Following the State Opening of Parliament and the Queen’s Speech, Brown’s Government precariously began to set out its legislative agenda, ever aware of its frail position. As previously mentioned, Labour held 322 seats following the 2007 General Election, two short of the 324 seats that were technically needed to hold a majority in the Commons. Yet, when one factored in the abstention of Sinn Fein’s 5 MPs, the Speaker and the three Deputy Speakers, then it was possible for a Government to command control of the Commons with more than 315 seats – Labour held this, and so initially Brown’s position, although shaken, was relatively safe. Indeed, a boost would come to the Prime Minister in early 2008 when John Bercow, Conservative MP for Buckingham, announced his defection to the Labour Party (which had been long-anticipated by many in the media), thereby lifting the number of Labour MPs to 323. Yet such an increase would be fleeting, as in May 2008 Labour lost the Crewe and Nantwich by-election to the Conservatives (who, since the general election, had held a lead of between five and fifteen points over Labour in all opinion polls), followed in June of the same year by the Glasgow East by-election, which saw Labour lose a further seat to the SNP.
Amidst the electoral setbacks faced by Labour was the onset of the Global Financial Crisis, which would be triggered in September 2008 by the filing for bankruptcy of the US investment bank Lehman Brothers, leading to international markets experiencing significant downturns (the British FTSE 100 saw its largest fall in a single day since 1987 in the aftermath of the collapse of Lehman Brothers). Brown’s response to the crisis came in October 2008, when a stimulus package of approximately £500 billion was announced with the intention of stabilising the British economy and preventing further losses. The reaction to such a package internationally was one of praise – the US and Europe would both follow Britain’s lead in organising bailouts and stimulus packages of their own in a bid to stop their economic freefall – while domestically the FTSE 100 recovered somewhat in the aftermath of the announcement. However, the cost of such a package did lead to the UK’s budget deficit (already on the rise due to increases on spending over the course of Labour’s tenure in Government) drastically increasing, which drew significant criticism from Davis and the Conservatives, who argued that Brown was neglecting Britain’s long-term economic future by allowing the deficit to grow to such a large rate.
The Great Recession would also add to the electoral damage sustained by Labour – anger at the Government for its economic policies prior to the crash (such as Brown’s decision to sell off much of Britain’s gold reserves at a time when the value of gold was at a significant low, rather than maintaining the gold reserves, which could have been sold off during the Financial Crisis to stimulate the British economy) led to the Conservatives’ polling lead increasing to over twenty points in most polls, while a further blows to the Government would come from the European Parliament elections in May 2009 (which saw the Conservatives secure a firm victory following Davis’ commitment that, if victorious at the next general election, the Conservatives would offer an In-Out Referendum on Britain’s membership of the European Union) and a by-election defeat in July of that year, in Norwich North, which the Conservatives won from Labour. Labour’s seat total was now down to 320.
It was at this point, after having lost the Party’s majority, seen significant losses for Labour at local and European Parliament elections and lost three by-elections, that many Labour MPs reached breaking point with Brown. Speculation abounded, many MPs openly voiced their dissatisfaction with Brown in Parliament and a few Junior Ministers called for Brown to go, only to be duly sacked from their portfolios. Initially, Brown resisted all calls to resign, insisting that he would carry on and fight the next general election – yet the Prime Minister eventually recognised that something needed to be done to assert his authority and establish a revived legitimacy for his premiership. In order to do this, Brown resolved to follow in the footsteps of the last Conservative Prime Minister John Major, resigning from the Labour leadership and challenging any of his opponents to ‘put up or shut up’. Then, Brown hoped (and many of his close advisors, such as Peter Mandelson, also agreed with such logic), a challenger from the left of the Party would emerge, stand against Brown and be decisively defeated. It appeared as a flawless plan.
Of course, what Brown had not anticipated was a challenge from the right of the Party.
When the Prime Minister announced that he intended to allow a leadership election to take place, daring any opponents to come forward, he had made the mistake of not going around his Cabinet securing the support of each individual Secretary of State. Therefore, the impression gained by many was that Brown was challenging the Cabinet as well as backbench MPs to stand – and, as it happened, one member of the Cabinet did. Foreign Secretary David Miliband had been the subject of speculation for a leadership challenge for several years (particularly in 2008, when an article written by him in
The Guardian was interpreted by many as a veiled challenge at Brown’s authority) and, initially, Miliband had dismissed any talk of challenging Brown. Yet the combination of setbacks suffered by Labour, along with the Conservatives’ vast polling lead, eventually spurred the Foreign Secretary to act and, a week after Brown’s announcement, Miliband confirmed his intention to stand for the leadership of the Labour Party.
