Call that a coalition?

The future of British politics and, even more, that of the Lib Dems, is unusually obscure at present, based as they are on a political arrangement that has no peacetime precedent since the development of the modern party system. Lloyd George’s post-First World War coalition was a prolongation of his wartime coalition, which already excluded much of the Liberal Party, and its only possible long-term role – as an anti-Labour front – was one the Tories thought they could play just as well if not better. The so-called National Government formed in 1931 was fraudulent from the moment of its foundation. Its basis was the Conservative Party, buttressed by a handful of former Labour leaders with nowhere else to go, and a fair slice of the Liberal Party. It had a negotiated programme of sorts at the start, but its policies soon became those of the Baldwinite Conservative Party, adjusted to suit the large number of ex-Liberal voters who supported it. That government collapsed in May 1940. Churchill’s wartime administration was a genuine coalition of virtually all the country’s political forces and after its break-up we had no coalitions until 2010.

British politicians from the dominant parties of the day have never been keen on coalitions. They dislike the negotiations required to set them up and believe them inimical to ‘strong’ government. Our electoral system is designed to minimise the need for them, and since 1945 even minority governments have been exceptional. Only one, James Callaghan’s, was based on an agreement with another party, and the collapse of the Lib-Lab Pact brought the end of his administration. The present government is unique in being a peacetime coalition of two complete parties based on a negotiated programme.

We still have no idea how it will end. Just as there are no conventions about how to set up a coalition in Britain, there are no conventions about how a general election should be arranged at the end of its term. Do the parties fight each other? Do they blame each other for such defects as the government acknowledges? Do they stand on different programmes? And, crucially, will there be an electoral pact? Had the Alternative Vote been approved things would have been easier. The Conservatives and Lib Dems, formally or informally, could have directed their second preference votes to each other. Now, unless the two parties agree to parcel out constituencies between them, the ‘government’ vote will be split. For the Lib Dems this could be a disaster. It is possible that in three years’ time the electorate will look more kindly on them than at present, but as things stand they will be lucky to win a seat.

This government was not founded on negotiations in which both sides made real sacrifices. For one thing, the two parties are of very unequal size. The negotiating weight of the Lib Dems is much lighter – it has only one-fifth of the coalition’s MPs – and it was always likely that they would have to make most of the sacrifices. In addition, their negotiators were unrepresentative of the party as a whole; more sympathetic to the Tories and readier to let them get their way. But the two parties had quite different conceptions of government. The Lib Dems were the party of PR, which almost always produces coalition or quasi-coalition governments set up after negotiations which assume the necessity of compromise and sacrifice. They came into the negotiations all too ready to make concessions. Clegg’s willingness to believe the best of the Tories, for instance, led him to accept the bargain by which the Tories secured the redistribution of parliamentary constituencies as part of the government’s programme, while the Lib Dems merely ‘won’ the right to put AV (not even PR) to a referendum. He evidently believed this represented a Tory compromise. It was anything but. Predictably, AV was lost and redistribution will do more harm to the Lib Dems than to anyone else. Like the Labour Party, the Conservatives are a majoritarian party: they believe in one-party government and programmatic purity, which is the reason they oppose electoral reform. They will accept compromise only if it is absolutely inescapable.

To make matters worse, the negotiations were absurdly rushed. Continental negotiations often seem interminable – in Belgium recently they lasted 541 days – but at least the resulting programme does not come as a surprise to the participants. The fact is that the bulk of the present government’s legislative programme, and certainly its most contentious elements, was never negotiated and wasn’t agreed by the Lib Dems until they were faced by it in Parliament. The NHS legislation was not part of the original programme and the Lib Dems should have killed it straightaway or, at the latest, when it was first returned to the Commons from the Lords. Even the feckless Cameron would have been unlikely to take a stand on a bill everyone recognised as hopeless. Yet Clegg waved the legislation through and it wasn’t until it went to the Lords that the Lib Dems seemed to realise exactly what they had allowed to go forward.

