Alex Massie

What A Carve-Up: The Glittering Prizes Awaiting Cameron and Clegg

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These are interesting times, aren't they? Interesting but scarcely simple. Nick Clegg may have suggested that a deal must be done by close of play, Monday if it is to be done at all and all the signs may still point to David Cameron coming to an arrangement with the Liberal Democrats but, clearly, difficulties remain. How could it be otherwise given the complexity of the situation and the stakes?

Policy is the least of the problem. If one accepts that the old left-right labels are increasingly outmoded and that the defining divide today is between the centralisers and the localists, between the liberal and the statist then, theoretically at least, liberal Tories and true liberals in the Liberal Democrats can do a deal. The principles can be agreed first and policies bargained later. Yes, there will be red lines but establishing the broad parameters first is a confidence-building measure that lays the foundations for an accomodation. Without that confidence there's nothing.

Which is one reason why Clegg cannot deal with Gordon Brown. Nothing in the Prime Minister's record or publicly-known character suggests he could form any kind of coalition. Hell, he spent the best part of a decade undermining and destabilising the Labour party's own intramural coalition. He is not cut from co-operative or trusting cloth and without trust there can be no coalition deal.

Notionally, Labour could still topple Brown and try to form a minority administration in partnership with the Lib Dems (this seems more plausible than a Rainbow Alliance of All the Smallest Parties) but this too is fraught with risk, no matter how much Labourites and despairing Liberal Democrats might wish otherwise. Would the public wear another "unelected" Prime Minister? The constitutional impediment is minor; the political problem enormous.

Nevertheless, this is one of the few cards Clegg has to play and it's reasonable for him to keep it in reserve. Just in case. Such a manoevre might have no more than a 5% chance of success but even that is enough to give the card some value. Not much, but just enough to persuade Cameron not to press too hard.

The Tory leader, however, has made few, if any, miscalculations to this point. The Lib Dems are said to be surprised by how flexible the Tory leadership is prepared to be. This will not surprise Cameron's critics on the right. Nor should it astonish any student of history.

Above all else, the Tories are the pragmatic party. Even Mrs Thatcher, in many ways the exception to so many rules, pursued her aims incrementally (at least until hubris got the better of her and invited nemesis to the feast). But in the past the Tories have shown their willingness to think the unthinkable - whether on the franchise or the tariff - and get the deal done. Not coincidentally this is one reason why they have been such a successful party. They know not to waste a crisis.

But if this gives Clegg cause to pause then that's no surprise. The history of Tory-Liberal alliances has been kinder to the Conservatives than the Liberals. Liberal Unionists, National Liberals and even parts of the Owenite rump SDP have been absorbed by the Tory party. There are many in Clegg's party who must fear, with some justification, that something similar could happen again.

These talks, then, aren't just a matter of how best to navigate the next few months. They're also the first steps in the dance towards the next election - whenever it may be - and potentially for the next several parliaments. What happens now - what happens today - may have consequences for years to come.

In ordinary times this would cause little problem for the Lib Dems. Despite the attractions of power and the Red Boxes, the party could walk away from any proposal and leave the Tories to sweat as a minority. That may yet happen. But the cost to the Lib Dems could be severe, perhaps even catastrophic.

Because these are not ordinary times. I suspect that since Friday the electorate has come to terms with the idea of a coalition government and is increasingly just fine with that, thanks. The public may not wish to endure prolonged squabbling and negotiating but apart from the party diehards I'm not sure the idea of coalition appals many people.

Indeed, many voters (heck, many journalists too) might find the sight of politicians discussing what they can agree about rather refreshing and a welcome change from the usual Westminster fare that, let us be honest, has not endeared the political classes to the Great British Public.

Regardless of the outcome of these discussions, something else is happening: the voters are being reminded of what's at stake in terms of the public finances. This was often obscured by the point-scoring and preening of the election campaign. Now that's over the politicians - of all parties - can afford a greater measure of honesty and realism. And when no party has a monopoly on power old-fashioned concepts such as "the national interest" can sound real and meaningful and suddenly pressing and urgent and no longer simply a cute code or proxy for "our party's interest". In short, our politics may have grown-up a little since Friday.

But this process of softening-up the public for the tough times ahead also makes it more difficult for Clegg to walk away from any deal Cameron offers. This is no time for Clegg, peeved that he doesn't get everything he might desire on electoral reform, to sulk in his tent.

