The Liberal Democrat Journey to a Lib-Con Coalition - Richard Grayson

richard S GraysonSouthbank house, Black Prince road, London Se1 7SJ

T: +44 (0) 20 7463 0632 | [email protected]

www.compassonline.org.uk

TheLiberaL

Democrat

Journey

To a LIB-CoN CoaLITIoN aNd where NexT?

The LiberaLDemocratJourney To a LIB-CoN CoaLITIoN– aNd where NexT?

richard S Grayson

about the author

Dr Richard Grayson is Head of Politics atGoldsmiths, University of London, and is one ofthree vice-chairs of the Liberal DemocratFederal Policy Committee, but writes here in apersonal capacity. He was the party’s Director ofPolicy in 1999–2004 and stood for Parliament inHemel Hempstead in 2005 and 2010, addingover 10% to the party’s vote. He was one of thefounders of the Social Liberal Forum and wasthe first chair of its Executive. In September2010 he takes up the post of Professor ofTwentieth Century History at Goldsmiths.

2

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3

The Liberal democrat

journey to a Lib–Con

coalition – and where

next?

Liberal Democrats and Conservatives sharingpower in a coalition at Westminster is notsomething that many ever expected to see. In sofar as people have ever talked about it beingpossible, it has usually been a jibe from Labourpoliticians who believe that their party has amonopoly on progressivism, despite there beingvibrant radical (sometimes Liberal) traditionswell beyond their own party. That it has happenedhas been extremely hard for some LiberalDemocrats and Conservatives to come to termswith. Even though all political parties are broadchurches, and in many senses contain paradoxicalcoalitions, there is much about the Lib–Concoalition which strains credulity. It upsets whatCharles Kennedy has called the ‘politicalcompass’.1

Much of the defence for the coalition hasfocused on the idea that there was ‘no alternative’.That argument is applied both to the parliamen-tary mathematics which brought about aLib–Con coalition, and to the budget. LiberalDemocrats in the coalition cite ‘unequivocaladvice from top government economic officialsand the Bank of England’.2 But they were not theonly credible people with opinions. Plenty ofeconomists have blown the ‘no alternative’argument out of the water demonstrating thatmany different options were available. One ofthose is Joseph Stiglitz, Nobel Prize winner,former World Bank chief economist, and one ofthe few to predict the global financial crisis.3

On there being no alternative to the coalition,there has been relatively little investigation ofwhether the deal has any ideological basis, otherthan some quite limited comments, partly fromLabour leadership contenders, but also one shortpiece by me on the Guardian’s ‘Comment is Free’site and another article in Prospect which partlytackled the issue.4 Yet if we are to understand thecoalition (and the budget) the ideology underpin-

ning both needs to be understood. Doing sobegins with a story about how it is possible that aparty which has often over the past decade beenseen as ‘left of Labour’ on civil liberties, demo-cratic reform, taxation and public services isengaged quite so enthusiastically in reducing thesize of the state.

Liberal traditions

While for many Liberal Democrats the coalitionis explained by practical circumstances, its ideo-logical basis can be found in the dominance ofcentre-right small state liberalism in the leader-ship of the Liberal Democrats. This is not a strandof thought that is alien to the party, and for muchof Liberal/Liberal Democrat history it has beenable to co-exist happily with more mainstreamcentre-left social liberalism. Indeed, had theoption of a coalition with the Conservatives notbeen on offer, it probably would have continuedto do so relatively unnoticed.

The story of co-existence does not have arecent beginning. There has been an on-runningdebate within Liberal politics on the role of thestate for well over a century. Very simplistically, itgoes back to debates which emerged in the 1880s.Liberals had traditionally focused on securingpolitical freedoms but it became increasinglyapparent that the lives of most people wereblighted primarily by the absence of clear water,work, education, healthcare and, basically,money. Of course, there was a strong traditiongoing back centuries of these deprivations beingtackled by some form of collective action, oftenchurch-inspired organisations. There was alsoscope for local government to act on these issuesand Joseph Chamberlain as Liberal mayor inBirmingham was one of those who led the way.

1 Charles Kennedy, ‘why I

couldn’t support Clegg’s deal with

the Tories’, Observer, 16 May 2010,

www.guardian.co.uk/politics/2010/

may/16/charles-kennedy-coalition-

views (accessed 28 June 2010).

2 Vince Cable, ‘Budget 2010:

united in austerity’, Guardian, 22

June 2010, www.guardian.co.uk/c

ommentisfree/2010/jun/22/budget-

taxandspending (accessed 28 June

2010).

3 Joseph Stiglitz, ‘osborne’s first

budget? It’s wrong, wrong, wrong!’,

Independent, 27 June 2010,

www.independent.co.uk/news/uk/p

olitics/osbornes-first-budget-its-

wrong-wrong-wrong-2011501.

html (accessed 28 June 2010).

4 James Crabtree, ‘who are the

Liberal democrats?’, Prospect, July

2010, pp. 31–5.

while for many Liberal democrats the coalition is

explained by practical circumstances, its ideological basis

can be found in the dominance of centre-right small

state liberalism in the leadership of the Liberal

democrats

But many Liberals did not see local action asenough and wanted the central state to be moreactive in the field of social reform. This came tofruition in the ‘Unauthorised Programme’ of1885, which advocated policies such as agraduated income tax and free public education.

