The past month shows this Government urgently needs a Coalition 2.0 Agreement

We’re fast approaching the two-year mark of this first post-war Coalition Government, and I think it’s fair to say the strains are starting to show. It is inevitable there will be tensions when two parties — with different traditions, values, expectations — come together to try and govern a country at a time of economic torpor.

Until now, a lid has more or less been kept on the inter-party warfare, not least thanks to the determinedly tight-knit fastness of the dual leadership of Messrs Clegg and Cameron. But that lid is now starting to shake as the pressure builds within and between both parties.

Coalition: making friends of enemies, and enemies of friends

It’s not hard to understand why. Governments progressively rack-up debits as their actions disappoint various internal groups, the more so in Coalition. And because consensus-through-concession is the nature of Coalition, each disappointed group can be that much more hopeful that if they lobby that bit harder their view will gain traction.

Two examples, one from each party…

First the Tories… initially fearful the AV referendum would produce the wrong result, lobbied their party leadership to throw its weight behind the No campaign, vilification of Nick Clegg and all. They won. (Small wonder, by the way, that the Lib Dems have therefore vetoed the appointment of Matthew Elliott — the Taxpayers’ Alliance svengali behind the anti-Clegg campaign — to a key post in Number 10.)

Secondly, the Lib Dems… stricken by the loss of the AV referendum and our pounding in last May’s local elections, the party pushed and pushed on the Health and Social Care Bill, gaining significant mini-victories along the way (though it’s hard to say anyone won as a result).

The lesson activists in the Coalition parties have drawn from these (and other) experiences? The harder you push, the more likely it is that you’ll get your own way. Though that’s true of all governments, the span of views in a Coalition government is inevitably much, much wider. This was the point David Laws addressed head-on in a speech last month, warning both Lib Dems and Tories not to retreat to their comfort zones, but to govern from the reforming centre:

He called for the Lib Dems and the Tories to ignore their left and right wings respectively. Neither party should differentiate into “old comfort zones”, he said. “Outdated” policies and principles should not halt the modernisation project. His clarion call: “This could be a great reforming government” − reveals the hope invested in the coalition by those members of the government operating in the centre.

This speech was a clear call for the Conservatives and Liberal Democrats to meet in the political centre and ignore the wings that could drag down the coalition. This view of the coalition as a grand reforming project sounds attractive to those in government (how could it not?) – but it also ignores large sections of both parties.

Time for a Coalition 2.0 re-boot

In the first few honeymoon months of the Coalition, there was much talk of the need for a Coalition 2.0 agreement to succeed the original document hastily drawn up in the tumult of May 2010. This sparked concern among activists from both parties, fearful such behind-doors discussions would usurp their own policy-making processes, and was designed to pave the way for some form of continuing Lib-Con alliance into and beyond 2015.

Yet the lack of any Coalition 2.0 thinking is becoming ever more apparent. With the vast majority of the Coalition Agreement well under way — as The Guardian’s pledge tracker showed here — there is an inevitable ‘What next?’ question looming.

Let’s take regional public sector pay, consultation on which began in this year’s budget, and which reared its head in The Observer today.

I have written before that I think market-based pay is the correct response to enable public services in the poorest areas to recruit the best possible staff. But that’s a personal view, not a Lib Dem view, and I’m probably in a minority within my party. It is certainly not a policy which was anticipated within the Coalition Agreement, except within schools where it was explicitly advocated as a measure to tackle social inequalities.

There exists, therefore, no mandate for market-based pay in the NHS approved by the Coalition parties, which means MPs from either side who dislike the policy will feel free in all conscience to reject it — just as we saw in last week’s Budget votes MPs from both parties rejecting measures (eg, on the so-called ‘pasty tax’) to which they felt they had not signed up.

‘When facts change, I change my mind. What do you do?’

Much has changed in the last two years. Most significantly, the fiscal austerity that most of us thought painfully necessary to eradicate the deficit in five years has been blown off course by the Eurozone crisis. As a result, Plan A has already morphed into Plan B+ by default, with slowing economic growth compelling a more drawn-out deficit reduction strategy.

