Troubled times for Clegg and Co

After the initial thrill of seeing Liberal bums occupying ministerial seats for the first time since the wartime coalition of the 1940s, the past couple of months have proved something of a reality-check for Britain's third party.

First, there was the loss of their rising star David Laws from the coalition Cabinet after just 16 days following revelations in the Daily Telegraph about his expense claims and his private life.

Then the Climate Change Secretary, Chris Huhne, was forced to do a Robin Cook and swiftly dump his wife for his mistress after their affair was exposed by the News of the World.

Mr Huhne kept his job, although conspiracy theorists would doubtless see a pattern in this double embarrassment for key Liberal Democrats at the hands of Tory-supporting newspapers.

But of course, the unease currently being felt across Nick Clegg's party is not just about the personal difficulties of individual Lib Dem ministers. It goes much deeper than that.

The first two months of the coalition have been dominated by the Tory 'cuts' agenda, with Chancellor George Osborne emerging as the dominant figure in the government much as Gordon Brown did under Tony Blair.

For the Lib Dems, it has meant the humiliation of being forced to eat their pre-election words, when they warned that cutting too deep, too fast could cause another recession.

More and more grassroots Lib Dems, and even some of the party's more left-leaning MPs, have started to ask the question: What's in this for us?

Well, this week came the answer – news that a referendum on changing the voting system from first-past-the-post to the alternative vote is to be held next year, probably on 5 May.

For Deputy Prime Minister Mr Clegg, who will formally announce the move next week, it represents perhaps a once-in-a-lifetime chance to achieve the Lib Dem Holy Grail of electoral reform.

There are strong practical arguments for having the vote this early on in the Parliament, in that if it were held any later there would be little chance of getting any changes through in time for the next election.

Against that, though, is the obvious danger that it could shorten the coalition's life by about four years if the referendum is lost.

Were that to happen, of course, there would be little incentive left for the Lib Dems to remain in the government, and Mr Clegg would come under pressure from his party to obtain a swift divorce.

This might, in turn, provide a perverse incentive for the Conservatives not to campaign too hard against the change to AV, although premier David Cameron has insisted that he will.

The referendum poses a dilemma for Labour, too. The logic of opposition suggests it is in their interests to get a 'no' vote in order to try to bring down the government and force a 2011 election.

But many Labour MPs favour AV, and both Miliband brothers have made clear the party will campaign for a 'yes' vote if they win the leadership.

Whether or not Mr Clegg succeeds in his ambition will depend at least in part on whether the coalition can retain the broad popular support it currently holds.

As the North-East knows all too well, referenda held at a time when the government is unpopular tend to result in resounding 'no' votes.

The biggest danger for the 'yes' campaign is that the public comes to view this as an irrelevance when set against the economic problems facing the country – as many Tory MPs already do.

Not for the first time in recent months, the Lib Dems are finding themselves having to negotiate uncharted – and shark-infested – political waters.

End of the 'golden generation'

Long-standing readers of this blog - if there are any - will doubtless have noted the distinct lack of blogging on the 2010 World Cup thus far compared with 2006. Partly it's a symptom of changing times. Life was considerably less busy back then - only one child, a house and garden that needed little doing to it, a considerably less demanding role at work than the one I now hold.

But really those are just excuses. The main reason I haven't blogged on the World Cup until now is that England's performances in it were so dire it was moreorless impossible to summon up the requisite degree of enthusiasm.

I don't think I was by any means alone in this. Friends who were happy to come round to our place and drink beer at 8am in the morning for England's early-morning kick-offs during the Japan-South Korea tournament in 2002 seemed oddly resistant to footie-related get-togethers this time round.

Is it that we are eight years older and wiser? Or is it simply that England are just shite?

Each World Cup is, in one sense, an opportunity to relive the experiences of the previous ones. Some football fans of a slightly older vintage than myself still long to repeat the thrill of our 1966 triumph, the more so perhaps as it recedes further and further into the dim and distant past.

But I was too young to remember much about that. For me, it is Italia '90 which continues to cast a shadow over each subsequent tournament, Sir Bobby Robson's men who continue to make each subsequent England team suffer by comparison.