The programme was ‘unauthorised’ partlybecause the party leader, Gladstone, did notsupport it. He was a small stater, the kind ofliberal that was ‘meant by describing MargaretThatcher as a nineteenth-century liberal. DespiteGladstone’s lack of support, the programmehelped create much enthusiasm for the LiberalParty and was a factor in their electoral victory in1885. Anybody looking at the strength of supportfor the radical agenda within the Liberal Party inthe mid-1880s would have expected Gladstone tocome under serious pressure to go in a moreradical direction. But that was all undermined by

the split over Irish Home Rule, which saw theleader of radicalism, Joseph Chamberlain, formthe ‘Liberal Unionist’ party and collaborate withthe Conservatives eventually on all issues, not justthe Irish Question. That set back the advance ofradicalism within the party, even thoughChamberlain managed to secure some key radicaldemands (such as the establishment of countycouncils, a marked expansion of the state) fromthe Conservatives – demands which Gladstonehad not been willing to grant.

Yet out of this split emerged a vibrant NewLiberalism, despite the loss of its most obviousleader. During the 1890s and early 1900s,thinkers such as L.T. Hobhouse and J.A.Hobson, drawing on the earlier work of otherssuch as T.H. Green, set out the intellectualagenda which would inspire much of the work ofthe Liberal Party in government from 1906onwards. At the core of their approach was abelief that the state (the central state in manycases) should tackle inequality in order to give

individuals greater freedom. From that viewsprang the foundations of the twentieth-centurywelfare state, laid by the Liberals from 1906 andthen built on by Labour after 1945, which initself drew heavily on the thinking of Liberalssuch as Keynes and Beveridge. However, thereremained a significant element within theLiberal Party which was more Gladstonian thanthe bulk of the ‘New’ Liberals.

During the inter-war years, the Liberal Partyremained at the forefront of developing ideas on thestate, most notably through Lloyd George’s ‘YellowBook’, which put forward the type of Keynsianpolicies which would not be tried in the UK untilafter 1945. Ironically, the implementation of thesepolicies saw some in the Liberal Party (such as itwas) flirt with small state thinking and cooperationwith the Conservatives in the late 1940s and 1950s.Under Jo Grimond’s leadership (1956–67) the partywas an overtly centre-left party, and Grimondconceived of individual freedom being best securedand protected in a social context. But the partybecame rather more anti-state than it had been inthe inter-war years. Grimond himself believed thatthe state had become over-mighty and wanted to seemore involvement of civil society in, for example,the provision of welfare. Despite that, Grimond stillwanted to see a ‘realignment of the left’, which gavea clear sign of where he saw his party on thespectrum when it came to issues such as poverty andredistribution.

It was towards the end of Grimond’s leader-ship that the importance of localism grew inLiberal politics. At this time, many Liberals,especially those in the Young Liberals, were onthe radical fringe of British politics, among themPeter Hain, who had a pre-Labour radical life asa Liberal. Terms such as ‘Red Guard’ used todescribe the Young Liberals at the time point tothis being the radical left rather than the radicalright, and the Young Liberals were often enthu-siastic about direct action. Into this contextcame community politics. Part of that was justabout how to campaign, but it also involvedempowering people collectively at a local level.As Liberals were elected to councils inincreasing numbers, they came to see localgovernment as having a crucial role in bringingpublic services closer to people and in providingmore accountability, even though policy was notoften very detailed.

‘as Liberals were elected to councils in increasing

numbers, they came to see local government as having a

crucial role in bringing public services closer to people

and in providing more accountability.’

4 | The Liberal democrat Journey

The Liberal democrat Journey | 5

New New Liberalism

Up to this point, at least since Liberals had beenin government, there was a fairly simple patternof the party wanting more state action when theConservatives were in power, and less withLabour in government. Thus it was that in the1980s and 1990s, the Liberals (and the SDP) andthen the Liberal Democrats fell firmly in the pro-state camp, vigorously opposing much of thedirection of the Thatcher and Major govern-ments. In general, the party did not want cuts andprivatisations. In the early 1990s, it did positionitself as being more pro-market in arguing thatwhere there had been privatisations, competitionshould be rigorously enforced so that a statemonopoly was not replaced with a privatemonopoly, and later briefly proposed privatisingthe railways. This arose from a concern held byPaddy Ashdown that, on the economy, the LiberalDemocrats were not enthusiastic enough aboutmarkets. He says in his memoirs that he wantedto take the party ‘towards a more free-marketeconomic position’.5 However, the party’s generalcentre-left positioning was clear, not least becauseit was leading the case for greater investment inpublic services, specifically with its policy ofadding an additional 1p to the basic rate ofincome tax to fund education. It was therefore nosurprise that Ashdown sought to ally with Blairand Labour from 1994. Ashdown was no differentfrom previous Liberal leaders in wanting arealignment of the left.

One initial effect of the Blair–Ashdown Projectwas some blurring (at least in the minds ofcommentators) about the identity of the LiberalDemocrats. With a Labour government pursuingincreased investment in public services andsignificant constitutional reforms (both of whichhad been at the core of the 1997 Lib Demmanifesto), many asked what was the point of theLiberal Democrats? The party was helpedbecause, in reality, Blair was pursuing little thatwas Liberal Democrat policy, and it soon becameclear that he was not somebody who wouldinstinctively give power away. When he refused toimplement electoral reform the Project was overand at least the constitutional reform agenda wasagain a way for the Liberal Democrats to take adistinctive position. Of course, even before that,there had been opposition to collaboration within

Labour ranks from tribalists like John Prescottand Gordon Brown. As Gordon Brown resignedas prime minister so he would no longer stand inthe way of a Lib–Lab deal, one wonders if he hadany recognition that all could have been verydifferent if he had not been such a barrier to thecollaboration that Blair and Ashdown wanted topursue.

