The Peculiar End of the British Labour Government
The results could hardly have left things tighter balanced. The Conservatives, the self styled "natural party of government", were tantalisingly close to winning a clear mandate to return to power after thirteen years in the wilderness.
Against them were the incumbent Labour Party, the UK's third party the Liberal Democrats (LibDems) and a number of smaller parties from Scotland, Wales and Northern Ireland (most of them centre left). If the numbers had been reversed, the LibDems would almost certainly have clubbed together with Labour, most Lib Dem voters considering themselves left rather than right of centre. The Conservatives were the largest party though, and the Lib Dems had pledged in the campaign to give the largest party the first hearing.
Shortly after the election, talks began between the LibDems and the Conservatives. They seemed to hit a glitch after a couple of days on LibDem demands to change the voting system, the party traditionally being handicapped by the UK's quirky "First Past the Post" system which sends the one candidate with most votes from each of the country's 650 constituencies.
Labour Had Their Chance
This gave the Labour Party an opportunity to leapfrog the Conservatives and seal a deal with the LibDems. One initial hurdle came down when Gordon Brown, who many LibDems felt was uncollegiate and tainted by poor ratings throughout his three year Premiership, fell on his sword. The way was therefore open for a progressive alliance of numerous centre left parties; a "rainbow coalition" so called as it would include just about every colour apart from Brown.
It didn't even get off the ground. Why, and who was at fault will be argued about in the British centre left for years, in coffee shops and through the pages of the lefty broadsheets The Guardian and The Independent. The LibDem negotiators said that their Labour counterparts were disinterested and merely going through the motions; the Labour team said that the LibDems made unreasonable demands and were only meeting Labour to flush out the best Conservative offer.
Nobody (apart from the eight negotiators) knows exactly which line is true. We do know, though, that, as the teams were meeting, several Labour party grandees and one Cabinet member went on the rolling news channels to denounce the proposed deal. They argued that the Labour party should accept the verdict of the electorate and head straight for the opposition benches. This argument certainly chimes with the traditional British sense of fair play and suggests a pleasant willingness from politicians to put national before party interest.
There is just one problem with the argument; it does not stack up. In any parliamentary democracy the crucial point is that one side commands a majority. Whether one side is made up of one or five parties makes no difference on a constitutional level. Besides, the alliance would have comfortably over 50% of the popular vote. So, despite the claims there was constitutional certainty and strong moral arguments that a "rainbow alliance" would be legitimate. It would seem then that the argument was simply a suitable reason that could be put forward in public when the real reasons were quite different. But what could the real reasons be?
A Delve Into the History Books
It seems that some Labour MPs were instinctively hostile to the idea of a coalition with the LibDems. The view Labour members have of the third party varies massively; some viewing them as centre left cousins, separated only by historical circumstances, whereas others have little affinity for them, seeing them as closer to the Conservatives.
To understand this ambivalence, the history of the LibDems needs to be outlined. The party was formed in the late 1980s in a merger between the Social Democratic Party (SDP) and the Liberal Party. The SDP itself was an offshoot from the Labour Party, formed when four senior members objected to the Labour Party lurching leftwards (nuclear disarmament despite of the Cold War and immediate withdrawal from the EU being key foreign policies).
The Liberals, on the other hand have a long lineage going back to the late 17th century Whigs. This party has traditionally stood strongly behind the free market and until Labour's emergence in the inter war period competed with the Tories for power. Thus, depending upon which parent you believe the Liberal Democrats resemble most, they are either traditional Social Democrats or proponents of laissez faire corporatism. Labour MPs who believe it is the latter will naturally not be keen on an alliance.
Did the Arithmetic Work?
As well as potential philosophical divides, there was an arithmetical issue. Whilst the Conservatives and LibDems together had a clear majority, Labour and the LibDems were just short. The Scottish and Welsh nationalists, as well as the Northern Irish centre left parties could all be expected to prefer a "progressive" rainbow alliance over the Conservatives at the outset. Things though could get sticky with time.
The most urgent issue facing the UK is controlling the budget deficit (currently over 11% of GDP). Tough decisions therefore need to be made soon and it is not difficult to predict that purely Scottish, Welsh and Irish parties would object to their respective nations' budget being cut. Whether they would "go nuclear" and force a new election is open to question; it is though easy to see how Parliament could quickly become a constant game of chicken with threats to the government's security always on the horizon.
To add to this problem, the Labour Party has always had its share of maverick backbenchers, willing to challenge the leadership on spending cuts. For most of the last decade this has not been an issue as the party has had comfortable majorities and the growing economy has meant a steadily increasing expenditure. However, in vastly different circumstances, internal rebellion could have brought down the Labour Party even if the Celtic parties could be kept on side.
Better in Opposition
The grandees doing the rounds on the rolling news channels have been around the block - more than once. Maybe, they saw all the above and decide that a Lib Lab coalition, at the whim of smaller parties and having to make swingeing spending cuts would be a disaster. Instability would reign (disastrous at a point where the UK needs to keep its credibility in the eyes of the bond purchasing markets) and the resultant problems could cause lasting damage to the Labour party's reputation.
Maybe, all things considered, it was better to watch from the opposition benches as the Conservatives and Liberals try to put aside their ideological differences to create a stable government. Watch as they implement the biggest austerity package in decades. The Governor of the Bank of England has reportedly predicted that the required measures will be so severe that the elections winners will be paying the political price for a generation.
The minutes of the first Cabinet meeting give clear indications for the future. The Conservatives have had to shelve their plan for a rise in the inheritance tax threshold, and the press reports that the rate of capital gains tax (which is generally lower than income tax) will be substantially increased. The future of the UK's unusual non-domiciled individual concept could also come under pressure. These measures will not nearly be enough, though. An increase in the rate of VAT looks likely, as it does not have the same symbolic position as income tax and the UK's rate of 17.5% is relatively low by European standards. With the required combination of tax increases and public spending restraint the Labour party could bounce back strongly.
They will need to use their time in opposition well though. The great ideological issue of how a party established for giving workers a collective voice in an industrial society can adapt to a post-industrial world remains. Tony Blair and New Labour had their own ideas but many at grassroots level yearn for a return to the traditional ideals.
And there are some controversial episodes of Blair's reign which have never been properly dealt with. Will the party, which has a significant pacifist membership, ever repeat the militant foreign policy seen in the Iraq invasion? Many party members also believe it went too far in its faith in the markets, as signs suggest that "soft regulation" may have exacerbated the credit crunch. And how far can market mechanisms be used in the provision of public services? Labour may have been in power for thirteen years but they never managed to answer these questions satisfactorily - at least not in the eyes of their own membership. Back in opposition, unencumbered by the demands of office they require to find their ideological compass.
