Tim's Gladstone Club talk

Gladstone Club talk

COALITION AND ITS LESSONS

I am so grateful to the Gladstone club for inviting me to give my reflections on the coalition. I'll spend the first part of my talk doing that, looking back, and then with your permission I will seek to look forward.

But I want to start by being blunt. On May 7th the Liberal Democrats were utterly and completely slaughtered. In terms of our vote and number of MPs we are back to the level of the 1970 general election, when the Liberal Party won six seats on 7.5 per cent of the vote, compared to this year's eight seats and 7.9 per cent. But the thing is, in 1970 the Liberal Party only fought half the seats in the country.

Compared to 2010 we lost almost two-thirds of our vote and over 85 per cent of our MPs. There is no other occasion in the entire history of the Liberal Democrats or the Liberal Party, stretching back to the early nineteenth century, on which we lost such a high proportion of our vote or our seats.

On May 7th Liberal Democrat candidates came second in only 63 constituencies, only 19 of which had not been won in 2010. We only managed a further 36 third places. The vast majority of our candidates - 524, 83 per cent of them - came fourth or worse; indeed, two particularly unlucky ones managed no better than seventh place. We lost 335 deposits, more than the Liberals, SDP and Liberal Democrats lost at every election from 1979 to 2010 put together.

So this is not exactly the state in which any potential leader dreams of taking over their party. But no one ever pretended that the fight for Liberalism was an easy one. But I am genuinely inspired, motivated and uplifted by the tremendous surge in our party membership since the election, a rise of more than 16,000 now. These people who are liberals at heart and who have chosen to become Liberal Democrats in deed - without even being asked. Just think how many tens of thousands more would join us if we went out there and asked them - which I plan to do. They believe Liberalism is worth fighting for, I do too.

I wanted to run through those horrific figures to underline the scale of the challenge facing us and to emphasise the need for a very long and very hard look at what we did in the last Parliament that might have contributed to the election result on May 7th.

We need to ask: First, was it wrong to go into coalition? Second, could we have handled coalition better? Third, could we have fought the election better? Fourth, how should we approach coalitions in the future? And fifth, and most importantly, how do we recover?

So, were we wrong to go into coalition? I have absolutely no doubt that we were right. At the 2010 election, as Paddy Ashdown put it, the electorate contrived to come up with 'an instrument of excruciating torture for the Liberal Democrats, where our hearts and emotions went one way but the mathematics the other'. A coalition with the Conservatives was the only combination that could deliver a stable majority government.

It is true that a Labour - Liberal Democrat coalition could have survived a vote of no confidence by relying on SNP, Plaid Cymru, Green and Alliance votes - but can you imagine trying to assemble that group of supporters for every vote on every bill and every amendment? Relying on Jeremy Corbyn and his mates to support every Budget and every public spending cut? Trying to govern together with worn-out Labour ministers who'd just been rejected after thirteen years in power, having crashed to their party's second-worst election result ever? And remember, during those five days of negotiations, the parade of Labour MPs trooping to the microphones to complain that they had no moral right to govern and wanted no part of any deal with us? Anyone who thinks that was a realistic alternative is living in cloud-cuckoo land.

Or could we instead have reached a deal with the Tories short of coalition, such as a supply and confidence arrangement? Our MPs discussed that immediately after the election, and reached the conclusion - rightly, I believe - that it was a non-starter. We would have collected all the blame for putting the Tories in while having no real chance to influence most of what the government did, short of a few big-ticket items. Remember that the bulk of government activities is not primary legislation, but ministerial decisions, allocating public spending, giving directions to civil servants, negotiating with the UK's partners in the EU or the UN - none of which we would have had any say over. The Liberal Party tried something like that in 1924 with the first Labour government - and when that government fell the party lost 75 per cent of its seats; we have never yet climbed back to pre-1924 levels of support. OK, in the end the 2015 outcome was worse that that - but you can understand why supply and confidence didn't look all that appealing to Lib Dem MPs in 2010.

