The clear winner of the British election, declared the Financial Times on May 8, was ‘Sir Gus O’Donnell and the Civil Service’. For the Guardian, too, Cabinet Secretary O’Donnell was ‘the hero of the hour’. A few months before the poll, when a hung parliament looked likely, Conservative leader David Cameron had announced his firm intention of leading a minority government, if the Tories won a plurality of seats. He would seek a pact with the Liberal Democrat Party on key legislation, rather than invite it to join a coalition ministry, and then call another election. Historical precedents—the close-run results of 1964 or 74—indicated going back to the country within eighteen months. There was sharp criticism from Conservatives of Cabinet Office plans to suspend the return of Parliament while a coalition was brokered: ‘The idea that a courtier like Sir Gus O’Donnell will decide this is straight out of the Victoria and Albert Museum.’footnote¹

To the despair of election-night commentators, the May 6 count produced no uniform pattern. On a slightly increased turnout of 65 per cent, there had been a swing of only 4 per cent to the Conservatives, who took 10.7 million votes, a 36 per cent share of the ballot, and 306 seats, short of the 326 needed for an overall majority. New Labour slumped to 8.6 million, down by 6 points at 29 per cent of the vote; but the electoral system’s bias in its favour and a stronger result in Scotland gave it 258 seats, some 40 per cent of the Commons. The ldp saw a swing of only 1 per cent and a popular vote of 6.8 million, increasing its share to 23 per cent, with 57 seats. Britain awoke on May 7 to the likelihood of a weak Tory government and a return to the polls by 2012.

With protests raging in Greece against the pasok austerity measures, and acrimonious disarray among European governments on how to deal with Eurozone banks’ imbrication in the looming sovereign-debt crises, this was not an outcome Whitehall or the City of London wished to see. Measured by gdp the British government’s debt was larger than that of Greece. An unprecedented monetary and fiscal stimulus—zero interest rates for 18 months; £200bn of electronically devised ‘quantitative easing’, some 14 per cent of gdp, poured into government bonds; £117bn in cash and an overall £1 trillion government guarantee for the stricken banking system—has failed to ignite even a flicker of growth in the uk economy. Inflation, rising towards 4 per cent, is higher than in any other oecd country; household debt is also at record levels. A hike in interest rates, pencilled in for 2011, will bring a concatenation of defaults and bankruptcies, with knock-on effects for the troubled banks, insurance giants and pension funds. By tacit agreement, a stocktaking of the economic and financial devastation had been kept out of the 2010 election campaign; party leaders referred synecdochically to the need to ‘tackle the deficit’, only one aspect of the mess. Austerity measures had been delayed until the May 2010 election was out of the way. The prospect of a minority government, battling to push through closures and redundancies under the shadow of further popular reckoning, was not one that Britain’s rulers could contemplate with equanimity.

Within five days that prospect had been ruled out of court. As a Financial Times report explained: ‘The Cabinet Secretary has positioned the civil service to take maximum advantage of the political uncertainty’.footnote² The House of Commons was suspended, on the basis of a draft constitutional handbook which mps had not been permitted to debate, while teams of functionaries helped to coach party leaders towards a mutually beneficial outcome. The next election would be delayed until 2015, with the instant introduction of fixed, five-year parliamentary terms. The majority needed for a no-confidence vote in Parliament would be raised to 55 per cent. Conservative and Liberal Democrat manifestos were elided into a single statement, with a pledge of future referenda to broker the two key areas of difference: electoral reform and further eu treaties. On 12 May, Cameron explained to the waiting press corps that he and Liberal Democrat leader Nick Clegg had come to realize, over the course of the negotiations, that the idea of a minority Tory government was ‘just so uninspired’. The Lib–Con coalition government, announced by the two youthful, telegenic party leaders in the sunshine of the Downing Street garden—‘just like a wedding’—was greeted with almost universal applause. The Financial Times: ‘A seamless transfer of power—a good week for the pragmatism and commonsense of the British constitution.’ The Economist: ‘The best possible outcome, given the ropey electoral numbers—we welcome it.’ The Guardian: ‘The public seem pleased with the coalition . . . This is surely the right response.’footnote³