Both Coalition parties had anticipated being able to approach a 2015 general election under a “We sorted out Labour’s mess” banner. That may still be possible. But, nervously, both are now casting round for other popular/populist vote-winning gambits, the Tories desperate to gain their first parliamentary majority in 20 years, the Lib Dems desperate to avoid electoral wipeout.

What could and should still enable creative tension within government is now erupting into destructive tension. As a result, the Coalition Government has lost any semblance of policy coherence in the past month.

Differentiation is fine if its dialectic enables both parties to find common cause. But at the moment differentiation gives every appearance of producing what critics of coalitions (and proportional representation) have always warned would happen: an inchoate mess in which the governing parties fight like ferrets in a sack, with each other and among themselves. Meanwhile the public looks on with withering indifference.

Answering the ‘What next?’ question

It is time for a Coalition 2.0 Agreement, a re-statement of what it is that the Lib Dems and Tories can unite around for the next three years of this Government.

Much of this will be Coalition 1.0 business still needing to be enacted. Some of it will simply be necessary and uncontroversial adjustment to the realities the economic crisis has brought about. Other policies may be new, a recognition both that facts change, and that through governing you learn from your mistakes and think up new ideas. Those new policies need to be debated and agreed upon, not sprung upon parties who will react with predictable hostility if they suspect their leaders of bouncing them.

Drawing up and agreeing a Coalition 2.0 will not be easy. The heady days of the Rose Garden have long since given way to gruelling months of grim reality. But the alternative is pretending that a document written in a fortnight almost two years ago is sufficient basis for governing for a further three years.

There’s a Catch-22 irony of being in government: it’s the worst possible time to stop and think about what you want to achieve. Most policy thinking and development happens in opposition and stops the moment you sit behind a ministerial desk. This government said it would be different, yet is beginning to look much the same as all others do: beleaguered and directionless, overwhelmed by the sheer mass of stuff that comes with governing.

There is still time to breathe new life back into this Coalition. But the work needs to start now.

* Stephen was Editor (and Co-Editor) of Liberal Democrat Voice from 2007 to 2015, and writes at The Collected Stephen Tall.

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30 Comments

  • Simon Hebditch 22nd Apr '12 - 3:09pm

    Stephen Tall makes a number of valid points about the need to think through the next stage of the Coalition Agreement. My problem with it all is that the central economic policy, including deficit reduction, is fundamentally flawed and needs a complete re-think. Both the SLF Plan C document, drawn up by Prateek Buch, and the Compass organisation’s Plan B document are important contributions to finding an alternative economic approach.

    If there is to be work done on a possible second version of the Coalition Agreement, it has to be clear that nothing, absolutely nothing, can take us beyond the end of March 2015. We should “no” at this stage to any agreed policy across the coalition which takes us over the election period and up March 2017 – as previously floated by Danny Alexander.

    Also, surely some serious thought also needs to be undertaken into whether there is a potential, alternative programme for the period from May 2015 which would see us ally with both Labour and the Greens. Nick Clegg’s unthinking hostility to any alternative scenarios simply illustrate one of the problems we have – the closeness of the values espoused by Clegg and Cameron. This was not a coalition of convenience but a marriage of values and principles – that is why William Hague hailed it as a “realignment of the right”.

  • jenny barnes 22nd Apr '12 - 3:23pm

    David Laws: “He called for the Lib Dems and the Tories to ignore their left and right wings respectively. Neither party should differentiate into “old comfort zones”, he said. “Outdated” policies and principles should not halt the modernisation project”

    The LD leadership has certainly given a good impression that they want absolutely nothing to do with any part of the LDs that is not signed up to the failed 33 year old neoliberal experiment. So what does that half, or more than half, of the party do now? Refusing to stand as candidates, withdrawing their effort from campaigning goes only so far.

  • Matthew Huntbach 22nd Apr '12 - 4:17pm

    What “modernisation” project? Who defines what is “modern”? For much of the last century USSR-style communism was thought to be “modern” so “modernisation” would mean moving in that direction. Using the idea that something has to be accepted because it is “modern” is fundamentally illiberal and antidemocratic – it is a way of forcing people to have things they don’t want, denying them freedom of choice, by using the bogus argument “it is inevitable, so you miught as well accept it”. Tony Blair was very fond of using this sort of argument. Use of it is, in general, sign of a third class mind. It is a weasely bogus sort of argument, anyone with some sense and integrity would find better reasons to argue their case than “mine is modern, yours is not, so shut up, you have to accept what I say”.

