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Saturday, 8 May 2010

Brave new world

These are strange, exciting political times. For the first time since 1974, the UK is in the highly unusual position of having to grapple with a hung parliament. Election night was a strange one. The initial exit poll seemed highly unusual, forecasting a low vote for the Liberal Democrats but unsurprisingly forecasting a hung parliament with the Conservatives as the largest party.

It turned out to be right. The Tories fell well short of an overall majority as the largest party, and now the horsetrading begins. Nick Clegg rightly made an early statement giving Cameron the first right to seek to form a government. In the circumstances, he could not have done much else. But what are the main considerations now for Clegg and the Liberal Democrats?

1. Coalition with Brown out of the question. This is the one absolute known unknown. There is no way that Clegg will prop up Brown. It would be electoral suicide and would quickly be labelled as a "coalition of losers". The coalition would also come under instant and vehement opposition from the press. Brown and Clegg do not get on - arguably worse than Cameron and Brown. It would also empower a Conservative Party that, despite all Labour's difficulties, failed to convince the British electorate on May 6th. I suspect, also, that Labour will not want a deal either. They will want quickly now to move on from the Brown era and install a new and more popular leader.

2. Not enough common ground with Cameron? Clegg and other senior Lib Dems will have war-gamed the outcomes from a hung parliament, and an offer from Cameron will clearly have been the key rehearsal. They may have been surprised by how far Cameron went yesterday. But the reality is there are very real differences between the Lib Dems and the Tories; and the important thing for a coalition government is where they do not agree. They do not agree on Europe and Clegg could not support a deal which sees a European Sovereignty Bill go through. Nor could they credibly shift their position on immigration or Trident. There are also differences, but not quite as severe, on aspects of taxation policy for example on the Tory married couples allowance. The differences are such that there must be significant compromises on both sides.

Neither is likely to do that; Cameron making the point that he deserves the right to implement the majority of his programme, whilst allowing some Lib Dem policies to be implemented. Clegg, too, can hardly turn round to all those who voted Lib Dem on May 6th and say that Trident or voting reform no longer matter. Both risk considerably disenfranchising their voters by suddenly crossing out parts of their manifesto. Instead, they need to judge what are the central aspects that they can give up without losing their grass-roots support. Europe, voting reform and immigration are not in that category.

3. A high price on voting reform? Clegg will be under huge pressure to deliver voting reform. A totemic issue for the Lib Dems, it is also seen as the central demand if there is ever a need for another party to enter a coalition with the Lib Dems. This is the dream situation for all those demanding electoral reform. But the Tories will not offer anything meaningful - yesterday's opening gambit was too low and will not satisfy anyone in the Lib Dems, least of all Clegg. But the Lib Dems need to be careful. Voting reform is not the key issue for the public. There is a real risk that they may risk appearing to be slavishly pursuing narrow party interest and ignoring the overwhelming demand to form a coalition in the national interest to tackle the more urgent problem of the economy.

In all his demands on voting reform, Clegg must remember that it is by no means clear whether a referendum would be won. And there is a real offer of power here on the table. If one of the key arguments in favour of PR is that it delivers coalition government; it may seem ridiculous to turn it down to secure that very outcome via a more circuitous, and by no means guaranteed, route.

4. Cabinet seats and a stake in government? It seems that these are not off the table. They offer the chance for real power and must be considered seriously. It does carry significant risk, though. The risk is that the Lib Dems would share a stake in the difficult decisions that the Conservatives now face. Being in government right now is probably a time when most would be pretty sanguine about their chances of being able to take popular decisions. The Tories need the Lib Dems - that's clear - but they will secretly be attracted to the possibility of sharing the blame and the difficult decisions with another party. The Lib Dems must balance the chance to implement some of their policies and to raise their credibility after being seen to be in government, with the reality of unpopularity that comes with power. But to turn down power may make many wonder what on earth the Lib Dems are for if, when given the chance, they decide not to go for it.

They may judge that it's time for the Lib Dems to grow up and start to build the house, rather than throwing rocks at it. Clegg's victory statement, three years ago, suggests to me that he agrees with that proposition for the Lib Dems to modernise and be more constructive.

5. The future of Labour and the Parliament. Clegg cannot just consider the here and now. He also needs to think about the shape of this Parliament. Labour, once rid of Brown, will quickly regroup. They will elect a presentable and much more popular leader in David Miliband. They will have a competent-looking Shadow Cabinet, packed with former Ministers whose reputations are broadly intact. And there is a very real chance, coalition or not, of a second election in the near future. There is a real risk not only that the Lib Dems could be tainted by governing with the Tories, but also that a rejuvenated Labour party finds itself able to present itself as the "clean centre Left" at an election that could be within two years.

My hunch, then, is that the Liberal Democrats will not enter into a coalition with the Conservatives. More likely is that the Lib Dems will agree to support the Conservatives on the most pressing issues, the economy, but that their support on other issues will be reserved. Expect a Clegg statement something like this:

"General Election result means that no party convinced enough of the electorate to give it a majority in the House of Commons. We are in a state of flux. But we cannot afford to be in a state of flux. The severity of the economic crisis that we face means that we must take brave decisions. The central issue of the election, and of the moment, is that we must come together to tackle the deficit. The Liberal Democrats will support the Conservatives to in a national economic council to tackle those challenges. We must have stable government that reassures the markets and the world that Britain will come through this crisis. But elsewhere there are real differences that remain. On Europe, immigration and political reform. We made a commitment to every Liberal Democrat voter that we would fight in the next Parliament on those issues. We cannot simply walk away from those promises. So we will continue to argue for what we believe in on the issues where we think differently to the Conservatives and the Labour Party. "

This, of course, depends on what Cameron offers Clegg on voting reform. He may surprise us once again and map out a course with Clegg to a referendum, where Tories campaign against and the Lib Dems campaign in favour. The Tories will know that the whole deal hinges on this. They will also know that they may be likely to win a referendum voting for no change to the voting system. For them, too, swallowing their pride on electoral reform may be worth doing in order to get a secure and stable coalition government.

But voting reform is where it hinges. Cameron's willingness to give significant ground will define this deal. But Clegg too could decide that there is too much risk in a full-on coalition. Better to offer qualified support in the national interest.

Time will tell.

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