Who are the Liberal Democrats?

A new generation of ambitious politicians has finally won a share of power for their party. But the rise of this hard-headed, centre-right group will not go unchallenged
June 21, 2010

On 4th June, BBC Radio 4’s The News Quiz began with the week’s big story: the resignation of David Laws, the Liberal Democrat chief secretary to the treasury. “Which axeman was first for the chop?” asked host Sandi Toksvig, as panellists joked that Laws’s use of his parliamentary expenses marked the first “proper” scandal of the new government. Toksvig—a Liberal Democrat supporter herself—then asked with mock pride: “So do you think this makes the Lib Dems finally a proper political party?” The jibe brought laughter from the audience, but was, in truth, a fair question. After a 20 year struggle to shed an image as a fringe party incapable of taking power, the Liberal Democrats have entered government for the first time.

The Lib-Con coalition was among the most unexpected events in recent British political history. Yet if it caught the media on the hop, it was almost as surprising for the Lib Dems themselves. For much of the past two decades, the party staked out its ground on the left. Even with David Cameron’s more liberal style of conservatism, most who dared dream of power after the 2010 election assumed it would come through a “progressive alliance” with a chastened Labour party. Looked at another way, though, the decisions taken by the Lib Dem leader Nick Clegg over those six tense days in May seem, if not inevitable, then less surprising. The Lib Dems have changed significantly since the early 2000s. The bearded civil libertarians are less evident at party gatherings, and the party has quietly developed a more effective national operation. More importantly, a new generation of talented and ambitious politicians—notably Clegg, Laws, Chris Huhne and Vince Cable—had gradually taken control. While the circle around former leader Charles Kennedy saw their task as opposing the injustices of market liberalism, this new cohort was more market friendly. They took aim at Labour’s enlarged state, while also arguing for fiscal discipline in the face of the financial crisis. In the Orange Book, a collection of essays published in 2004, the group argued that Lib Dems needed to balance their social instincts with a rediscovery of the party’s market-friendly roots. These changes were reinforced by shifts in policy following Clegg’s 2007 leadership victory, and together set the stage for the decision to join not with Labour, but with the Tories.

The conference of 1,650 activists called by Nick Clegg to ratify the coalition agreement brought together his party’s various factions on 16th May. The result was an overwhelming vote in favour of Clegg’s decisions—a surprising moment of near-total unity given the party’s unexpected post-election path. Like any political organisation, the Liberal Democrats are an association of different tribes. The old Liberal party itself has two conflicting traditions. On its right is a 19th-century liberal approach concerned with individual freedom and limiting state power. On its left, from the turn of the 20th century, flows an interventionist “social liberal” strand, given fullest form in the writings of sociologist Leonard Hobhouse. His work offered a positive vision of the state, and found expression in the reforming governments of Asquith and Lloyd George. (The two 20th century figures most associated with the growth of state power—Keynes and Beveridge—were both Liberals.)

Having been eclipsed by Labour from the start of the 20th century, the Liberals recovered only gradually, first under Jo Grimond in the late 1950s and 1960s, and then more strongly following the merger with the Social Democratic party (SDP) in 1988. The marriage was at first a messy one, with the former SDP leader and ex-Labour foreign secretary David Owen rejecting the merger and drifting off into a loose alliance with the Tories (and thus sharpening the anti-Tory instincts of the new party)-. The rest of the SDP merged with the Liberals to form the Social and Liberal Democrats, which in 1989 became just the Liberal Democrats. Today the Liberal/SDP divide matters less; the generation that brought the parties together has aged, and many of its leaders have retired to the Lords. Nonetheless glimpses of it remain, as when some former Liberals viewed Charles Kennedy with suspicion because of his youthful SDP membership.

The left-leaning Paddy Ashdown, elected leader in 1988, helped iron out some of these differences, meaning future internal divisions generally came not from ideology or history but organisation—in particular the local government activists. By the mid-1990s the Lib Dems boasted more than 5,000 councillors, overhauling the Tories to become the second most powerful local party. Today they have around 4,100 councillors, some involved in local coalitions with the Tories too. Indeed, until the Orange Book was published, the Liberal Democrats’ most obvious division was between local government activists and the Westminster leadership. In the latter stages of Ashdown’s leadership, his desire for closer links with Labour often led to conference spats with local activists. Charles Kennedy’s consensual style meant such run-ins were less common. Meanwhile a new cadre of businesspeople began to help run the party—such as Tim Razzall, Kennedy’s campaign chief, and Dick Newby, his chief of staff.