They called this the 'golden generation,' but Capello's motley crew couldn't hold a candle to that lot. Sure, on paper you would rate John Terry a better player than Terry Butcher, Steven Gerrard above David Platt, Wayne Rooney above Peter Beardsley even. But they wouldn't play for Fabio like those boys played for Sir Bobby twenty years' back.

And with such evident lack of passion on the pitch when compared to the England teams of old, how on earth could we fans be expected to work up the same level of excitement as of yore?

The general consensus in the papers this week has been that the 2014 generation of potential World Cup players is considerably less gifted than the present one, although it is surely too early to say whether the likes of Jack Rodwell, Kieran Gibbs, Jack Wilshere and Conor Wickham will go the way of Rooney and kick-on to world-class status, or flatter to deceive in the manner of other one-time prodigies such as Theo Walcott and David Bentley.

But it need not necessarily be a handicap. The only truly world-class players in our World Cup-winning side in 1966 were the goalkeeper, Gordon Banks, the captain, Bobby Moore, and midfield fulcrum Bobby Charlton. Were they not national heroes, some of the others would almost have qualified for the description 'journeymen.'

The difference was that Sir Alf moulded them into an effective unit, much as Sir Bobby somewhat serendipitously managed to do with his charges in 1990.

If someone - Martin O'Neill perhaps - can do that four years from now, then perhaps the flame of that unforgettable summer may yet flicker into life again.

Playing for the highest stakes

Whenever we journalists describe something as a "political gamble," or even a "huge political gamble," I sometimes think we need to go and take a lesson in the avoidance of cliché.

The fact is, all political decisions require an assessment of the balance of risk, and in that sense, all political decisions are gambles to some extent or another.

Delaying the general election until moreorless the last possible moment was a gamble for the then Prime Minister Gordon Brown, for instance.

He was gambling on the fact that the economy would pick up sufficiently before 6 May to show the electorate that his prescriptions were working. It wasn't that far away from coming off.

The gamble unveiled by Chancellor George Osborne in his first Budget on Tuesday, however, was of an entirely different order.

This wasn't just a gamble with his own future, or that of the Con-Lib coalition. It was a gamble with the future of the whole country and the jobs and livelihoods of millions of its people.

The debate over the Budget has thus far focused on two issues. First, whether it could reasonably be called "fair" and "progressive," and secondly, whether or not the £40bn extra spending cuts and tax rises were avoidable.

All I would say on the first point is that it depends how you define fairness. Some will say that the rise in VAT to 20pc is fair because it will affect everyone in the same way, while others will say it's unfair because it will disproportionately hit the poor.

The more illuminating debate surrounds the second point – whether this Budget was indeed unavoidable, or whether these cuts are at least in part ideologically motivated.

As I noted last week, the government's attempts to lay the blame for the cuts at Labour's door has aroused the opposition from its post-election slumber and forced it to stand by its own, more limited deficit reduction plan.

The really difficult thing is that no-one knows who is right about this. There is no clearer consensus among the economists about how fast the deficit should be cut than there is among the politicians.

In short, it's a case of suck it and see. We will only find out the answer once we have been there and done it.

Whatever the outcome, it is no exaggeration to say that the politics of the next decade and beyond will be shaped by it.

If Mr Osborne's strategy works, and he succeeds in bringing down the deficit without causing another recession, then David Cameron will almost certainly win a second term and probably, this time, with an outright majority.

But if it he is wrong, the current political status quo will be transformed

The coalition's political honeymoon will come to a swift end, and Mr Brown will start to look not so much like a failed leader as a lost leader, or a prophet without honour in his own country to use a Biblical analogy.

A vindicated Labour Party would then be on course for a victory at the next election every bit as crushing as the one it achieved in 1997, four years after the last Tory government's claim to economic competence was swept away by Black Wednesday

The Conservatives could be out of power for another generation, while their Liberal Democrat collaborators may well be wiped off the political map entirely.

While some on the left might welcome this apocalyptic scenario on the grounds that it would be good for the fortunes of the Labour Party, the cost in terms of human misery would surely be too great.

For that reason, we'd better all hope that Mr Osborne's great gamble does indeed pay off.