Developing the party’s identity was a majortask in the early days of Charles Kennedy’s termas party leader. Those involved in policy develop-ment and the overall messaging of the party (ofwhom I was one as the party’s Director of Policyin 1999–2004) took the question of identity andbasic principles very seriously. We developedwhat I have always seen as a modern restatementof the social liberalism (called New Liberalism inits day) espoused by Hobhouse: social liberalism,overtly greened and decentralised to meet thechallenges of the twenty-first century. It could besaid that we were adopting a New NewLiberalism. This was based on the principle ofindividual ‘freedom’, which had three dimensions:decentralised decision-making, the importance ofgreater equality, and the belief that futurefreedoms depended on building sustainabilityinto everything that we do. That approach wasfirst set out in the party’s 2000 pre-manifestoFreedom in a Liberal Society. It was probably thesecond point that was most important in the early2000s because it was crucial to the party’s posi-tioning with regard to Labour. On the one hand,it helped Liberal Democrats be clear that theircommitment to social justice had a differentpurpose from Labour’s collectivist instincts. Justas importantly, it allowed the party to tackleLabour on social justice issues where we felt it wasbeing too timid. If that appeared to be ‘left ofLabour’ (as commentators often said) we could beclear that our view was entirely consistent withLiberal traditions. Hobhouse was cited in aid ofthis cause, especially phrases such as ‘the strugglefor liberty is… a struggle for equality’.6

Underpinning this view was a strong commit-ment to state action, albeit a radically differentstate from Labour’s, and one that has consistentlystressed the dangers of a coercive state in waysthat social democrats do not.7 Consequently, inrecent years, expansions of state power on matterssuch as detention of suspects have been vigor-ously opposed. Liberal Democrats do not have

5 Paddy ashdown, A Fortunate Life:

The Autobiography of Paddy Ashdown

(London: aurum, 2009), p. 238.

6 L.T. hobhouse, Liberalism (New

York: Galaxy Press, 1964 [1911]),

p. 21.

7 richard S. Grayson, ‘Social

democracy or social liberalism?

Ideological sources of Liberal

democrat policy’, Political

Quarterly, 78, 1, Jan–Mar 2007, pp.

28–35.


the same view of the state as the Labour Party.That said, social liberals have consistently hadmuch more in common with social democratsthan they do with Conservatives because thesocial liberal response to state dangers is todecentralise and control state power (throughstrong rights legislation) rather than to reduce thestate’s role overall.

In policy terms, our approach over the pastdecade has included some very strong denuncia-tions of aspects of public services policy, especiallytarget-setting and interfering with the judgment offrontline staff. In 2002, our conference agreedproposals from a policy working group (moreoften than not described as the ‘HuhneCommission’ because Chris Huhne chaired it)which advocated radical decentralisation anddemocratisation of public services. That groupalso envisaged allowing new providers into thestate system, but it was never as far-reaching as theConservatives’ version of academies. What hasbeen interesting about that debate in the partyuntil recently is that it has sometimes been framedas opening up common ground with New Labour.Back in 1998 there was a debate at party confer-ence on neighbourhood school trusts (NSTs)which saw the leadership pushing a proposal forsomething like Labour’s academy model. Yetpolicy-making in the Liberal Democrats was andstill is extremely democratic with party conference(comprised largely of representatives elected bylocal parties) being sovereign. If it wants to defeatthe leadership it can and NSTs were stronglyrejected. In years to come, the party opposedLabour’s academies because they took power awayfrom local authorities.

The orange Book

It was into this mix of policy that the The OrangeBook: Reclaiming Liberalism (London: ProfileBooks, 2004) was thrown at party conference in

September 2004. A lot of simplistic commentshave been made about The Orange Book. Inparticular, it has been said repeatedly that thebook opened up a stark divide between economicliberals and social liberals in the party. There ismuch wrong with this view. Much in The OrangeBook was already party policy, such as the bulk ofNick Clegg’s chapter on Europe. Even thoughMark Oaten’s chapter on crime did contain somenew proposals, these had actually emergedthrough the formal structures of the party andwere about to be voted for (with no great dissent)at the party conference that year. The book alsocontained a chapter from Steve Webb who ismanifestly not on the pro-market wing of theparty. Moreover, as I have argued in KevinHickson’s recent edited volume on Liberalpolitical thought, even somebody like DavidLaws, who is portrayed as the high priest ofeconomic liberalism in the party, is deeplyconcerned with tackling poverty.8

However, parts of The Orange Book did throwdown a challenge to the party’s current positions.In two chapters, David Laws argued that the partyhad too often become a supporter of the ‘nannystate’ and he also argued that public servicesneeded to be more responsive to people asconsumers, for example through funding health-care by an insurance system. Some of thatapproach echoed aspects of New Labour (as hadthe 1998 neighbourhood school trusts debate),which says as much about the place of the LabourParty on the political spectrum at the time as itdoes about the Liberal Democrats.

This would have been dynamite at any time inthe electoral cycle but was particularly explosivecoming when the party had spent the previousfew years agreeing a pre-manifesto document andhad within the past two years rejected healthinsurance during its public services review. Morefundamentally, The Orange Book represented achallenge to the way Liberal Democratsapproached the state’s role in public services,arguing for more market-based policies. For thatreason, while recognising the limitations of theeconomic-social liberal dichotomy, many of ushave been happy to continue to present TheOrange Book as a challenge to the social liberalorthodoxy of the party.

