Witness (Question number 1-36)|
Rt Hon David
14 October 2010
Q1 Mrs Laing:
Good morning, Mr Laws.
Good morning, thank you for inviting me.
Mrs Laing: Thank you very
much indeed for coming to give us evidence this morning. May I
begin by giving the apologies of the Chair, Graham Allen, who
has been unwellnothing serious but unwell todayand
unable to chair the Committee, and so I'm chairing it in his place.
He sends his apologies. He had been looking forward to this session.
Let me begin by explaining that, as part of our inquiry
into the constitution and constitutional matters generally, we
are undertaking an inquiry into the mechanisms for the formation
of coalition government and we are very grateful to you for coming
to discuss this with us this morning. First of all, is there anything
you would like to say by way of introduction?
Mrs Laing, thank you very much for inviting me. I think all I
should say, by way of introduction, is just explain very briefly
what my role was, so you know where I can and cannot help. I think
probably the perfect person to have had herebut probably
not the perfect time for him this weekwould have been the
present Chief Secretary, Danny Alexander, because he was not only
in the talks but he was, as Nick Clegg's Chief of Staff, the person
who had some of the discussions with Gus O'Donnell and, to some
extent, with contacts in Buckingham Palace before the election,
so that the process of coalition forming was well understood,
and then he chaired our negotiating team in the talks.
My role was to be in a small group, which Nick Clegg
formed a couple of months before the general electionprobably
in February or Marchto think about what would happen in
a hung Parliament; to consider the options, to consider our priorities
and to consider issues to do with internal party communications
if we ended up in some sort of partnership with another party.
We had a small team of people who did that work before the election
and made recommendations to Nick Clegg and to others in the party.
Then it was that same team that Nick used to negotiate with the
other two parties after the election delivered a hung Parliament.
Q2 Mrs Laing:
That is very helpful. So those around your party leader were prepared
before the general election for the negotiations? We should not
really be surprised at that.
Yes. It was obvious that a hung Parliament was a possibility.
Obviously, given that it was going to be a fairly unprecedented
arrangement if a formal coalition was formedand obviously
fairly important both to the country and to us as a partyit
merited quite a lot of preparation and consideration of the different
options in the hung Parliament, what the key policies would be
that we would want to negotiate on, how we would get the agreement
of the party during that period of time and how we would interface
with other parties. So there was a reasonable amount of thought
that went into that, but with a relatively small group of people.
As I say, Nick did not chair those meetings but he set up a couple
of groups that then reported in to him and made recommendations.
There were one or two meetings during the general election itself,
particularly on the Sunday before the Thursday of the general
election, just to take stock of where we were and to make sure
that we were ready for a hung Parliament.
There had alsoI think over a slightly longer
period of timebeen some discussions between individual
Liberal Democrat spokespeople and senior civil servants in some
of the Departments, about our policy priorities, so that they
were prepared to have briefings and costings on some of the key
policies, in order to facilitate the discussions after the election.
Jim Wallace in the House of Lords oversaw that process for Nick
Q3 Mrs Laing:
Thank you. That is very helpful. Before we go into details of
the history, the chronology of what happened, can I ask you a
general question about the coalition agreement, which evolved
and then became the key document that came out of the talks? In
your opinion, does the coalition agreement carry the same weight
as a manifesto commitment?
I think it carries a slightly different weight, doesn't it. I
mean, a manifesto is the platform of a particular party if they
secure power. It is a statement of what we want to do if we, as
parties, have a majority in the House of Commons. The coalition
agreement reflects the fact that no party secured an overall majority,
either of the votes or of seats, in the House of Commons and,
therefore, we had to make compromises. I am sure that people who
voted both for the Conservatives and for the Liberal Democrats
sometimes write to their Members of Parliament and say, "We
voted for you and we have something slightly different from what
was in your manifesto". But the truth is that, as Liberal
Democrats, we did not win a majority in the general election unfortunately.
We only got one seat in 10 and, therefore, we could not deliver
our manifesto. Therefore, this agreement now supersedesas
our commitment for this Parliamentthe pledges that were
in our election manifesto.
Mrs Laing: Thank you.
Does anyone wish to startTristram first, and then I will
come to you, Simon.
Hunt: Could that continue further outside of a coalition
agreement? Do you see a constitutional precedent whereby you have
a manifesto and you could conceivably argue, "Well, we haven't
received a majority of votes, we only have 30-something. We're
still the governing party but the mandate isn't there, we're going
to establish a slightly different coalition". That would
not necessarily be a coalition agreement, but you would have an
agreement for the Government post-election. Does the role of the
manifesto change, or do you think that is only unique to coalitions?
I think it is particularly relevant in a coalition circumstance,
if I understand your question correctly. Clearly, neither party
can get all of its manifesto delivered. By definition there will
have to be compromises and, therefore, you have to have some type
of agreement early on that sets out, on the most difficult and
sensitive issues, how you are going to deliver policies in government.
The coalition agreement that was published just after the coalition
was formed was a fairly short document, so it only focused on
the big issues. Obviously there are compromises to be made in
some other areas as well, but the coalition negotiating teams
consider that they dealt with the most prickly issues. I am not
sure whether I have answered your question properly.
Hunt: But in terms of being held to account at the next
election, you would regard yourself as being held to account by
the coalition agreement not by your manifesto?
I would now, in the sense that I would say to our electors, "This
is now what we're committed to delivering". But does that
mean that I do not expect the electorate in my constituency to
have views about what was in our manifesto and whether they think
that we have done the right thing or not? Of course they will
have those views, and if some part of the manifesto, which we
made concessions on, has not been delivered, then they are entitled
to reflect that in their voting in the next general election.
