John Rentoul: Nick Clegg could yet be proved right

The Lib Dem leader has not got much out of the coalition so far, but it is the second half of this parliament that matters

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Most people seem to think that the Liberal Democrats are gathering in Liverpool this weekend to provide the next few frames in the party's slow-motion car crash. It is taken for granted that Lloyd George's old charabanc, with its bolted-on 1980s-style SDP aerofoil, is heading for a brick wall. The party has slumped in the opinion polls, including in our ComRes survey today, as 40 per cent of those who voted Lib Dem regret their choice, with no influx of new supporters to make up the loss. It is widely believed that Nick Clegg and Vince Cable sold their souls, conveniently reversing their view of the need to cut public spending in order to reverse their rear ends on to the Treasury bench. Of people who voted for them, 52 per cent agree that "the Lib Dems appear to have sold out on their principles".

It can only end in tears, can it not? Clegg has tied himself to a Conservative government against the instincts of most of his party members, just when that government has to make public spending cuts on a scale that would make Margaret Thatcher look like a Swedish social democrat. Just as in the three peacetime coalitions of 1895, 1918 and 1931, the Liberal leaders will in due course be absorbed into the Tory ectoplasm, while the members and a rump of MPs will return, weakened, to the wilderness whence they came.

The historian Kenneth Morgan recently argued that those previous coalitions were also all disastrous. "The first prevented Irish self-government and was responsible for the Boer War. The second saw us plunge into economic depression. The third made the social effects of that depression even worse. Each time, the Liberal coalitionists showed themselves to be mostly shallow opportunists willing to jettison their principles for the sake of office."

The thing about conventional wisdoms, however, is they can be wrong. There was a time when men thought mullet haircuts were a sensible idea or when aliens thought mashed potato should come out of a packet. So it is worth exploring the alternative thesis: that Clegg and his colleagues responded intelligently to the election result and that the Liberal Democrats could be strengthened for the long term by the coalition.

In fact, the days after the election have already been picked over several times by the instant historians - including, most recently, by Steve Richards, my esteemed counterpart on The Independent, in a book published last week. The account in Whatever It Takes makes it clearer than before that Clegg did as well as he could in an awkward situation. The option of a deal with Labour was – if only just – unworkable.

Clegg's real choice, therefore, was between a coalition with the Conservatives or a looser deal that reserved the right to decide how Lib Dem MPs would vote on each division in the Commons. The latter would have reduced the Lib Dems to reacting passively to whatever was proposed by the Tories. Put like that, it was not a difficult choice. Either way, the Lib Dems would have had to allow George Osborne's Budget cuts to go through, or to have forced another election. Yet the spirit of the party, which takes bodily form in the persons of Clegg's four predecessors, Sir Menzies Campbell, Charles Kennedy, Paddy Ashdown and David Steel, hankers after the myth that a Lib-Lab pact was do-able and remains an option to which the Lib Dems could revert at any time. That ghost story will provide much of the narrative thrust to the reporting of this week's conference.

Not only did Clegg make the right choice in May, however, but there is a case for saying that it was in the long-term interests of his party and the values for which its members think it stands. The case against him is essentially that the coalition is bound to be unpopular and that the Lib Dems will share the blame for making unpalatable cuts. It ain't necessarily so.

The key issue is the depth and timing of the cuts. Here, I think Osborne is playing politics as much as economics. Like any negotiator, the Chancellor knows he has to start the bargaining by asking for more than he expects to get. He wants to send a shock through Whitehall, make the deepest possible cuts in the first three years, then ease up as the next election approaches. It may be the economy will bounce back more strongly than expected, in which case he and David Cameron would think it prudent to allow Clegg to claim some of the credit for "saving" popular services from the worst of the cuts.

Which is another way of saying that the Tories have an interest in making the coalition work, and that means allowing the Lib Dem part of it to claim some successes. Clegg has not got much out of it so far, it is true. But it is the second half of this parliament that matters, not the first. It looks as if the Lib Dems will fail to claim the one really big early prize in May next year, when the referendum on voting reform is likely to be lost. If so, that will be the Labour Party's fault for falling for the simplistic formula: electoral reform = coalition = Bad Thing. A finding of YouGov's last poll of Labour members on the leadership was that they split 45:41 per cent in favour of keeping the existing voting system.

But Lib Dems should study an important new article by Professor John Curtice in Parliamentary Affairs, which shows why hung parliaments remain "highly likely" in future, even without voting reform, and even after the boundary changes to equalise the size and reduce the number of constituencies.

Thus the Lib Dems go into the next election with coalition partners who have an interest in their success, with a fall-back option, if the coalition parties lose ground, of being finally able to do a deal with Labour in a parliament that remains hung. All Clegg has to do this week is set out what it is all for. But that is another story.

Follow John Rentoul on Twitter twitter.com/JohnRentoul

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