Given the strength of hostility to The OrangeBook, outsiders might wonder why there was not

‘The orange Book represented a challenge to the way

Liberal democrats approached the state’s role in public

services, arguing for more market-based policies’

.

8 richard S. Grayson, ‘Social liber-

alism’, in Kevin hickson, ed., The

Political Thought of the Liberals and

Liberal Democrats since 1945

(Manchester: Manchester

University Press, 2009), pp. 48–64.


9 Crabtree, ‘who are the Liberal

democrats?’.

10 ‘why we should welcome the

launch of the Social Liberal

Forum’, 14 February 2009,

http://eatenbymissionaries.blogspo

t.com/ (accessed 28 June 2010).

a more organised challenge to it. To some extent,I think the bulk of the party was complacent. Itwas so badly received at party conference thatmany people thought it had been seen off. Relatedto this, one writer recently pointed to a ‘dominantbut intellectually dormant social-liberal wing’ ofthe party.9 Such a description overlooks whatsocial liberals had been doing in the party. Wehad certainly been dominant, with broadly socialliberal views dominating key party committeesand key staff positions. But we had hardly beendormant, organising a major programme ofpolicy review, covering not just public services,but many other policy areas including crime,Europe and basic principles. Even as early as2001, the vast bulk of the policies in the partymanifesto had been developed since 1997. Wewere not relying on old policy and there was aparticular new focus on tackling social injustice.So The Orange Book could look dynamic becausesocial liberals were seeking to defend existingpolicy, which was policy because social liberalsdominated the party. Why be alarmed by whatlooked like a fairly insignificant centre-rightinsurgency?

reinventing the State

However, as people around The Orange Bookcontinued to give the impression that they werethe only people in the party coming up with newideas, some social liberals decided that a responsewas needed. This had been talked about for sometime already, but took off when in March 2006Duncan Brack (then chair of the party’s FederalConference Committee and one of the mostwidely respected people in the party) and I askedDavid Howarth (MP for Cambridge and one ofthe party’s most prominent thinkers) to take partin editing a volume which was to be calledReinventing the State: Social Liberalism for theTwenty-First Century (London: Methuen, 2007).We wanted to flesh out some existing policies,propose some new ones where appropriate, andput forward a coherent social liberal view of thestate. The book stemmed from a view that therewas much wrong with the state but that theanswer was not to reduce it, but to reform andrelocate it, especially by making public serviceslocally and democratically accountable. We also

wanted to argue that the mainstream view of theparty was a social liberal one and drew in chaptersfrom some who were seen as ‘Orange Bookers’,notably Nick Clegg and Chris Huhne, to stress thebroad reach of social liberal ideas. The bookeventually appeared in September 2007. It waswell received in the party but gained littleattention in the media because it was notproposing a major shift in Liberal Democratpolicy and so contained little of news value for themedia.

Media attention may also have been limitedbecause a central part of the book was anargument that divisions in the party had beenoverstated. In his chapter, David Howarth arguedthat all Liberal Democrats are social liberals. Hiscontribution to the debate tackled the idea thatthe Liberal Democrats were divided between‘social’ liberals and ‘economic’ liberals. DavidHowarth argued that all in the party were tiedtogether by a belief in redistribution anddemocracy as weapons in the fight for greaterindividual freedom. Where there was a division,he said, was between ‘maximalist’ and ‘mini-malist’ social liberals, which was a debate overhow far the state should go on redistribution andeconomic equality. One way of characterising thisdifference in a way that those who are notpolitical theorists can grapple with easily is to talkof centre-left and centre-right social liberals,although these labels are mine and not used byDavid Howarth.

One other point needs to be made about thesupposed social-economic liberal divide is thatfor the vast bulk of the party, the issues concernedin the debate are not pressing. In a thoughtfulblog, party activist and thinker Iain Sharpe said ofa speech I gave in Newcastle in February 2009, ‘Iwince a little when I read Richard Grayson’sreference to “two approaches” to Lib Dem policy,“Orange Book” and “social liberal”.’ Iain went onto say, ‘This makes me feel more uncomfortableas I, and no doubt many other Lib Dems, don’t fallneatly into either camp, and don’t find themmutually exclusive.’10 On that basis, I think Iainwas right to criticise what I said. I am certainlyclear that such a divide does not exist for mostmembers. As I shall argue below, the party is rela-tively under-factionalised. Indeed, ‘OrangeBookers’ are a very small section of the party,probably a much smaller section of the party than


11 BBC News, ‘Lib dems want

parent-run schools’, 12 January

2008, http://news.bbc.co.uk/1/hi/

education/7183247.stm (accessed

28 June 2010).

12 BBC News, ‘In full: Nick Clegg

speech’, 14 January 2008, http://

news.bbc.co.uk/1/hi/uk_politics/718

7852.stm (accessed 28 June 2010).

New Labourites were in their party – and theywere never large in number. However, as labelsfor the directions from which much policy initia-tive has come, I defend the terms. While theparty’s policy and principles have been broadlysocial liberal, a clear policy drive has come fromthe direction of The Orange Book.

