Chris Huhne: This is a crisis. A coalition is the only way

A half-hearted deal would have appeared fragile and short-term. Our economic problems call for tough decisions and certainty
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The Independent Online

Today the most democratic party in British politics makes the most momentous decision of its post-war life: will the Liberal Democrat special conference approve the coalition agreement with the Conservatives? The parliamentary party and executive have backed the deal, but we have always been an activists' party, and today's conference in Birmingham is going to be key.

As one of the four Lib Dem negotiators of this deal, I believe that it is essential in the national interest to provide sound and stable government. If we turn away today from taking responsibility, we will be voting for deferred decisions and an early election at a time when the country desperately needs certainty. Any other course of action is fraught with the most serious political and economic danger.

For me, the background to this election and to the negotiations has always been perilous. I spent years of my life in the City advising investors on countries going through sovereign debt crises, and I never want a Governor of the Bank of England or a British Chancellor to have to count the money in and out as the South Koreans did at Christmas 1997 or the Greeks are doing now. The national humiliation is the least part of a crisis that hits the poorest and most vulnerable hardest of all.

Yet we face a prolonged period when we will be relying on the financial markets to lend the Government the money to bridge the largest peacetime gap between taxes and spending in our history. A fiscal problem of this scale is not resolved overnight. Indeed, no fiscal problem of our magnitude has ever been resolved in less than four years, and sometimes much more. If we fail to maintain the momentum of improvement, the markets could lose confidence in progress at any time. The price in higher interest rates could destroy the recovery.

That is why the Lib Dem MPs concluded that there was no point in a half-hearted deal where we would undertake to vote for budgets and confidence motions, but not participate. It would have been seen by the markets as a low-trust arrangement heading for early breakdown, and in turn the parties would have dodged the tough decisions because they expected another election and feared voter retribution. Only a coalition can deliver certainty for the prolonged period we need.

Of the 10 biggest programmes of fiscal austerity since 1970 anywhere in the developed world, seven have been undertaken by coalitions. Indeed, the strongest governments in our own history have been coalitions in pursuit of a clear goal. Sir Winston Churchill's government – the last to have Liberals in the cabinet – saw us through the darkest days of our history to ultimate victory in 1945.

To achieve this coalition agreement, of course we have had to compromise just as the Conservatives have done. Both of us have had to give up cherished aims. But I am convinced that we have found important common ground not just on securing a strong green growth package to underpin the recovery and curb the deficit, but also on Liberal Democrat priorities for fair taxes, a fair start for children and a radical reform of our political system to bring trust back into public life.

If we are to ask for sacrifice – as we must – it is crucial that the measures are seen to be fair. That is why there will soon be a big first step towards our goal of lifting four million low income people out of income tax altogether by ensuring that no one pays income tax on the first £10,000 of earnings. That change will also make it easier for those on benefit to keep more of their earnings as they move into work during the recovery.

Another key goal of our election campaign was more support for disadvantaged children in the education system through a "pupil premium", and that is also a commitment of the coalition. Children only get one chance for a good education, which is why their life opportunities must be protected even at a time of national crisis.

And finally, we achieved agreement on what will be radical constitutional reform. We will legislate for the alternative vote triggered by a simple majority in a referendum. This will ensure that every MP has half of the votes, and that no voter need vote against the party they fear instead of voting for the person they want. It is not a proportional system, but it will be fairer and is a key first step to fair votes.

Fixed term parliaments will remove the Prime Minister's power to go to the country at an arbitrary moment, while a Lords mainly elected by proportional representation will provide the most effective bulwark against an overmighty executive. A freedom bill will roll back the Labour intrusions into civil liberties: a restricted DNA database on the Scottish model, abolition of ID cards, confirmation of jury trials, and restoration of the rights of protest.

Some fear that all the good that has been set out in the coalition agreement could merely be reversed if there is an overall majority for Conservatives or Labour at the next general election, but this underestimates both the way these measures are likely to become the new political consensus and also the checks and balances of the Lords. No one party has a majority in the Lords, and our deal means that no one party is ever likely to control the Lords.

Our Lords and Commons parliamentary party approved this deal without a single vote against, precisely because it offers a vision of a better society towards which so many of us have striven for so long. The programme of constitutional change is the most important since 1911. We have an exciting route map to a fairer, greener and more liberal society. Our successors in the Liberal tradition will never understand if we fail today to rise to the challenge, for the first time in a generation, of putting our principles into power.

Chris Huhne is the Secretary of State for Energy and Climate Change

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