Changing the voting system can wait a little and, even if it is desirable that it be changed, it would be unseemly, unstatesmanlike even, to make it a pre-condition in a time of agreed national extremity. Nor would pressing too hard on this matter enhance Clegg's reputation, earned or not, as the Change Guy.

Most voters care not a fig what Shirley Williams or Simon Hughes think about anything. Indeed, if the price of a deal is their disappointment it might be thought cheap at twice the price. The same calculation applies to Lord Tebbit and the some of the Tory right. In the current climate, I suspect voters will respect politicians who stand up to the petty monomaniacs in their party and not be impressed by leaders who capitulate to those vested interests. In other words, it is a time for bravery and imagination.

That doesn't make it easy, least of all for Clegg. From his perspective both a formal coalition or a "Supply and Confidence" arrangement are fraught with risk. The former is tougher to sell to his party; the latter carries few assurances that it will be any safer than navigating his way through the shark-infested waters that lead him to the former.

It's not unreasonable for Clegg to think of his party's future electoral fortunes, even at a time like this. But he may be damned if he does and damned anyway if he doesn't. A formal arrangement, complete with seats in the cabinet and a Programme for Government, ties him to the fortunes of a government that is going to have to make many unpopular decisions. In return, of course, he can advance liberal aims across a range of government departments and this is no small bauble. No Liberal leader in decades has had such an opportunity.

But clearly such an arrangement means he is likely to stand or fall with Cameron. Their fates will be bound together and it's not impossible to see how, some years down the line, this could - only could mind - lead to a slow but irrevocable split in his party as the left drifts off to Labour and the right is slowly absorbed by the Conservatives. This could happen even if, at some point, the Liberal Democrats achieve their much-cherished voting reform. Greater love hath no man than that he lay down his party for his country and a seat at the top table.

And yet, not doing a deal or only agreeing to an S&C arrangement is scarcely any safer a proposition. Walking away from the negotiations - especially when it is clear that the Tories have acted more magnanimously than their back-benchers find palatable or understandable - ruins Clegg's claims to leadership and seriousness. Why vote for a party that is not interested in power or in advancing the causes it feels would best serve the nation? What would be the point of the Liberal Democrats? If these were less extreme times it's possible Clegg could get away with this but not now, not in these times. When the country called, Nick, where were you?

No, such a course seems an invitation to squeeze the Lib Dem vote next time out. And that might be what would happen if he goes down the S&C road too. The Liberals might then find themselves responsible for the timing of the next election while simulataneously being held responsible for the Tory budget and all that flows from it. They would, if you like, be in power but not in office.

If so, they'd then receive their share of the blame for any unpopular measures while receiving no credit - and no record upon which to run - for anything that might prove popular or successful. This too would seem to invite a hammering at the next election. (As would putting Labour in to bat again - a decision which could not, in any case, guarantee electoral reform either.)

Meanwhile, the advantages of a formal coalition are clear for Cameron. In the first place he gets a government with a workable majority for the price of a few compromises in a time when economic necessity would have forced compromise on him even if the Tories had won 350 seats themselves.

Secondly, he can parcel out responsibility for unpopular measures and go some way towards protecting his flank at the next election. Thirdly, he can hope the coalition works well and delay an election until late 2012 or, preferably, beyond. Fourthly, if and admittedly perhaps against the odds, his ministry proves a success then as the senior partner in a government that began the process of stabilising the public finances, tackling the national debt and overseeing a return to sprightly economic growth, then he can garner the lion's share of the rewards.

If that happend the Tories will be tempted to ditch the Lib Dems or be beastly to them. This would be a mistake. In fact, the case for generosity becomes stronger the more successful and durable any arrangement is. (I'd suggest, incidentally, that the leaders try and agree a Three Year Programme for Government.) Coalitions are partnerships and they break down, most often, when the senior partner acts in a high-handed or thoughtless or stupid fashion.

Superficially this appears to give the junior partner the whip hand but this is often true only in the short or immediate term. Voters are good at punishing parties who behave needlessly recklessly or who break a government without good cause. (The fate of Dick Spring's Irish Labour party in 1997 is one such example.) In this current instance the Lib Dems have little incentive to abandon ship.

So why not press on with a minority Tory ministry which would, it seems, be the preferred option of many Conservatives? Well, because this might not be as stable as a proper coalition and because it is far from obvious that the electorate would return significantly more Conservative MPs in six months or a years' time.

