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  AV Referendum: Coalition Buckles

  January–May 2011

  ‘If you wanted a formula to maximise the prospects of the coalition falling apart, decide at the outset to select an issue of existential importance, ensuring that it will be seen as vital to both parties, then say you will conduct a debate in public on its implementation with both parties being on different sides: you will then have your formula for disaster.’1 This is the prediction of Cabinet Secretary Gus O’Donnell, whose job it is to oversee the smooth conduct of the virgin coalition government. The dynamite charge he envisages is a vote on introducing electoral reform in the form of the Alternative Vote (AV), which is duly enshrined in the Coalition Agreement.

  Electoral reform is of fundamental importance to the Lib Dems. Since their replacement by Labour in the 1920s as one of the two main parties in Britain’s two-party system, they have believed that only proportionality would address their historic problem as the third party: the proportion of votes they receive at elections translates into only a pitifully small percentage of seats in Parliament. While a form of proportional representation has long been their preferred system, they agree to AV, which asks voters to rank candidates in order of preference to ensure that the winner receives over 50% of the vote. Although Lib Dems believe AV to be an improvement on first-past-the-post, which has long been Britain’s method of choosing MPs, it is not the proportional system they crave. To the Cameron team in the first few weeks of coalition, the implications of any successful AV referendum seem a long, long way away. The immediate concern in those warm May days is binding the Lib Dems into a government to ensure that their own favoured policies, including Plan A, would thus be enacted.

  When Cameron sees Conservative MPs on 10 May 2010 in House of Commons Committee Room 14, he tells them that electoral reform is the minimum price that the Lib Dems are demanding for agreeing to come into a coalition government. The chief whip, Patrick McLoughlin, acknowledges that there was ‘very little dissent’ about it at that meeting.2 That evening, William Hague, who is leading negotiations, offers Lib Dems a national referendum on AV, which will form a cornerstone of the Coalition Agreement. He knows that AV is the biggest single gamble in the Coalition Agreement. If the country votes in favour of it, it will change politics forever.3 Like all in Cameron’s team, insofar as he thinks through the implications at all, he assumes that AV will be rejected in a referendum and that it will be a necessary inconvenience.

  The clear understanding of the coalition negotiators is that the Conservatives and the Lib Dems will campaign on opposite sides of the argument, but that they will do so in a dignified way, as becoming of ‘Rose Garden’ partners. That at least is what the Tory negotiators think is agreed. The Lib Dems have gleaned a different understanding: that Cameron will not himself lead from the front, and that as PM, he will maintain an Olympian distance above the troops slugging it out on the ground. The following weeks give no cause for concern. Nick Clegg is reassured by Michael Gove’s hands-off, even indifferent, attitude to the result of the referendum. Julian Astle, Clegg’s special adviser, is working on the understanding that the Tory leadership will let AV ‘go’ to focus on other matters.4 One of Clegg’s senior policy aides agrees: ‘Cameron’s personal view was that he didn’t really give a damn. AV is not a massive change to the first-past-the-post system. His view was, “Nick, you and I, we’ll just stay out of the fray on this one.”’ Indeed some leading Conservatives, like Gove, are actively considering coming out and supporting AV.5 In the second half of 2010 every poll indicates that the ‘No’ side will win. Cameron has reason to be laid-back. In January 2011, a high point in Conservative/Lib Dem harmony, the Fixed-Term Parliaments Act is passed by 320 votes to 234, which means that unless there are exceptional circumstances, general elections will be held every five years in Britain and no longer at the whim of the prime minister. At the first Conservative conference at Birmingham, AV is barely mentioned.6 George Osborne is in unashamedly pugilistic form, picking up a ‘No to AV’ sticker from a conference stall, albeit placing it on the inside of his lapel.7

  December sees the first harbingers of problems. A Guardian/ICM poll at the beginning of the month puts ‘Yes’ on 44% but ‘No’ on only 38%.8 The New Year in 2011 brings a chill wind to Number 10. The Coulson affair is rocking the confidence of the party in Cameron and heralds open season for critics to come out into the open. In the second week of January, rumours fly around Westminster that Cameron and the high Tory command are not putting their weight behind the referendum just four months away.