But I am entitled to say to them that we did not have an overall
majority; that we had to make compromises; that if we had not,
there would not have been a stable Government formed, and that
if they want Liberal Democrat policies to be implemented in full,
then enough people will have to vote for them to deliver them.
Mrs Laing: Thank you.
Q6 Simon Hart:
This is on a related procedural point. How does this play in the
House of Lords, where the Salisbury Convention normally applies
to manifesto commitments and the Lords deal with that kind of
legislation slightly differently? Do you think that the Salisbury
Convention, in some shape or form, ought to apply to the commitments
made in the coalition agreement, or can it?
That's an interesting question. I think that those in the Lords
have to acknowledge that in a coalition the circumstances are
slightly different from those that pertain where a party has been
able to form an outright majority; that if there is to be effective
government, in a situation where no party has an overall control,
then there has to be some sort of compromise between the parties
after an election and that, since those parties have been democratically
elected, that has to be respected. So I am sure there are those
in the Lords who will make that argument about the validity of
agreements reached as part of a coalition, compared with those
in a manifesto by a majority party. But I think it is difficult
to think, in the circumstances that we have, of a better way of
dealing with this. I think ultimately, democratically elected
parties, where there is no overall majority, are entitled to reach
agreements of this type and expect that they will be respected
by all parts of the Parliament.
Q7 Simon Hart:
Would you go as far as saying that the Lords needs a convention
that applies to these circumstances, because clearly the current
one does not?
Yes, I think you are right, that this is an issue that needs some
consideration, given the potential otherwisein not just
present circumstances but in future circumstancesfor people
in the Lords to take different views about what type of mandate
the Government have.
Mrs Laing: Thank you.
Simon, is there more?
Simon Hart: That's
all, thank you.
Mrs Laing: Would anyone
else like to come back on this specific issue? In that case I
will move to Andrew Turner.
Q8 Mr Turner:
Can we start with what happened on Monday 10 May and Tuesday 11
May, when I am told Gordon Brown resigned, David Cameron took
office and then the Liberal Democrat parliamentary party and its
federal executiveI am reading this outendorsed the
outline coalition agreement reached by the negotiating teams.
We do not have any such democratic system; in fact we are probably
quite pleased not to have one. Could you just say a little bit
more about what this parliamentary party and its federal executivethat
is especially importantare involved in, and did this take
place after David Cameron became Prime Minister and/or before
Nick Clegg became Deputy Prime Minister?
We have a relatively democratic process within the Liberal Democrats,
in terms of the approval that is required under circumstances
such as this. There had been what had become known in our party
as a "triple lock", which was imposed by our conference
when Paddy Ashdown was dealing with Tony Blair in the 1997 Parliament,
when people in our party became rather nervous about whether or
not the coalition would be formed without them knowing about it.
So we had a process of approval that required the parliamentary
party, our federal executive, which is the sovereign party body,
and ultimately a special conference having to sign off on the
There is a question about whether the special conference
was necessary or not, which I will not bore you with because it
is probably a slightly geekish side aspect of this, but certainly
I think we had a higher level of party approval than was necessary.
We were also faced with a situation, on the afternoon of the Tuesday,
where we were seeking to conclude the agreement with the Labour
Party in the afternoon and the existing Prime Minister, Gordon
Brown, became increasingly of the viewI think, as the afternoon
went onthat the discussions with his party were effectively
at an end. At that stage, he became very impatient to resign and
felt, to some extent, that he was being kept hanging on as part
of a negotiation and I think the civil service, the Labour Party
and the Liberal Democrats were very concerned that he should not
resign too soon because, as soon as he resigned, there would then
not be a Government and a Prime Minister, and the Queen would
be obliged to send for somebody else to form a Government, even
though one had not been agreed. I think the timing was that he
resignedhaving become rather impatient, as we understand
itjust before we put the final touches to the coalition
agreement, but where we had made most of the agreement but had
not quite finished it and before, obviously, we had had the discussions
in our parliamentary party and federal executive, which were,
I think, at 10 o'clock that night. So, at the stage that Gordon
Brown resigned, the Queen then had to call for David Cameron,
as the obvious alternative Prime Minister. But he went to the
Palace not knowing whether he would be leading a coalition Government,
or a minority Conservative Government, because we had not had
a chance to go back to our parliamentary party and our federal
executive to get their agreement to the coalition document.
Q9 Mr Turner:
The problem seems to me to be that if, for example, the Liberals
had had a plurality and the Conservatives had been the smaller
party, you would not have been able to hold that meeting until
after. What happens if the Prime Minister, Mr Brown, resigns and
you have not done this process of going through the hoops with
your executive? Is the Queen then left without anyone?
That is a rather interesting question, which I would probably
need to seek advice on. I imagine that the pragmatic answerbut
I do not know whether this is the technically correct answeris
that I hope Nick would take up the offer to go to the Palace and
say, effectively, that he had this agreement but it would be all
signed and sealed later on, in the same way that we did not have
the permission of the special conference before the Government
was formed the next day and before Nick became Deputy Prime Minister.
I don't think we needed to. We relied upon the fact that this
was such an obviously appropriate agreement that our special conference
would vote for it and support it. But since the eventuality of
us being the larger party was not one that we planned for before
the election, we did not cross the bridge of whether or not Nick
would have to keep the Queen hanging on while the parliamentary
party met. But I suspect, as a pragmatic fellow, Nick would probably
accept the Prime Minister's job and then deal with the small print
Mrs Laing: I am not sure
it's entirely fair to expect Mr Laws to answer that question,
but that was a very good pragmatic answer. Thank you very much.