The only other real option open to us was to stay in opposition and see a Tory minority government take power. Either we would have combined with Labour, the nationalists and others to vote down its Queen's Speech - leading to a second election just weeks after the first - or we would have had to let the Tories govern as a minority until they felt strong enough to call a second election, probably in the autumn, and probably win a majority, given that they would have been able to argue, quite reasonably, that the Liberal Democrats had turned down an opportunity to join the government at a time of national crisis. For remember the background. Just three days before the election, the Eurozone countries and the International Monetary Fund launched the first bailout loan to rescue Greece from defaulting on its debts. There was a real fear of a collapse of the Eurozone and consequent financial turmoil on world markets. Were we supposed to walk away from this and leave Britain to a second election or a minority Tory government?

Many people have told me how much they disliked the coalition we formed with the Conservatives, and I understand why. But no one has yet convinced me that we had any other credible option.

And also remember, the coalition deal looked pretty good at the time. Key Liberal Democrat manifesto pledges were at the heart of the agreement including raising the income tax threshold to £10,000; introducing the pupil premium to give extra resources to schools taking on children from disadvantaged backgrounds; restoration of the earnings links for the state pension; a banking levy and reform of the banking system; investment in renewable energy; an immediate cancellation of plans for a third runway at Heathrow airport; an end to the detention of children for immigration purposes; the dropping of plans for identity cards; agreement to reach the UN target of 0.7 per cent of GNP for overseas aid by 2013; reform of the House of Lords; and the introduction of a fixed-term parliament of five years. It's worth pointing out that with the exception of Lords reform every single one of those objectives was achieved.

The coalition programme also stopped the Conservatives bringing in some of their manifesto commitments such as cutting inheritance tax, renegotiating elements of the Lisbon Treaty and scrapping the Human Rights Act, among many others.

No wonder the parliamentary party, the Federal Executive and our special conference all voted for coalition by overwhelming majorities. So, yes, for a whole host of reasons it was right to enter coalition.

The second question is: could we have handled coalition better? Back in 2012, the Journal of Liberal History - which, incidentally, if any of you don't subscribe to I thoroughly recommend; - published an article by Tim Bale called 'The Black Widow Effect: Why Britain's Conservative - Liberal Democrat Coalition might have an unhappy ending'. Now, if you remember what black widow spiders do to their partners after mating, you'll get an idea of what the article was about. Looking at the experience of coalitions in European countries and in New Zealand - another country with a Westminster-style political system - the article concluded that junior coalition partners find it very difficult to claim the credit for anything that goes well but find it equally difficult to escape blame for anything that goes wrong. In particular, any improvement in the economy only tends to benefit the senior partner. That all seems pretty prophetic now!

So, was our heavy defeat inevitable from the start? Well, our friends in European Liberal parties who came over to talk to us at the beginning of the coalition warned us that we might lose half of our vote - but we should have expected to have been able to replace at least some of them with new voters, who liked what we did in coalition but who had never previously considered that we had a chance of getting into government.

And the experience of our Scottish party in coalition with Labour from 1999 to 2007 suggests that junior partners are not always doomed to disaster. In the 2003 election the Scottish Lib Dems actually gained votes, slightly, and ended up with the same number of seats; in 2007, again they saw a small increase in their vote, though they lost one seat.

This suggests that the 2015 election result was not inevitable; that our performance was at least to some extent in our own hands. And in many ways we had an extremely good record in government - of which personally I am immensely proud. As well as the commitments I listed above, every one of which was achieved, with one exception, we brought in same-sex marriage, created the world's first Green Investment Bank, established the triple lock for pensions, created two million apprenticeships, started to provide free schools meals for the youngest pupils, and much more. I don't believe any of that would have happened without Liberal Democrats in government.

