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From the archives: the coalition is born

11 May 2012

6:18 PM

11 May 2012

6:18 PM

It is two years to the day since David Cameron first entered 10
Downing Street as Prime Minister. To mark the occasion, here’s James Forsyth’s cover story from the time on the deal that put him there:

Can this marriage of convenience work?, James Forsyth, 15 May 2010

‘It is not the prize. It is a means to the prize.’ This is how one long-time political ally of David Cameron described the Tory leader’s entrance into Downing Street at the head
of a coalition government. The deal with the Liberal Democrats which has put Cameron in Downing Street is, as this Cameron ally admits, ‘an arranged marriage not a love match’. In the
run-up, the bride’s family was trying to negotiate a better dowry from an alternative suitor, and many in the groom’s family were praying that he would be jilted at the altar. Guests on
both sides of the church could be heard whispering that the marriage would never last.

Yet a coalition with the Liberal Democrats has been the leadership’s aim ever since it came up short in its effort to gain an overall majority. They believed that a minority government
without a fixed-term parliament was the worst possible combination, as it meant that the government could be toppled at any time. They concluded that, once inside government, the Liberal Democrats
would be more committed to making things work and more likely to compromise on policy. George Osborne was also keen to gain political cover for the massive reductions in public spending that will
be necessary to get the deficit under control. Indeed, I am told that ‘George regarded cover on cuts as the real prize.’

On Monday, the coalition seemed in danger. The Lib Dems wanted more concessions on electoral reform than the Tories had been prepared to give, and opened formal negotiations with Labour. There was
something approaching panic amongst the Tory leadership, who feared a Labour-Lib Dem deal. At a dinner that evening, Mr Osborne said he believed the game was up. For all the leadership’s
dismay, Tory MPs were that evening bullish about the prospect of a Lib-Lab pact that would have been widely reviled and collapsed within months — leading, they believed, to a Conservative
majority government. But an MP who went to see Mr Cameron on Sunday evening reports that he had no appetite for a rematch: he looked uncomfortable whenever the idea of another election was
mentioned. He still seemed to be reeling from what was (by the definition he gave The Spectator a fortnight ago) a failed election campaign.

With the Liberal Democrats having opened formal negotiations with Labour, Cameron called a second shadow Cabinet meeting on Monday and announced then that he intended to offer a referendum on
changing the electoral system. The alternative vote would be on offer, and he would campaign for a ‘no’ result. Cameron argued to the shadow Cabinet, and to MPs he spoke to later, that
such an offer was necessary to prevent the Liberal Democrats from going into government with Labour and simply legislating the change. Mr Clegg’s threat — that he might run off with
Gordon Brown — was effective in increasing the pressure on Mr Cameron.

Chris Grayling, the shadow home secretary, was the only person to speak against the idea. Relations between Grayling and Cameron have been particularly strained since Grayling’s remarks about
B&Bs being allowed to exclude gay couples. Grayling told friends that Cameron had not returned his calls for weeks after the incident: he felt as he if was on the way out.

In the shadow Cabinet meeting, Cameron made the case that only by going into government could the process of detoxifying the Tory brand be completed: only by governing as a reasonable,
compassionate party could the Tories persuade the voters that that’s what they were. The meeting was carried with relative ease. Cameron’s position was boosted by the fact that on
Monday afternoon the negotiating teams had only discussed what items from the Liberal Democrat manifesto would be added to the government’s programme and had not gone on to decide which Tory
policies would be dropped or diluted.

Having secured the agreement of the shadow Cabinet, Cameron convened a special meeting of the parliamentary party. Most of those present either backed the deal or held their tongues. But on the
phone afterwards, one senior backbencher described the situation to me as a ‘massive screw-up, a massive failure to get to where we needed to be electorally, compounded by amazingly inept
negotiations’. Another shadow Cabinet member said: ‘The people who lost the campaign are now conducting the coalition talks.’ When it was revealed that Oliver Letwin and Ed
Llewellyn were on the negotiating team, one Tory barked at me: ‘So Llewellyn and Letwin are negotiating for the Lib Dems. Who’s doing the job for us?’

All this reveals the tension between the leadership and the rest of the party. The leadership seems genuinely convinced that it ran a good campaign, one that did as well as could be expected in a
difficult election. But the rest of the party disagrees. In a survey by the activists’ website ConservativeHome, 62 per cent of party members described the campaign as ‘poor’.
Among veteran Tory MPs there is a feeling that the election really should have been won comfortably. Among new MPs who fought marginal seats there tends to be a view that the party lacked messages
that resonated on the doorstep. Even new MPs who are fully signed up to the Cameron project have told me that the national campaign was ‘disappointing’ and left them short of ammunition
on the doorsteps. The coalition negotiations postponed the analysis of why the Tories failed to gain a majority. But now people are pushing for a full debrief. As one member of the Tory front bench
in the last parliament said to me, ‘We mustn’t skip the post-mortem.’