What's more, if Cameron dedides to go to the country soon and of his own free will the parliamentary arithmetic need not change much to suddenly make a Labour-Liberal deal, led by a new Labour leader, much more feasible than is currently the case. And that, quite clearly, could have disastrous consequences for the Conservative party. (This is a point that Sunder Katwala makes in a quite excellent, splendidly imaginative post.)

This gets us to a vital point: the stakes in this game are much higher than the question of who wins what and who gives what up in the next few days, weeks and months. There is - no, there may be - an opportunity for Cameron to redraw the map in such a fashion that the Tories could be the "natural" party of government for years to come and that far from achieving the occasionally-dreamt-of "reunification" of the liberal and labour movements British politics will be dominated by the centre-right instead.

Granted, this is looking some way ahead and granted to it would require enormous boldness, no small measure of bravery and considerable imagination to achieve. But one can, if tentaviely, see how it could happen if - if, I say - Cameron has the vision and the conviction to do it. It may be that Cameron will eventually, gradually have to take the lead on widespread political reform and that this might indeed require changing the voting system.

Again, that need not be the immediate priority - the public finances and public sector reform take those palms - but if Cameron can convince Clegg that he is serious about this then he can, as Sunder suggests, extract a handsome price: namely that the coalition, having weathered the worst of the financial storm and embarked upon political reform, would stand for re-election on a joint ticket.

Audacious? Certainly. Difficult? Undoubtedly. Impossible? Not entirely. Such an arrangement could even, perhaps, be extended to an agreement that, in a smallish number of seats, the Tories would give way to the Liberal candidate while in others the Lib Dems would give the Tories a free run.

This wouldn't put Labour out of power forever (doing so would not in any case be healthy) but it could give Cameron and Clegg ten years in which to make their mark while, crucially, giving a Toquevillian freedom agenda time to take root, grow and flower. In such a scenario - however far-fetched it may seem - the localist, decentralising ideas the parties share would have become the orthodoxy, the tax system would be fairer and simpler, government would be both more accessible and accountable, public services would be utterly transformed and so on and so forth...

But the second term is crucial because even if Britain's fiscal predicament weren't so galling the best and brightest reforms that can be culled from the parties respective manifestos will take time to bear fruit.

Utopian? You could say so. Fanciful? You could say that too. Deluded? Alas, maybe that as well. But this is, if not the prize, then certainly a prize worth dreaming big dreams to achieve. And if Cameron really has it in him to be the Disraeli figure Peter Oborne dreams of then this is something Dave in turn must contemplate in his more dreamy moments.

Would there be difficulties? Of course. Europe remains a potential booby-trap but even here the potential for trouble may be less than is sometimes assumed. Britain won't be joining the euro and, anyway, who knows what shape the EU project will be in next year let alone five years from now? But if Europe can be placed in cryogenic suspended animation then the other difficulties are details. Sure, details matter but they can be overcome and where they can't be overcome they can be finessed.

True, any such realignment of British politics could produce any number of possible outcomes and the Conservative party itself could, like the Lib Dems, split with the right scurrying off to UKIP. That's obviously one among many risks even if, depending on the voting system (and Brussels), it might not be the parliamentary force its backers might desire.

I confess, too, that I have little clue as to how the Labour party might respond to this kind of rearrangement of the political orbit. My guess, however, is that they'd be severely discimbobulated for a decade or more by which time everything will have changed and the good things the centre-right has done will have become largely undoable. 

So there is an argument to be made that the Tories should be generous to the Lib Dems, nurture them, encourage them, stroke them, pet them and see this moment as a long-term opportunity, not simply a question of short-term necessity.

Of course much of this is drawn only in rough outline. But it's something that I think all the parties should be thinking about in these unusual times. The moments for real reform and real, long-lasting change sneek up on you and tend, too, to be borne from moments of extremity and peril. This may be one such moment.

Elections, as they say, have consequences and they're not always the ones anyone foresaw. This may be one such election and these some such consequences. This is a moment of great risk for both Cameron and Clegg but also, at leas potentially, one of enormous opportunity.

A formal coalition still strikes me as being the best, least risky endeavour in the short-to-medium term; it could also be be the arrangement that offers the greatest opportunity and riches in the long-term if  - and it's a deficit-sized if - Cameron and Clegg have the imagination and bravery to go for it. Even then it might not work but it is, I think, worth trying...

We shall find out soon.