Policy challenges

Even if Reinventing the State did not gain muchmedia attention it did send a signal inside theparty that social liberals were organising. Therewas already plenty to organise over. At the confer-ence which launched Reinventing the State, theparty debated a plan to drop the longstandingpolicy of putting a 50p tax rate on incomes over£100,000, and fund a tax cut of 4p in the basic rateof income tax through a series of changes to thetax system relating to pensions contribution andcapital gains tax, and also environmental taxes.One of the ways the leadership got this proposalthrough was to argue that it would be more redis-tributive than the old 50p policy. That was truebut the party lost a powerful symbol of itscommitment to taxing the rich more (whichcould in any case have been combined with thenew policy). The leadership may also have beenhelped by the fact that for all the characterisationsof Ming Campbell as a grandee, it is well knownin the party that he is nothing other than a centre-left politician whose instincts are strongly infavour of redistribution and tax-funded publicservices – as we have seen in his recent statementsabout his commitment to scrapping tuition fees.

It was with a change of leader at the end of 2007that the agenda really shifted. The debatesbetween Nick Clegg and Chris Huhne had beenpolicy-light. Chris Huhne had used what theClegg camp termed ‘wedge’ issues such as Tridentto try to open up divides, but in reality mostmembers were looking at who would present theparty in the best possible light. Yet very soon afterthe election, Nick Clegg began to push a differentagenda. In his first major policy speech as leader,Clegg advocated ‘free schools’, which would beunder the oversight of local councils, but notcouncil controlled.11 This was the kind of ideawhich would probably have been badly received ifit had been put forward in the leadership election

and might have cost Clegg his very narrowvictory.

That same speech also set out thoughts on thestate which were on one level fairly innocuous,but could be read as setting out a new direction asregards the state. Clegg said:

The state must intervene to allocate money on afair basis. The state must intervene toguarantee equality of access in our schools andhospitals. And the state must oversee corestandards and entitlements. But once thosebuilding blocks are in place, the state must backoff and allow the genius of grassroots innova-tion, diversity and experimentation to take offin providing an array of top-class schools andhospitals.12

In theory there was not much with which LiberalDemocrats could disagree, but at the time a fewworried that this indicated a new direction thatwould be focused on reducing the size of the stateoverall, rather than the traditional approach ofrelocating it through devolution. In the monthsthat followed there was some internal partydissent around ‘free schools’ and the leadershipgradually stopped using the phrase. It was notuntil the September 2008 conference that therewas something for those concerned about thisdirection to really oppose.

Then, in a general policy document calledMake it Happen, 21 words marked a significantshift in the direction of the party: ‘We’re lookingfor ways to cut Britain’s overall tax burden, soordinary families have more of their money tohelp themselves.’ It sounded reasonable enoughbut it was a big shift. We already had policy for taxcuts, funded either redistributive taxes on thewealthy, or by green taxes. But reducing theoverall tax ‘burden’ went a huge step further,funding yet more tax cuts by reducing the moneythat government can spend on the things thatindividuals have decided are best provided collec-tively, like schools, hospitals, pensions, unem-ployment benefits, disability allowances, policeand the armed forces.

At the conference, a vigorous debate followed.An amendment put by my own local party,proposed by Paul Holmes MP and Evan HarrisMP, proposed that ‘any reduction in overall levelsof public expenditure should be a lower priority


13 richard reeves, ‘Social liberals

should join Labour’, Guardian, 19

September 2008, www.guardian.

co.uk/commentisfree/2008/sep/19/

libdemconference.liberaldemocrats

(accessed 28 June 2010).

than measures to reduce inequality in Britishsociety, improving public services, including inparticular health, education, child care and publictransport, and making the urgent investmentsneeded to tackle accelerating climate change’. Toface down this challenge, many big guns werewheeled out by the leadership, some of them weunderstood to be very reluctant speakers againstthe amendment. Despite a spirited argument, theamendment was defeated by conference represen-tatives who seemed to be increasingly leadershiployal. Estimates of how much support theamendment secured vary from 25% to 40% butthe clear result was defeat. Though the argumenthad not been made overtly, it also showed thosewho wanted to reduce the size of the state overallthat the party would allow them to do it.

Social liberals organise

Defeat in the tax debate was a huge shock to thosewho identified themselves overtly as socialliberals and the debate continued on the confer-ence fringe. One event was organised by the loosegrouping around Reinventing the State and amongthe speakers was Richard Reeves, then director ofDemos but more recently declared as a LiberalDemocrat and now special adviser to Nick Clegg.Reeves set out the same views as he put forward atthe fringe in an article entitled ‘Social liberalsshould join Labour’.13 At the time, it was treatedby many social liberals as just the kind ofprovocative piece that think tank directors like toproduce. It was not seen as terribly well informedabout the party. Reeves commented that socialliberals ‘explicitly describe themselves as “centre-left”’. We wondered why that was even worthy ofcomment given that Ming Campbell (hardly onthe party’s fringe) regularly used the term todescribe himself.

On reflection, though short, the article was avery revealing piece. Reeves was spot on thatthere is a divide in the party over attitudes to thestate. He suggested that perhaps there might be arealignment after the election, and some wouldsay there has been. Where Reeves was spectacu-larly wrong in the view of social liberals was thatour principles were those of Labour rather thanthe Liberal Democrats. This point was treatedwith derision when it was made at a fringe

meeting at our party conference. Our reaction tothe 2008 conference was not to leave but toorganise, in two particular ways.