At the same time we stopped plenty of Tory initiatives: you'll remember that they wanted the Orwellian data communications bill, to fire workers at will without any reasons given, to introduce nation-wide immigration checks on all new tenants and lodgers, to stop geography teachers telling children about how we can tackle climate change, to cut the time childminders can give to each child, and to scrap help with housing costs for young people. We blocked all of that, and more. Over the next five years people will see exactly what a difference we made to government. In fact, the last five weeks have made it pretty clear what an outstanding job Nick Clegg and team did.

And don't forget that we also delivered stable and lasting government, in a way which very few predicted when the coalition was formed. Indeed, in many ways the coalition government was less riven by internal disputes than were the Blair-Brown governments, and less prone to abrupt changes of direction than was the Brown government from 2007 or the Major government between 1992 and 1997.

But none of this did us much good on May 7th. It would probably have won us millions of 2nd preferences in an AV election - but you will recall that we don't have that system. You see, it seems as though people simply stopped seeing the Liberal Democrats as relevant at all. Early results from the British Election Study reinforce Tim Bale's argument, in his 'Black Widow' article, that the Liberal Democrats gained no credit for what went right. For example, 44 per cent of voters felt that the economy was getting better, but only 19 per cent attributed this to the Lib Dems, compared with 73 per cent who credited the Tories.

On the other hand, we didn't collect much of the blame either. Two-thirds of voters felt that the NHS had deteriorated under the coalition, but only 19 per cent blamed the Lib Dems for it, compared with 69 per cent who blamed the Conservatives. 42 per cent of voters felt that education had also deteriorated, and 64 per cent blamed the Conservatives, while only 19 per cent pointed to the Liberal Democrats.

There'll be more to come from the British Election Study, but it seems clear that the majority of voters simply seem to have felt that we were an irrelevant component of the government. Why is this? I'd suggest there are four main reasons.

First, we forfeited voters' trust, above all by the tuition fees episode, a disaster from start to finish. Having had the argument within the party, fought an election with phased abolition of fees in the manifesto, and forced all our candidates to sign a pledge opposing any increase in them, the worst possible thing we could have done was to junk all of that and sign up to a rise in fees - but that's exactly what we were asked to do. In retrospect, we should never have agreed to any element in the coalition agreement which involved our MPs abstaining on the way forward - it gained us no credit while attracting all the blame.

Of course there was a limit to what we could do - we were the junior partner in the coalition, after all. But we should have argued for it harder in the coalition negotiations; and if we were unable to reach agreement, we should simply have decided to have no coalition policy on it. Having signed the pledge, we had to keep our word. It didn't matter that our commitment to abolish tuition fees wasn't a priority, it wasn't on the front page of the 2010 manifesto - it was nevertheless symbolic and central to millions of our supporters and members. Which is why dropping it so comprehensively was so fatal.

I warned at the time that this was our equivalent of Labour's choice to engage in the Iraq War, a decision which would damage our image and reputation long after the details of the policy had been forgotten. It gives me no pleasure to conclude I was right; it was at that point that voters started to disbelieve us, whatever we said. When it came to the election, so many of them thought that we just didn't matter.

Incidentally, it seems to me now that the reason we lost so many seats was only in part down to the Conservative surge caused by fear of a Labour / SNP government. The figures indicate that a larger factor in our heavy defeat was that the 'coalition' of voters who had elected Liberal Democrat MPs in the past saw insufficient reason to continue doing so and thus chose to go Labour, Green or elsewhere - it was the ultimate unwinding of tactical voting. Rebuilding that coaltion of voters is essential if we hope to seriously increase our number of MPs next time.

In passing, I'd just add it was a tragedy that the tuition fees row obscured what was in the end a pretty good policy. We didn't go along with the Browne Review's recommendation of lifting the cap on fees entirely, we raised the threshold at which loans have to be repaid from £15,000 to £21,000, we ensured more money was spent on helping the most disadvantaged students get into university. The new system has not prevented young people from going to university - the number of students is now at a record high - and we also protected funding for further education. But that all is now forgotten. Decent policy. But as for the politics, well we all know the answer to that one.

