The making of a cutters' coalition

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To their dismay, the Tories failed to win a majority in the election, leaving Britain with a hung parliament. Labour was not wiped out, and, despite losing seats, Nick Clegg led the Lib Dems into government with Cameron's Tories. Dan Mayer analyses the coalition that no one voted for.

The general election will be remembered as the election nobody won.

It was supposed to be the Conservative Party's triumphant return to power. Backed by Rupert Murdoch and the City of London, facing the tired and unpopular Gordon Brown, David Cameron was supposed to fulfil his Etonian destiny by effortlessly sweeping into Number 10.

But despite the most favourable circumstances he could hope for, even though he had forced the hard-right of his party to keep quiet, Cameron still failed to win an outright victory.

In the televised debates Liberal Democrat leader Nick Clegg appeared to tap into the popular demand for an alternative to New Labour and Old Tory. The media lauded his performance as fresh, representing a new style of politics. Polls put the Lib Dems ahead of Labour. They dared to hope for their best performance since Lloyd George, finally breaking the British two-party system. But their share of the vote barely changed, still stuck in third, and with fewer MPs than in 2005.

In many ways it was the Labour Party that performed best when compared to pre-election expectations. Brown had looked down and out. After 13 years of attacking their base, with membership dropping to an historic low, it looked like New Labour would finally be punished. They lost but were not crushed.

Under Tony Blair, between 1997 and 2005, Labour lost 4 million votes. Under Brown they lost only a further 950,000. Labour's core vote still turned out. The numbers don't tell the whole truth. In a whole host of inner city areas Labour MPs actually increased their majorities. Labour regained control of "heartland" councils they had lost in the 2000s, including Islington, Camden, Liverpool and Harrogate. They gained 414 councillors nationally.

Labour's vote

Some on the left had argued that New Labour had become a straightforward capitalist party that could never again reconnect with its working class base - this magazine devoted space to having these debates. If this were the case it wouldn't explain the resilience of Labour's votes, the fact that they did best in inner cities (and won in London) and the fact that the top three reasons given to pollsters for voting Labour were "Support for NHS and schools", "The economy and the need to ensure recovery" (ie not cut spending immediately) and "Conservatives are for the rich, not working people".

Despite everything, fear and hatred of the Tories and a memory of Margaret Thatcher meant Labour held on to the votes of its working class base. This will worry David Cameron.

In Barking, on a massively increased turnout, Labour wiped the BNP off the council 51-0 and Margaret Hodge increased her majority against Nazi führer Nick Griffin.

Unfortunately some in Labour think that they lost the election because they appeared "out of touch" on immigration. Jon Cruddas argues, "We had too many people coming too fast… Immigration has been used as a 21st century incomes policy."

Labour has introduced the harshest immigration laws in Britain's history. But few will have voted for Brown because of his tough stance on migrants or "British jobs for British workers" rhetoric.

Bigotry

The constant attacks on immigration have however given a boost to the far-right - UKIP and the BNP combined got 1.5 million votes in this election. A paucity of politicians willing to defend migrants means that this is now one of the few issues where the left finds itself in a small minority of public opinion. Labour lost votes because of years of bigoted laws and worse rhetoric, not because it failed to connect with "bigoted" members of the public.

It is a quirk of the present first past the post system that if the Tories had gained 15,000 more votes across certain constituencies they would have had an overall majority. This would have been much more demoralising for Labour supporters and trade unionists, and helped Cameron secure his grip on the Conservative Party. But they didn't.

The five days of negotiations after the election left the shortcomings of Britain's parliamentary democracy starkly exposed. They have left the Con-Dem coalition open to accusations of illegitimacy from the very start.

Three quarters of Lib Dem voters, and many of the party's grandees, would have preferred Clegg to form a coalition with Labour. Many voted Lib Dem because they stood to the left of Labour on issues like immigration, Trident and student fees.

"The market", a small number of unelected bankers and traders, saw things differently. As the election results came through, sterling began to fall. With Athens burning in the background, "the markets" made it clear they would accept nothing less than immediate cuts.

The press joined in, with a Sun front page declaring Brown "A squatter in Number 10". A report by banking group BNP Paribas said a Lib-Lab coalition would "almost guarantee" a credit downgrade for Britain. Hours later the deal was done and Cameron entered Downing Street.

The Lib Dems went from promising no immediate cuts to joining a government which pledged to make cuts straight away. Tory "red lines" where Clegg caved in included Trident, Europe and a cap on immigration. The promise of a referendum on the alternative vote system of balloting provides very little compensation. This is the least proportional of the various proportional representation systems and would have given the Lib Dems 79 seats in the current parliament rather than 57.

