Nick Clegg speaks at Bloomberg's London headquarters on June 9, 2014. Photograph: Getty Images.
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The smaller coalition party nearly always gets smashed – but all is not lost for the Lib Dems

To cement its identity in future coalitions, the party needs to own departments.

Shortly before the 2010 general election, aware that the Conservatives were unlikely to win a majority, an anxious David Cameron asked Angela Merkel what it was like to lead a coalition government. “The little party always gets smashed!” she mischievously replied. As he met the German chancellor in Sweden in recent days, Cameron could have been forgiven for recalling her remark. Like their sister party in Germany, the Free Democrats, which lost all of its seats in the 2013 Bundestag election, the Liberal Democrats have indeed been smashed.

Since 2010, they have lost a third of their members, 1,500 of their councillors, all but one of their MEPs, nine by-election deposits and more than half of their previous opinion-poll support. The Tories, by contrast, have retained most of their 2010 vote share of 36 per cent and have consistently exceeded expectations in local elections. “We knew we would pay a price for working with the Conservatives,” said Nick Clegg in his recent speech at the Bloomberg headquarters in London.

In these circumstances, one might expect there to be little optimism among the Lib Dems. But the shifting plates of British politics have given them hope. With both the Tories and Labour doubtful of winning a majority in 2015, many Lib Dems believe that they will once again act as kingmakers in a “balanced parliament” and extract significant concessions for doing so.

Some are even more sanguine. At a recent parliamentary party away day in Wyboston, Bedfordshire, Danny Alexander declared that the Lib Dems could become the largest party in British politics by 2025. “We were all rolling our eyes, even Clegg’s spads,” one of those present tells me. David Steel’s 1981 exhortation to Liberal activists to “go back to your constituencies and prepare for government” looks modest by comparison.

Though it is now rarely recalled, there were those who argued that coalition would enhance, not diminish, the Lib Dems’ popularity. The standard explanation offered for the party’s recurrent midterm slumps was that it failed to receive the media attention devoted to the Conservatives and Labour, a defect rectified by equal treatment at the time of the general election. But with Liberal Democrats in government, this disadvantage would be removed permanently. The more the public saw of the third party, the logic ran, the more it would like it.

That the reverse proved to be the case was partly because of their alliance with the Tories. As Tony Blair shrewdly observed, a party that ran to the left of Labour for three successive elections could not hope to avoid punishment for entering government with a party to its right. Long before Clegg and his fellow Lib Dem ministers walked through the division lobby in favour of higher tuition fees, their poll ratings had collapsed.

The party’s “contamination” by the Conservatives encourages the thought that an alliance with Labour could have a cleansing effect. Clegg’s pledge in his Bloomberg speech to borrow to invest in infrastructure was the latest example of policy convergence between the two parties. But a partnership with the opposition would pose dangers of its own kind. Such is the degree of policy overlap that the Lib Dems would risk becoming indistinguishable from their centre-left rival. The existential question that stalks Clegg – “What is the point of the Lib Dems?” – would become more rather than less insistent in coalition with Labour.

It is in anticipation of this fate that the former Lib Dem minister Jeremy Browne has called for the party to embrace an “unbridled, unambiguous” programme of free-market liberalism. Browne considers the left-leaning party president, Tim Farron, and the Business Secretary, Vince Cable, to be examples of what Keynes called “watery Labour men”: social democrats who would be better off with Ed Miliband.

What Browne’s position boasts in intellectual rigour, it lacks in electoral nous. Outside the City of London, there is little appetite for turbo-Thatcherism. Rather than veering to the right, the Lib Dems should adopt other means of differentiating themselves. An increasing number in the party, including on its federal executive, believe it was a mistake for Clegg not to demand control of entire government departments in 2010. His decision instead to spread the Lib Dems across Whitehall made it harder to claim credit for policy achievements and left the party’s junior ministers looking like the helpless hostages of their Tory superiors. The next time parliament is hung, the party should learn from the approach of its Scottish sister, which took control of justice and agriculture in its first Holyrood coalition with Labour in 1999 and prospered in the subsequent election. Far from being wiped out, the party retained all 17 of its seats in 2003 and most of its vote share.

Having named his coalition negotiating team for 2015, Clegg should already be targeting politically attractive departments. A Lib Dem minister could win control of the housing portfolio and take credit for a Macmillan-style building programme, or secure home affairs and act as the guardian of civil liberties. Tim Farron told me: “There’s a lot of wisdom in that . . . When you’re a smaller party, identity is everything. Being known for one or two and, if you’re really lucky, three good things is what you’re after in terms of getting traction with the voters.”

A few days ago, Clegg received a consoling text message from his friend Jan Björklund, the leader of the Swedish Liberal People’s Party (currently polling at 6 per cent). “Us liberals,” he wrote, “must never accept that we can only survive in opposition.” An admirable sentiment – but if the Lib Dems are to avoid being continuously smashed in a new era of hung parliaments, they need to wise up and ensure they are better prepared.

George Eaton is political editor of the New Statesman.