  Graham Brady and the executive of the 1922 Committee come on a visitation to Downing Street. They are not happy. ‘You do realise that there is now a serious prospect that you could have the distinction of being the last ever Conservative prime minister,’ they tell him.9 Cameron listens stony-faced. After the grilling, Osborne warns Cameron that a challenge by angry backbenchers might follow a lost referendum. This is not remotely what Cameron wants to hear in the present climate. At the end of February, with just ten weeks to polling day on 5 May, polls are even more in favour of the ‘Yes’ campaign: one by Ipsos MORI puts ‘Yes’ on 49% with ‘No’ on 37%.10

  Matthew Elliott – co-founder of the TaxPayers’ Alliance (a think-tank dedicated to low taxation) and a vigorous campaigner – is brought in to spearhead the all-party ‘No’ campaign, to run alongside the Conservatives’ own campaign. He gives a bleak presentation to Cameron’s team on the outlook. Unless robust financial effort is put into the cause, the referendum will be lost.11 Panic is mounting in growing sections of the party: more start saying the Conservatives will never achieve an overall majority again if AV is brought in. Among Cameron’s circle, Osborne is the most agitated; strategist and pollster Andrew Cooper is the most sanguine, believing that the tide will turn and the ‘No’ campaign will triumph.

  Osborne convinces them more impetus is needed. Stephen Gilbert, Conservative director of campaigning, is brought in to transform the campaign. An experienced organiser, he has known from the outset that the key to defeating AV is to get out the Labour vote against it: Labour too will lose out if AV is introduced. Gilbert works with Andrew Feldman to ensure that the campaign is properly funded and energised. Cameron’s team are particularly irked by the ‘Yes’ campaign being awarded a huge grant from the Joseph Rowntree Foundation. Cameron knows raising more money is key, but he is becoming uneasy with the aggressive turn campaigning is taking. He knows it will damage his relationship with Clegg and his Lib Dem partners if he himself accepts the upfront role Osborne is urging him to take. The vitriol against the Lib Dems is about to become personal.

  Writing on the influential website ConservativeHome, former MP and journalist Paul Goodman anticipates the angst of Conservative MPs should the referendum be lost: ‘First he [Cameron] messes up the election. Now he’s messed up the referendum. We’ll never govern again on our own – and I’m going to lose my seat.’12 Right-wing websites and commentators are saying Cameron has been weak in his running of the coalition and should be giving the Lib Dems a much harder time; indeed, that he should never have conceded the referendum in the first place. Cameron is caught between a rock and a hard place. Attack Clegg and he strains the coalition: hold back, and his party attack him. To the Lib Dems, Cameron’s predicament is a symptom of his weakness in his party. Libya is taking up much of his attention in these months. He is at a loss to know what to do. Osborne has heard enough: he can take no more fence-sitting. ‘Look,’ he says, ‘we have to win this fucking thing; who cares what Clegg thinks?’ There are no ifs and buts. Cameron listens in silence. So do other members of the team in his study, watching how he will respond. Later that day, Cameron calls Feldman: ‘I absolutely agree with George,’ he says. ‘We cannot lose this.’13

  Everything now changes from February. Cameron puts Number 10 on a war footing, telling his staff to get right behind the ‘No’ campaign, and instructs CCHQ to organise at least one major activity for
him on AV each week.14 There is no love between Labour and Conservative in the marriage of convenience that is the ‘No’ campaign. Labour’s team are pleased by the new Tory activism. But on funding, they take the view that ‘you fucking Tories can raise the money we need’. Self-made millionaire Peter Cruddas is duly brought in by Feldman to help them do so, recognising that the ‘Yes’ campaign is still better organised and funded. Money soon starts to flow and confidence rises. Clegg’s team are incandescent about Cameron’s new tack. They suspect the PM at best of turning a blind eye, at worst of ordering the ‘No’ campaign to personalise their attacks on Clegg. The Lib Dem leader’s poll ratings are on floor level: Clegg’s aides surmise the Conservatives are capitalising on his weakness by turning the leader of the ‘Yes’ campaign into an object of public ridicule, in effect making the referendum not about AV but Clegg himself. To the Lib Dems, Cameron’s action is in direct contravention of earlier (if disputed) understandings. It is ‘the great betrayal’.

