U.K. 2010: A new government
by Razi Rahman, deputy managing director, London
The United Kingdom entered unchartered political waters in May as David Cameron and Nick Clegg announced details of the new Liberal-Conservative coalition government. Speaking to press in the Downing Street garden on their first full day in office, Mr. Cameron and Mr. Clegg emphasized their "shared resolve" to tackle the challenges facing Britain. The prime minister said the new coalition will be united behind the principles of freedom, fairness and responsibility, and its key purpose would be to provide "strong, stable and determined" leadership for the long term. The scale and extent of the change in politics was underlined by the fact that the process for appointing Ministers was conducted not by the prime minister alone, but together with his deputy, Nick Clegg, with each new cabinet minister meeting both men at 10 Downing Street.
The key priority for the new government is tackling the structural deficit. The government has already announced that public spending in 2010-2011 will be reduced by £6.2 billion. This will take the form not only of "efficiency savings" as promised during the election campaign, but also spending cuts: 10,000 university places will be scrapped, the Child Trust Fund will be phased out and one-to-one tuition for children who fall behind in numeracy and literacy will end. Further cuts will have to be made by local government and in as-yet-unspecified "lower priorities" in departmental spend. Yet this is only the start. The real extent of the scale of action needed to tackle the deficit only emerged after the emergency budget on June 22. The spending review will take place in the autumn.
On policy, the two parties have shown a real willingness to compromise, with the Conservatives conceding more in policy than many expected. Yet there are points of real disagreement between the parties - principally on Europe, Trident, immigration and nuclear power. So how are they proposing to deal with this? On immigration, the coalition has adopted Conservative proposals for an annual limit on non-EU economic migrants. On defense, they have agreed that Britain's nuclear deterrent should be retained, but that Trident should be scrutinized to ensure value for money, with the Liberal Democrats able to make the case for alternatives. The boundaries of collective responsibility may be stretched still further when nuclear power is under discussion. The coalition agreement envisages that new nuclear construction is "possible," but then devises a process which allows the Liberal Democrats to maintain their opposition to it. Given that the Secretary of State Chris Huhne is himself a Liberal Democrat, it is easy to see why the industry is nervous.
Europe may cause the coalition further difficulty. In William Hague, the government has a foreign secretary who is a genuine eurosceptic. The rest of Europe will hope that the Liberal Democrat presence in the government may tame the wilder excesses on the Conservative benches. While the parties have agreed that any further transfer of power will require a referendum, the language in the Conservative manifesto around repatriation of powers has been quietly dropped. The agreement suggests an uneasy compromise, and the government may be fortunate that the focus of the first few years is likely to be on the economy and domestic policy rather than Europe.
Given such difficulties, why did David Cameron choose to enter such a coalition, describing it as "so much better than the alternative," minority government? Having failed to gain the overall majority that many Tories expected, there has been a rumbling criticism within the party about the strategy, message and tactics of the campaign. Yet a more considered analysis may be that the problem was not so much the campaign, but rather the fact that an electorate that wanted change was unconvinced that the Conservative Party had itself really changed. Perhaps Cameron decided that the result gave him that opportunity to dramatically alter perceptions of the party.
There will be MPs and activists in both parties who will hate this arrangement, and although they may keep their counsel during the political honeymoon, they will be more than prepared to speak out in the months to come. There are still many questions unanswered and much scope for tension and rivalry. Will some Conservative MPs look at their Liberal Democrat counterparts and wonder, have they got my Ministerial job? Can the two parties deport themselves during by-elections and local council elections in such a way that it does not damage relations at Westminster? Will the parties restrain themselves during the party conference season?
The way in which the two parties and their leaders navigate these challenges will go some way in determining whether this represents the "historic and seismic shift" in British politics which the prime minister has heralded.