Indebted and Unbalanced: The Political Economy of the Coalition

Abstract

On 20 May 2010, when the Coalition published its Programme for Government, two key objectives were identified which would provide the twin benchmarks for evaluating the political economy of the Coalition and its economic policy performance in office. First, and in their foreword to the Coalition’s programme, David Cameron and Nick Clegg affirmed their agreement that ‘the most urgent task facing this coalition is to tackle our record debts, because without sound finances, none of our ambitions will be deliverable’ (Cameron and Clegg, 2010: 7). However, while they believed that ‘[t]ackling the deficit is essential’, they also affirmed that this was not what either of them had entered politics to achieve. On the contrary, the creation of the Coalition had not only provided the means to strengthen and enhance their respective ‘visions of a Britain better in every way’, but also ‘the potential to deliver era-changing, convention-challenging, radical reform’ (Cameron and Clegg, 2010: 7). Consequently, a second key objective for the Coalition’s economic policies was identified. This would be ‘to build a new economy from the rubble of the old’, a much broader political economy than simply the alleviation of fiscal deficits. This second objective would encompass support for ‘sustainable growth and enterprise, balanced across all regions and all industries’, the promotion of ‘the green industries that are so essential for our future’, ‘radical plans to reform our broken banking system and new incentives for green growth’, and ‘a Britain where social mobility is unlocked’ (Cameron and Clegg, 2010: 7).