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In this together: how the Lib Dems battled to ­restrain the Tory monster

Peter Oborne takes on David Laws’ Coalition: the Inside Story of the Conservative-Liberal Democrat Coalition Government – an account of the 2010-15 coalition from the Liberal Democrat point of view.

To date, every serious account of the coalition government – think of Cameron at 10 by Anthony Seldon and Peter Snowdon – has been written from the Conservative point of view. As a result, the Liberal Democrat side has been seen as an irritant or dismissed as a joke. Thanks to David Laws’s memoir, this imbalance has been redressed. He presents a welcome perspective, telling the story of how the Lib Dems battled to ­restrain the Tory monster.

This book makes the politics of the coalition come alive. It is well written, with a great deal of humour and a nice eye for detail. Laws was a member of the “quad” of senior ministers, alongside David Cameron, George Osborne and Nick Clegg. Seventeen days after his appointment, a financial scandal forced his resignation as chief secretary to the Treasury. This was a loss to the coalition but Laws remained at the heart of events, stayed close to Clegg and returned to government as a more junior minister.

Clegg kept a diary of his five years in Downing Street and Laws has had access to it. He also seems to have kept notes of his own. This book is, in effect, a joint production by Clegg and Laws and should be ­interpreted as the official Lib Dem version of history. It contains contemporaneous ­records of conversations between Laws, Clegg and senior Conservative members of the coalition government. As a result, we have a better understanding of Tory ministers than ever before.

Let’s start with the Lib Dem verdict on the Prime Minister. Over dinner at an Italian restaurant in July 2013, Clegg reveals to Laws that he is not impressed:

“Cameron does have a lot of emotional common sense, and good abilities as a political leader. But I really don’t know what he stands for, other than keeping the Conservative Party in power. He is something of a quicksilver politician. He ducks and weaves to get good press coverage, but he travels very lightly in terms of core beliefs and ideology.”

After his last formal meeting with Cameron in 2015, Clegg hasn’t changed his mind: “He always believes that he can get himself out of a tight corner. One day, he won’t.”

By contrast, we learn that Clegg has a high regard for the Chancellor, George Osborne:

“George loves power even more than Cameron. But he is more reckless with his popularity . . . [He] also has a strange maturity about the limits of his own personal appeal to the electorate. He understands they don’t love him and probably never will. George is quite thoughtful about Europe, and tolerant and metropolitan in his outlook . . . And the more I deal with him, the more I respect him. He is so totally blunt and transactional. George always thinks and understands what each side wants, and he is always saying, ‘Can’t we cut a deal?’”

The Chancellor nevertheless emerges poorly from this book. As far as welfare is concerned, Clegg judges that he is “incredibly right wing . . . I’ve never seen much evidence that he really cares about the poor and disadvantaged.” Laws reports that relations between the Treasury and the Department for Work and Pensions were “often bad and sometimes awful”. He says that the Chancellor would fail even to notify Iain Duncan Smith of policy announcements that directly affected him. No wonder the welfare secretary eventually resigned.

Laws also writes that Osborne told ­Danny Alexander, who replaced him as chief secretary to the Treasury: “You give up on bashing company directors, and we’ll give up on bashing the workers.” This gives further credibility to Duncan Smith’s claims that Osborne has victimised the poor.

During a row about Budget cuts, Clegg complained that Osborne was wrong and his figures implied £33bn rather than £25bn of cuts. Osborne replied, “£25bn and £33bn are pretty similar. We can just fudge that a bit.” Such lack of attention to detail helps explain why Osborne’s budgets have consistently unravelled and suggests that he may not be qualified to be Chancellor.

Laws’s account of Cameron’s decision to call a referendum on the European Union has even greater contemporary relevance. It is hair-raising – a classic case of clever short-term tactics having catastrophic long-term consequences. The story begins in the summer of 2012, with the Tory right breathing down the Prime Minister’s neck and Ukip on the march. Cameron rang a sceptical Clegg to tell him that he was planning to hold a referendum on the EU. Clegg warned him that he “cannot hope to buy off his EU critics”. Cameron replied: “I have to do this. It is a party management issue. I am under a lot of pressure on this. I need to recalibrate.” Clegg later told the Prime Minister:

“. . . either your renegotiation is just going to be symbolic and insubstantial, like Harold Wilson – in which case, what’s the point? – or you are going to have to go for a full renegotiation, which you may never achieve with other countries on this timescale.”

Cameron looked “pretty sheepish” and just said: “I know, Nick. That’s why I won’t be spelling out for some time what I am going to negotiate on.” This account is of first-order importance because it helps to explain how an expedient decision made for party management reasons four years ago has evolved into a civil war inside the Conservative Party.

At the heart of Coalition is a defence of the art of politics. Its epigraph comes from Machiavelli: “The Prince who walks away from power walks away from the power to do good.” Laws’s central argument is that the Lib Dems achieved far more in their five years of coalition government than they did in their long years out of office. Yet he honestly admits: “What we cannot yet know is what price we will pay in future influence because of the setbacks we suffered as a consequence.” The book concludes with a long list of Lib Dem achievements, ranging from the scrapping of ID cards to the triple lock on the state pension and the increase in the personal tax allowance. Some sections are moving, in particular the account of Clegg’s mortification when the scale of the Lib Dem defeat becomes clear.

This is an important work that goes a long way towards explaining our contemporary political predicament. I cannot recommend it too highly. 

Coalition: the Inside Story of the Conservative-Liberal Democrat Coalition Government by David Laws is published by Biteback (624pp, £25)

This article first appeared in the 31 March 2016 issue of the New Statesman, The terror trail

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Scotland's vast deficit remains an obstacle to independence

Though the country's financial position has improved, independence would still risk severe austerity. 

For the SNP, the annual Scottish public spending figures bring good and bad news. The good news, such as it is, is that Scotland's deficit fell by £1.3bn in 2016/17. The bad news is that it remains £13.3bn or 8.3 per cent of GDP – three times the UK figure of 2.4 per cent (£46.2bn) and vastly higher than the white paper's worst case scenario of £5.5bn. 

These figures, it's important to note, include Scotland's geographic share of North Sea oil and gas revenue. The "oil bonus" that the SNP once boasted of has withered since the collapse in commodity prices. Though revenue rose from £56m the previous year to £208m, this remains a fraction of the £8bn recorded in 2011/12. Total public sector revenue was £312 per person below the UK average, while expenditure was £1,437 higher. Though the SNP is playing down the figures as "a snapshot", the white paper unambiguously stated: "GERS [Government Expenditure and Revenue Scotland] is the authoritative publication on Scotland’s public finances". 

As before, Nicola Sturgeon has warned of the threat posed by Brexit to the Scottish economy. But the country's black hole means the risks of independence remain immense. As a new state, Scotland would be forced to pay a premium on its debt, resulting in an even greater fiscal gap. Were it to use the pound without permission, with no independent central bank and no lender of last resort, borrowing costs would rise still further. To offset a Greek-style crisis, Scotland would be forced to impose dramatic austerity. 

Sturgeon is undoubtedly right to warn of the risks of Brexit (particularly of the "hard" variety). But for a large number of Scots, this is merely cause to avoid the added turmoil of independence. Though eventual EU membership would benefit Scotland, its UK trade is worth four times as much as that with Europe. 

Of course, for a true nationalist, economics is irrelevant. Independence is a good in itself and sovereignty always trumps prosperity (a point on which Scottish nationalists align with English Brexiteers). But if Scotland is to ever depart the UK, the SNP will need to win over pragmatists, too. In that quest, Scotland's deficit remains a vast obstacle. 

George Eaton is political editor of the New Statesman.