The willingness of the Lib Dems to accept an apparent fait accompli, like the NHS Bill or Michael Gove’s education ‘revolution’ or even the extent of the spending cuts, was the result not simply of parliamentary weakness or feeble leadership, but of the ambiguities of their own policy and rhetoric. For the last thirty years or so, the Lib Dems have presented themselves as the party of Europe, of electoral and institutional reform, and of localism or communitarianism. The first two are thoroughly defensible, if more distant than they ever have been. The third is much trickier; not in the sense that localism is impossible to achieve, but that as a slogan it is so easily hijacked. Eric Pickles’s local government legislation, an onslaught on the powers of local government if ever there was one, was presented as liberating it from Whitehall. Gove’s education policies, which could well wreck England’s education system, were justified as giving parents ‘choice’ and returning authority to school principals. They do no such thing. Parents have choice only when they agree with the secretary of state; otherwise they have none. The same is true of headteachers. All state schools are, or will be, Conservative Party schools. If there were any doubt about this, the fate of Downhills School in North London removes it. There, the parents who strongly opposed attempts to turn the school into an academy were described by Gove as ‘Trots’, the head resigned and the governors were sacked. The school has now been handed over by the government to a trust run by Lord Harris, the chairman of Carpetright and a Tory peer – its 14th school apparently. This disreputable episode excited not a tweet from the Lib Dems. Yet it points to what is, or should be, the central question of contemporary politics: the privatising of social authority, and thus power, in England. Having privatised the state’s assets, the government is now privatising its functions and responsibilities. The right to determine the relationship between schools and society (or employment services and society, or prisons and society) is being removed from elected institutions, gathered up by Whitehall and parcelled out to friends and supporters of the ruling party. It is a fundamental attack on democratic politics, and one carried out as much by New Labour as by the Tories. Hitherto, the Lib Dems played no part in this, but now, as with the NHS legislation, they have acquiesced in it – and without a squeak.

Have they made the coalition significantly, or even moderately, less Tory? The answer must be no. They could argue that this failure is the result of inadvertence or of their partner’s dishonesty, the effect of which has been to suppress the real differences between themselves and the Conservatives. Equally, it could be argued that the differences between the two parties have been exaggerated. That they differ over the NHS, in the sense that the Lib Dems would never have introduced the legislation, is obvious. (But then, neither would Cameron if he’d bothered to find out what was in Lansley’s bill.) Even more difficult to explain is Lib Dem agreement to the spending cuts. These are brutal, almost without precedent, and their effect is to harm disproportionately those whom the Lib Dems claim to represent. They are, above all, the policies of those social circles in which Cameron mixes (and with whom he rides). Their agreement to the cuts is unlikely to have been inadvertent, or conceded in a spirit of goodwill, or even a result of the logic of coalition government. During the election campaign it was clear that Clegg had decided that a coalition with the Tories was the way of the future, as were savage spending cuts; and that presumably was, and still is, also the position of Danny Alexander, Chris Huhne and Vince Cable. Certainly, the silence of the Lib Dem parliamentary party over the cuts, the refusal of any Lib Dem minister to resign in protest (not even Sarah Teather, who managed to absent herself from several votes over cuts to welfare benefits), suggests that the differences between the parties are slighter than both insist.

Most Lib Dem activists don’t think of themselves as slightly leftwing Tories; the party’s leaders don’t think of themselves that way either, at least not publicly. There is an institutional dynamic which keeps the party together as well as a feeling within the membership that there is a political space uninhabited by the other parties. Both leaders and members are aware that unless something is done to halt the general impression that the Lib Dems are Tory poodles the future is neither bright nor orange. That is why the budget was so important for them.

Its details were heavily leaked, not least by the Lib Dems, and they will insist they got what they wanted. Clegg had obviously made it clear to the troops that defence of the 50p top rate was pointless, while Simon Hughes let it be known that top rates of tax don’t matter anyway – though they clearly matter to those who are supposed to pay them. Is there much in the budget, therefore, they can claim as their own? Left to themselves, the Tories might not have introduced the increase in personal allowances at the bottom end, and probably not at the rate the budget specifies, but they can certainly live with it. In any case, the changes benefit middle-income groups more than low-income – something already well known.