The second way we could have handled the coalition differently came in our re-enforcing the unfair narrative that we didn't matter, by going along with some pretty high-profile Tory policies - most notably, reform of the NHS, the introduction of the bedroom tax and the lowering of the top rate of income tax to 45 pence - those last two making an absolute mockery of George Osborne's claim that 'we're all in it together'. All of these were exactly what the electorate would expect the Tories to do - and none of it was what they'd expect us to do.

It didn't matter that NHS reform would have been much worse without us - the details were complex and confusing, and it was the overall message, of privatisation and cuts in services, which stuck. Set against those three key issues none of our achievements really had much traction. Green Investment Bank, same-sex marriage, the pupil premium - good, worthy policies, good Liberal Democrat policies, but not 'the economy, stupid'. Probably the only economic policy the electorate liked and recognised as ours - the raising of the income tax threshold - was coopted by the Tories anyway.

The third thing which contributed to our invisibility with the electorate lay in the allocation of departments. I completely follow the logic behind the responsibilities our five cabinet ministers ended up with, but with the benefit of hindsight we suffered for not having control of any major spending department, such as education or transport. Constitutional reform and climate change are important issues for the party and personally I am uncommonly passionate about both, but they are much less salient to the general public. And although many of our junior ministers had real achievements to their credit - in particular, I'd say, Steve Webb, Norman Lamb, Jo Swinson, Norman Baker and Lynne Featherstone - again they were usually not obvious to the electorate.

The fourth way in which our handling of the coalition laid the seeds of the May 7th defeat was in going overboard, during the first nine months, in proving that it could all work. Obviously it was important to demonstrate that a coalition, unfamiliar as it was to the electorate, could deliver effective government, but we did this so impressively well that we submerged our identity. Everyone remembers the 'Rose Garden' press conference, and the picture of the two leaders entering Number 10 with Nick's hand on Cameron's back. But the impression of unity, of an indivisible whole, was underlined time and time again.

Of course, this all went into sharp reverse after the 2011 local, Scottish and Welsh elections, and the AV referendum disaster but - again with hindsight - by then it was too late. In the first twelve months of the coalition we fell from the 23 per cent we won at the 2010 election to 9 per cent in the opinion polls, and essentially we never recovered afterwards.

My third big question is: could we have fought the 2015 election more effectively? To be honest, I think by the start of the campaign our fate was more or less sealed. However, I believe we made yet more errors during the campaign which perhaps cost us yet more seats, If we'd fought a better campaign maybe we could have saved the four which we lost by less than 2,000, and maybe the further four that we lost by less than 3,000 - which, given our present circumstances, would have made a big difference!

What was the problem? Instead of fighting on a positive message around the Liberal Democrat vision, we focused on what difference we could make to the other two main parties - giving the Tories a heart and Labour a brain, cutting less than the Tories and borrowing less than Labour. That approach gave the electorate two messages: first we were desperate to get into power, second we didn't much mind with whom; and third we didn't stand for anything by ourselves.

At the same time we failed convincingly to take on UKIP - the polar opposite of everything we stand for - and fell into the Tory trap of pretending that a vote for the SNP was somehow illegitimate.

A year ago, in June 2014, Chris Huhne wrote a piece in the Guardian entitled 'Lib Dems must show they want to change the system, not just run it'. Our election message seemed to be: we want to run the system, not change it.

Meanwhile our activists, the campaigns department and organisers around the country fought a heroic campaign and I am extremely proud of them.

I don't need to spend too long on my fourth big question: which is: how do we approach coalitions in the future? Of all the many challenges that face us now, this is not an immediate concern! Yet what the last five years - or, more accurately, the last twenty-five years - have shown is just how volatile British politics is now; and also just how limited is the support the Conservatives and Labour now command. In 2010 the combined Tory-Labour vote fell to below two-thirds of the total, for the first time since Labour supplanted the Liberals as the main non-Tory party in the 1920s. This year, despite us losing 15 percentage points, their combined vote rose by a measly 2.7 per cent. The Conservatives' winning vote of 36.9 per cent is lower than their score in half the elections they lost since the war, and the Labour vote of 30.4 per cent is their third worst result since they started fighting all the seats in the 1920s - only 2010 and 1983 were lower. So the chance of another hung parliament - and potentially, another coalition - within our political lifetimes is, I think, reasonably high.

