib Dems in the Cabinet. (Economist 9th October 2010).

At the party conference Cameron was keen to invoke a national, almost wartime, spirit, reminiscent of the last time when there was a coalition. The attempt is to place Cameron above party as a national figure. But over-personalizing has its dangers if the key person loses popularity - remember Blair- so Tories must be careful. His judgment was called into question quite severely when his chief spin doctor, Andy Coulson, was forced to resign in January 2011 as questions of his involvement in a recent phone- hacking scandal refused to go away.

One final point needs to be made about the Conservative-led coalition: its tone is nothing like that of earlier Tory governments. There is no hectoring shrillness, and, more significantly, no plonking, patronising upper middle-class voices, characterised, memorably by Simon Head as ‘the sneer of cold command’ (Guardian, 2nd October 2010).