I think, in answering the question, you could just about write
an entire university thesis on it but that's not fair this morning.
Q10 Mr Turner:
Gordon Brown has been described in some areas as an obstacle to
reaching an alternative coalition agreement with Labour. Is that
what the Liberals felt?
Yes. Before the election, I think that we felt that there were
issues if there was a hung Parliament, and the Labour Party option
was an option, about whether it would be easy to go into Government
with somebody who was a defeated Prime Minister and also somebody,
I think, personally, who would be quite difficult to deal with
in a coalition. He seems to be difficult to deal with in terms
of his colleagues let alone another party. There was some consideration
given to whether it would be appropriate to say before the election
that we would not go into a coalition that was led by him. But
that, of course, opens up lots of other questions about who the
alternatives would be. We neither took a decision on that issue
before the election nor did Nick say anything publicly, other
than express his commitment to talk to the largest party in terms
of votes and seats first. After the election, based upon the defeat
that Gordon Brown had suffered as Prime Minister and our view
that, actually, he would be impossible to work with in coalition,
the view very rapidly formed itselfin the 24 hours after
the election resultthat it would be impossible for there
to be any Labour coalition with him as the Prime Minister. That
was fairly quickly communicated to him.
Q11 Mr Turner:
So you are saying, "Not a hope, Mr Brown. We're going to
deal with the Labour Party in some form", with the leader
obviously, either to decide to have a coalition with the Conservatives
or let the Conservatives get on with it on their own?
That is not quite right. What Nick had said during the general
election campaign is that, whichever party had the largest number
of seats and voteswe assumed that it would be the same,
but obviously it could have been differentwe would talk
to them first, because we thought it would look very odd to the
public if we went into talks first with the party that had just
appeared to have lost power. Nick was very insistent about that
during the campaign and he was very insistent about that after
the general election result, in spite of a lot of pressure by
Gordon Brown to open parallel negotiations. We were always very
clear about that. That did not mean that that was the only potential
coalition outcome. The view was that if the talks with the Labour
Party were not successful, and if it was possible to reach a policy
agreement and to form a stable coalition with the Labour Party,
that was certainly something that we were willing to consider.
Obviously, we would have been mad not to because it would have
weakened our negotiating position, in terms of delivering as many
of our policies as possible.
Q12 Mrs Laing:
If I may just follow that up, did the position, as set out by
the Liberal Democrats at that point, have a significant effect
on the timing of the resignation of Gordon Brown as Prime Minister?
I think that they probably did, in the sense that he understood
that unless he made it clear that he was going to step down as
Labour Leader and Prime Minister fairly rapidly, we would not
be able to enter serious talks with his party. He understood that,
and in fairness, with a little bit of a struggle and a little
bit of equivocation about the timing of his departure, he accepted
that and therefore enabled the talks to take place.
Mrs Laing: Thank you.
Andrew, do you have any other questions?
Q13 Mr Turner:
Just one. So Gordon Brown announces that he will step down on
Monday and yet the talks went ahead then with Labour and the Liberals
together. The following day, Gordon Brown resignedin the
early evening, I thinkand then David Cameron took office.
The Prime Minister, Gordon Brown, announced that he would resign.
I think it was a forward-dated resignation, it was not immediate.
There was some issue about how long it would take. But he announced
that on the Monday, the 10th, in the afternoon at about 5 o'clock.
Then after that, fairly rapidly, there was a Cabinet meeting where
he announced to them his resignation and then there was a meeting
of the Liberal Democrat and Labour teams, which went on for a
couple of hours. Then the Liberal Democrat and Labour teams met
again the next morning to have further talks. Those did not make
any progress, from our perspective, and then there were talks
with the Conservatives in the afternoon that finished around the
time that Gordon Brown was resigning as Prime Minister.
Q14 Mr Turner:
The problem seems to me to be that your talks with Labour happened
after Gordon Brown said he was going to resign. Who leads the
Labour Party at that time, if the talks had shown the potential
for being successful?
In the talks?
Mr Turner: In the
talks, obviously, but certainly who becomes Prime Minister is
what I want to know.
My recollection of what was agreed and announcedI hope
I am getting this rightwas that Gordon Brown was offering
to resign but would have remained Prime Minister for a couple
of months while the leadership election took place. For a while
he was suggesting that he might remain for a longer period of
time and help to win the AV (alternative vote) referendum, and
so forth, but we thought that probably would not help very much
to win the AV referendum. So I think the idea was that he would
stay on for two or three months through to the summer and there
would be a new Leader of the Labour Party.
Mrs Laing: Thank you.
Again, that is not fair: Mr Laws, you're responsible for many
things but the conduct of Gordon Brown as Prime Minister is not
one of them.
Mrs Laing: Andrew, are
we finished on that? In that case I go to Stephen Williams.
Williams: Can I first of all ask, David, do you think our
team and the other teams realistically had enough time to put
together a stable Government? The United States has its elections,
I think, the first Tuesday in November, and the new Administrationnew
congressman, new senators, governors, whateverdo not take
office until January. Our European neighbours sometimes take months
to put together a coalition government and yet we did it in a
matter of four days. Do you think that is sensible in the future?
Yes. Our team had a slightly different view on this. Some of my
other colleagues, for instance, Chris Huhne, who is very up on
the way things are done in other countries, and Andrew Stunell,
who is used to local election negotiations, felt that we should
take a lot of time and make sure that we got it right. During
the preparation for all of this Chris was telling us how long
they took to form coalitions in Germany and Malta, and all sorts
of other countries. But it seemed to me, firstly, that as this
was the first coalition that had been formed in this way in the
UK in living memory, the public and media expectation would be
very high that this would happen quite swiftly, and that they
would judge the coalition early on by how efficiently this all
appeared to be done. Of course, there was also a lot of instability
in the markets, which we were concerned about, given the situation
in Greece and southern Europe, and there was some fear that if
it took a while to form a coalition that could spread to the UK.
