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

by Stephen Tall on April 22, 2012

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 “Outdated” policies and principles should not halt the modernisation project.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 Tall is Co-Editor of Liberal Democrat Voice, and also writes at his own site, The Collected Stephen Tall.