The increases in the rate of stamp duty on ‘mansions’ and the proposed measures against tax avoidance have been touted by the Lib Dems as raising ‘five times’ the amount lost by reduction in the top rate. Believe that and you’ll believe anything. ‘Closing tax loopholes’ has been a favourite device of chancellors through the ages and it hardly ever works. If the Tories really thought it was going to raise so much from the rich they would never have agreed to it. Rates of taxation really do matter; closing loopholes really doesn’t. And plainly they are not ‘tycoon’ taxes. In principle, further taxing the housing market is very desirable – favoured even by the Treasury and (apparently) by Osborne. The way that market has been allowed to develop has done immense damage to the British economy. Were they really serious the Lib Dems might have proposed the addition of two or three more bands to council tax and a revaluation of house property in England. The Tories would have hated the second but might have swallowed the first. Fiddling around with stamp duty on very expensive houses is a poor substitute, as will soon become clear.

Some aspects of the budget were so puzzling that one wonders whether they were even discussed by the Big Four – Cameron, Osborne, Clegg and Alexander. Presumably the Lib Dems will not claim as their own the ‘simplification’ of personal allowances for pensioners. ‘Simplification’ is not in fact indefensible: the relatively well-off aged, unlike the young, have hitherto been overprotected by the coalition. It is the manner in which it was done. Did the Lib Dems (or anyone else) not foresee what the next day’s headlines would look like? Were the Big Four aware that the failure to align personal allowances to inflation would bring another 250,000 or so taxpayers into the 40p band? These are people the Lib Dems have always tried to embrace. The seemingly careless way the budget was constructed can only alienate them.

In the face of Cameron’s hostility to any further taxation of the circles in which he mixes, the Lib Dems have got a little. But in relation to previously announced cuts in spending of all sorts the budget is small beer. The real damage to lower income levels was done when the coalition took an axe to working tax credits and the budget only partially compensates people for this loss. For those on disability benefit (now ‘personal independence plans’), for example, the budget does nothing. And since it does little if anything to accelerate economic growth it also offers nothing to those who are now or will become unemployed. The budget has to be seen in relation to severe cuts in social expenditure – health, education, local government services. These lower the standard of living of those affected and therefore constitute regressive tax increases. In no serious way is this budget redistributive, or even fair: it is only a footnote (except, of course, for pensioners) to policies already in force and supported by the Lib Dems.

The difficulty for the Lib Dems, in part, lies in their view of the world. They have a sense of ‘fairness’ but little sense of ‘poverty’. Unlike the Tories, they are not indifferent to life at the bottom, or even near the bottom, but political exigency has made it a low priority for them. Even allowing for the comparative weakness of their position within the government, which is a genuine constraint, the role of the Lib Dems in the present parliament has not been heroic. They have been allowed very little by the Conservatives, except for presentational purposes, and they have fluffed important opportunities – often as a result of Clegg’s failed leadership. Where they now go is very difficult to say and they are no doubt as perplexed as anyone. The remaining three years could simply be death by a thousand cuts; their role ever more obviously to protect a very right-wing Conservative Party. That points to abandoning the coalition. From their point of view, however, the arguments for continuing it are strong. They could say it was in the ‘national interest’: that the Tories would be even worse without them (see Europe, human rights). They could say that they entered for the long haul and that to withdraw now would be feeble or irresponsible. There is also the anti-Labour argument. The present leadership of the Lib Dems seems genuinely to believe that Labour cannot be trusted with the economy whereas the Tories, under supervision, can. Clegg, for example, is clearly closer to the Conservatives than to Labour. Much depends on what happens to the economy in these next three years. If it recovers significantly and there is some money to spend, the Lib Dems can argue that they are better at spending than the Conservatives, and that the long haul was worth it after all. If it doesn’t, the Lib Dems have only one strategy left, which is to argue that they are the only people who can save the country from another Labour government or from a full-blooded Tory one. Or, at the next election they could simply become ‘government’ candidates.