  • I’m sorry to pick up on only one sentence but “I have written before that I think market-based pay is the correct response to enable public services in the poorest areas to recruit the best possible staff.” doesn’t seem to make sense. If say Darlington hospital can’t recruit a good midwife on £30k per year, then how are they going to recruit good midwives on £21k per year? How would it be possible for Bournemouth to keep midwives on £24k per year if Southampton’s paying out £29k per year.

    My assumption would be that if there are nationally mandated regional pay arrangements, the DH would have to fund hospitals in richer areas more and take money away from hospitals in poorer areas to compensate for the pay rates. Is that what you want Stephen?

  • Agree with DM Andy

    I found Stephen’s arguments for regional pay incoherent with a number of questions/difficulties ignored.

  • Simon McGrath 22nd Apr '12 - 4:26pm

    @Simon Hebditch “Also, surely some serious thought also needs to be undertaken into whether there is a potential, alternative programme for the period from May 2015 which would see us ally with both Labour and the Greens.”

    Or to put it another way give the Greens have one MP ( and given the disaster they are making of running brighton Council will be lucky to keep her), ally with the Labour Party.

    Are you seriously suggesting that we support one economic policy in the period 2010-May 2015 but would be quite happy in June 2015 to do a 180 turn and support an entirely different one?

  • Simon McGrath

    and here comes the LD problem.

    If you support policies for post 2015 meaning that both you and the Tories will have to same policies going into 2015 then how can you possibly go into Coalition with anyone else but them? If that is the case then why not stand in the 2015 election as a Coalition?

    I have already said before that the LD actions during this coalition will lead to a split in the party at the next election as you will either be a continuing coalition with the Tories or a very weak opposition to them. The best result would be a resounding Labour victory allowing you to be a coherent opposition but from the rich not the left – unless you reinvent yourselves starting by dropping Clegg!

  • “I’m sorry to pick up on only one sentence but “I have written before that I think market-based pay is the correct response to enable public services in the poorest areas to recruit the best possible staff.” doesn’t seem to make sense.”

    I assumed it was an error for “richest areas” …

  • @Simon McGrath
    ‘Are you seriously suggesting that we support one economic policy in the period 2010-May 2015 but would be quite happy in June 2015 to do a 180 turn and support an entirely different one?’

    Surely that would depend on the problems in 2015, whch might be quite different from the ones now. Say the deficit is less of a problem (if it isn’t then Labour will almost certainly win a majority anyway), and the biggest issue is a sluggish economy. The tories want to have an across the board tax cut, and a further cut to corporation tax paid for by even further cuts in spending. Labour want say a vat cut and other measure paid for by some means of wealth tax. Are you really saying that any agreement with Labour is a non-starter?

  • Are you seriously suggesting that we support one economic policy in the period 2010-May 2015 but would be quite happy in June 2015 to do a 180 turn and support an entirely different one?

    Consider what happened pre and post general election no problem at all.

  • “Are you seriously suggesting that we support one economic policy in the period 2010-May 2015 but would be quite happy in June 2015 to do a 180 turn and support an entirely different one?”

    Isn’t that the logic of coalition with a much larger party?

    For the period 2010-2015 you are supporting an economic policy that is a compromise, worked out between the Lib Dems and the Tories. And as we’re always being told, as the Tories have so many more MPs we must expect their views to have greater weight.

    After 2015 it’s very unlikely that you’ll be in coalition with the Tories. If your policies as a separate party won’t be any different from the coalition’s, what’s the point of being a separate party? And in the unlikely event of your being in coalition with Labour, obviously the negotiated compromise would be very different from the present one.

