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Cohabitation, English Style

Can a marriage of convenience between Tories and Lib Dems endure for five years?

May 24, 2010, Vol. 15, No. 34 • By IRWIN M. STELZER
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Cohabitation, English Style

David Cameron

"A bird may love a fish, but where would they build a home together?” asked the milkman Tevye in Fiddler on the Roof. Apparently, in Britain’s House of Commons. After falling just short of an absolute majority of 326 parliamentary seats in the recent general election, David Cameron’s Conservative party (305 seats) has hammered out a deal to form a coalition with the Liberal Democrats (57 seats). Cameron, the Tory leader, has “kissed hands,” as they say in Britain, and accepted the queen’s offer to form a new government. Nick Clegg, the Lib Dem leader, will be deputy prime minister in the first peacetime coalition since the Depression-spawned National Governments of the 1930s.

To say this is an odd couple is to put it mildly. Cameron is wary of ceding more sovereignty to the European Union’s bureaucracy; Clegg is an enthusiastic Europhile who would have Britain replace the pound with the euro. Cameron wants to limit immigration into an overcrowded Britain that is rapidly losing its national identity; Clegg favors unlimited immigration and legalization of those who arrived illegally. Cameron wants the government to push the development of nuclear power; Clegg opposes it. Cameron wants to strengthen Britain’s military capability and is a supporter of NATO; Clegg would like to replace Britain’s attachment to NATO with greater reliance on a European Defense Force and would abandon Britain’s nuclear deterrent. Cameron wants to crack down on judges who hand out lenient sentences to muggers and other hoodlums; Clegg thinks jails should be places of redemption, not punishment.

But these differences matter little when they stand in the way of power and jobs for politicians that have been out of government for 13 years—ever since Tony Blair led a modernized and victorious Labour party into No. 10 Downing Street. So Clegg has agreed to a limit on immigration from outside the EU and not to press for adoption of the euro “in this Parliament,” and Cameron has agreed to the Lib Dems’ key demand: a referendum to convert the British electoral system to proportional representation, the system that has made Italy and Israel virtually ungovernable, as smaller parties end up in a position to make and break governments. 

The quirky deal requires Conservative MPs to vote in favor of holding a referendum on electoral reform, but leaves them free to campaign against such a change when the referendum is held. The parties have agreed to disagree about nuclear power. These and other features of the Conservative-Lib Dem détente are laid out in detail in the coalition agreement.

The fun part will come when Cameron is off to some international meeting, and Clegg has to stand in for him at prime minister’s question time, fielding questions from his counterpart in the now-minority Labour party, whoever that might turn out to be. Or when Cameron is on paternity leave in a few months—his wife, Samantha, is pregnant—not an easy break to arrange since the PM’s residence is in the same building as his office. But paternity leave it must be, if Cameron is to be true to the practices the politicians have imposed on the British labor market and to his carefully crafted image as a modernizer. 

The “single most pressing problem” facing the new government, says Mervyn King, governor of the Bank of England, is the state of Britain’s finances. The deficit is running at about $250 billion annually, some 12 percent of GDP (approximately the same as ours), and is set to be the largest in Europe by the end of this year according to Azad Zangana, European economist at Schroders bank. The rating agencies have let it be known that they are increasingly uncertain that Britain should be allowed to retain its triple-A bond rating.

The new government has pledged to produce its first budget in 50 days, showing the steps it will take to stanch the flow of red ink. It will not be easy to keep to that timetable, given the wide differences between Conservatives on fiscal policy. George Osborne, the Tory chancellor, has his work cut out for him if he is to deliver a promised “significant acceleration in the reduction of the structural budget deficit.” The parties agreed that “the main burden” of deficit reduction would fall on spending cuts rather than tax increases. Rumor has it that the Tories favor a 4:1 ratio of spending cuts to tax increases, while the Lib Dems prefer a ratio of 1.5:1.

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