Lansons Conversations

The Coalition Government: Initial remarks and challenges ahead

It was only months ago when at a sun basked joint press conference Clegg and Cameron joshed and teased with each other as they set out their very civil partnership. That amorous day in the Downing Street garden has faded to a fond memory as summer gives way to autumn and the harsh political reality curtails the coalition’s short lived political honeymoon. It is timely to offer some initial remarks on this novel political settlement. Timely because as much as this Government was given a honeymoon, it is now over. But timely also because Britain does not usually do coalitions and it is intriguing to see how this nascent aberration is doing. Set against a very low level of expectations, the coalition has surprised most political commentators who thought the arrangement was too flimsy to bear the strain of these two uneasy bedfellows. The two common predictions were the coalition wouldn’t be able to do much or last for too long before the Lib Dem left or Tory right threatened to destabilize the Government. This first prediction has been roundly debunked as the Government has embarked on a programme which will see our 11% deficit slashed by 2014. This is the most ambitious deficit programme in the G7 and the cutting is deeper and earlier than many expected. With the NHS budget protected and defence and schools partially ring fenced, other Government departments could have their budgets reduced by a third – these would be the deepest cuts in public services since the Second World War. But this is not a purely fiscal exercise. The coalition Government are questioning what the role and size of the state should be. United by shared predisposition to decentralize, both Cameron and Clegg have set about fundamentally shifting power away from an overbearing centre to town halls, doctors, parents, charities and the public. This central belief informs radical plans to create free schools, give GPs budget holding powers and make the police more accountable to the public. In each key area of public service the coalition are set about transforming the status quo. Compared to that squandered first term of the New Labour Government, where they enjoyed a huge majority and demoralized opposition, this Government’s ambition is striking. So far so good it would seem. The Government has frontloaded a lot of the pain of fiscal tightening and outlined how they would dramatically reshape public services. Challenges abound however. Will the Government Spending Review be too much for the public and economy to accept? The risk of a double dip recession remains – particularly as the economy must learn to live without the shot in the arm of low interest rates and quantitative easing. How would the Lib Dem coalition partners react to a no vote on AV? We are at the beginning of a major test for the coalition – the difficult party conference season, the spending review and AV referendum all threaten to throw this project off path. One thing is for certain, politics has never been more uncertain.