Should Nick Clegg have held out for the Chancellorship?

Should Nick Clegg have held out for the Chancellorship during the coaliton negotiations last year?

I know, I know but bear with me.

I was suprised following the coalition negotiations that none of the jobs that are traditionally considered the big 4 (PM, Chancellor, Home Secretary or Foreign Secretary) were given to Lib Dems. Sure, we got Deputy PM which depending on how you looked at it could have been a bigger job than any of the big 4 except PM. But I am not convinced it has turned out like that nor was it really very likely.

From my understanding of what happened during the negotiations themselves, gleaned from various contemporaneous accounts I do not think that the idea of any of these jobs going to a Lib Dem was seriously entertained. To be fair there are specific problems with each of them:

PM: Non-starter. This role clearly has to go to the leader of the largest party.
Chancellor: Economic policy is the lynchpin of any government and it seems superficially obvious that the role should go to a member of the largest party. But I will come back to this.
Foreign Secretary: Figurehead of the government's foreign policy and given how important this area is to the Conservatives it is difficult to imagine them being happy with a Lib Dem in the top job at the start of a new coalition.
Home Secretary: Given the Conservative Party's traditional stance on issues like Law and Order it would be surprising if they took a Lib Dem in this role lying down. You've only got to look at how the "Sixth Lib Dem in the cabinet" ((C) Nick Clegg 2011) Ken Clarke is doing in the more minor role at Justice to see how this could have gone. Plus Home Secretaries are often only one or two prison or immigration scandals away from political oblivion so Clegg would likely have wanted to steer clear of this anyway.

So how do I think Clegg could have held out for the Chancellorship?

Well all the talk at the time of the negotiations, not least from David Cameron was of an open and generous offer to the Lib Dems to help form a government. It was clear that Cameron and Clegg wanted to bind the two parties together in a strong coalition primarily to reassure the markets that the incoming government was serious about getting a grip on the finances. As Clegg and the other senior Lib Dems made clear following the discussions that they were indeed serious about getting the deficit down there is no reason to think that this programme would have needed to be watered down had Clegg become Chancellor. Indeed if anything it could have sent an even stronger message to the market that the government was seriously committed. After all, Clegg would hardly be likely to demur later in the parliament from an economic policy that he was chiefly responsible for.

There is also of course the political dimension to this. I can certainly imagine that a good number of Conservative MPs would have been less than impressed with such a move. But it is easy to forget now just how opposed they were to a referendum on any sort of electoral reform until they were faced with the stark choice of potentially not forming the next government. I strongly suspect with the right leadership from Cameron that they could have been persuaded.

Which leads me to perhaps the most important point here. Part of the official title of the role of PM is "First Lord of the Treasury". This is often forgotten about, especially these days in the aftermath of the way Gordon Brown managed to use the Chancellor's office to essentially run an alternative government within government from Tony Blair. But that was an extreme example thrown up by a unique set of political circumstances. Cameron and Clegg are generally much more collegiate and it is reasonable to assume that their relations as PM and Chancellor would have been cordial. And of course Clegg would not have been able to get anything through without Cameron's backing so it's not as if he would have been able to go on manouvers even if he had he wanted to.

Another political aspect to this is how the allocation of the role of Chancellor would have reflected the political strengths of the people in the two most senior roles in government. We know Cameron can command 307 MPs through the lobbies (caveat - on subjects other than the EU!). But Clegg can command 57 MPs through the lobbies. How many can George Osborne command? Officially none. But even unofficially he would struggle to get the same number as Clegg through. The truth is that Clegg could effectively bring down the government if he wanted to. Osborne probably could not. He could weaken it for sure but the only person apart from Cameron himself who has the political clout to do this is the man who is currently our Deputy PM.

If Clegg had become Chancellor then the dynamics of the cabinet would have had to be quite different. There would have needed to be a strong Conservative as Chief Secretary to the Treasury (my money would have been on Phillip Hammond) and a suitable role would have needed to be found for Osborne (perhapsa beefed up Deputy PM role combined with Conservative Party Chair?). There would have been other knock-on effects such as Vince Cable would have been unlikely to be Business Secretary but I suspect things would have settled down quite nicely.

The problem I see with the current situation is that Deputy PM at the moment is a bit of a non-role. I know that Clegg has all sorts of responsiblity for constitutional change but with AV out of the window and Lords reform looking ever more tinged with chlorophil from that lengthening grass I can't help but feel that his political skills would have been much better served with the job that is actually number two in the government hierarchy rather than his current one that often seems difficult to define.

This sort of arrangement may have proven more sustainable in the longer run too. Since the failure of the AV referendum the Lib Dems in general and Clegg in particular have started to pursue a much stronger differentiation strategy from the Conservatives. This would have been much harder for him to do if he personally had been much more tightly bound into the centre of government decisions in the Treasury.

We'll never know for sure how this would have played out but Cameron and Clegg could be forgiven for reflecting that it might have been to the advantage of both of them if such a bold move to bind the current parties of government together had been taken from the outset.


This post was first published on Dale & Co.