  • paul barker 22nd Apr '12 - 7:18pm

    Can I just remind everyone on the (self-defined) “left” of the party that they too signed up to the coalition agreement, for 5 years, not till it gets tough. People who want to re-fight that battle are wasting their time & everyone elses.
    I dont disagree with the basic thrust of this article but I think we have to constantly remind ourselves that the media are our enemie, they arent exagerating splits they actively promote them.

  • paul barker

    Does that apply to the Tories as well?

    Can you show me the paragraph that says

    ‘Top down reorganisation of the health service and increased privatisation’

  • @ Steven Tall
    “I have written before that I think market-based pay is the correct response to enable public services in the poorest areas to recruit the best possible staff.”
    Find me a Conservative who believes this. To Tories market based pay means high pay in high cost areas and lower pay in lower cost areas plain and simple. Or to put it another way transferring even more money from the regions of the UK to London.
    I am sure that Tories would be pleased to reduce the pay of individuals in the public sector, outside London, so that public spending can be reduced. But you would have a tough job to convince them to do the opposite of this. ie To enable the best staff to be recruited in those areas with the greatest need (deprived locations in high cost areas) while cutting pay rates in, say, areas of London which are not deprived .

  • Malcolm Todd 23rd Apr '12 - 12:13am

    Yep, it’s pretty clear that all the rhetoric from the government is about how high public sector salaries in low-wage areas “crowd out” private sector employment. This “we could pay more to teachers in deprived areas” shtick is liberal wishful thinking. (And of course, there are already incentive payments available in public sector pay schemes, as several people pointed out to Stephen when he previously posted in favour of this.)

  • Those who advocate market based pay would condemn the regions of England and Wales to ever greater inequality with London and South East. It would suck resources out of these areas and with it the best staff. Those regions would suffer greatly and in turn the private sector in these regions(who rely on the purchasing power of public sector staff in the said region) would be placed at a great disadvantage. No rational economic argument has been put to justify regional pay, yet this is what the govt want. It is simply a ruse to attack national collective bargaining.

  • Matthew Huntbach 23rd Apr '12 - 6:19am

    Paul Barker

    ‘When the facts change, I change my mind. What do you do, sir?’

    Not having been a delegate to the special conference, I did not sign up to anything. Howver, I am reminded of the famous Keynes quote: ‘When the facts change, I change my mind. What do you do, sir?’.

    The right of the party told us we should sign up because Tory policy would work and we’re benefit from that in 2015. That “fact” has changed, hasn’t it?

  • Even the tory grass roots think that regional pay is barking mad extreme right idea that will lose them votes. Well, that was the reaction on Conservative Home anyway and it was almost certainly why the proposals were dropped from the budget speech.

    At the risk of stating the obvious, paying public sector workers less for working in deprived areas will lead to (a) lower quality staff working in those deprived areas (b) an increased wealth divide between regions through positive feedback – i.e. decreasing aggregate demand for the private sector in poorer regions (c) savings in public expenditure, meaning lower taxes for the rich (does anyone really think it would lead to increased spending on public sector workers in expensive areas of the country!?). Those are the three reasons why Cameron and his government want it.

  • James Sandbach 23rd Apr '12 - 3:03pm

    I think we need a Coalition 2.0 agreement like we need a hole in the head – another agreement would tie us in to yet more tory policies, closer association and embrace with the tories, less flexibility to argue the case for lib dem policies – what would on earth we would gain by it? Something to help keep the tories to account and extra leverage – I think not ; they’ve consistently breached both the spirit and letter of coalition 1.0 agreement so why would it be any different with coalition 2.0. It would also mean approaching 2015 election as “the Coalition” rather than “the Liberal Democrats”. The whole idea of 2.0 agreement was a Danny Alexander one which, as I understand, has had loads of cold water poured all over it for the above reasons.