This article first appeared in the 11 June 2014 issue of the New Statesman, The last World Cup

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Arsène Wenger: how can an intelligent manager preside over such a hollowed-out team?

The Arsenal manager faces a frustrating legacy.

Sport is obviously not all about winning, but it is about justified hope. That ­distinction has provided, until recently, a serious defence of Arsène Wenger’s Act II – the losing part. Arsenal haven’t won anything big for 13 years. But they have been close enough (and this is a personal view) to sustain the experience of investing emotionally in the story. Hope turning to disappointment is fine. It’s when the hope goes, that’s the problem.

Defeat takes many forms. In both 2010 and 2011, Arsenal lost over two legs to Barcelona in the Champions League. Yet these were rich and rewarding sporting experiences. In the two London fixtures of those ties, Arsenal drew 2-2 and won 2-1 against the most dazzling team in the world. Those nights reinvigorated my pride in sport. The Emirates Stadium had the best show in town. Defeat, when it arrived in Barcelona, was softened by gratitude. We’d been entertained, more than entertained.

Arsenal’s 5-1 surrender to Bayern Munich on 15 February was very different. In this capitulation by instalments, the fascination was macabre rather than dramatic. Having long given up on discerning signs of life, we began the post-mortem mid-match. As we pored over the entrails, the curiosity lay in the extent of the malady that had brought down the body. The same question, over and over: how could such an intelligent, deep-thinking manager preside over a hollowed-out team? How could failings so obvious to outsiders, the absence of steel and resilience, evade the judgement of the boss?

There is a saying in rugby union that forwards (the hard men) determine who wins, and the backs (the glamour boys) decide by how much. Here is a footballing equivalent: midfielders define matches, attacking players adorn them and defenders get the blame. Yet Arsenal’s players as good as vacated the midfield. It is hard to judge how well Bayern’s playmakers performed because they were operating in a vacuum; it looked like a morale-boosting training-ground drill, free from the annoying presence of opponents.

I have always been suspicious of the ­default English critique which posits that mentally fragile teams can be turned around by licensed on-field violence – a good kicking, basically. Sporting “character” takes many forms; physical assertiveness is only one dimension.

Still, it remains baffling, Wenger’s blind spot. He indulges artistry, especially the mercurial Mesut Özil, beyond the point where it serves the player. Yet he won’t protect the magicians by surrounding them with effective but down-to-earth talents. It has become a diet of collapsing soufflés.

What held back Wenger from buying the linchpin midfielder he has lacked for many years? Money is only part of the explanation. All added up, Arsenal do spend: their collective wage bill is the fourth-highest in the League. But Wenger has always been reluctant to lavish cash on a single star player, let alone a steely one. Rather two nice players than one great one.

The power of habit has become debilitating. Like a wealthy but conservative shopper who keeps going back to the same clothes shop, Wenger habituates the same strata of the transfer market. When he can’t get what he needs, he’s happy to come back home with something he’s already got, ­usually an elegant midfielder, tidy passer, gets bounced in big games, prone to going missing. Another button-down blue shirt for a drawer that is well stuffed.

It is almost universally accepted that, as a business, Arsenal are England’s leading club. Where their rivals rely on bailouts from oligarchs or highly leveraged debt, Arsenal took tough choices early and now appear financially secure – helped by their manager’s ability to engineer qualification for the Champions League every season while avoiding excessive transfer costs. Does that count for anything?

After the financial crisis, I had a revealing conversation with the owner of a private bank that had sailed through the turmoil. Being cautious and Swiss, he explained, he had always kept more capital reserves than the norm. As a result, the bank had made less money in boom years. “If I’d been a normal chief executive, I’d have been fired by the board,” he said. Instead, when the economic winds turned, he was much better placed than more bullish rivals. As a competitive strategy, his winning hand was only laid bare by the arrival of harder times.

In football, however, the crash never came. We all wrote that football’s insane spending couldn’t go on but the pace has only quickened. Even the Premier League’s bosses confessed to being surprised by the last extravagant round of television deals – the cash that eventually flows into the hands of managers and then the pockets of players and their agents.

By refusing to splash out on the players he needed, whatever the cost, Wenger was hedged for a downturn that never arrived.

What an irony it would be if football’s bust comes after he has departed. Imagine the scenario. The oligarchs move on, finding fresh ways of achieving fame, respectability and the protection achieved by entering the English establishment. The clubs loaded with debt are forced to cut their spending. Arsenal, benefiting from their solid business model, sail into an outright lead, mopping up star talent and trophies all round.

It’s often said that Wenger – early to invest in data analytics and worldwide scouts; a pioneer of player fitness and lifestyle – was overtaken by imitators. There is a second dimension to the question of time and circumstance. He helped to create and build Arsenal’s off-field robustness, even though football’s crazy economics haven’t yet proved its underlying value.

If the wind turns, Arsène Wenger may face a frustrating legacy: yesterday’s man and yet twice ahead of his time. 

Ed Smith is a journalist and author, most recently of Luck. He is a former professional cricketer and played for both Middlesex and England.

This article first appeared in the 24 February 2017 issue of the New Statesman, The world after Brexit