What manner of beast is the Lib–Con coalition? Though the Tories dominate in political heft—306 out of 363 mps; 19 out of 24 Cabinet seats—the ideological complement brought by the Liberal Democrats is the decisive hegemonic component. Firstly, although the main planks of the programme (the economy, welfare, education, etc.) are dismally familiar, given Britain’s tri-partisan consensus, the Liberal Democrat input situates the coalition agreement minimally, but self-consciously, to New Labour’s left: a bill to roll back Blair’s surveillance state; a commission on the Glass–Steagall-style separation of investment and deposit banks; a mildly redistributive capital-gains tax. Cameron has spoken of reducing inequality in the public sector: salary ratios should not exceed 20:1. In Washington, Foreign Secretary Hague pledged support for ongoing imperial campaigns, but ‘not in any slavish way’.footnote⁴ The liberal intelligentsia, viscerally anti-Thatcher and accustomed to think of itself as centre-left, seems for the most part surprised and pleased to be swept up in the Lib–Con tide. Will Hutton will be chairing a commission of inquiry for the government; Frank Field has also been offered a job. John Lloyd is typical of many coming to terms with ‘the paradox’ that ‘we look to a Conservative-dominated government for some form of egalitarian collectivism’.footnote⁵

For Cameron, leveraging the Conservatives’ scant 36 per cent of the vote into a healthy, 80-seat coalition majority has also helped to contain the Tory Euro-sceptic right, which dominated the parliamentary party’s first two terms in opposition, having given the Major government much grief. When Cameron launched his 2005 leadership bid as a self-declared ‘heir to Blair’, with a mission to ‘make people feel good about being Conservatives again’, he received overwhelming support from the membership, but won only a plurality of Tory mps—90, against 57 and 51 respectively for Thatcherites David Davis and Liam Fox. His ‘Blue Labour’ faction, as the right dubbed it, made some headway before the 2010 election. Dozens of pliable new Tory parliamentary candidates were selected on the basis of ‘diversity’—youthful, brown-skinned, female, gay. Party chair Sayeeda Warsi, born in 1971, is the daughter of a Pakistani mill-worker turned small-businessman, from Dewsbury. Nevertheless, Thatcherites would have constituted over a third of a minority Tory government. Cameron has shown himself quite as authoritarian and opportunist as Blair in his handling of the party. An attempt to bulldoze the backbench 1922 Committee to allow frontbench participation was rammed through by 168 votes to 118, although Cameron then had to row back, under a storm of protest.footnote⁶ But if backbench revolts offer little threat to legislation, the Thatcherites are made of sterner stuff than New Labour’s Campaign Group. They also have a section of the press behind them: a much-debased Daily Mail, the Spectator, parts of the Telegraph. Already the Lib Dems’ number two at the Treasury, David Laws, has had to resign over a sex-cum-expenses scandal, subletting from his clandestine boyfriend with taxpayers’ money, as revealed by the Telegraph. The honeymoon may be shortlived.

The Liberal Democrat left, like the Tory right, has qualms about the Lib–Con coalition, which leaves them with no currency as an anti-Tory option. But Clegg can argue that this is a once-in-a-century opportunity, finally opening the way to electoral reform.footnote⁷ The Liberal Democrat demand for an Alternative Vote system, if passed by referendum, will only dilute the present first-past-the-post arrangement; the Electoral Reform Society has estimated that the ldp’s 57 seats in 2010 would rise to 79 under av, mostly at the expense of the Tories. Under a transparently proportional system such as Germany’s, it would have 149 seats, New Labour 188 and the Conservatives 234. But virtually any change, even one as minimal as av, will increase Liberal Democrat leverage within the political system. The party also stands to benefit from being so visible in government, the fresh-faced Clegg constantly by Cameron’s side on tv.