Some of us were pushing for this to take place quite quickly and
viewed it as not impossible to agree the key issues quite quickly.
I think this is the type of thing where the more time you allocate,
the more time you will spend talking about ityou could
spend weeks talking about all the entrails of itbut my
view is that we could agree the big issues, more or less on the
time scale that we did. I thought that was about the shortest
sensible, and we delivered on this.
The other two parties were pushing harder, I think.
Both David Cameron and Gordon Brown wanted a coalition to be formed
by the Monday, and were talking about their concerns about would
happen when the markets opened if we didn't have a coalition or
good progress towards it. I do not think that time scale was realistic
or necessary. But I do not think that we lost a lot by compressing
it into the time scale that we did deliver on. All we would have
done, if we had spent additional days talking, is messed around
with the small print and added all sorts of bits and pieces that
could be dealt with, perfectly sensibly, later in the longer agreement
that was published a week or so after the coalition was formed.
Williams: If you were to go through this process againthere
is a very high chance the next election may result in a hung Parliament,
so the parties will have to have negotiating teams, and will obviously
spend the next four years about how they might do ithow
do you think it should be done differently? Do you think there
should be more time and would it be a nice constitutional innovation
if there was a breathing space built in?
I do not think I would change it, except that I think, once we
have been through a process like this, there might be a bit more
tolerance and patience among the public for a little more time,
if it was needed. It certainly was important to us as a party
that we should not feel bullied into any particular time scale
that would weaken our negotiating position. But compared with
1999 in Scotland, where they formed the coalition for the first
Scottish Parliament after the Scottish Parliament elections, this
was a lot more of an efficient, swift process. In Scotland in
1999, where I went up as a staff member to assist in some of the
background work for the negotiations, it was not until the Monday
morning when any serious discussions commenced. So there were
three days after the election when, as far as the media and the
public were concerned, nothing happened. I do not think that does
very much to reassure people that coalitions can lead to good
stable government. For our party, which believes in PR, it is
particularly important to demonstrate to people that you do not
end up with a complete and utter shambles and no Government for
weeks on end.
Williams: I have just one final question, Chair, about
the two negotiating teams from the other parties. Do you think
the Conservative negotiating team and the Labour negotiating team
were equally prepared to form a coalition, or do you think the
attitudes were different?
I think the Conservative negotiating team had done a lot of work,
were very serious, were very well prepared and sent us various
papersin fairness to Labour, they sent one or two papers
as well. But those papers, on the Conservative side, engaged quite
seriously with what the obvious issues and problems were going
to be and offered solutions and that helped our talks with the
Conservatives a lot. As for the Labour team, Ed Balls has said
publicly that he did not think that they prepared very well, or
at all, and that impression certainly came across in negotiations.
In fairness, I think that Andrew Adonis had probably thought about
the issues quite a lot and thought through the constitutional
issues. But what was a particular problem with the Labour team
was not only that we felt that they were somewhat split on some
of the key issues that we were discussing, but that we did not
have Alistair Darling there as the Chancellor. The Labour team
seemed to suggest to us that they did not have any mandate to
agree on economic tax or spending policy without the Chancellor's
permission. That made it really difficult to discuss half of what
were our most important issues because there was nobody in the
room who was willing to take responsibility for that. That was
totally different from the Conservative negotiations where the
Conservative team, on almost all issues, had complete authority
Mrs Laing: Thank you.
Sheila Gilmore would like to make a quick point.
Gilmore: It was following up the other question from Stephen.
Is part of the problem that coalition building in Britain is presented
as a crisis and, therefore, a lot of pressure is put on that may
be unnecessary were there were a clear process, an understood
constitutional process for this? I think you will agree that a
lot of the media presentation at the time was along the lines,
"This is a terrible crisis and if we don't do something about
Yes, I think that's true. In Scotland, in 1999, my recollection
is that when the coalition was finally formed most of the media
coverage was not about the details of it but reported, "Hurrah,
at last these useless people have formed the Government and sorted
it all out and the shambles is over". But I do not think
there was any way around that on this occasionthe risk
that the media and the public would form that view if we took
a long period of time putting things together. We were worried
it would take some time to get this right and that, in the meantime,
the publicity would be damaging and it would damage the type of
politics that we think is something that comes out of having a
fairer voting system. So I think, on this occasion, it was particularly
important for us to act quite swiftly and, more so, because of
the state of the financial markets. But I agree with you, if this
does happen againand I suspect it's what's now happening
in Scotland and Wales, where they are getting used to these thingsthen
I think both the press and the public would be a bit more tolerant
about, and understanding of, the processes and the time scale.
Although I still think it is reasonable to expect two parties
to have a clear idea of their negotiating objectives and get on
and agree something relatively rapidly.
In Scotland, in 1999, it was not just the complexity
of some of the issues and the disagreements on some of them, but
how long it took the parties to get into the same room together
that delayed the negotiations. This time, the parties, or certainly
the Conservative and Liberal Democrat parties, were in the same
room by 7.30, I think, on the day after the electionFriday
the 7thso that's when the talks started. That was a long
way in advance of what happened in Scotland.
Q19 Mrs Laing:
Thank you. That's very helpful. Committee, we'll go a little faster
now because everybody wants to get in. Before I move to Tristram
Hunt, can I ask you, as a general point, were you aware before
you went into negotiations that the Cabinet Secretary had put
together a new chapter to the Cabinet Manual about how a coalition
might be formed? If you were aware of it, had you read it and
was it helpful?