  • jenny barnes 23rd Apr '12 - 4:04pm

    This from Andrew Lilico on ConservativeHome

    “The reason is that the Coalition’s constutional reform programme isn’t simply imperfect. It isn’t that it’s quite good but could be better. It is that what the Coalition is doing (and not doing) is precisely what I am involved in politics to oppose. I have been arguing against British entrapment in the Single European State, against an elected Second Chamber, against proportional representation, against the doctrines of Human Rights for more than twenty years. I did so when these were ideas of just the Liberals and Social Democrats; I did so when they were propagated by New Labour; and I continue to do so now the Cameroons advance them. The Coalition, with its constitutional reform programme, makes itself my political enemy. I am not simply disappointed that it isn’t doing things exactly as I want. Rather, it is trying to do exactly what I am in politics to object to.” ( http://conservativehome.blogs.com/thecolumnists/2012/04/andrew-lilico-its-not-stubborn-oppositionalism-to-oppose-fundamentally-anti-conservative-long-lastin.html )

    I feel exactly the same – only about different things; probably the ones Mr. Lilico is 85% in favour of.

  • Matthew Huntbach 24th Apr '12 - 2:15am

    Simon McGrath

    Are you seriously suggesting that we support one economic policy in the period 2010-May 2015 but would be quite happy in June 2015 to do a 180 turn and support an entirely different one?

    What do you mean by “support”? In a democracy one supports, in the sense of accepts, whatever the people voted for, and that may change as facts and opinions change. That does not mean one wholeheartedly agrees with it. The fact that we are in coalition with the Conservatives now does not mean we wholeheartedly agree with Conservative economic policy. It means we accept the view of the people as given in 2010 and endorsed very firmly by the referendum of 2011 that they prefer Conservative economic policies to ours and they very much prefer a system whereby representation is distorted in favour of the largest party which should therefore dominate policy making even if it did not gain an absolute majority of votes.

    What you are saying seems to be that now we are in a coalition with the Conservatives we have no choice but to stay in it for ever. Had the general election of 2010 been slightly different we might have found a Labour-LibDem coalition to be the only viable government. Would you then say we should stay in coalition with Labour forever?

    We need to educate the people of this country on democracy and so make more clear what our position is. We have an influence on the current government, but it is a small one, as reflects the will of the people expressed in 2010 and 2011. We are not “happy” with this government, because it is not a government of our party, it is a government predominantly of another party which is very different from ours. Our position is that Britain needs a government with a secure majority, therefore we have accepted this compromise – there was no other choice because there was no other viable government with a secure majority. Not to have accepted this compromise would have damaged this country due to the ensuing instability, and would have been arrogant seeing as how we obtained less than a quarter of the votes and so should not be in a position to dictate. Even if we had been, as we said before the election, the fairest choice should we really hold the balance would have been to go with the will of the people and opt to support a government led by the party which they by their votes made the largest party. So, should the situation be the other way round after the next general election, we would endorse a Labour-led government. That would not mean we had converted to full agreement with Labour Party policy, it would mean just that we accept the will of the people.

    If the people of this country want a government in which our policies dominate, then they have to vote for us. That one is surely quite simple.

  • Matthew Huntbatch

    I don’t remember a referendum on the economy in 2011. There were LE but extrapolating that to an economic referendum is a little ambitious and anyway you could say Labour did better than the Tories

    I think you are also mistaken in your idea of ‘educating people on democracy’ – firstly I think this is a little arrogant and secondly I think 2010 LD voters would have an issue on accepting this idea of having only a small influence on the Tories – I know I do. The Tories only gained 36% of the vote compared to the LD 23% – that to me is not so huge a difference that the LD should capitulate to the Tories.

    The LD have the power to prevent Tory legislation which is not in the Coalition Agreement and should be more prepared to use it – perhaps if the LD in Government stood up and said that we only have 9% or so of the seats but represent 23% of the population on votes it would emphasise the inequity of FPTP and also show those of us voters who accept mathematically the reality of the coalition but don’t accept that way it has been practiced, that the LD do have a separate identity and a strength of purpose.

  • Matthew Huntbach 24th Apr '12 - 10:19am

    bazzasc

    I don’t remember a referendum on the economy in 2011.

    There was a referendum on the electoral system in May 2011. The main argument of the “No” side in that referendum was that the best thing about our current electoral system was the way it distorted representation in favour of the largest party and against third parties. They said this was a thoroughly good thing because it usually results in a government of just one party which they said is good because it is more decisive. They said, quite explicitly, that it is better to have an electoral system which distorts in order to achieve this. And, by two-to-one, the British people voted to agree with them.