The party’s relative strength in the “Celtic fringe” has also mattered. In its years in the doldrums, the Liberal party survived largely in those areas less touched by the class politics of the industrial revolution—rural Scotland, Wales and southwest England—where non-conformist identities remained. This was further boosted by entry into coalition governments with Labour in 1999 (in Scotland) and 2000 (in Wales). Curiously, neither the devolved assemblies nor the massed ranks of councillors has provided an alternative power base: few local leaders have gone on to become prominent in Westminster. Nonetheless, the small band of MPs are often outnumbered by those whose background in local government usually means a benign view of the state, support for local income taxes and resistance to reforms in public services. The influence of the local authority faction can still be seen in suspicion of education policies (such as Labour’s academy schools programme, which the Tories want to extend) that threaten to take schools out of the control of local government.

Unlike the two “old” parties, Lib Dem activists still play an important role in policy, and the votes of members at party conference matter. Election manifestos are produced by an intricate series of committees and reviews, co-ordinated by a federal policy committee of 29 people comprising MPs, officials and elected party members. Overseeing this is a 35-strong body called the federal executive, which brings the leader together with MPs, MEPs, councillors and members. Power is effectively split in three directions: between Clegg and his office, his MPs and Lords, and the wider membership as filtered through the committees. This lively internal democracy means the issues that most unite members—such as support for civil liberties or environmentalism—can create powerful blocks that the leadership is reluctant to challenge.

Perhaps recalling bitter splits during the 1980s, Lib Dems are loath to admit that debates within their party have become more ideological of late. Charles Kennedy made this point when resigning as leader in 2006, admitting “there is a genuine debate going on within this party—somewhat crudely caricatured at times... in rather simplistic terms as between social liberals and economic liberals; in rather misleading terms as between traditionalists and modernisers.” But he went on to dismiss it, saying that he had “never accepted that these are irreconcilable instincts,” stressing instead the party’s unity over support for civil liberties, the EU, environmental protection and multilateralism abroad.

The idea that the Lib-Con coalition was the inevitable result of an Orange Book coup is, of course, an unpopular caricature of recent history. And there are equally plausible explanations. One senior Lib Dem figure explained the move in terms of the party’s desire to back a further big step towards the “Europeanisation” of Britain, in which coalition government follows on from higher public spending, greater devolution, and a more centrist, consensual politics. The fact that the deal was made with Tories rather than Labour, as most Liberal Democrats would probably have preferred, is also down to circumstances: the election arithmetic made a Labour deal all but impossible. Those close to the negotiations recall that, in the first few days after the result, the party’s mood was to remain in opposition, offering the Conservatives “confidence and supply” support on an issue-by-issue basis. Later, standing in Downing Street’s rose garden, Clegg and Cameron said they had rejected this as “uninspiring.” But in truth both leaders saw the benefit of shielding themselves against more fundamentalist factions within their own parties: Cameron telling his negotiating team that this was the chance to ditch the inheritance tax cut favoured by the right; Clegg happily ridding himself of his party’s stubborn opposition to university tuition fees and nuclear power.

Support for a deal was never in doubt among the ambitious Orange Book group. Meanwhile, Clegg was able to placate the left wing of his party by stressing Labour’s failures on political reform and civil liberties, while the promised referendum on the alternative vote was crucial in carrying a number of late-night sessions with his Lords and MPs. For the Lib Dems, support for the coalition represented a coming of age, and it was made possible by the development of a mature intra-party ideological debate common to Labour and the Tories—one that began almost a decade earlier.

As the Liberal Democrats gathered for their annual conference in Brighton in 2003 they were, on the surface at least, in good shape. The 2001 election had seen the party consolidate gains from 1997, winning another six seats to take its total to 52. Poll ratings had been boosted by Kennedy’s opposition to the invasion of Iraq earlier in the year, and by Labour’s introduction of tuition fees. With Iain Duncan Smith’s Tories in disarray, party strategists even talked boldly of becoming the official opposition by the decade’s end. Not everyone, however, was happy.

David Laws, who had in 2001 replaced Paddy Ashdown as MP for Yeovil, met party donor Paul Marshall for a quiet drink. Laws was a former banker who had made enough money to retire at 28, going on to work (unpaid) in the party’s policy team in the mid-1990s. Marshall’s career had been almost the reverse: once a parliamentary researcher to Charles Kennedy, he went on to run a hedge fund and become a key Lib Dem financier. Neither man saw themselves as hostile to the party’s social-liberal traditions, but were seen to be from its market-friendly centre-right—and both were worried about the direction the party had taken under Kennedy.