I think Danny Alexander dealt with the Cabinet Secretary, along
with Nick, before the election and discussed all these issues,
including, I think, with the Queen's Private Secretary. Therefore
they had a very clear understanding of what was going to happen
and what was expected and what the civil service would do. They
communicated that to us. My recollection is that when we had a
summary of all our agreements and our strategywhich was
in mid-March, I think, attached to a note that Danny did that
summarised our conclusionsthere was the document that you
are describing, as I recollect it. But if that was the right document,
then it didn't seem to me to add an awful lot to what one would
assume and know anyway, except for the very clear understanding
that the Palace did not want to be involved and that it was our
responsibility to find somebody, who was going to be the Prime
Minister and be able to command a majority, before putting the
Queen in a position where she then had to send for somebody to
be the Prime Minister. But, other than that, there did not seem
to be anything that was terribly exciting in the document that
would constrain or inform our negotiations.
Mrs Laing: That's very
helpful, thank you. Tristram Hunt.
Hunt: On the ground, during the period of negotiations,
what was the role of the Cabinet Secretary? We have had evidence
from him suggesting he wanted a Government in place, also from
Monday, because he was concerned about the markets, which should
not necessarily be the primary concern of the Cabinet Secretary.
But what was his function during this period of negotiation?
I think he, and his civil service colleagues throughout the Government,
had a done a good job in the run up to the election, I am sure,
in communicating with both opposition parties and understanding
their priorities and researching their policies. I think a lot
of that work had been done and we saw some of it, which highlighted
the costing of our policies, issues that the civil service were
concerned about, and so forth. They had also gone out of their
way obviously to have good communicationsto a greater extent,
I think, than in previous Parliamentswith Nick Clegg and
with Danny and others to make sure that there was a clear understanding
of what needed to happen. They had arranged the accommodation
in the Cabinet Office; I think they had appointed a civil servant
who would support our team, specifically, rather than relying
upon somebody who was seen to be part of the existing Government.
So they had done quite a lot of that work and that preparation.
When we met, I think probably on the first formal day of negotiations,
the Saturdayor sorry, maybe it was the SundayI think
Gus offered to have the Governor of the Bank of England come to
brief us, and I can't remember whether there was somebody from
the security services or not, to inform our thinking, presumably
particularly on the financial situation, which neither party took
up because we did not think it was necessary. We suspected we
knew what he was going to say and we also thought it was more
appropriate for our Treasury spokesmen to talk to him, so we suggested
it was dealt with bilaterally.
Gus also did offer to support the negotiations directly
by having civil servants in the room taking notes, and so forth.
That is very much how it happened in Scotlandin fact civil
servants drafted the agreed parts of the policy negotiation and
then sent it into politicians for the disagreed bits to be resolved.
But, here, our parties decided that we would do the talks direct,
that we did not need the civil servants in the room and, therefore,
they left and the talks only took place with the negotiating teams
and some note takers.
Hunt: On the role of the Governor of the Bank of England,
George Osborne is on the record as saying that the Governor was
invited in butas you suggestit was not needed. The
Chancellor has suggested that was because there was a high degree
of, effectively, ideological concurrence between yourself and
the Conservatives, so there was no need for you to be shunted
into thinking that way. You were pretty much all on the same page
from Friday morning.
I think the reasons that we did not take him up on that offer
were firstly, that we thought we knew more or less what he was
going to say; secondly, the crisis, or the potential for financial
turbulence, did not seem to be quite to the extent of the type
of crisis that would have required us to bring a non-political
figure into political negotiations. I think also, because we felt
we understood the economic circumstances, probably on our side
of the table we did not necessarily feel that we wanted to be
leant on in any way or perceived to be leant on. We were also
offered, I think later in the talks, the Permanent Secretary to
the Treasury to brief us. I think probably, although we did not
get a chance to discuss our reasons for not taking it up, because
this was put to us when we were in the negotiations in front of
the other parties, I would have been a little bit reticent to
have been seen to be bringing in non-political individuals that
might influence in any way the decisions we reach. But, having
said no, we then felt slightly guilty thatgiven the Governor
of the Bank of England is an important person, his view is not
insignificantwe made sure that Vince Cable was contacted
so that he could have those discussions. I am not sure whether
he ultimately had them, because we then had some feedback that
Gordon Brown was a bit upset about what was going on, and I am
not quite sure whether he managed to torpedo that proposal or
whether Vince ultimately met up with the Governor. But we thought
that that was the best compromise, that we would not end up getting
involved with non-political people during our negotiations but
that we would make sure that somebody as important as the Governor
of the Bank of England would be listened to, at quite an important
time when there was still some nervousness about whether the contagion
in Greece and elsewhere would spread to the UK.
Hunt: One final question. Would you say, despite it being
the convention that it was the sitting Prime Minister who should
have the first attempt to form a coalition, that the energy activism
of the civil service was focused on yourselves and the Conservatives?
In fairness to the civil service, because we did not want to look
too promiscuous, we did not have our negotiations with the Labour
team in the Cabinet Office, partly because we did not want to
be going in and out of the same building talking to different
people, which probably, presentation-wise, would not have looked
wonderful. So we had our talks with Labour outside the Cabinet
Office in a room in this building. Although when we started formal
discussions, Gus O'Donnell did come along and he made the same
offer, and we also declined it, so there weren't any civil servants
in the meeting.