Given what happened this year, if we have the chance, should we avoid another coalition? No, I don't believe so. We are a political party, not a pressure group; there is no point in being in politics if you don't seize the chance to govern when you get the opportunity. And the pluralist politics we envisage, and the reforms to the electoral system we want to see, mean that coalition should become the norm, not the exception.

Obviously, however, we must learn from the 2010-2015 experience, and I draw three lessons for any future coalition. First, having proved once that coalition can work and deliver stable government, we don't need to go to all that effort to demonstrate it again; we must be clear about our differences with our coalition partners from the start - as Lousewies Vanderlan of D66 said, 'coalition is business not marriage'. Second, we need to have a clear impact, from the beginning of the government, about what matters most to the electorate: economic policy. And third, given that even with these conditions in place we are likely to lose votes, an absolute precondition of coalition must be electoral reform - guaranteed, without a referendum.

But clearly we have a long way to go before we're in any position to demand anything like that.

So, I hope you will permit me to go beyond my remit here - I think I've done enough analysis of the coalition years, of what went well and what went less well. Because all that matters to me now is that we recover. That the Party of Gladstone, Lloyd George, Grimond and Kennedy does not go gentle into the night, but rages with great effect to restore our fortunes and build a strong and electorally successful liberal voice that will do those great leaders proud.

This is the only thing that matters in the leadership election. I've written and spoken about this elsewhere and I will do so further over the next five weeks. But briefly, it should be obvious that we have to approach politics in a very different way in this Parliament from what we've been used to. We need to become a movement, not another managerial Westminster party.

We've fallen into a style of fighting elections which relied on identifying ourselves as the main challenger to whoever held the seat, and then mobilising local grievances to convince the voters that we were on their side, whatever they thought and whether or not they were remotely Liberal in their beliefs. What we actually stood for and believed was almost irrelevant, except during atypical periods such as the war in Iraq - with the result that while the electorate began to recognise a few things we were against - the Iraq war, tuition fees, cuts in local services - they didn't know what we were for.

As the only Liberal Democrat in the UK who got more than 50% of the vote in the election on May 7th, I am a strong supporter of intelligent seat campaigns. We have immense talent in the party that needs to be used better than it currently is in this respect.

But we can't credibly present ourselves as the main challenger in the more than 500 seats where we're in fourth place or worse; 'it's a seven-horse race' isn't a great slogan! We have to convince people to vote for us because of what we stand for, not just because they don't like the incumbent.

In turn that means that our doorstep conversations need to change so that we do community politics properly - no more concentrating only on finding our supporters and moving on, we have to also engage with people, talk to them and convince them that we're worth listening to.

It won't be easy, it might be a long hard slog, but I'm confident that it's possible. Remember, there was only 7 years between David Steel taking over the leadership in 1976 and the Alliance's record breaking vote in 1983. I don't see why our recovery shouldn't be more swift than we fear, but it is not a given, we will have to earn it. We've done it before, in the 1950s and '60s, when the Liberals recovered from near oblivion to challenge the Tory-Labour stranglehold on power; in the 1970s, when we adopted the approach of community politics, building on our local roots, fighting alongside local campaigners to make life better in a myriad of little ways for individuals and their communities; and in the 1980s, when I was a proud foot soldier as Paddy Ashdown and colleagues rebuilt the Liberal Democrats from the ashes of merger to argue the case for a fairer, freer, greener Britain.

