The Lib-Lab Pact

A Parliamentary Agreement, 1977-78

Jonathan Kirkup

• Publisher: Palgrave Macmillan
• Year: 2016
• ISBN:
  9781137527691
• Topic: History
• Subtopic: British History
• Index: History

Using archival sources and interviews with key participants, new insight is gained to how the Lib-Lab Pact of 1977-78 - an agreement, short of a full coalition - came about, was structured and implemented, and how Liberal leader, David Steel, might have achieved significant policy concessions on electoral reform.

1

Cross-Party Co-operation in British Politics 1945–1977

The formation of the Lib–Lab Agreement in 1977 followed over 30 years of unambiguous single-party Government, the longest such period since the Whig supremacy.¹ This was a consequence of the bi-polar nature of the two-party system inherent in British politics between 1945 and 1970.² The eight general elections in this period saw executive power shared (albeit unequally) between the Labour and Conservative parties, both achieving office with working majorities; there was thus no requirement for formal cross-party arrangements through this period. Between 1945 and 1964, the Labour and Conservative parties consistently gained over 85% of the popular vote and over 95% of the seats in the House of Commons. The Liberal Party, greatly diminished since its erstwhile prominent position in British politics, were the next largest block of MPs unaffiliated to either of the two larger parties but they enjoyed neither the parliamentary representation nor the political mandate to form a functioning coalition with either of the larger political parties, even if it had been required.

As well as there being no necessity for coalition, there was also an institutional distrust of coalition politics. This was in part a historical legacy, encapsulated in the (often misquoted) maxim of Benjamin Disraeli that ‘England does not love coalition’, and in an assumption derived from the perception of continental politics that coalitions lead to unstable Government, undermining decision-making. While this perception was prevalent in British politics, it was especially apparent in the Labour Party in the post-war era. This in turn derived from two principal factors: first, a belief that coalition-forming would undermine the pursuit of socialism; and second, its own political legacy – specifically the decision of Ramsay MacDonald in 1931 to split the Labour Party and join the National Government. MacDonald’s decision resulted in a schism within the Labour movement, keeping the Labour Party from office for over 15 years, and fostering an inherent dislike of cross-party co-operation.

This perception was manifest in the actions and attitudes of Clement Attlee in his decision to break the wartime consensus on 23 May 1945, when he rejected the prospect of a peacetime transitional coalition and instead insisted that a general election be held. Attlee was a vehement opponent of coalition politics, describing MacDonald’s action as ‘the greatest betrayal in the political history of this country’.³ The subsequent Labour landslide ended any notion that a coalition Government might be formed. The general election of 1950, however, reduced the Labour Party’s erstwhile majority of 146 seats to a mere five. Faced with the almost certain prospect of losing this majority over the ensuing months (there had been 52 by-elections in the previous parliament), Attlee called a second general election in 1951, in which an exhausted Labour Party was defeated, heralding 13 years of Conservative Government. It should be noted that a Lib–Lab coalition in 1950 would have secured a comfortable working majority for the Labour Party of 23 seats. However, while Clement Davies, the Liberal Party leader, had warmly welcomed the reforming policies of the incoming Labour Government in 1945 (not least because Labour’s economic and social reforms were framed around the ideas of two leading Liberal thinkers, Keynes and Beveridge), by 1950 he had positioned the Liberal Party in opposition to Labour’s policies of centralisation, epitomised by the drive for nationalisation, on the premise that they were not consistent with Liberal values.

The only significant moves towards cross-party co-operation in the decade after the Second World War were advances made by the Conservative Party and, more specifically, by Winston Churchill. In 1946 and again in 1950 Churchill held talks with Clement Davies, in an attempt to construct an anti-socialist alliance. He offered the Liberals a clear run in 60 parliamentary seats in the next general election, but the offer came to nothing. The Conservatives were not prepared to concede to the Liberal demand that any deal must include the introduction of proportional representation (PR), while Liberal activists were concerned that they would be consumed by the Conservative Party.⁴ Subsequently Lord Woolton, Chairman of the Conservative Party, reached an agreement with Lord Teviot of the National Liberals (those Liberals who had split from the official Liberal Party after 1931), which fused the National Liberals permanently with the Conservative Party at constituency level. The Woolton–Teviot agreement had the unintended consequence of galvanising the official Liberal Party into issuing their ‘declaration of independence’ and reasserting their desire, in the face of ‘Conservative overtures … to maintain an independent Liberal Party’. Thus for the remainder of Davies’s leadership, the Liberal Party set its face against coalition as a strategy.⁵

The Conservatives secured an overall majority of 17 in the general election in 1951 and retained a working majority for the remainder of the parliament. He nevertheless continued his strategy of attempting to form an anti-socialist alliance with the Liberal Party, going so far as to offer Clement Davies a Cabinet position. Davies, in an act which has been acknowledged as critical to the maintenance of an independent Liberal Party, rejected Churchill’s advances.⁶ Churchill’s retirement in 1955, and the return of a Conservative Government with a significantly increased majority at the subsequent general election in the same year, eradicated the necessity for any Con–Lib alliance ‘against socialism’.

