Where to now?

Saturday May 15 2010

UK government Despite the shared pragmatism behind the outbreak of harmony brokered by former rivals David Cameron and Nick Clegg, sceptics ask whether their coalition can go the distance, writes James Blitz

David Cameron, Britain's new prime minister, sat in the cabinet room in 10 Downing Street on Thursday morning, his ministerial team assembled around him for the first time, and looked across the table at Nick Clegg, his deputy. "Someone said to me yesterday, Nick, that you and I are the new Tony Blair and Gordon Brown of British politics," he laughed, harking back to the duo that once ran the mighty Labour government. "I have to say, I thought that was setting the bar rather low."

At the end of a most remarkable week in British politics, Mr Cameron can be forgiven his moment of hubris. For Britain is transfixed by the pact the 43-year-old Conservative leader has forged with Mr Clegg, leader of the Liberal Democrats and his once bitter rival.

The deal gives Britain its youngest prime minister in almost two centuries. It returns the Conservatives to power for the first time in 13 years. Britain has its first coalition government since 1945, the year that Winston Churchill's wartime alliance against Hitler ended. The Lib Dems, Britain's third and often forgotten party, have entered government for the first time since the death of David Lloyd George, their formidable leader, 65 years ago.

In the past four days, the public has watched with wonderment - and not a little bewilderment - the birth of this coalition. Mr Cameron and Mr Clegg have welcomed the dawn of a "new politics", a break with Britain's adversarial political culture, a recasting of the parliamentary landscape. After a year in which the public has become chronically disillusioned with politicians, above all because of the way many MPs wrongly claimed taxpayer-funded allowances, both have called the pact a "seismic shift". In one of many remarkable announcements this week, they have vowed to keep this coalition government alive for a five-year parliamentary term.

Some, however, survey this outburst of harmony with scepticism. Mr Cameron and Mr Clegg are after all politicians who, before the inconclusive outcome of last week's general election, barely knew each other. In the live television debates that dominated the campaign, they were at each other's throats. Out in the country, many Conservative and Lib Dem activists are sworn enemies, fighting pitched battles in local and national elections.

Labour, in the meantime, mocks the decision by the Lib Dems, historically a member of the centre-left family, to team up with the Tories. "The Liberal Democrats are a party of the radical left, disguised by the fact that its MPs are such reasonable-looking people," says Lord Adonis, a former Labour cabinet minister. "This coalition brings together Britain's biggest spenders and its biggest cutters, its most ardent europhiles and europhobes. If this government lasts five years, it will have defied every conceivable law of political gravity."

At the birth of this coalition, one thing can be stated with certainty: few predicted it. So how did it happen? We must start with the personalities of the party leaders. Mr Cameron and Mr Clegg have much in common. Mr Clegg is only a few months younger than the prime minister. Both were educated at leading private schools and have a penchant for tennis. As they walked in lock step through the Downing Street rose garden this week for the their first joint press conference, their tall, handsome demeanour left the press converging on a single thought: they might have been a newly engaged couple making their vows at a civil partnership ceremony.

Personality, however, goes only so far to explain this alliance. After all, the two politicians have shown no liking for each other in the past. Shortly after taking over the leadership of the Lib Dems in December 2007, Mr Clegg rebuffed a dinner invitation from Mr Cameron, saying such a thing would be inappropriate. In the years since, they have directed plenty of barbed comments at each other. Mr Clegg once described Mr Cameron as "a cuddly symbol, perhaps, but fundamentally irrelevant". Mr Cameron, for his part, was embarrassed to be reminded by a reporter this week that he had once described Mr Clegg as "a joke".

Instead, the drivers for the creation of this coalition are to be found elsewhere. First and foremost, there is the economic state in which Britain finds itself. The country is in the throes of an unprecedented budgetary crisis, with a deficit of about 12 per cent of gross domestic product. Both leaders have known for a long time that financial markets look to the UK to reduce the current budget deficit of £163bn with aggression. Failure to do so could lead to a run on sterling assets.

