The Liberal dilemma

Centre-left, centre-right or just centre? The problem has plagued Britain's Liberal Party and its successors for much of the past century, and with this month's deal between Liberal Democrats and the larger Conservative Party it threatens to resurface in ever more acute form following 70 years of broad Liberal alignment with the advancement of "social justice".

This isn't the place to go into the rights and wrongs of the May 11 Tory-LibDem pact: the smaller grouping was faced with the choice between a numerically fragile coalition with Labour and one which could command an unassailable Commons majority, albeit with a Tory party historically seen by many Lib Dem supporters as a bitter ideological foe.

In the event, the overwhelming majority of the party and its voters have accepted the deal, with the first subsequent public opinion polls showing LibDem support down three percentage points at 21% of electors in Great Britain and backing for Labour up by a similar amount. If that's to be believed, perhaps a million of the nearly 30 million who voted on May 6 would have switched from LibDem to Labour rather than vote for a future Conservative ally in government, enough probably to make a Labour-LibDem coalition the likely government. But had that been the outcome, others would now doubtless be registering their displeasure by shifting their allegiance from LibDem to Tory - perhaps in sufficient numbers to give the latter a Commons majority - so any alternative scenario is little more than speculation.

This isn't the first time Liberals and Conservatives have shared government office: there were coalitions (mostly incorporating at least some Labour elements) in 1915-22 and 1931-45 (with mainstream Liberals in opposition in 1933-40), and then Prime Minister David Lloyd George in 1920 went so far as to plan Conservative fusion with his wing of a divided Liberal Party, a scheme that fell through partly because of Liberal distaste for its anti-Labour implications.

British political Liberalism has always straddled two ideological tendencies: economic liberalism with its emphasis on individual rights and free markets; and the social liberalism that has dominated the party since the 1950s, with its embrace of public intervention as a means to extend opportunities to exercise the freedom which the party advocates. To maximise liberty that may in effect be available only to some, or to seek to extend opportunity for its enjoyment to all? That is the liberal intellectual dilemma.

The growth of social liberalism extends far beyond Liberal Democrats' identification in recent decades as a party of the centre-left. Gladstone's party provided an umbrella for labour representation in Parliament (the "Lib-Labs") from the 1880s. Unemployment benefits and old-age pensions were an innovation of the last wholly Liberal government a century ago. The comprehensive modern welfare system was the brainchild of the Liberal economist and social reformer William Beveridge rather than of the Labour Party on which its shortcomings are often blamed.

Attempts to reverse such leftward drift likewise predate 2004's "Orange Book" with its advocacy of a more pro-market agenda for the party. In the late 1940s and early 1950s a libertarian fringe managed to influence party policy in a rightward direction, many later drifting toward the Conservatives. The former wing of the party which had under Sir John Simon remained in government with the Conservatives after 1933 itself went on to join the latter party, though its breach with the Liberal mainstream was over its acceptance of protectionism, contrary to classical Liberal tenets.

In recent decades the party has continued to lean to the left on a range of social policy issues while striving to emphasise its separateness from Labour. But on some issues such as reducing the role of central government or limiting regulation of business, the present party leadership is closer to Conservative tenets, and it's significant that of the five LibDem Cabinet ministers appointed to the new government, four were "Orange Book" contributors.

Where does that leave Liberal Democrats in future? The partnership with the Conservatives is likely to run its full five-year course. The coalition deal has already strained relations with Labour, with each side accusing the other of insincerity in wanting to arrive at a satisfactory policy compromise. If, as seems likely, the new government faces voter antipathy for its promised spending cuts, the LibDems could bear the brunt of an electoral setback in 2015. Electoral reform may bring them more seats, but Labour remains well placed to gain a substantial share of their vote while there is likely to be little net transfer between Conservative and LibDem.

Can LibDems head off such a loss of the support painstakingly rebuilt since the election disappintments of 1992-2001? Perhaps, but to do so they may have to reverse their recent drift from social to economic liberalism, a particularly delicate manoeuvre given their government pact with the party whose own strident advocacy of private-sector models pioneered the ascendancy of the market perspective in UK politics. If they can achieve the difficult balance between a progressive social agenda and co-operation with a party still widely considered suspect in the social reform arena, they may yet enjoy at least a taste of the best of both worlds.