    So far as I am concerned, that ends the line you are trying. If the British people though there was something wrong with a government that is dominated by one party though that party had only 36% of the total vote, they had in the referendum the chance to show that by voting “Yes” to electoral reform. Although the electoral reform proposed in the referendum was a a small one, most people on either side agreed it was a first step towards the introduction of proper STV – if the people agreed to it, it suggested they wanted a change and they then might want further change. Part of the line of the “No” campaign was to oppose AV on the “slippery slope” argument, since much of what they said was really more a criticism of proportional systems than of AV. Almost every commentator interpreted the two-to-one win by “No” as a rejection of all change to the electoral system, as an end to any chance that proportional representation will be introduced in our lifetimes. I do not remember reading a single comment article anywhere in the published media which interpreted the victory by “No” as meaning “No because AV is not enough of a reform – we want more”. Nor do I recall any published letter or other reply to this commentary from a “No” voter complaining about being misrepresented by the claims the “No” vote was a vote which ruled out all electoral reform.

    The government we have results from the weakening of representation of the third party and the strengthening of representation of the first party. That distortion was enough to rule out a coalition of the second party and third party. It also very much weakened the third party in negotiating a coalition with the first party. So while FPTP in the 2010 general election did not quite give government by one party, its distortion worked almost to do that. FPTP in 2010 did just what its supporters in the referendum of 2011 said it does and said was the best thing about it. And, by two-to-one, the British people voted to agree with them.

    Therefore, so far as I am concerned, the referendum in 2011 was a vote of confidence in the government we have now, a vote to endorse that government, which is indeed being very decisive on deficit reduction, it has decided its strategy and is keeping to it. I believe the British people were given enough information to make up their mind, and so they did. I did not and do not agree with them, but as a democrat I must accept their decision. So far as I am concerned, anyone who voted “No” in the referendum voted for THIS government in the shape it takes, and therefore have no moral right to complain about it. Anyone who did not vote and therefore let “No” win should also shut up – you had your chance to vote against this government by voting against the electoral system which gave it to us, but you did not.

    And to any “No” voters who say “I didn’t see it that way”, all I can say is “Tough – next time THINK when you vote”.

  • Matthew Huntbach 24th Apr '12 - 10:39am

    Now, following up on my previous message, of course I KNOW that most voters did not see it the way I have put it. Maybe the referendum would have gone differently if the “Yes” side had been run by people who could see what an effective argument it wold have been to put it this way. I believe that by pointing out to people what they have effectively done by voting “No” or abstaining and letting “No” win, by pointing out the logical contradiction in moaning about the weakness of the Liberal Democrats and the dominance of the Conservatives and then voting for an electoral system whose supporters give this weakening of the third party and strengthening of the first party as its main virtue, people may be got to think seriously about democracy. That is the lesson, sometimes the most effective lessons are the hard lessons.

    I was a supporter of proportional representation even before I joined the Liberal Party in the 1970s. My politics are to the left in many ways, but I big reason for me joining the Liberals rather than Labour was that the Liberal Party was the only major party which supported electoral reform. So I fully recognise and accept the argument made about 23% and 9% and 36%, but the British people by and large do not. When they had the chance last year, they voted against that argument. I believe they were wrong to do so, but I was on the losing side.

    Unfortunately, when Liberal Democrats go on about this sort of thing it is, by and large, written off as just self-serving. They don’t seem quite to see that when Labour and the Conservatives argue for FPTP, that too is self-serving. But the villains of the piece are Labour. That is why I say again and again that a “No” vote was a vote FOR this government, because I want to make it quite clear that those Labour politicians who supported “No” were propping up the Tories in a way more fundamental than the Liberal Democrats are. By opposing electoral reform they propped up the Tories not just now, but for a generation in the future, because so long as we have FPTP we will have Tories enjoying the distortion it gives in their favour. Apparently there were some Labour politicians on the “Yes” side. Were there? If so, they were so feebly on that side that I don’t think anyone noticed. So I blame them as well for being so feeble,