The official view on why the party failed to win is that it did not do well enough in three areas. First, Scotland: the party won only one of 52 seats north of the border, with the voting share
little changed from the 1997 wipeout. Second, areas with a lot of people dependent on the state, for employment, benefits or housing; and third, seats with a high ethnic minority population. To the
Cameroons, this is proof that the problem was that the party had not changed enough. They argue that the nature of these three areas where they failed shows that a more right-wing message on the
economy or immigration would not have delivered a better result.

Others disagree. One member of the shadow Cabinet who fought the election remarks ruefully that when the ‘Tory party dies the word “Lisbon” will be found written on its
heart’. His theory is that Cameron’s failure to find a way to have a referendum on the Lisbon Treaty even after it had been ratified demoralised the Tory activist base. He also thinks
that it made a crucial number of Eurosceptics either stay at home or vote for Ukip. Others argue that Cameron’s shift on Lisbon made him look like just another politician.

Talk of the Tory right baring its teeth misses the point. Their concerns are not so much about ideology as about competence. Many of them are perfectly happy with the ‘Big Society’
message — their gripe is that it was woefully mishandled.

There is incredulity in Tory circles about the failure to test the campaign’s messages properly. Contrary to the public perception, the Cameroon leadership — Steve Hilton in particular
— are averse to polling. Bill Knapp, an American consultant the Tories hired for the campaign, has been infuriated by the failure to poll properly. Even after the Tories had come up short on
Friday morning, the leadership refused to poll the public’s attitude to coalition negotiations even as they tried to work out what message would resonate most with them.

For others, including Lord Ashcroft, the real problem was the TV leaders’ debates. Indeed, Ashcroft’s decision to appear on the BBC’s election night special has sparked concern
that he might be planning to produce his own critique of the campaign.

A lot of the campaign was based around Cameron personally. At events Tory staff often sported DC10 badges. But in this bitterly anti-politics environment, the public — predictably —
refused to fall in love with Cameron. As one MP put it, ‘They thought the country would fall head over heels for David and Samantha and it didn’t.’

But as Cameron told his MPs, the party is in a less than ideal position now and is tasked with making this coalition government work. The political opportunities for the Tories are huge. If
successful, this coalition could re-align British politics: drawing the Tories and the Liberal Democrats closer together and isolating Labour.

If, as intended, the government runs until May 2015 and is broadly successful — with the economy roaring into recovery — then the Tories may well find themselves in the strongest
position they have been in electorally for decades. They would know that in the Liberal Democrats they had a reliable coalition partner. Labour would have to win an outright majority to be sure of
governing. The anti-Tory tactical vote would also have nowhere to go in Lib Dem/Tory marginals; Labour voters would be unlikely to lend their votes to a party who had been using its votes to keep
the Tories in power at Westminster.

A productive coalition would also shift the Liberal Democrats to the right, making an electoral pact — and even, some say, an eventual merger — more likely. The process of a five-year
coalition would repel the party’s left-wing activists, giving it a more centrist base and focusing the party on a classic liberal agenda, an emphasis on small government that the Tories
share. This would shift the centre of gravity in the Lib Dems, bringing the membership in line with the party’s more centrist leadership. A Liberal Democrat party that was essentially liberal
rather than social democrat would lean to the right — whereas the party now taking its place in government leans to the left.

There is already chatter in Tory circles about how the Liberal Democrats could be brought into the fold in the long run. The enthusiasts for the deal contend that uniting the Liberals and the
Conservatives is part of the Tory party’s Churchillian legacy.

The risks are as great as the potential rewards. There is a danger that the Liberal Democrats claim credit for everything good that the government does and that the Tories get the blame for
everything unpopular. So the rise in the income tax thresholds is a Lib Dem policy but the cuts are still Tory cuts. Another risk is that the Tories will instinctively view the coalition through
the prism of what they have given up, while the Liberal Democrats will look at it through what they have gained; making them much more effective at communicating their message.

Some fear that coalition with the Liberal Democrats could, pace Cameron, actually slow the process of detoxifying the brand. The concern is that the public will think that the government is only
reasonable because the nasty Tories are being moderated by the nice Liberal Democrats. Underpinning all this is the big danger that the Liberal Democrats will walk out at a crucial moment. Even if
the fixed-term parliament is made law, this will not alter the realpolitik. The Lib Dems retreating to the opposition benches and leaving the Tories to struggle on in government would be a disaster
for the Tories.

Even if the Lib Dems are not plotting an exit strategy, they may well start doing so if their poll rating tumbles as the cuts take root. One insider tells me that he thinks that the Liberal
Democrats’ secret, parallel negotiation with Labour over the weekend will ensure a certain amount of realism at the top of the party about the way the Liberal Democrats behave. Indeed,
I’m informed that Mr Letwin is the ‘only person’ who appears to be genuinely convinced that a new, more consensual era of British politics has begun.

Cameron ran a cautious campaign and it failed to deliver him a majority. He has responded to this with a move of remarkable boldness. No one can be certain how it will play out. But now that
education and welfare reform are in the hands of proven Tory reformers, and if the Lib Dems can be trusted actively to defend the cuts, then the result could fundamentally realign British politics
— and in the Conservatives’ favour. It is an almighty risk. But in the dismal circumstances facing the government and the country, it is a risk worth taking.

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