There were, through this period, examples of local agreements between Liberal and Conservative constituencies. Informal ‘electoral pacts’ were established in Bolton and Huddersfield in 1950 and 1951 respectively. Whilst never formally endorsed by either the Conservative or Liberal parties nationally, they were nonetheless pivotal in maintaining the representation of the Liberal Party at Westminster. Meanwhile, again at local level, a large proportion of the Liberal municipal representation, particularly in the North of England, was achieved through alliance with another party.⁷ The Liberal Party faced its nadir at the 1951 general election, when only six Liberal MPs were elected, five of whom were in seats uncontested by the Conservatives. Only Jo Grimond’s Shetland and Orkney seat was won against a Conservative challenge. Roy Douglas argues that, had the Conservatives stood against Liberals in every seat, only three Liberals would have been elected.⁸ Following the failure to achieve any significant political advancement in 1955, Clement Davies resigned the leadership of the Liberal Party, to be replaced by Jo Grimond. Under Grimond’s leadership a more self-confident Liberal Party terminated the local agreements in Bolton and Huddersfield for the 1959 general election. Proposed agreements in Scotland with the emerging Scottish National Party (SNP) were also rebuffed. Grimond’s charismatic leadership also resulted in an influx of young, educated, politically active individuals into the Party, many of whom, such as David Steel, John Pardoe, Michael Steed, Tony Greaves and Richard Holme, would be important figures in the political strategy of the Liberal Party in the 1970s and 1980s. Equally, as will be discussed in greater detail shortly, Grimond’s decision to shift the Liberal Party decisively to the left of the political spectrum had clear implications for the prospect of cross-party co-operation in the future.

Grimond’s early period in office saw a ‘Liberal revival’, exemplified by the by-election successes at Torrington in 1958 and Orpington in 1962. This led to a growing belief among those Liberal activists who had experienced the so called ‘wildness years’ of 1945–1955, that the Liberal Party could exist independently of pacts or cross-party agreements.⁹ Paradoxically, this self-confidence was juxtaposed with Grimond’s primary political strategy: the realignment of British politics, a process that, it was broadly acknowledged, could only be achieved through cross-party co-operation.¹⁰

Grimond’s political strategy was predicated on the belief that the real division in British politics was not simply between Labour and the Conservatives, but rather between ‘progressives’, of whom he saw the Liberals as an integral part, and ‘conservatives’, who he believed existed both on the right and left of the political spectrum. Grimond envisaged the creation of a new centrist party made up of the Liberal Party, the moderate social democrat wing of the Labour Party, and perhaps a smaller number of moderate Conservatives, thereby leaving the rump of a Socialist Party on the Left and marginalising the Conservative Party on the Right. As will be discussed later in this book, the exact process whereby realignment would occur, in what form and how the Liberal Party would emerge from this transition were not clearly defined by Grimond (or his successors), and would lead to significant intra-Party dispute for the remainder of the twentieth century.¹¹ Nevertheless, Grimond had positioned his Party ‘towards the sound of gunfire’, in the hope that it would be prepared to embrace political opportunities if and when they arose.¹²

Grimond’s advocacy of realignment in the late 1950s was largely predicated on the belief that an unreconstructed Labour Party was unlikely to win an overall majority. Therefore the return to power in 1964 of a Labour Government, albeit with a wafer-thin majority, undermined Grimond’s thesis and suggested little prospect of an immediate change to the duopoly of the political system. However, paradoxically, two issues emerged at this time that resulted in speculation that cross-party co-operation might soon develop in British politics. First, the mid-1960s saw the emergence of a partisan de-alignment in British politics. Both the vote share and the political representation of minor parties at Westminster increased. The Liberals’ success at Orpington was an example of this, but it was also witnessed in the by-election successes for Plaid Cymru in Carmarthen in 1966 and the SNP in Hamilton in 1967. Secondly, the Labour Party had been returned with a majority of just four seats, and, as in 1950, there was consequently every prospect that, through attrition of by-election defeats, Harold Wilson’s administration would not be able to survive for a full parliamentary term.

These events seemingly increased the prospect of Britain becoming a multi-party political system, and therefore made a coalition Government seem more feasible. The following section will examine two such occasions when parliamentary arithmetic resulted in speculation that a cross-party understanding might be reached: in 1964–1965 and 1974.¹³ Parallels between 1964–1965, 1974 and the subsequent Lib–Lab Pact will be highlighted, with an assessment of the extent to which the decision-making and actions of Jo Grimond (in 1965–1966) and Jeremy Thorpe (in 1974) affected the perspectives and strategy of David Steel in 1977.

