1) The Lib Dems are surprisingly united
One might expect a party conference following the Lib Dems’ first full year in Government, the 2:1 defeat in the AV referendum, the loss of 750 councillors, and the tanking of the economy to be a scene for dissension, rows and splits. Far from it. The mood at the Lib Dems’ annual conference has been one of calm and loyalty.
The only significant public spat has been over whether or not the proposed NHS reforms should be debated again. Sensible calls from activists like Prateek Buch for the party to reconsider its deficit reduction plans have largely fallen on deaf ears while heckling has been limited to a fringe meeting where Chris Huhne talked up the virtues of nuclear power.
In place of dissent, delegates seem happy to be in a position of power. Lib Dem Voice co-editor Mark Pack is fond of telling people that 75 per cent of their manifesto has been implemented. And to keep sprits up during the week, the conference faithful have been thrown some yellow meat on high pay transparency, energy companies, and repealing parts of the Digital Economy Act.
The surprising levels of unity can also be attributed to the Lib Dems’ recent electoral performances. Since their wipeout in May, the party has been picking up council by-election victories including a totemic win in Eton. Although 47% of their voters say they won’t do so again, their poll ratings have picked up since May. And commentators have also started softening their take on the party with Steve Richards, Matthew D’Ancona and Polly Toynbee all offering glimmers of light in the party’s fortunes.
2) Nick Clegg is safe as leader
The Lib Dems have shown a ruthlessness in recent years in dispatching unpopular leaders. Despite net satisfaction ratings of -28, no-one is seriously threatening Clegg’s position. Part of this is down to a lack of alternatives. One prominent activist told me that there was no-one on a par with him. Huhne is, don’t forget, a two-time leadership loser who is weakened by the ongoing investigation by Essex police.
‘Latest gag from Lib Dem minister: “Q: What does Tim Farron want to be when he grows up? A: Simon Hughes”.’
Whether he leads the Lib Dems into the next election is, of course, open to speculation. But rumours that Clegg will take up a position at the European Commission in 2014 have been dismissed in the strongest possible terms as mischief making by Labour and Tory commentators.
3) The Lib Dems’ strategy is focused on differentiation…
Lib Dem ministers and activists alike are united behind a strategy of “differentiation” (the process of drawing a distinction on policy with the coalition). They hope that over time the public will give them credit for delivering their priorities and blocking right-wing Tory ideas.
The heavy briefing on raising the tax threshold to £12,500 and keeping the 50p rate over the weekend was part of this effort. Measures on the environment and support for early years are expected to feature in Nick Clegg’s speech today as a further attempt to set out the distinct Lib Dem agenda within government.
This is all well and good in a week where they have the media’s sole attention but it’s unclear how it will work once they get back to Westminster. At some point soon, the Government will have to update its coalition agreement. For this to have any credibility it will have to include some new policies rather than being a blank piece of paper accompanied by a briefing operation setting out what was omitted.
The Lib Dems will also need to be careful to ensure that differentiation does not go too far and lead to splits. If the European Central Bank judges that it needs the right to issue Eurobonds, a European treaty revision will almost certainly be necessary. How that is handled – and in particular whether the move goes to a referendum – will test the coalition’s coherence beyond almost any other issue.
4) …but they are unable to differentiate themselves on the economy
No matter how much differentiation the Lib Dems are able to achieve on public service reform or tax policy, they will struggle to do so on voters’ number one issue: the economy. Nick Clegg has described the coalition agreement as his “original sin” and their unwillingness to negotiate a slower deficit reduction programme of any kind is likely to be what many voters ultimately find impossible to forgive.
Evan Harris - speaking at IPPR’s fringe - set out that the Lib Dems had no political choice on cuts since a longer deficit reduction programme would have meant being bound with the Tories to a further programme of cuts going into the 2015 election. But this may become the reality despite their austerity programme.
If further downgrades yesterday by the IMF to growth forecasts for 2011 and 2012 prove true, it will mean that the spending review of 2014 will need to do more to close the deficit. Instead of being able to perform a pre-election tax giveaway, the Coalition will be forced to set out where future tax rises or spending cuts will come from, or risk missing their treasured fiscal targets.
5) The 2015 electoral strategy is unclear
Despite the conference cheer over their role in government and the uptick in the polls, no Lib Dem I heard was able to clearly articulate what their 2015 electoral strategy would be. Some, like Evan Harris, at least say that the party will have to replace those “protest voters” that they have lost as a natural result of becoming a governing party.
One perfectly reasonable strategy, which may end up being the implicit, if not explicit, goal in 2015 would be to manage expectations and institute a damage limitation exercise. The boundary review will cost them a fairly modest seven seats in England (fewer than some had predicted) while delivering safer seats for some of their more vulnerable MPs including Simon Hughes.
Even an extreme swing of seven points to Labour and three points to the Tories (leaving the Lib Dems on 13 per cent) would let them keep around two-thirds of their MPs. No doubt the third facing the boot from Westminster will feel pretty bitter about their predicament. But against hyperbolic claims of extinction by some, there may be an explanation other than delusion for their collective calm.