  The energy that Osborne and Stephen Gilbert bring to the campaign from Downing Street, and the funds that Feldman and Cruddas acquire from CCHQ, combine with the newfound bellicosity of the prime minister. The voices of Conservative criticism are placated. On 18 February, Cameron gives his principal speech in the referendum campaign at the Royal United Services Institute. He tells his audience outright that AV will be ‘bad for democracy’.15 The all-party ‘No’ campaign, which becomes primarily the vehicle to mobilise the Labour vote for polling day, is increasingly bypassed by Number 10. Cameron and Osborne divide up phone calls to newspaper editors and commentators, urging them to fight AV. Eventually the Daily Telegraph, Daily Mail, Daily Express, Sun and The Times all come out against. The Lib Dems are furious when they hear about the calls.

  The ‘No’ campaign, reflecting strenuous market research, focuses their campaign on the ‘three Cs’: cost, complexity and Clegg. Television adverts feature a horse race in which the third-placed rider goes on to win, and another has Alan B’Stard – the louche star of the 1980s and 1990s television comedy show The New Statesman, played by Rik Mayall – winning an AV election. Labour’s team on the ‘No’ campaign are delighted to see Clegg, a figure they despise, besmirched: ‘They are only too happy to tear strips off Nick Clegg. Labour loved this stuff,’ says Elliott.16 The ‘Yes’ campaign try to respond in kind. One of their posters features a photograph of the British National Party leader, Nick Griffin, with the strapline ‘He’s voting “NO”. How about you?’ But their campaign is lacklustre by comparison. So successful has the ‘No’ campaign become that Labour are alarmed that it is becoming a ‘Tory front’ with Cameron using it to gain profile for himself and his party. On 18 April Labour Party heavyweight John Reid appears on a platform beside Cameron, to the delight of the ‘No’ campaign. The morning after, the Guardian publish a poll showing that support for AV is collapsing.17 Osborne asks CCHQ what more he could do by way of a ‘big intervention’ to help the ‘No’ cause. ‘Lend your authority as chancellor to our claims about the cost to taxpayers of AV,’ he is told. To Lib Dem fury, the No to AV campaign says the change will cost the country £250 million, leading Chris Huhne to write an angry letter on 24 April asking Osborne to deny this claim.18 For Clegg, ‘the spring of 2011 was the lowest of the low’.19

  Number 10 is finding it hard to maintain the story that Cameron is not responsible himself for the personal attacks and that they are instead down to Labour: ‘Basically we convinced ourselves that it was Labour who forced us to play tough. But this was a fairly thin fig leaf,’ admits one of Cameron’s inner circle. They know the attacks will anger Clegg: it is a calculated risk, but one they feel they have to take. They draw the line merely at personal or nasty stories about Clegg or the Lib Dems.

  Not that Clegg sees it that way. At the height of the campaign he visits his parents near Oxford with his wife and children. ‘Look, we’ve just got this leaflet through the door,’ his father tells him, ‘it’s outrageous.’ Clegg junior is handed the leaflet depicting what he describes as ‘incredibly personalised stuff about me’.20 He believes the personal attacks are wholly gratuitous and can under no circumstances be justified. He is sickened by the Tory mantra: ‘It’s Labour’s fault, not ours’, or ‘We have to work with Labour on the campaign and they felt it was the only way to make their voters vote against AV: we are terribly sorry’. Not that it totally shatters his view of Cameron: he continues to believe in his partner’s integrity and discomfort at what is happening.

  On Tuesday 3 May, two days before the referendum, matters come to a head in Cabinet. Lib Dem Energy Secretary Chris Huhne is observed to be in a highly charged state as he waits outside the Cabinet Room for the meeting to begin. He then bursts in with a stack of leaflets from the ‘No’ campaign attacking Clegg for going back on the Lib Dem pledge on tuition fees, and says he is appalled by the actions of those at the very top of the Conservative Party.21 The meeting begins. He turns on Cameron: ‘I want to know if you disassociate yourself from these leaflets smearing Nick.’ He challenges the PM to sack Stephen Gilbert, demanding to know whether he had been responsible for producing them. Cameron is taken aback by the onslaught. ‘I am not responsible for the all party literature produced by the “No” campaign,’ he says. Huhne thinks he is dodging the question and shoves the leaflets across the Cabinet table towards Osborne. ‘This was always going to be a difficult period for the coalition,’ Osborne responds, seeking to pacify him. Huhne comes back at him, even more forcibly, demanding if he had known in advance about these leaflets. ‘I am not going to be challenged by a Cabinet colleague acting like he is Jeremy Paxman on Newsnight,’ responds the chancellor.