In the first instance, we realised that we neededto be more able to influence the policies that cameto conference. We knew that if the leadershipcontinued to control the Federal PolicyCommittee (FPC) which produced policy papersthen it could get pretty much anything it wantedthrough a conference which had recently lost twoleaders and was not minded to give a bloody noseto a third. Consequently, a number of people whoovertly identified as social liberals stood for theFPC. Many made specific pledges on tuition fees,which was a key issue. Some of us had alreadybeen involved in a small policy working group onhigher education. We were in a minority on thatgroup, which was coming to the view thatscrapping fees was no longer affordable. Inaddition to believing that fees are a disincentive tostudents from poorer backgrounds, many of usfelt this issue to be a key battleground in thedebate over reducing the state’s role in publicservices.

The results of the FPC elections in late 2008saw a big change in the committee’s membershipand a clear majority for those who wanted toretain the policy of scrapping fees. So when theworking group proposed changing our policy, theFPC overturned that part of the report. Theproposal that went to conference was backedoverwhelmingly. In fact, the leadership had beenheavily defeated but without a big public row,which made it much easier for them to accept.Although the timing of the scrapping was laterspread over years in the final manifesto, thepolicy remained in the manifesto and would nothave done had social liberals not organised.

At the same time as electing people to thepolicy committee, social liberals established anew internal pressure group, the Social LiberalForum (SLF), which was primarily aimed atrallying social liberal opinion in a more organisedfashion than previously. Launched in March2009, with Steve Webb MP as chair of its AdvisoryBoard and myself as chair of the Executive, itsmost important role in addition to organisingweb-based policy discussions was to gathernames of conference representatives who mightbe rallied should there be any further rows withthe leadership. At the September 2009 conference

there were clear signs that this was working in anumber of conference debates as the SLF effec-tively organised against a further leadership bidto downgrade the scrapping of tuition fees. Butthen, for nearly a year prior to the 2010 election,internal disputes were largely put to one side.During the election itself, the party was hugelyimpressed by Nick Clegg’s performance, whichundoubtedly helped soothe some concerns abouthis ideological direction.

how did the Liberal democrats accepta Lib–Con coalition?

How then does this narrative help us to under-stand the way in which the coalition has beengreeted within the Liberal Democrats? Why hasthere not been more internal opposition? In thefirst place, we must not underestimate the extentof tribalist knuckle-headed Labour opposition toa deal with the Liberal Democrats. John Reid andDavid Blunkett were the tip of an iceberg in aparty where many despise ‘the Liberals’. Suchpeople lining up to tell the media that a period ofopposition would be best for Labour was aterrible disappointment for those LiberalDemocrats who were openly calling for a dealwith Labour.14

In contrast, the leadership has been able to putforward an argument, which finds much favourin the ranks, that the party is getting much fromthe coalition deal. All are agreed that theConservatives offered much more than anybodywould ever have imagined. As Polly Toynbee saidof the coalition agreement, ‘There are policieshere that Gordon Brown and Alistair Darlingadamantly, and wrongly, refused to contemplateso wedded were they to New Labour’s rigidcaution, triangulating themselves to death.’15 Thatnot only involves major constitutional reform butalso a strong green strand and the sweeping awayof some Labour legislation which posed threats tocivil liberties. The leadership has been able toclaim some success in the budget on matters assuch as capital gains tax. Despite Liberal

Democrat gains being arguably very small, manyin the party are happy and some are even‘ecstatic’.16

But there are also factors of political culturewhich explain the party’s support for thecoalition. The Liberal Democrats have becomeincredibly leadership-loyal in the past few years.The trauma of losing Charles Kennedy and MingCampbell in quick succession should not beunderestimated. In both leadership campaignsthat followed there were revelations which madethe Liberal Democrats the butt of jokes and theparty has had no desire to go through anotherleadership campaign. There has been a strongsense that however narrowly Nick Clegg won, theparty was going to stick with him, and hisbrilliant personal election campaign just a fewmonths ago performance cemented that view.

At the same time, the political culture of theLiberal Democrats is an inherently reasonableone. Faced with an inspiring speech, partyaudiences are as likely to nod in agreement asthey are to burst into spontaneous applause.There is also a tendency in the party’s culture totry to see all sides of an argument and the partyhas long talked about how coalitions would bepositive because they would involve drawing on awide range of opinions. All of these factorsencourage a strong desire in the party to showthat a coalition can work at Westminster. Theargument that the parliamentary mathematicsmade no other option possible, which was astrong part of the leadership’s case to MPs, hasalso been accepted by the party as a whole. So,they nod, reasonably, and get on with it. Itexplains why pretty minimal gestures towardsimplementing Liberal Democrat tax policies inthe budget were received with the response ‘betterthan nothing’ by many in the party, even if theprice of that was a VAT increase. It is a pragmaticapproach that is verging on the ideological itself:it’s always better to get something in return forsomething unpalatable than it is to get nothingfor something else unpalatable. The danger ofcourse is that the ability to resist hugely unpalat-able choices becomes neutered.

Meanwhile, the party is under-factionalised.Whenever I have used that phrase in conversa-tions with friends in the Labour Party, they canscarcely contain their amusement. They comefrom a political culture which has far too many

14 Neal Lawson and richard

Grayson, ‘Lab and Lib: a dream

team’, Guardian, 9 May 2010,

www.guardian.co.uk/commentis-

free/2010/may/09/labour-liberal-

democrats-progressive-alliance

(accessed 30 June 2010); Jonathan

Freedland, ‘hung parliament: Nick

Clegg forced to play fair maiden as

suitors bow’, Guardian, 7 May

2010, www.guardian.co.uk/

commentisfree/2010/may/07/hung-

parliament-nick-clegg-decides


15 Polly Toynbee, ‘Coalition

government: like a flat-pack with

screws missing, this deal will

wobble’, Guardian, 12 May 2010,

www.guardian.co.uk/commentis-

free/2010/may/12/coalition-govern-

ment-polly-toynbee (accessed 30

June 2010).