I am sure that civil servants would have supported
us extremely professionally and even-handedly in both circumstances,
but I do think sometimes there is a risk that the civil service
can see the way the wind blows. And in Scotland when we were negotiating
with Labour, we certainly felt that there was an inequality in
the relationship between ourselves and Labour in the way that
civil servants dealt with each team, because they knew who the
more powerful party was. We did not have that problem, or didn't
perceive that problem at all, in these negotiations I ought to
emphasise. But I think that sometimes it is inevitable that strong
impartiality of the civil service is qualified by a bit of anticipation
of who is going to be wielding the power.
Mrs Laing: Thank you very
much. Have you finished, Tristram? Simon Hart.
Hart: Thank you. If we could go back to something you said
earlier on in the early stages of the negotiations. Could you
clarify this: you gave the impression that you went into negotiations
with Labour with no real anticipation of it leading anywhereand
I'm not sure of the expression you usedbut you felt you
had to? Had there been a different leadership of the Labour Party
at the time how much difference would that really have made? In
other words, was the problem Gordon Brown or was the problem Labour?
Which leads me to the second point: you referred to the impatience
of Gordon Brown, and the perhaps slightly premature resignation,
do you think there should be a protocol in place which limits
what a Prime Minister can do in bursts of impatience at that kind
of time? That picks up on Sheila Gilmore's pointif the
nation knew that there was always going to be a 10-day period
when a coalition would be formed, everybody would be a lot more
relaxed and it would not have the feel of a crisis about it. The
third, slightly more light-hearted, point is: if you were going
through the motions a bit with Labour when it came to theI
think the expression wasbig comprehensive offer by the
Conservatives to form a coalition, were you pleasantly surprised?
Did you feel David Cameron offered over the asking price or did
you know what was coming down the line?
On the Prime Minister issue, I think there ought to be an understanding
that the Prime Minister stays on to facilitate negotiations in
a hung Parliament. I think that is the expectation. In fairness
to him, I think it was said by Peter Mandelson that Gordon Brown
was not very keen to end up leaving Downing Street in the dark.
Obviously some of the people in the media were implying that he
was clinging on after he should have cleared off. Once he felt
that the negotiations with Labour were going nowhereand
they weren't going anywhere after midday on the Tuesdayand
he felt he was being held in place in order to facilitate the
forming of a Government by other parties, he was obviously getting
quite agitated and eventually lost patience a few hours before
it would have been ideal, but I think one can understand that.
Had he lost patience 24 hours before, then it would have been,
I think, a bit more of a problem and a bit more untidy.
On the Labour talks, we certainly went into them
with very serious intent, having done a lot of work and being
willing to negotiate and contemplate dealing with Labour. Our
problems were two-fold: firstly, we felt the Labour team had not
done sufficient preparation in some areas; did not have a mandate
to negotiate some of the key policy issues; did not make the concessions
in some of the key areas that the Conservatives had already done;
and seemed to be quite split on some of the important issues and
economic policy, so we did not really know what the position was
on some of the key tax spending and deficit issues. Secondly,
we did not think that some of the Labour Party people on the negotiating
team were committed to forming a coalition. We thought some of
them probably had a different view of what the Labour Party's
interests were. So that was one of the most important things that
made us think we could not take this further. We did not think
they were united or serious, with the exception probably of Andrew
and Peter Mandelson.
But we did, of course, have a concern about
whether such a coalition could deliver stable Government because,
with Labour, it would have had to be a coalition with side confidence
and supply agreements with the DUP, the SDLP, the Alliance party,
a Green, and possibly the Welsh Nats. That did not seem to be
likely to form the basis of a very strong Government, particularly
one that was going to have to take unpopular decisions. So both
parties knew that that was an issue, but I think the lack of preparedness
and unity on the Labour team were also quite an important signal
to us that the whole thing just was not going to work.
On David Cameron's statement on the Friday,
we had expected him to make a big bold offer, including coalition,
because we thought that that was what the country would expect
and that they would expect all the parties to be trying to form
a stable government. We did not think that parties would want
to be seen to be putting their own interests before that of the
country. So we expected that. What we did not necessarily expect
was that it would be his preference. On re-reading the statement,
and then thinking about what happened afterwards, I think where
he did slightly surprise usand which perhaps we did not
pick up on on the day was that it did seem as if his preference,
as far as I can understand it privately, not having had the chance
to ask him about it, was for a more stable coalition-type arrangement,
rather than a looser confidence and supply agreement. We had not
thought that that was necessarily the course that he would go
Mrs Laing: Thank you very
much, Simon. Christopher Chope.
Q24 Mr Chope:
Can I take you back to what you said earlier on about Gordon Brown;
you said there was an idea of getting him to help by staying on,
so he could help win the AV referendum.
That wasn't our idea.
Mr Chope: No, that
was his idea and you said that was rejected, but was there ever
any discussion about the possibility of Labour legislating immediately
for AV without a referendum?
No, I don't think that that was ever very likely. I won't say
that there were not discussions about whether there did or did
not need to be a referendum, but I think both sides knew that
it would be very unlikely that we would want to change the voting
system without one. I suspect that there was a certain amount
of confusion because our view was that there needed to be a post-legislative
referendumthat we needed to get legislation through firstand
so what we were often talking about was that there needs to be
immediate legislation on this. I think that there was some mangling
across the parties as to whether "immediate legislation"
meant without a referendum but that was never on offer from the
Q25 Mr Chope:
It was never on offer from the Labour Party and so when Conservative
MPs were told that that had been put forward as an offer to the
Liberal Democrats, and that, to avoid immediate legislation, they
should sign up to the prospect of an AV referendum, they were
I do not think that they were misled, but I think there was a
certain amount of confusion in this very chaotic period; both
because there were some media reports that Gordon Brown might
be able to offer that and also because some of the discussions
that were had across the parties were on the basis of immediate
Q26 Mr Chope:
But this was given to the Conservative parliamentary party, at
the only meeting where there was ever any discussion prior to
the coalition agreement being formed. What was said by leaders
of the Labour Party was that this was a fact. Are you saying that
the leaders of the Labour Party were mistaken, had been misled
by somebody or misled themselves?