  • LondonLiberal 24th Apr '12 - 1:44pm

    @ Stephen Tall

    “Much has changed in the last two years. Most significantly, the fiscal austerity that most of us thought painfully necessary to eradicate the deficit in five years has been blown off course by the Eurozone crisis. As a result, Plan A has already morphed into Plan B+ by default, with slowing economic growth compelling a more drawn-out deficit reduction strategy. ”

    The Eurozone is obviously affecting us, but i think it’s the bonkers and economically wrongheaded approach to deficit reduction instead of keynesian growth policies that is keeping us at essentially zero economic growth. More spending on vital national infrastructure, not least desperately needed social housing, would create jobs, reduce the deficit in the medium term, and create enormous social good. I thought Clegg believed in that before May 2010 (because he said so) – but it turns out he didn’t at all. This lie of his, perpetrated first on his own party and then the country, is the key to why he has signed us up to all the rest of the Tory cr*p that we – the party and the country – have to swallow on a daily basis.

  • I think, in the light of continuing subdued growth, we do need a change of tack on economic policy in the second half of this parliament.

    I support the tax increases and spending reductions needed to eliminate the structural deficit i.e. that part of the deficit that would remain when the economy is operating at full employment

    To maintain aggregate demand during the period the restructuring is being undertaken to 2017 – capital spending on infrastructure and borrowing to fund the cyclical shortfall in government revenues is necessary. Spending on infrastructure and job creation must be planned to accelarate as the reductions in departmental revenue expenditure deepen.

    Economic growth and a return to full employment is an essential element of returning the public finances to a state of health. Cyclical borrowing will not decrease significantly without aggressive policies to stimulate growth. We are running out of supply side measures and now need to concentrate on fiscal measures. Why this should be seen as anyway controversial is beyond me. The alternative is an internal devaluation i.e. a very long period of stagnation and falling living standards.

  • The logic of Stephen’s position is that the LDs should stand on a joint ticket with the Conservatives at the next general election.

    This is also the logic of Danny Alexander’s idea of an extended the agreement running past the next election.

    Speaking purely from the standpoint of what will deliver the most LD MPs at the next election this is probably the most sensible course of action open to the LDs.

    At which point some people may point out Stephen hasn’t said that (explicitly), and no, he hasn’t, but I am reading between the lines here.

    If you wanted to stand on a coalition platform, then a coalition 2.0 agreement would be an excellent place to start. If you intended to try to get back to any sort of credible “equidistant” stance between Labour and the Tories in 2015, then a coalition agreement 2.0 does not make any sense.

  • Juf

    I agree with you that I think there are some people who are considering a pact and are just not coming clean at the moment. Stephen and Mark are in this camp I am afraid to say. Consider Stephen’s incredibly partisan post today about the Levenson Inquiry and his consistent advice to Tories

    I think it would split the LD clearly but this will happen anyway after the next election.

  • Simon McGrath
    “Are you seriously suggesting that we support one economic policy in the period 2010-May 2015 but would be quite happy in June 2015 to do a 180 turn and support an entirely different one?”

    It is worth pointing out, over and over again, that this is EXACTLY what the Liberal Democrats did in 2010. They had one economic policy in their manifesto and campaigning, which was a broadly similar pace of deficit reduction to the one proposed by Labour, and with added flexibility if the economy was worse than expected, and then in coalition did a 180 turn and supported an entirely different one.

    Why not try it again, eh? It has worked so well.

    ps Does anyone else remember Nick Clegg RIDICULING Osborne for suggesting you cut spending in a recession, and yet that is what he now accepts.

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    Jeff – I wholly agree with UKIP’s reservations about TTIP What a shame those reservations didn’t transfer to Tory Brexiteers. Vince Cable has a rose-tinted...
  • User AvatarJoseph Bourke 27th Jun - 12:28am
    The political studies association offers an independent view on lessons to be learned from coalition by the junior party https://www.psa.ac.uk/insight-plus/cameron-clegg-coalition-lessons-learned: "In terms of policy, the...
  • User AvatarJeff 27th Jun - 12:19am
    Tom Harney 26th Jun '19 - 11:04am We elected MPs. The majority in the Commons voted for a Prime Minister. She then acquired the right...