Paddy Ashdown once told aides that his party was like a flawed car: without a strong driver it veered to the left. One might predict that a centre party squeezed on its left by new Labour would shift to the centre-right, to ground vacated by the Tories after 1997. But in 2003, as Ashdown predicted, the opposite was under way. Laws, in particular, was concerned that a combination of good economic times and the party’s embedded anti-conservatism had led it to put too much faith in the state, and too little in the market. Although Ashdown is most remembered for courting Labour, his leadership included centrist moves, like dropping the penny on income tax pledge, and his 1999 resignation speech called for the liberation of “the great institutions that deliver our public services—education, health, justice, welfare—from the clammy embrace of corporatism.” This was an instinct shared by the then Labour leader Tony Blair, part of the reason for their mutual attraction. But where Blair was making an aggressive case for public-services reform, the new Kennedy leadership seemed unwilling to follow. As one adviser put it, there was a danger that the party was known for combining an “eco-pacifist” agenda with an approach to public services that promised to solve all problems with higher spending. It was against this backdrop that Marshall and Laws decided to gather their party’s new generation, and publish the Orange Book to push the liberal case.

In addition to putting forward their ideas, the Orange Bookers were also subtly pushing back at the electoral campaigning techniques that had rescued the party from its years in the wilderness—but now seemed to have reached their limits. There was even a word to describe this approach: “Rennardism,” named after Chris Rennard, the party’s powerful chief executive. Rennard resigned from the post in 2009, but his rise within the party—joining at the age of 12 to eventually become its campaign director and then its head—coincides with its emergence as an electoral force. Rennard recalls: “Back in 1989 there were 16 paid staff employed by the Liberal Democrats, operating out of only two floors in our Cowley Street HQ. We had no campaigning support, and no understanding of how to support work in local constituencies.” The approach to local campaigning he developed was a logical response to the disadvantages his party faced under the first-past-the-post electoral system, and its lack of a class base of supporters.

Academics Andrew Russell and Edward Fieldhouse studied the make-up of Lib Dem voters and found that their class profile made them look like Conservatives, but ideologically they tended to be closer to Labour. Even so the duo found that “Liberal Democrat voting was weakly related to the social and demographic characteristics of voters,” concluding that because the party was “unable to mobilise support on the basis of social divisions, instead it must look… to issue-based mobilisation.” This meant a deepening focus on local campaigns; a “pavement politics” approach that won the Lib Dems a reputation as fanatical leafletters and door-knockers, and a reputation as the best political campaigners in Britain.

One activist explained what he understood Rennardism to be: “You win by campaigning locally, and you choose a strong local candidate. And as a result many of our new MPs tended to be people who represented their community rather than national issues.” Understanding the party had little chance of victory in most of the country, Rennard targeted its limited resources in a few potentially winnable seats. Between elections he built up the party in local government, seeing councillors as stepping stones to MPs. Winning by-elections through flooding a constituency with activists became a speciality.

Yet for all its success, Rennard’s model was criticised for putting local campaigns above consistent policies. A third party in a system built for two always struggles to find distinctive policies; the Lib Dems have often been accused of pointing to the right in the south and west of England to win Tory voters, and to the left in the north to win Labour voters. But as Labour moved to the centre, the Lib Dems found their most distinctive positions—such as the penny on income tax to fund education, or opposition to the Iraq war—to Labour’s left. Other signature policies involved more public spending, such as free long-term care for the elderly. It seemed that the party’s strategy of tactically responding to voters’ concerns to win by-elections had taken hold nationally, creating an opportunistic mish-mash of policy.

It was against this background that the Orange Book was published. It had Charles Kennedy’s blessing—he noted in a preface that all its ideas were “compatible with our liberal heritage.” Indeed, most of the contributions—from the likes of Clegg, Huhne and Cable—were uncontroversial. Cable’s chapter called for a greater use of the private and third sectors in the provision of public services. But Laws’s contribution put the group’s case most frankly. His opening essay mocked a list of Lib Dem statist policies: “the compulsory micro-chipping of dogs… bans on animals in circuses, and even a ban on giving goldfish as prizes in fairs.” In a further chapter he suggested that the party should examine replacing the NHS with a system based on social insurance. And in one barbed passage he asked “how did it come about that over the decades up to the 1980s the Liberal belief in economic liberalism was progressively eroded by forms of soggy socialism and corporatism?” An article in the Independent heralded the essays as a “revolution” from a group of “young turks who are more Blairite than Mr Blair.” Internally, the Orange Bookers stood accused of creating disunity in the run-up to the 2005 election, and the book’s launch, planned for the party’s 2004 conference, was cancelled.