I do not know because I have not discussed that with them and
was not at the meeting. What was certainly true is that I do not
think there would have been a coalition without the guarantee
of legislation on an AV referendum. However, I do not think it
was the case that there was a firm offer to us on the issue of
AV without a referendum. I think what there was was a determination,
on our part, that the legislation should be immediate and should
not be after a referendum. That requirement for immediate legislation
might have been interpreted by some as meaning immediate legislation
without a referendum.
Mrs Laing: I think we
have to be careful here. To help our witness, it is not for Mr
Laws to answer for the leaders of the Labour Party, but it is
very helpful if you would follow Mr Chope's line of questioning
on what was discussed between the Liberal Democrats and the Labour
Party and what was offered by the Labour Party. Christopher.
Q27 Mr Chope:
Yes, I will leave that one now, but obviously this confusion arose
somewhere and I take it that it did not arise from conversations
between you and the Labour Party?
Not as far as I am aware and obviously I am not aware of all the
discussions that there were between others in the party. I was
part of the negotiating team negotiating with the four Labour
negotiators. There would have been other conversations going on
with people such as Lord Mandelson, who was in communication with
Danny Alexander. I think that this is one of the things that was
an issue of confusion in the smoke and heat of the battle.
Q28 Mr Chope:
Yes. Can I just ask you: in the period leading up to these discussions,
was the possibility of a minority Government very seriously being
considered? You say that you got the impression that the current
Prime Minister had ruled that out, very early on, and wanted to
try and get a coalition. Obviously if you have a hung Parliament,
you can either have a coalition Government or you can have a minority
Government. With the numbers as they were, a minority Government
would have been quite on the cards. Would you have been happy
to go along with that?
We thought that a minority Government where there was no co-operation
with the Liberal Democrats, and no agreement of any kind, would
be very unstable, very bad for the country, very destabilising
for the financial markets, and that whichever party was responsible
for delivering that minority Government, with no co-operation,
would probably face a high penalty in a succeeding general election.
What we did think was quite possibleand what we thought
might be a likely outcomewas a Conservative Government
with a confidence and supply agreement, where we would have been
sitting on the Opposition Benches but where there would have been
an agreement in exchange for some policy understandings between
the two parties for us to support a Conservative Government on
confidence and supply issues. When we felt we could not make any
progress on some issues, including electoral reform, we actually
negotiated a confidence and supply agreement, and that is what
we concluded in our negotiations on the Monday morning.
So we finished on Monday midday with a confidence
and supply agreement between the two parties, which we both undertook
to look at and which we undertook, initially, to take back to
our members for their view. We did not regard that as something
we were going to recommend to them because, frankly, we did not
think that we had necessarily hit the bottom line on the agreements
that could be reached on some of that political reform and we
did not know whether David Cameron would wish to make any further
moves. But we did take that back to our party members. Their view
was that they wanted a full coalition with one or other of the
parties, because they believed that what confidence and supply
offered us was responsibility with not much power or input, and
that, other than the few pledges that were signed up to immediately
in the confidence and supply agreement, we would not have much
ability or control over what the Government did. So we would take
all the political pain of having to sign up for cuts, and higher
taxes and everything, but we would not be in any control of this
After our parliamentary party met on that Monday,
and before the Prime Minister resigned, it reached the decision
that it thought that a coalition government would be better for
us, in terms of delivering policy, and also that it would be better
in terms of delivering economic stability. It thoughtand
may well have been rightthat a confidence and supply agreement
would have eventually unravelled, and that we would probably have
ended up with another general election, either in the autumn or
in early 2011, having made no serious progress on tackling the
deficit. But we did conclude negotiations on that particular option.
It was our parliamentary party collectively, including Nick as
leader, who thought that that was not the right way to go.
Q29 Mr Chope:
And that was quite a well-formulated document, the draft confidence
and supply agreement?
As I remember it, it was a five or six page document that covered
a lot of the issues in the ultimate coalition agreement, particularly
on deficit reduction, taxation, banking reform, political reform
and the environment. We had not got on to discussions on relations
with the EU, asylum and immigration, and some of those areas that
were tacked on towards the end of the negotiation of the full
coalition agreement. So it was a shorter version of the coalition
agreement that you have now.
Q30 Mr Chope:
My last question is this: it has been said that you and Oliver
Letwin basically cooked a lot of this up before the general election,
because you have neighbouring constituencies and travel frequently
on the train between London and the west country.
Who said that?
Mr Chope: I read
about that somewhere, and I just wondered whether you could confirm
or deny whether you had any discussions with Oliver, or with anybody
else in the Labour Party, about the possibility of coalition Government
before the actual general election?
Disappointingly, none whatsoever. I mean, disappointingly for
your story, none whatsoever. I mean Oliver and I, our houses are
quite near but I've never been to his house, he's never been to
mine and I don't think I've ever met him on the train. We seem
to go back at different times.
Mrs Laing: We're definitely
getting into the Agatha Christie side of things here. That's very
helpful, thank you, Mr Laws. Finallywe're about to run
out of timeSir Peter Soulsby.