  Round the Cabinet table there is a collective dropping of ministerial jaws. Huhne turns on Sayeeda Warsi, and says she must resign as party co-chairman. Several ministers with longer memories, like David Willetts, wonder whether they are about to witness a ‘Heseltine moment’, a reference to the highly charged occasion when the blond-haired firebrand stormed out of Thatcher’s Cabinet in 1986 over the Westland helicopter affair. ‘You could hear a pin drop,’ Willetts recalls.22 It is the trickiest moment in Cabinet for Cameron by a distance: yet Huhne is not finished. He reverts to Cameron and demands that he condemns posters that have suggested that babies’ and soldiers’ lives are at risk if AV is introduced. Cameron and Osborne argue that they are only responsible for the ‘No’ campaign being run by the Conservative Party.23 When asked again on Radio 4’s Today programme to condemn the posters featuring ill babies, Cameron replies, ‘The fact is that if you move to a new voting system it will cost money.’24 After the Huhne inquisition is over, ministers return to Cabinet business.

  Cameron’s team reflect on the outburst at their 4 p.m. meeting. They have different views. Some see Huhne’s outburst as anti-Clegg positioning: Clegg is at a very low ebb, the tuition-fees row has damaged his confidence, with over 30,000 protestors marching on the streets, some carrying effigies of Clegg. He has been suffering both personally and professionally for a number of months: he was ill in the early part of 2011 as well as being ‘crucified in the right- and the left-wing press in a way that I don’t think we’ve seen in British politics since the days of Neil Kinnock’.25 He is further damaged by the poor showing of the party at the Oldham East and Saddleworth by-election on 13 January, the first of the parliament, where the Lib Dems were heavily defeated. Most think Huhne is up to something. But Oliver Letwin thinks Huhne is motivated by genuine panic at the prospect of not achieving electoral reform: ‘In Eastleigh, I’ll be in terrible difficulties if we join a coalition with you: we must get AV,’ Huhne had told Letwin, referring to his vulnerable position in his own constituency.26 The truth is that Clegg is desperately weak and has become depressed about his party’s fortunes, and Huhne, for all his indignation, is parading his own leadership credentials.

  Thursday 5 May is referendum day. The AV system is resoundingly rejected by 67.9% to 32.1% on a turnout of 42.2%. Victory strengthens Cameron’s
position in the Conservative Party. For a time. And at a cost. As O’Donnell predicted, the episode has inflicted significant and enduring damage to the coalition. To Clegg, ‘a certain kind of hardness entered into the transactions’ thereafter, while to Vince Cable ‘it was perfectly clear that we were dealing with people who have no sentiment’.27 To Danny Alexander, ‘it is the moment the scales fall away from our eyes about the Tories. The personal attacks on Nick were personal and brutal.’28 It ends any notion that the relationship between the two parties will realign British politics. ‘We are one team. We are one government’ had been the mantra of Cameron, Llewellyn and Coulson when they first went into Downing Street. There were joint meetings, shared offices, joint political Cabinets at Chequers, joint press operations and joint policy units. The AV debacle sweeps all this away. There are to be no more joint meetings. ‘Nothing again will rest on goodwill, everything has become a transactional relationship,’ says Astle. ‘It became: “I’ll concede this in return for that.” It was all negotiation and bargaining.’29

  But survive the coalition does. Clegg picks himself up and the Lib Dems put their show back on the road. They’ve lost their primary raison d’être for entering the coalition: electoral reform, and with its defeat, much of the support in the country for their party leadership becomes more flaky. And yet there is now a new purpose for the Lib Dems in the coalition, informed by the sober recognition that pulling out would result in a general election, which would be disastrous for them electorally. The new mission is to continue to show that they can be credible members of government, bring economic stability back to the country, and achieve as many of their own policies as they can. For a while after the defeat, Clegg’s leadership position looks to be in serious danger: but when Huhne resigns in February 2012 to face prosecution for perverting the course of justice over a speeding offence, the pressure recedes, and Clegg’s buoyancy slowly returns. To coalition architect Letwin, the AV episode provides the moment of greatest tension within the coalition to date: ‘If we could get through AV in one piece together, we could get through anything. The coalition would indeed endure until 2015.’30 It is for this reason that for some, the AV referendum proves ‘the key turning point’ that ensures the coalition lasts for the ‘full five years’.