Long reach of the Laws

Posted On: 
12th July 2012

A Liberal Democrat backbencher with unrivalled access to power, David Laws is concerned about constitutional reform and the economy, but remains one of the biggest champions of the Coalition

Standing alone amongst a small collection in David Laws’ famously well-organised Westminster office is an interesting trio of books.One is the Orange Book, the collection of pro-market essays edited by Laws in 2004, marking out his determination to keep his party away from the wilderness of the unelectable Left.Then there’s Nigel Lawson’s take of his time as part of Mrs Thatcher’s Treasury in the 1980s, a decade in which he battled to reign in public expenditure – the challenge which Laws embraced wholeheartedly during his time as Chief Secretary to the Treasury following the 2010 election.Finally there’s a copy of 22 Days in May, Laws’ own account of the formation of the coalition, his brief ministerial career, and the expenses scandal which led to both his resignation and declaration of his homosexuality.

The three books serve as useful markers for the three most important chapters in Laws’ political career: ambitious declaration of intent, his approach to being a Treasury minister, and his sudden downfall.

He admits that the Orange Book, which raised his profile considerably, ruffled feathers in the party.

“Actually, I think much of the party now does understand where I am coming from and the image of me within the party is probably more rounded than it was after the Orange Book, when people thought I must be just some kind of secret Tory working away in the Lib Dems, to kind of undermine all our principles and beliefs”.

And the understanding works two ways. “I think I might not have stayed in politics if I’d felt the Lib Dems were not serious about being in government”, Laws reveals. “Ten years ago, I sometimes found some parts of our party quite frustrating. You felt that we’d got so used to throwing stones from the sidelines in British politics that that was all some people’s ambition was. Why bother being in a third party if third party politics is too dangerous to go into government and you’re going to forever be on the sidelines of politics? That wouldn’t be something that I would find very interesting or worthwhile.”

The formation of an unlikely coalition with the Conservatives in 2010 took the Lib Dems to centre stage, and Laws admits he has been pleasantly surprised with his party’s response. “I thought the party would find it much more difficult making that decision and actually staying in a coalition government and making it work, and actually I think the party has shown that it has grown up hugely over the last decade.”

First as Chief Secretary to the Treasury, then as a backbencher, Laws established himself as a Liberal Democrat eager to make the case for cuts to public spending. As such, Tories often suggest, perhaps awkwardly, that Laws is their favourite Lib Dem.“I don’t find those things a problem”, he insists. “I’m used to the fact in politics that... people will have particular images of you and visions of you and once they’ve got those images in their head it’s sometimes difficult for them to understand the full picture. What is sometimes difficult for people to understand about me is that I come to politics from a perspective of seeking to be liberal across a whole range of policy issues.”The present chapter of David Laws’ political career finds him as a Liberal Democrat backbencher, albeit one close to the Deputy Prime Minister, and one of the coalition’s most vocal supporters.

Not surprisingly, he is concerned by the rows over reforming the House of Lords. “This is an important part of the coalition agreement. It wasn’t actually a controversial part of the coalition agreement – it’s something, by my recollection, that we agreed in a few minutes of discussion”, recalls Laws, a negotiator in the coalition talks. “I think it’s very important in terms of honouring the coalition agreement and both parties so far have signed up and delivered all of the aspects of the coalition agreement and it’s therefore really important we continue to do that.”Asked whether the Lib Dems could withdraw support for implementing a boundary review if Lords reform is rejected, Laws issues a note of worry – or perhaps a threat.“It would be dangerous for the coalition if we allowed people in thetwo parties to constantly speculate on which policies might come to grief if other pledges are not kept. Both parties have a big responsibility to accept that a deal is a deal. If one party, be it the Lib Dems or the Conservatives, started not delivering pledges in the coalition agreement, then that will obviously be something that would be a de-stabilizing and a very negative development.”

There is one area where Laws can see consensus: reform of party funding. He leads the Lib Dem delegation to solve a political problem which is still stalling despite last year’s Kelly report. Laws admits there have been “ups and downs” during cross-party talks, but is “optimistic” that an agreement will be struck.

“We’d hope that we might be able to complete that by round about now. I suspect it might take a little bit longer than that, but I think the case for reforming party funding is still very, very strong. When I consider those issues and compare them with over challenges like getting party agreement on Lords reform, this feels like the kind of thing that a few sensible people ought to be able to figure out in a dark room in a matter of hours.”

That said, he admits that progress isn’t always easy.“It’s like kind of playing three dimensional chess, not only in terms of there being three parties in the game but also these issues of how do you fund it? What’s the cap? How do you deal with the unions?”Then, in an answer which might also work for Lords reform, Laws adds: “I don’t think the public would understand if we said, you know, there’s this great big challenge, it is really important to clean up party funding, we all said that we would do that in our manifestos, now we’re sort of agreeing something and not doing anything about it.”

Before constitutional matters became his concern, Laws was at the heart of the government’s primary challenge of balancing the books and restoring economic confidence. He accepts that all has not gone according to plan.

“It’s plainly the case that the economy is going through a much tougher period now than everybody expected when the coalition was formed in 2010”, he admits, arguing that “the headwinds of the eurozone are hurricane-like rather than galeforce-like, and that means that the economy has been growing more slowly than we expected.”Laws believes more needs to be done to inspire growth in the economy – but insists that this was always the government’s plan.“When people talk about the government’s economic strategy and sticking with Plan A, they’re right. That’s exactly what we need to do, but Plan A was not just a plan to control public expenditure tightly and to cut real public spending, Plan A was also a plan that relied upon growth”, Laws argues, before hinting that Plan A needs a tweak or two.“It’s clear that there needs to be more action on monetary policy, more radical both in terms of scale and in terms of the radical nature of those monetary interventions, and the government needs to keep on doing what it is already doing which is to look at other ways which it can boost investment spending.”