Q31 Sir Peter
Soulsby: Yes, I do realise we're running out of time, in
fact it is the pressure of time that I wanted to return to. You
have described how things became quite hurried once Gordon Brown
announced he was off to the Palace, but in fact you had already
got a long way before that happened. You have talked about the
need for there to be sufficient time for any agreement or any
coalition to be formed after an election. In a sense, it was fortunate
that Gordon Brown did not throw in the towel earlier and that
you had reached that stage. You did talk about the need for there
to be some form of convention about how an incumbent Prime Minister
allows the time for things to happen, even if they know that they
are not going to be a part of any future Government. What sort
of convention do you think is needed and how could that be enshrined
so that a Prime Minister who had lost an election was able to
give the time, and also to show that they can leave in a dignified
I think there should beand I think there probably is, but
I am not sure that it is codified very unambiguouslyan
expectation that the sitting Prime Minister stays in place to
have a stable Government while a coalition is being put together.
What time scale is reasonable for a Prime Minister to wait is
an issue that I do not feel qualified to answer on. The case here
was that Gordon Brown did stay on, and it was fortunate that we
had reached the point in negotiations with the Conservatives where
we were able to publish this agreement.
I do not know what would have happened had we said
to him that we were not willing to enter into negotiations at
all, or had it not been for the fact that the negotiations with
his party had more or less unravelled just a few hours beforehand,
because he clearly was very serious himself about seeking to get
a coalition and he ultimately was willing to stand down as Leader
of the Labour Party to facilitate it. I do not doubt his commitment
after the election to try to get this type of agreement. I do
not think the problem was with him, it was with many other members
of his party. But part of why he was staying on, presumably, was
to try to get that coalition agreement with the Liberal Democrats.
I think it is impossible to know what his view would have been
had we told him, on the Friday, that the one thing we were not
going to do was go into coalition with the Labour Party, but I
imagine that, as a responsible Prime Minister, and individual,
he would have stayed on for a period of time but that he would
beas he was getting on that Tuesday afternoonpretty
Q32 Sir Peter
Soulsby: It strikes me that there is a real danger that
if a Prime Minister has clearly lost an election, has no prospect
of being part of any future Government and is under pressure from
the media to gobut is obviously wanting to leave with some
dignitythat it could be that the Prime Minister would leave
without allowing sufficient time?
The Prime Minister certainly could do that. It seems to me a more
informal understanding that the Prime Minister will not do that,
and will not put the Palace in a situation where the Queen has
to call for another Prime Minister not knowing whether there is
an alternative leader who has the confidence of enough people
in the House of Commons to form a Government. So at the moment
I think we probably are relying a little bit on the goodwill of
the existing leader, under circumstances where they are certain
that they are not going to be the next Prime Minister. But I suppose
it is also reasonable to expect anybody that holds that type of
office to behave in a responsible way and finish discharging their
responsibilities, and maybe that, as you say, should be explicit.
Mrs Laing: Thank you,
that is very helpful. We have gone over time but Andrew Turner
indicates that he has one quick question.
Q33 Mr Turner:
Yes. You said that on the Monday morning the members of your parliamentary
party had the opportunity to look at three or four things on your
list, and you listed those and you said, I think, that AV was
one of those things. Is that correct?
On the Monday morning the Liberal Democrat and Conservative negotiating
teams met and we were drafting a confidence and supply agreement,
because we did not believe that then there would be agreement
on the alternative vote, and we finished that in the very early
afternoon. We then took that back, firstly, to Nick Clegg and
then to our parliamentary party, and we undertook to communicate
the response from the parliamentary party to David Cameron before
a Conservative parliamentary party meeting that was scheduled
later on in the afternoon. We did not give copies of that agreement
to all of the people at that parliamentary party meeting because
it would have been too risky that it would have leaked out, particularly
when Conservative MPs were not aware of the detail of the agreement.
But we discussed the principles of it and it was on the basis
of discussing those principles, and our attitude to coalition,
that we concluded that we definitely did not want to go down a
confidence and supply route. Nick then communicated that to David
Cameron after our meeting so he knew where things were.
Q34 Mr Turner:
AV was one of those things?
There were two separate decisions. So what was in that agreement,
the draft confidence and supply agreement, was obviously not a
referendum commitment on AV. Presumably it was the offer that
was tabled by the Conservatives to establish a committee to look
into the issue. I'd have to check whether it was that or whether
it was a free vote in the House of Commons.
Q35 Mr Turner:
Would you let us know?
Yes, because I think that was the offer that was made after David
Cameron's original statement, but it certainly was not a pledge
that there would be a referendum. I think it was just a pledge,
essentially, that Parliament would scrutinise this in some way.
Mrs Laing: If it's not
too inconvenient to you, it would be very helpful to this Committee
if you were able, in due course, to answer that question to us.
Thank you very much. Are there any other vital points? We are
Gilmore: Very quicklyit may be something for us
to reflect on as well as the Committee. A lot of members of the
public believe that a hung Parliament would give an opportunity
for bits of almost all parties' policies to come together, rather
than a firm coalition. Do you accept that is the public view of
what they expected?
Sorry, do you mean a sort of National Government?
Yes, in a way, perhaps, or maybe it's a public misunderstanding
of what a hung Parliament implies.
I don't know, I think people did have an understanding that it
would mean two parties coming together, rather than three, and
I know that David Cameron did tell Nick Clegg on the Friday that
he had not had any phone call from Gordon Brown suggesting that
they should form a coalition.
Mrs Laing: That is very
good news. Thank you very much, Mr Laws. You have been most helpful
to us. We have gone over an hour and we are very grateful to you
for answering our questions, in such detail and with such candour.
Thank you very much indeed.
1 Clarification from Witness: With regard
to the question put to me on a draft confidence and supply agreement,
I can confirm that what was offered in this on electoral reform
was a free vote in the House of Commons on an AV referendum. Back