Although he has conceded very little, Cameron's failure to win an overall majority has led to grumbling from Tory backbenchers. After five years of clamping down on the right wing of his party he still failed to win. Norman Tebbit blamed Cameron's failure to make a hard ideological case for cuts for squandering a poll lead "which no Tory leader had seen since the bad old days of 'the nasty party'."

So this uneasy coalition lacks democratic legitimacy and Cameron and Clegg lack wholehearted support from their parties. But longevity and legitimacy are very different things. While the coalition may be pulled apart by its own internal incoherence or, more likely, by opposition to unpopular cuts, there is every possibility it could last the promised five years.

The Tories only need the backing of a small number of Lib Dem MPs to stay in government - just their ministers or Clegg's Orange Book faction would suffice. It will not be in the interest of either party to force an early general election after the coalition shenanigans, still less after a swathe of massive cuts.

This government is being forced to make cuts very quickly. Britain's deficit is on a par with Greece and Portugal. The eurozone bailout leaves the pound looking dangerously isolated. George Osborne has already announced £6 billion of cuts. He plans an emergency budget on 22 June. The scale of the attacks will be enormous. A report in the Financial Times estimates:

"First, the Treasury's existing plans for public spending already imply cuts to government departments of £37 billion (2.5 percent of national income) a year by 2013-14.

"Added to this, the coalition agreement has committed the parties to increases in spending on overseas aid with an annual cost of £4 billion; fresh income tax cuts with a price tag of about £5 billion, as a downpayment on the Lib Dem plan to raise income tax thresholds; £3 billion a year for avoiding some Labour tax increases; faster deficit reduction, which implies additional spending reductions of about a further £8 billion; a jobs package at £600 million; more funding for poor school pupils at £2.5 billion; and higher old age pensions costing about £2 billion.

"Set against this are near-term plans to raise taxes on aviation of £3 billion and capital gains tax of about £2 billion.

"Put this together and Mr Osborne will have to announce public spending cuts of £57 billion a year by 2013-14 from a non-protected budget of about £260 billion - cuts of about 22 percent."

This will constitute the biggest attack on the welfare state since the Second World War. With inflation running at 4 percent, a rise in VAT combined with a pay freeze would eat into the living standards of workers. But much of Europe is cutting the pay of public sector workers and Cameron's decision to give his ministers a 5 percent pay cut gives an indication of his intentions. And job losses in the public sector look likely to mount well into the hundreds of thousands.

It is not possible to implement cuts on this scale without provoking huge resistance. But it is harder still when there is no mandate for cuts.

None of the parties went into the election promising the level of cuts they intended to make. Talk of reducing the deficit focused mainly on public sector "waste" and "inefficiency". A report by the Institute of Fiscal Studies reckoned that the Tory manifesto only made clear where around 30 percent of the cuts would come from. The Lib Dems had promised not to start cutting the deficit immediately in case it endangered the recovery.

Thatcher won her elections with a hard-right argument against the welfare state. There was a degree of ideological support for neoliberalism and a sense that the post-war consensus model had failed. Many workers brought their council houses under the right to buy and Thatcher was confident enough to accompany her privatisation schemes with advertising campaigns inviting people to buy shares in, for example, British Gas.

But after 30 years of neoliberal policies and the catastrophic failure of the market, popular anger is focused on bankers, not the welfare state, and the majority of workers retain a "social democratic" consciousness.

Weak and nasty

So we have a weak government, vulnerable to accusations of democratic illegitimacy, forced to make tougher cuts than Thatcher without anything like the levels of popular support for cuts that she had. They will be faced with a Labour Party that is defeated but not dejected, many of whose members are relishing a chance to rebuild their roots in opposition and a trade union movement whose leaders will find it much easier to oppose Tory cuts than they did Brown's.

The viciousness with which trade unionists have been victimised at British Airways and the willingness of employers to go to the courts gives a taste of things to come. Labour may be looking forward to opposition but Labourism, constrained by separation of politics and economics, and a tradition of putting nation before class, has no solutions to this crisis.

The resilience of Labour's working class support does not make up for the weakening of its roots. Trade union leaders have shown no willingness to defy the anti-union laws, and a tendency to prefer shoddy compromises which undermine their members' morale to struggle.

Over the coming months socialists will need to take advantage of the greater willingness of labour movement leaders to fight at the same time as proposing more effective strategies of resistance. Initiatives like the Right to Work Campaign can help build broad opposition to Con-Dem cuts and create wide networks of resistance and solidarity.

At the very least we can score some victories and put socialists in touch with very many workers just as they begin to question whether the current system can provide for them. If explosions of struggle on the scale of Greece do break out, the groundwork we lay now could make the difference between victory and defeat.