Given this grim economic backdrop, the election that resulted in the first "hung parliament" in 36 years gave Mr Cameron and Mr Clegg few choices. The Lib Dem leader could have forged a coalition with Labour, his more natural ally on the centre-left. But a Lib-Lab pact would not have provided a Commons majority and would probably have disintegrated rapidly.

Mr Cameron could have tried to run a minority government, grubbing for votes from Lib Dem MPs on an issue-by-issue basis. But this, too, would have been an unstable arrangement, almost certainly triggering a second general election within a year. Both men quickly realised the benefits of being seen to forge a more durable agreement "in the national interest".

Into this situation, however, comes a third factor that unites the two: both men are pragmatists at heart, more interested in getting things done than in being in politics for its own sake.

"Cameron is more pragmatic than ideological," says Peter Snowdon, an author who has studied the Tory leader close up. "In contrast to Margaret Thatcher, most things are up for debate, for framing and forging positions on. As the events of this week show, a canny ability to adapt to changing circumstances may well characterise his premiership."

Some would go further in analysing Mr Cameron's motives. They believe that his alliance with the Lib Dems clinches his personal ambition to shift the Conservatives to the centre-ground of politics, marginalising his party's rightwing extremists - "detoxifying the Tory brand", as some of his supporters put it.

Whatever his motives may be, the crucial point is that a similar pragmatism is found in Mr Clegg. A former European Union trade negotiator, he is well versed in the kind of deal-making in which European political parties engage to form coalitions. Like Mr Cameron, he has tried to reorient his party. Mr Clegg has made the Lib Dems more realistic on economic policy.

In spite of the coalition's 74-seat majority, the question on many minds this weekend is whether it can last. There are good reasons to give its founders the benefit of the doubt. First, this government must undertake a painful programme of fiscal consolidation, cutting billions in state spending programmes and almost certainly increasing value added tax this year to raise cash for Treasury coffers. It would therefore be political suicide for Mr Cameron and Mr Clegg to descend into an election any time soon. In addition, following Mr Brown's departure - perhaps to be replaced by David Miliband, the talented former foreign secretary - both know they will soon face a resurgent Labour party.

"Labour did better than many thought at the election and will be in a stronger position to win the next one," muses one Conservative MP. "Cameron and Clegg must therefore establish a good track record, going to the next election when Britain is in an economic upturn."

Yet there are risks. One of the biggest is that Lib Dem MPs and activists will feel disillusioned by the compromises Mr Clegg has made with the Conservatives this week, ditching cherished party policies - such as an amnesty for long-staying illegal immigrants - in order to seal the deal.

"It's good to find ourselves in government and show we can be responsible," says one Lib Dem activist. "But many people think we're trapped in a Conservative bear hug. We'll have to bear the burden for the big spending cuts coming down the road. And, as the smaller members of the coalition, we risk losing our identity as a party the longer this goes on."

On the Conservative side, too, there are fears about what the alliance means. The eurosceptic ideologues on the right of the party will be horrified at the way Mr Cameron has joined forces with the europhile Mr Clegg, a man who speaks five continental languages and whose formative political years were spent in Brussels.

Others are worried that the Lib Dems, after so many decades at arm's length from government, are scarcely professional. "They are pavement politicians who will run for cover at the first accident and emergency department we have to close," says one Tory MP.

The fear of yet others is that an unexpected event could destabilise the coalition. An escalation of the crisis over Iran's nuclear programme, for example, might result in a big break between the Conservatives, hawks on the issue, and the Lib Dems, who reject military action outright.

For now, however, the focus is on the two authors of the coalition. In their first days in power, they have cast their project in the most ambitious of terms. "Of course there will be sceptics and doubters," Mr Cameron said this week, "but I believe we can make this work. I wouldn't be doing it if I didn't.'' Mr Clegg, likewise, has declared that, while there will be "bumps and scrapes" along the way, "this is a government that will last".

But sceptical voices will not be calmed quickly. Ultimately, these are the leaders of two separate parties, both with long traditions, that will one day do battle again at a general election. Today they are brothers. At some point they will be rivals once more. The question is when.