This threw the race wide open, as John McDonnell (the left-wing candidate whom Brown had expected to run) stood down and instead backed Brown over Miliband. This meant that the Prime Minister had unintentionally created a serious threat to his leadership and, as hustings took place, opinion polls of the Labour Party membership, Labour Party supporters and the British electorate as a whole darted between leads for Brown and Miliband. For Labour MPs, members and supporters who would be making the decision, there was intense debate over who to endorse – on one hand many felt a loyalty to Brown and an urge to stick with the Prime Minister. On the other, Brown’s performance at the 2007 General Election, combined with the Party’s subsequent by-election losses, led many to consider Miliband, who they believed could successfully rejuvenate the Party, as an effective alternative.
Eventually, the leadership race would come to a close on the first day of the Labour Party Conference on September the 27th at Brighton. The result would be close, with only a few votes separating the two contenders, yet ultimately what could have been a perfect opportunity for Brown to re-assert his leadership backfired.
David Miliband was now leader of the Labour Party, yet he did not rush to ask Brown to tender his resignation to Elizabeth II. Instead, Miliband resolved to embark on a risky strategy to restore Labour’s position – establishing an agreement with the Liberal Democrats, either a confidence and supply arrangement or a full-blown coalition government. At first, many were confused and bewildered at the new leader’s strategy, as Labour still held 320 seats, ahead of the 315 which was needed to hold an effective majority in the Commons and so, although the Party’s position was precarious, no agreement was necessary. Yet Miliband had a justification for wanting to pursue an agreement with the Liberal Democrats – outwardly, it was to establish a government with a firm majority which could make the decisions in the national interest without hesitation at a time of economic crisis, while, when conferring to aides and other Party officials, Miliband had far more Machiavellian reasons for wanting such an agreement. The new leader believed that, if the Liberal Democrats entered into any sort of agreement which would result in them influencing – and holding a degree of responsibility over – Government, then they would cease to be the natural party of protest, resulting in many voters returning to the two major parties. And, since it was widely believed by many that most Liberal Democrat voters were left-of-centre, Miliband hoped that this would primarily benefit Labour and allow the Party to once again overtake the Conservatives in opinion polls.
And so, with Miliband’s outside justification seeming reasonable to most commentators (and his real reasoning delighting many within the Labour Party), Brown remained Prime Minister while the new Labour leader assembled a negotiating team to commence talks with the Liberal Democrats, now led by Vince Cable (who, following Chris Huhne’s defeat in his Eastleigh constituency in 2007, had become the standard bearer of the Party’s Social Democratic faction and had narrowly defeated Nick Clegg (the leader of the Orange Book faction) for the Party leadership following Campbell’s resignation). Cable, and most Liberal Democrats, had initially been sceptical of Miliband’s offer of an agreement and privately suspected that the Labour leader’s reasonings were designed to harm them, yet, having been put on the spot, the Liberal Democrats ultimately had very little choice but to go ahead with talks – after all, with a Hung Parliament in place and the next general election appearing ever more likely of a large Conservative majority, this posed the best opportunity for the Liberal Democrats to see their policies implemented in Government, while Miliband’s emphasis of ‘national interest’ meant that rejecting any offer of an agreement outright would appear to the public as putting party before country. Therefore, a Liberal Democrat negotiating team was assembled to talk with its Labour counterpart and, for two weeks, the two sides remained behind closed doors discussing a programme of Government.
Eventually, one was arranged – it was agreed that the Liberal Democrats would receive seven Cabinet positions in a coalition government (with Miliband serving as Prime Minister and Cable rejecting the office of Deputy Prime Minister, which was regarded by many as ‘worthless’, in favour of the office of Business Secretary) which would implement several areas of the Liberal Democrat Manifesto, including several constitutional reforms (such as introducing fixed-term Parliaments), while Labour agreed to hold a referendum on whether or not Britain should continue to use First Past the Post (FPTP) for general elections or instead switch to the Single Transferable Vote (STV) instead (such a referendum had been a red line for the Liberal Democrats, and any attempt by Miliband to compromise by offering the Alternative Vote (AV)
without a referendum failed). With a deal between Labour and the Liberal Democrats confirmed, Brown duly travelled to Buckingham Palace on October the 19th 2009, offering his resignation, shortly after which Miliband would accept an invitation from the Queen to form a Government. And so, the Miliband-Cable Coalition was inaugurated – yet how long would it last?