16 richard Grayson, ‘The Lib dem

leadership’s self-flagellating

appetite for cuts’, Guardian, 22

June 2010, www.guardian.co.uk/

commentisfree/2010/jun/22/lib-

dem-leadership-cuts; ‘divisions

open over the budget’, Guardian,

26 June 2010, www.guardian.co.uk

/uk/2010/jun/26/divisions-open-

over-the-budget (accessed 30 June

2010).


despite Liberal democrat gains being arguably very small,

many in the party are happy and some are even ‘ecstatic’.

factions. So why is this a problem in the LiberalDemocrats, when we know how divisive factionshave been in other parties? It’s a problem if youwant a party to be able to stand up to the leader-ship. In a party which has properly organisedfactions, if the leadership goes down a path that isunpopular with the bulk of the membership, thenfactions can rapidly organise opposition. Whatwe saw in September 2008 in our tax debate wasan embryonic faction putting up a good fight butnot being properly organised enough, despitearguably being more in tune with the member-ship than the leadership was. But factions taketime to become deeply rooted. The Council forSocial Democracy, which was able within monthsin 1981 to form the Social Democratic Party, hadorigins way back in the Campaign for DemocraticSocialism, and drew on a decades-longGaitskellite organisational base. Just two years onfrom the 2008 tax debate, social liberals were farbetter organised than they had been, but lackingin the kind of factional identity which could beused to have a decisive impact on the leadershipduring the coalition negotiations. Imagine thatone or two MPs had decided not to back theagreement and had gone to the oppositionbenches. They would have been totally isolatedbecause there would have been no body ofopinion in the party which recognised Jo BloggsMP, representing Inner City, as a member of theirfaction and somebody they should follow. Thatunder-factionalisation means that those inWestminster who have the most influence on thebig decisions made in the party’s name have littleeffective connection to different ideologicalstrands in the party. If the different strands in theparty want to influence what its MPs do, and havemore leverage on the leadership, better organisedfactions are going to be essential.

What the party still does not seem to recognise,or at least accept as a problem, is that the coalitioncan also be best understood as the preferredoption of a leadership grouping which since ittook over the party has consistently soughtpolicies which will reduce the role of the state andsteadily take a centre-left party to the centre-right. The major debates in the past two to threeyears have seen the small Orange Book tendencyin the party steadily whittling away at broadlycentre-left policies on, for example, the level ofpublic spending, the level of income tax and the

role of local government in education. That hasgiven the leadership much common ground withthe Conservatives. We now have a leadershipwhich talks as often about the state being aproblem as it does of how it (and only it) can helpsolve problems,17 and tends to use the amorphousphrase ‘fairness’ rather than ‘equality’. That has nodoubt been appealing to progressives, not leastwhen accompanied by bold claims aboutreplacing Labour as the main progressive force,but may not go as far as they think it does.18

Although it is hardly a scientific test, a search ofNick Clegg’s party leader website revealssomething of the tone of his speeches: there are113 references to fairness, 17 to equality, 13 toinequality, and 2 to redistribution. Whereequality is used, it tends to refer to civil rights. Itcan be argued that ‘fairness’ is simply a voter-friendly way of describing equality, butarguments on the intrinsic benefits of a moreequal society are scant from the leadership.Statements such as ‘the worst excesses ofinequality’19 are rare indeed, as well as beinglimited, and rarely is an overt case made for amore equal society, even when the party has astory to tell that included a redistributive taxpolicy in the 2010 manifesto. Indeed, in his 2009Demos pamphlet The Liberal Moment Cleggdismissed the argument that ‘an unwillingness togo far enough with redistributive taxes’ is part ofthe explanation of Labour’s failure to tackle ‘socialdivision’.20

On tuition fees, social liberals had a majorsuccess in resisting the leadership’s drive to thecentre-right. However, that has not impacted on thecoalition agreement, which merely allows Lib DemMPs to abstain on any increase to fees – despitetheir pre-election pledges to vote against anyincrease. Moreover, the coalition agreement hasallowed the leadership to pursue its zeal for cuttingpublic spending. It does this having explicitly ruledout major cuts in 2010/11 in the election campaign,and having opposed the scale and timing of the cutsnow introduced by the government. The argumentfor this rests on a ‘no alternative’ case, which is atodds with the views of many economists. Suchmatters can only ever be a matter of judgment – wemust all accept that. But judgments reflect valuesand the decisions made by this government onTreasury matters illustrate its overwhelminglysmall state centre-right ideology in bright lights.


17 a good example is Nick Clegg’s

views expressed in his pamphlet

The Liberal Moment (London:

demos, 2009), www.demos.co.uk/

publications/the-liberal-moment


18 See Nick Clegg’s website at

www.nickclegg.com/home.aspx


19 ‘Four steps to a fairer Britain

says Nick Clegg’, 11 January 2010,

www.nickclegg.com/nccom_news_

details.aspx?title=Four_steps_to_a

_Fairer_Britain_says_Nick_Clegg

&pPK=800fa58c-5bc9-45d3-8b58-

32b93d5c2e96 (accessed 29 June

2010).

20 Clegg, The Liberal Moment, p. 60.

where next?