In the general election that followed, the Lib Dems won 62 seats—the party’s biggest ever haul. On the surface, this seemed a rebuke to the reformers. But worries about the party’s leadership and ideological direction quickly became more widely shared. Kennedy admitted that the 2005 manifesto had been something of a “shopping list.” Concerns on the centre right increased when leftist MP Paul Holmes defeated the centrist Matthew Taylor to become party chairman. But doubts about Kennedy’s strategy were eclipsed by those about his drinking. In one grim Newsnight exchange Jeremy Paxman began an interview with Kennedy by asking: “Does it trouble you that every single politician to whom we’ve spoken in preparing for this interview said the same thing: ‘You’re interviewing Charles Kennedy? I hope he’s sober’?” Frustration over Kennedy’s style were not limited to the party’s centre right. Duncan Brack, a social-liberal thinker, later wrote that, without Iraq as a rallying cry, the “hollowness at the centre of his leadership would have been exposed much earlier.” He concluded: “The problem with Kennedy was not alcohol; it was that he was not capable of being an effective leader.”

Kennedy finally resigned in January 2006, and an immediate split opened up as Clegg backed Menzies Campbell for leader, while Chris Huhne had a tilt at the crown himself. This deepened at the next leadership election, after Campbell’s inglorious year as leader. Clegg had long been seen as leader-in-waiting by the party’s centre right, but Huhne ran an energetic campaign, appealing to the more numerous left. In an attack titled “Calamity Clegg,” he hinted darkly at his opponent’s support for education vouchers and Trident. Some in Clegg’s team pushed him to take a more aggressive modernising tone. But he played it safe, and it worked, just—Clegg won by barely 500 votes out of a total of 41,465 cast.

Having been elected without challenging his party, Clegg needed to define himself while preparing for a general election many thought was imminent. An early indication of his views came in a speech on public services in January 2008, which laid out a vision in which “the state must back off and allow the genius of grassroots innovation, diversity and experimentation” in schools and hospitals. Taking on those in his party, and especially within its local government base, Clegg argued that he wanted to develop “a new liberal model of schools that are non-selective, under local government strategic oversight but not run by the council.” Six months later Clegg pushed his party again, this time on tax—publishing a policy document called “Make It Happen,” outlining plans for cuts in public spending and tax cuts for the least well off.

Such moves gradually forced a reaction from the dominant but intellectually dormant social-liberal wing, in particular, over Clegg’s attempts to change the party’s opposition to tuition fees, hinted at during his party’s 2008 conference. Shortly afterwards, left-wing MP Evan Harris combined with Kennedy’s former director of policy Richard Grayson to organise a slate of candidates to sit on the party’s federal policy committee. The committee then blocked Clegg from changing the tuition fees line before the party’s 2009 spring conference. When Clegg later hinted that the policy was unaffordable, most of the committee took the extraordinary step of writing a letter to the Guardian confirming the pledge would be in the manifesto. Grayson, along with Duncan Brack, also published a book of essays to challenge the Orange Bookers, Reinventing the State. Brack’s essay outlined the importance of greater equality as a party objective, and defended the role of a reformed, decentralised state. (Clegg and Huhne, in an implicit call for unity, also wrote chapters.) Elsewhere, a new organisation called the Social Liberal Forum was founded to try to bring coherence to the party’s left, and to balance out other new groups, such as the think tank CentreForum, funded by the Orange Book co-editor Paul Marshall. The result is a party that increasingly sees policy decisions as a contest between its two ideological wings.

If the coalition falls apart in the next two to three years—most likely over education or a foreign policy issue, according to one Lib Dem insider—the electoral consequences for the smaller party could be severe. But even if it goes the distance, Clegg still needs to demonstrate—to his voters and members—that the Lib Dems have brought a distinctive agenda into government, and could do so again. Yet this need to signal dividing lines with their Tory partners will have to be carefully managed to avoid looking like disunity. Tensions within the coalition will be matched by strains within the Lib Dems too. Vernon Bogdanor, the Oxford professor of politics, has argued that throughout the 20th century liberals have been divided between “those who were sympathetic to pacts and arrangements with other parties, and those who feared compromising their independence.” Those Lib Dems who worry that post-election agreements may stray from the party’s priorities can already point to the coalition’s support for nuclear power, or the increases in tuition fees.