Cross-party discussions 1964–1974 and their influence on the Lib–Lab Agreement 1977–1978

Wilson–Grimond discussions 1964–1965

As noted above, following the 1964 general election, the Labour Party, after 13 years in opposition, returned to Government, but with a slender majority of just four seats. Although the new Prime Minister, Harold Wilson, had made no contingency plans for governing with such a small majority, he confirmed that he would govern as though he had a larger majority and would attempt to enact the Government’s legislative programme accordingly.¹⁴ Nevertheless, parliamentary arithmetic was such that the most probable medium-term outcome, given the likelihood that the Government’s majority would be eroded through subsequent by-election defeats, was either a second general election or the creation of a cross-party parliamentary agreement. The only possible ‘coalition’ partner was the Liberal Party, as the Ulster Unionists, the only other party represented in the House of Commons, were affiliated to the Conservative Party.

The events of 1964–1965 have generally been regarded as unrelated to the Lib–Lab Pact, primarily because David Steel, quoted in 1977– 1978 and in his subsequent writings, broadly dismissed the significance of this period in affecting his own decision-making.¹⁵ Steel notes only the appointment of Liberal MP Roderic Bowen to the vacant position of Deputy Speaker, a decision he took without consulting Grimond, as of significance in shaping his subsequent attitude. Even then, this was only insofar as it stressed the need for collective responsibility and loyalty within the Liberal parliamentary Party.¹⁶ However, there were in fact many parallels between the events of 1964–1965 and those of 1977, and more pertinently, lessons from this earlier period which, had they been noted, might have been beneficial to Liberal Party preparations, negotiation strategy and intra-Party consultation during the subsequent Lib–Lab Pact. The first significant suggestion that a Lib–Lab understanding might be established in 1964–1965 was press speculation by two fringe Labour MPs, Woodrow Wyatt and Desmond Donnelly, although it should be noted that they were motivated not by a desire for realignment but by their own discontent with Labour Party policy, and specifically steel nationalisation. Jo Grimond nonetheless felt compelled to respond to their overtures, and he stressed to the Liberal Council that ‘he did not see why he should repudiate suggestions made by backbench Labour MPs, although he doubted if anyone was more opposed to pacts than he was’.¹⁷

Grimond’s rejection of the Wyatt/Donnelly proposal was primarily based on the political reality that at that stage Wilson did not need Liberal support to remain in office and Grimond did not want to ‘show his hand’ until required to do so. Grimond wanted to reassure his grassroots; he was aware that a large number of Liberal Party activists were fiercely independent-minded and fearful that the parliamentary Party might be more amenable to a cross-party understanding. Party President Nancy Seear encapsulated this activist mood in the 1960s. At the Scarborough Assembly in 1965 she stated: ‘We have not spent these years isolated but undefiled in the wilderness to choose this moment to go, in the biblical phrase, a-whoring after foreign women.’¹⁸

Despite his assertion that the Liberal Party would not enter into an understanding with Labour, by early 1965 Grimond nonetheless felt compelled to outline how any subsequent agreement might be structured:

Either we must have some reasonably long-ranging agreement with the Government or a general election. We must have an agreement of a few months on some purpose we both want. I should be very much opposed to going back to the 1929 system, in which the Labour Government and Liberal Party made practically daily ad-hoc decisions.¹⁹

Grimond’s demand for a long-ranging, formal agreement was in some ways replicated by Steel in 1977, but, as will be noted later, some aspects of Grimond’s strategy, his attitudes and responses, were markedly different from Steel’s prior to the Lib–Lab Pact. Specifically, Grimond reasoned that ‘common aims should be worked out’ prior to formal discussions, that a draft understanding should be established in advance of an occasion when they were actually required and that the Liberal Party should have structural and institutional arrangements in place should any cross-party negotiations take place. Very much in keeping with the philosophy of consultation that characterised his leadership, Grimond established a system of ‘shadow’ spokesmen in preparation for ...

Table of contents

• Cover
• Title Page
• Copyright
• Contents
• List of Tables and Figures
• Acknowledgements
• Introduction
• 1. Cross-Party Co-operation in British Politics 1945–1977
• 2. Build-Up to the Lib–Lab Pact, 1974–1977
• 3. Cross-Party Discussions, 17–20 March 1977
• 4. Lib–Lab Discussions, 17–23 March 1977
• 5. Cabinet Discussions on the Lib–Lab Agreement
• 6. The Lib–Lab Consultative Mechanism
• 7. Liberal Party Reaction to the Lib–Lab Pact
• 8. Policy Implications of the First Phase of the Pact
• 9. The Renewal of the Lib–Lab Agreement
• 10. The Second Phase of the Lib–Lab Pact, July–September 1977
• 11. The Final Phase of the Lib–Lab Pact, October 1977–August 1978
• Conclusion
• Notes
• Bibliography
• Index