I believe that we start this process of recovery by picking on a few major issues around which to mount campaigns - and not just any old topic where the government happens to be unpopular, but issues which fit with our beliefs and tell a story about who we are, what we believe and why we believe it. Thanks to the Tories gaining a majority, there'll be no shortage of candidates: making the case for the European Union, fighting against the sell off of housing association properties, defending the Human Rights Act, standing up against the so-called snoopers' charter, pointing to the damage the Tories will do to the whole of society, not just the poor, by £12 billion of welfare cuts - because an unequal society is a weaker society for everyone. Inequality is not just morally wrong, it is foolish - it is a waste of talent, it damages Britain.

But to repeat my point from before, campaigns against things aren't enough. Underlying all of our campaigning we need to put forward a positive message of belief in this country, in its citizens and their communities. Nick Clegg once spoke about 'the premise that there's something wonderful about every person, there's something marvellous about their potential and talents, and you've got to do everything you possibly can in politics to emancipate individuals, to give them privacy, give them freedom, give them the ability to get ahead'.

That's what Liberalism is all about. It's an optimistic confidence in the capacity of everyone to make the most of their lives, to fulfil their talents and to realise their dreams. It's the belief that government has a duty to make this possible - to create the conditions in which people and their communities can flourish.

If I become leader, I want the party to take the lead not just in campaigning against all the illiberal, authoritarian, divisive policies of the Tory government will bring forward. I want to make the case for four key objectives.

Active, ambitious, liberal government to create a new economy - low-carbon, high-skill, innovative, enterprising and resource-efficient, because this is what we need to generate jobs, prosperity, opportunity and wealth in a competitive world; an economy where the government thinks long-term and new ideas flourish, and where wealth and opportunity are spread across the whole country; and a government open to new economic thinking, ditching the failed orthodoxy that brought us the Great Crash and embracing new ways of thinking that are realistic about how markets behave and in which ethics matter.

Leading a national campaign to tackle our growing housing crisis. Fighting the Conservatives' attempts to sell off housing association homes, building a movement alongside the housing associations and groups like Shelter so that we build the affordable homes that people need. Nowhere else is the need for Liberal Democrats to stand proudly as the advocates of the people so clear.

Openness and Internationalism - because nationalism is a force for division, aggression and intolerance. Whether you wrap yourself in the union jack or the saltire, the politics of nationalism and identity is divisive and wrong, Liberals are patriots but the antidote to nationalism. Because cooperation with our European neighbours is needed more than ever for a clean environment, for open trade, to stand up to corporate power and to protect the victims of conflict from those who would exploit and abuse them. But we must speak to people with passion about the importance of our membership of the EU and speak of the union as being the world's most successful peace process. A union that has taken countries that had nuclear weapons on their soil pointed at one another and put them around a table.

And reform - to deliver a new federalism, which is the only way to preserve the United Kingdom; a new voting system where parties can't win outright power on just 37 per cent of the vote, and an end to the power of money in politics; and a framework which provides security against crime and terrorism without trampling on civil liberties or human rights, which champions the rights of individuals and their communities.

We have to motivate people, starting with our own members and activists, rebuilding the party in areas where it's been dormant for a decade and more. People may vote for a political party because of what's in their wallet or issues they weigh up in their head. But they join a political party because something gets them in their gut - and it's time we went out there and got people in their gut.

I was asked at the weekend what my 3 priorities for the Liberal Democrats would be if I became leader - I considered listing my top policy areas as I have just done, but I said something different. My top 3 priorities for the Liberal Democrats? Winning, winning and winning.

Colleagues, I am fed up of being right and losing elections

I want to build the most effective election winning machine in the country, and all machines need fuel - and our fuel is a passionate belief in liberalism. A belief in the people that liberalism will empower. Some will say that liberals have no vested interests. That labour have the unions and that the tories have big business. But we do have vested interests. Our vested interest is in the powerless people in your street, in your village in your block who have no one to speak for them but us.

It is for their sake that we must now resolve to mount the mother of all fight-backs.

Our party will soon elect a new leader, but we need to see that our party must have 61,300 leaders. All of us self-starters scrapping to save and to strengthen the liberal cause. I hope you will give me your support to lead and inspire that fightback.