Senior Lib Dems admit it is not yet clear how the party plans to marry the need for swift decisions to be taken in government with its slow-moving internal policy development. Equally, Clegg will need to be mindful of the ongoing debate within his party. While the Orange Book cohort now occupy the main government jobs, the party’s left may respond by taking further hold of its internal machinery. This is what appeared to happen when Simon Hughes, long a standard-bearer for the left, made a show of running for the previously unimportant position of deputy leader, a position he won on 9th June.

Clegg also faces a series of complicated choices. As a popular deputy prime minister, he is now the most powerful Liberal Democrat leader ever—a position reinforced by his impressive personal performance in the televised election debates between the three party leaders. If he can deliver, and win, a referendum on the alternative vote (and thus probably gain a dozen more MPs at the next election to add to the current tally of 57) his power will grow further. He also benefits both from the profile of government, and a new power of patronage. But his policymaking position is much weaker than Cameron’s, and he is also more constrained by his party’s policies. Although those close to him say the issues that most drive him remain political reform, the EU and civil liberties, none of which are mainstream concerns, in opposition Clegg began a process of remodelling his party around a new agenda closer to that of the Orange Book. Proximity to the Tories could strengthen this push: the opportunity to use the coalition to triangulate between his party’s left and his coalition partners will be tempting. But the opposite may end up happening too: the need to maintain unity in his party could force Clegg to stake out positions that appeal to its left.

It is perhaps apt that the Lib Dems and Conservatives ended up in coalition, given how closely the modernising project of Laws, Clegg, Cable and Huhne from 2003 onwards mirrors the process undertaken simultaneously by David Cameron and George Osborne. The latter wanted to move their party to the centre and shed an image of nastiness. The former wanted to move their party to the right, and gain an image of professionalism. Both were united by the need for change, a frustration with their current leadership, and a hunger for power. (And both are overwhelmingly from establishment backgrounds—public school and Oxbridge.) Taking the final step of going into coalition showed that the Lib Dems had become a mature political force—one which finally silenced those who feared the party would always prefer the purity of opposition to the messy compromise of government.

The sorry story of Lib-Con coalitionsby Dick Leonard

“A new politics,” claim supporters of the Liberal Democrat decision to enter coalition with the Conservatives. Not quite. Leaving aside the two world wars, there have been four occasions during the past 216 years when Liberals, or their Whig forerunners, have joined Tory-led coalitions. And each time it was the Tories who flourished, while their partners disappeared without trace.

The first occasion was 1794, when William Cavendish-Bentinck (left), the third Duke of Portland, led more than half the Whig party into the government of William Pitt the Younger. Six cabinet places were won, but the rump of their party was left in opposition under Charles James Fox. The “Portlandites” soon lost any independent existence. As a doddery old man, Portland much later achieved the unique distinction of having served both as a Whig (1783) and a Tory (1807-09) prime minister.

Forty years later, in 1834, Edward Stanley led a small group in resignation from Earl Grey’s Whig government, in protest against political concessions given to Catholics in Ireland. These “Stanleyites” were at first independent, but later joined a Conservative government led by Robert Peel. Although his group was soon swallowed up, Stanley became the 14th Earl of Derby and later led three Tory minority governments.

In 1886, Lord Hartington and Joseph Chamberlain led a large number of Liberal Unionists out of their party in protest against Gladstone’s policy of Irish home rule, in time joining governments led by Lord Salisbury and Arthur Balfour. Chamberlain (left) proved equally divisive in his new home, where his advocacy of tariff reform prompted Winston Churchill to defect to the Liberals. Hartington and Chamberlain eventually resigned, leaving the renamed Conservative and Unionist party as the only trace of their entry.

Finally, in 1931, the Liberals joined the “national” government nominally led by former Labour prime minister Ramsay MacDonald, but with Tories Stanley Baldwin and Neville Chamberlain calling the shots. Chamberlain’s protectionism quickly provoked a split in the Liberals, however, and led their leader Herbert Samuel to resign as home secretary. Those who stayed, led by foreign secretary John Simon, set up a new Liberal National party which, though it formally existed until the 1940s, soon became indistinguishable from the Tories.

All four occasions show the same pattern: Liberals entering coalitions and dividing their party, before being swallowed up. Nick Clegg believes he can keep his party’s independence, but to do so will be the triumph of hope over experience.

Dick Leonard recently completed a trilogy of books on prime ministers from Walpole to Blair