Pacts and Tents - the Liberal Democrats and Labour

I was quite surprised to find out this week that prime minister-in-waiting, Gordon Brown has been in negotiations with the Liberal Democrat party to see if they would like some of their MPs to have seats in Brown's government which will be formed next week. Even though the Labour government's majority in 2005 slid from 165 in 2001 (and 179 in 1997) to 66, this does not seem small enough for Brown to be scrabbling around looking to form a coalition in order to get legislation passed.

The relationship between Labour and the Liberal Democrats (and their ancestors the Liberals) is a long one. From 1903-18, the two parties had an electoral pact which meant that the Liberals would not contest some seats where Labour candidates were likely to win. Many early Labour MPs had been former Liberals anyway. With the rise of the working class it was liable that Labour would eclipse the Liberals anyway. Liberal support enabled the first Labour government, a minority one (they were dependent on the votes of other parties to be sure of passing legislation) in 1924. In March 1977 the so-called 'Lib-Lab' pact was established between the two parties because James Callaghan's Labour government was now a minority one too. The country was facing severe economic crises due to inflation and felt obliged, through pressure from the International Monetary Fund (IMF) to drop Keynesian approaches to the economy (e.g. stimulating consumer demand and so reducing unemployment through creating public-backed works) for more Monetarist ones. Callaghan delayed the election until 1979 and the Conservatives won the power they would hold for 18 years.

Before the 1997 election which brought Tony Blair and his party to power, Blair was concerned that he might end up with a minority government. Labour had been out of power for almost two decades but memories attributed to them many negative attributes, most of them false, of being a 'tax and spend' party and in the pockets of the trade unions (which by 1997 had been basically destroyed by Thatcher anyway) so he approached the Liberal Democrats with what was called the 'big tent' suggesting some of their leading MPs would come into the government. However, when Blair won the landslide in 1997 he had no need of the Liberal Democrats and they and many of the policies they supported such as proportional representation for elections and other constitutional reform were forgotten.

Despite the Blair party not needing them, the Liberal Democrats have prospered. In 2005 they gained 22% of the vote and 62 seats (the Conservatives got 32.4% of the vote but 198 seats, more than three times as many) which is the largest number they had achieved since 1923, rising from 52 in 2001 and 56 in 1997. Is Brown worried he will lose more seats at the next election now that the glamour of Blair has gone, the party is restructuring itself away from being the Blairist party to a modern form of Labour Party or that current Conservative Party leader, David Cameron seems the first credible one for a decade? So far the Liberal Democrats have rebuffed Brown, partly it seems they were embarrassed by press coverage. Sir Menzies Campbell, the least dynamic Liberal Democrat leader probably since the 1970s seems uncertain what he wants anyway. It is no suprise Brown turned to Lord Ashdown, the Liberal Democrat leader 1988-99 and supporter of the 1970s Lib-Lab pact, but he too has turned the prime minister down.

Are the Liberal Democrats still smarting about being wooed and then spurned in 1997? Blair's arrogance made him behave foolishly then, as even if he had no longer needed Liberal Democrat support he did not need to turn away from them so abruptly. The Liberal Democrats may be biding their time, waiting for a better offer or to see how Brown's regime turns out. Sometime in the early 1990s the Liberal Democrats and the Labour Party passed each other on the political spectrum. As the 'centre' had shifted farther to the right with Thatcher and Labour moved to the new centre, the Liberal Democrats adhered to what had been characteristic of the centre back in the 1980s and indeed before. Now with everyone further right than them, they seem to be the radicals.

The Liberal Democrats' opposition to the Iraq War, their strong support for the European Union including introduction of the Euro currency to the UK, their strong green policies, their wish to reform the tax system to benefit the poorest, all of these things seem more left-wing than what Labour espouses. They also stand for a secular society which these days seems quite radical if one listens to the faith-supporting Christian Democrat core of Blair's party. Maybe Brown wants to inject some Liberal Democrat radicalism to counteract the rightist views of the Blairites who will remain numerous in his party. Maybe Labour is running out of ideas and to get the Liberal Democrats into the government will be less embarrassing than stealing ideas from them at arm's length. Labour has always had Liberal input. Its welfare state model of the 1940s was that of William Beveridge, a Liberal not a Socialist; its economic policy was first economic planning, again propounded by some Liberals in the 1920s then from 1948-76, Keynesian economics and again John Maynard Keynes was a Liberal, not a Socialist.

What gains and losses would the Liberal Democrats face from a working relationship? If Brown follows Blair's line and embarrassingly follows the USA into terrible wars the Liberal Democrats own members would condemn the party for being part of this. On the other hand it would be the first time Liberals were properly in the government for decades and might allow Liberal Democrats' views to get a greater airing and maybe they will gain credibility by showing they can serve in office. This is a game that has high stakes, but if the Liberal Democrats play it sensibly, the second decade of the 21st century may see a three-party political arena that is more dynamic than that seen in the second decade of the 20th century. Debate and choice are always to the advantage of the electorate.