So if not a Plan B, then is this a Plan A+? Laws resists the suggestion. “I kind of hesitate to invent an alphabet soup of different options for the economy. To me it’s not A+, B, B- or C, it is Plan A. Plan A is a plan for spending control and growth. The spending control bit is coming in absolutely fine, so we need to just go on delivering that. The growth bit is more challenging, almost solely because of the situation in the eurozone and so we and the Bank of England need to take more aggressive action to deliver plan A.”With the current spending review set to March 2015, Laws believes there is no urgent need for a revision. “For the time being, in this year, when the focus is on recovery, that’s where all of the economic focus needs to be. We have a spending review that covers the period that goes right out to the end of March 2015. I don’t think there’s any rush to make decisions about spending beyond 2015, and given that there’s so much uncertainty about the eurozone, to try to be fixing, at a very earlystage, our spending plans beyond 2015, I think would be unwise.”

That said, it is “obvious that at some stage, at the very least we’ll have to fix the spending plans for 2015 to 16” before the general election in May 2015, “by which time we will be in a new fiscal year which we have no budget plans for at the moment, and we can’t expect public services to go into April 2015 with no budgets”.

Committing to any spending plans beyond the scheduled lifetime of the coalition is, however, a risky business. “How much further we go into the next Parliament and [in] how much detail is, I think, something which Nick and David Cameron have yet to fix, and need to mull in the light of the conflicting pressures… to have long term economic plans, which is something the markets find attractive, but on the other hand not to have economic plans that go too far into the next parliament, given that both parties are going be fighting the next election on independent manifestos and can’t do that if our economic policy is in lockstep for too far into the next parliament.”

Talking of being in lockstep, at what point do the two parties walk away from each other? Laws believes that the last 12 months before the election will see “more emphasis on the different offers that we’re going to be making at the May 2015 election” but, ever the coalitionist, he warns that “both Nick and David Cameron will have a very strong incentive to make sure that that process of differentiation doesn’t get out of control and lead to a sort of chaotic and unproductive year of government which would just make people in the country conclude that this government wasn’t working very well and damage the reputation of both parties as well as the coalition.”

He rejects the idea of withdrawing Lib Dem ministers before the election. “That would look pretty unconvincing to the public... Are they really going to have a different view of the Lib Dems and think of us as a more independent party just because we sort of bailed out of the plane just before it comes into land? I kind of doubt it.”

Before then, might we see a renewal of the coalition’s agenda, the so-called Coalition 2.0 document? Laws shakes his head. “Some people have muddled up the 2.0 thing with other things. Coalition 2.0 is just this group of Lib Dems and Conservatives who meet on a monthly basis, really to make sure that there’s some productive discussion and thought going on outside the formal mechanism of government... it’s not an attempt to come up with some kind of product or second coalition agreement” he explains. “I think what will happen later this year is that Danny Alexander and Oliver Letwin are leading a process that is about reviewing the original coalition agreement to see how much we’ve achieved, how much we still need to achieve, whether there’s any changes we need to make to improve our chances of delivering the policy goals in the original coalition agreement, and that will lead to some kind of product at some stage which will be looking forward to what we need to do over the last two, two-and-a-half years of the parliament. It’s more or less been decided, however, that the idea of having a separate coalition agreement is really not necessary. The original coalition agreement was fantastically ambitious.... focusing on those things and delivering those big things would be far more important than coming up with a lot of small, diddly additional policies that would simply distract us.”

And what does the future hold for David Laws? He is considered a certainty for a government return once Cameron and Clegg reshuffle their personnel, but Laws insists that he is happy where he is.

“I just kind of accept the role that I’ve got, basically. I’m not kind of obsessed about my position, rank or role. I’m obsessed about the coalition working, about us using this period of time productively. I don’t wake up every morning thinking about what I might be doing, I wake up every morning thinking what I could and should be doing given, where I am.” But if he were asked to return to government…? Laws smiles. “I’m using the Winston Churchill response. Commenting on invitations that haven’t been made, accepting or rejecting them, is bad manners”.The latest chapter of David Laws’ political career may remain a work in progress, but you can be sure that, sooner rather than later, there is more to follow from a Lib Dem who feels quite at home in government. 

Laws on...the fuel duty u-turn criticism: “Frankly, out in the real world where higher fuel prices are one of the things that really squeezes peoples incomes, I don’t think people could give a toss about whether a minster has a hard time on Newsnight or not.”

Laws on...Tory modernisation: “I think over the last few months the modernisation part of the Conservative agenda has been less in evidence than it might have been, and less in evidence than it was in the run up to 2010.”

Laws on...Budget u-turns: “I’m sure everybody would rather have a budget where the original announcements and the final Finance Bill are more in kilter and obviously everybody in the government will be looking at what lessons can be learned from that – including the Treasury.”

Laws on...the challenge for the banks: “The banks themselves now have a responsibility to take action to restore trust, not with some sort of public relations campaign but by actually tackling some of the root causes of loss of public confidence, one of which is the absurd levels of remuneration that there have been in banking over the last few years”