What does this mean for the future of socialliberalism? Most social liberals in the LiberalDemocrats are backing the coalition for some orall of the reasons stated above, and possibly forother reasons. But there are clear signs of concernin the party. One does meet activists who say thatthey are now ashamed to face many of those theymet in the election campaign who backed theparty. There are many voters who desertedLabour for the Liberal Democrats in 2005 and2010 who say they will never support the partyagain. They simply did not want a Conservativegovernment and feel badly let down by the factthat the coalition was formed.

It is possible that some social liberals willsimply drift away from the party. But it is signifi-cant that they do not seem to be flocking toLabour. Of course, Labour has gained somesupport, but there does not seen to have been anyexample of any nationally known activist, letalone an MP, crossing the floor. The mostprominent are probably two councillors in Exeterand one in Hull.21

For Liberal Democrats there are many barriersto joining Labour. In the first place, Labour is inthe middle of a leadership contest, which meansthat the direction of the party is unclear. Nothinghas changed in Labour’s policies since the lastelection. All leadership candidates remainresolutely committed to some measures againstwhich many Lib Dems fought hard, and on issuessuch as immigration, some of the leadershipcontenders seem only likely to make mattersworse. There are many people in the LabourParty with whom Liberal Democrats can findvery much common ground (probably more thanthey can with some other Liberal Democrats).On that point, Jon Cruddas’s 2009 lecture ‘Thefuture of social democracy’22 sets out an agendawhich could appeal to many Liberal Democrats.But the Cruddas agenda remains far from theapproach of many in the Labour Party. In thelong term, the Liberal Democrat entry into thecoalition may create the conditions for a furtherrealignment on the centre-left of British politicsif the Liberal Democrats become inextricablyidentified with the pursuit of a small stateideology, but Labour has to change significantlybefore that can happen.

In the meantime, those Liberal Democratswho are concerned about the coalition stick withthe party to see how the situation develops. Thereis a long tradition of this tactic in British politics.Those who stayed with Labour despite Iraq, the10p tax rate, crackdowns on civil liberties, tuitionfees and much else can testify to that. Partiesregularly lose their way and their members oftenhope that they can find their way back. It is clearthat a social liberal agenda remains and LiberalDemocrats, if they can take one step away frompragmatism, will see many areas on which thecoalition agreement is woefully inadequate. Atthe top of this list is democratic localism, withstrong local government taking big decisions onpublic services to respond to local demand anddrive up standards. It is joined by the struggle forequality after a budget which, despite thebandying around of the word ‘progressive’, takes ahigher percentage of income from the poorestthan from the richest.23

In developing new ideas which go beyond thelatest manifesto, social liberals could be arguing fora new political economy, which puts issues of powerin the workplace and the ownership of assets backon to the political agenda in the way that the LiberalParty once did. There is also the matter of sustain-ability on which the coalition deal probably gave theLiberal Democrats the most and where the partyhas an undoubtedly strong team in government.But far more ambitious plans than those in thecoalition agreement are needed to tackle runawayclimate change.

Meanwhile, social liberals have an opportunityto lead debates on areas where the left has beentoo timid. Social liberals should look to challengethe free market orthodoxies which led to thecurrent crisis, and which leave people enslaved inan economy where materialism dictates everlonger hours worked so that people can acquiremore ‘stuff ’ that does not really make themhappy. These fundamental problems with theeconomy and with lifestyles remain totally unad-dressed by the coalition. Perhaps also we can startto be more aware of the persistence of social classin a country which, more than ever since the1960s, sees its top political leaders drawn from anarrow social elite and where birth cohortevidence shows that parental background has amajor influence on academic attainment, healthand labour market opportunities.24


21 BBC News, ‘exeter lib dem

councillors join Labour’, 7 June

2010, http://news.bbc.co.uk/1/

hi/england/devon/10252745.stm;

hull & east riding, ‘Lib dem coun-

cillor defects to Labour Party over

coalition’, www.thisishullan-

deastriding.co.uk/news/Lib-dem-

councillor-defects-Labour/article-

2259432-detail/article.html


22 Jon Cruddas, ‘The future of

social democracy’ (London:

Compass, 2010), www.compasson-

line.org.uk/news/item.asp?n=8823


23 anushka asthana, ‘George

osborne’s budget cuts will hit

Britain’s poorest families six times

harder than the richest’, Observer,

27 June 2010, www.guardian.co.

uk/uk/2010/jun/27/osborne-

budget-cuts-hit-poorest (accessed

30 June 2010).

24 Our Changing Lives, ‘Social

mobility – are opportunities

declining?’, http://ourchang-

inglives.net/impact/socialmobility.

aspx (accessed 30 June 2010).

On all of these areas, it should be the LiberalDemocrats making the running. If the party canensure that its structures operate so as to allowthis clear voice to come through, then it has everychance of putting forward a distinctive manifestoat the next election, one that will in all likelihoodput it closer to a reformed Labour Party shouldthe alternative vote deliver another hung parlia-ment. Alternatively, the party can be happy withmorsels from the Conservative table, enthusiastic,

surprised and occasionally ecstatic to see little bitsof Liberal Democrat policy implemented. If theytake that approach, then the party will become ashollowed out as Labour under New Labour.Meanwhile, the public are unlikely to be enthusi-astic when faced with an overall record ofrunning down the state to the levels that madevoters so willing to embrace New Labour in 1997after nearly two decades of slash and burn.


richard S GraysonSouthbank house, Black Prince road, London Se1 7SJ

T: +44 (0) 20 7463 0632 | [email protected]

www.compassonline.org.uk

TheLiberaL

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The Liberal Democrat Journey to a Lib-Con Coalition - Richard Grayson