Nick Clegg: we caused offence by joining Tories, but it's worth it

Deputy prime minister admits coalition created 'surprise' but insists there was no option

Nick Clegg today defends his decision to spurn a progressive coalition government with Labour, saying it would have been unworkable and regarded as illegitimate by the British people.

But in an article for the Guardian the Liberal Democrat leader acknowledges the ill-feeling that his party's decision has created, admitting: "It has caused both surprise and with it some offence."

Before a closed party conference on the decision tomorrow, Clegg concedes: "There are those on both the left and right who are united in thinking this should not have happened.

"But the truth is this: there was no other responsible way to play the hand dealt to the political parties by the British people at the election. The parliamentary arithmetic made a Lib-Lab coalition unworkable, and it would have been regarded as illegitimate by the British people. Equally, a minority administration would have been too fragile to tackle the political and economic challenges ahead."

He also says that since the formation of the coalition, and his appointment as deputy prime minister, he has discovered a surprising degree of agreement on the principles of government, including the dispersal of power from Whitehall. "No government – whether it's a coalition of parties, or a coalition of rivalries as in the Blair-Brown governments – is able to survive without a core set of common assumptions and aspirations," he writes.

In a separate interview with the Guardian, Vince Cable, the Lib Dems' deputy leader and new business secretary, insists that the coalition is united in its determination to break up banks and stop "vast" and "unacceptable" bonuses.

Speaking for the first time since taking on the role, he said he thought Royal Bank of Scotland and Barclays should be broken up to stop them posing a risk to the whole economy. "The implicit assumption is that there is a structural problem," said Cable, who has taken his lead from the Bank of England governor, Mervyn King.

The new government will shortly announce who is to chair a year-long commission into how to break up banks, but in the meantime intends to impose limits on bonuses. "The underlying assumption is that there will have to be restructuring in the banking system in order to make the system safe," Cable said.

"Vast bonuses, particularly where it involves cash payments, are just not acceptable and that will be stopped by the new government and properly regulated in the interests of reducing risk."

The new business secretary said he and George Osborne, the new chancellor, would work together. "We are both agreed that unacceptable bonuses have got to be stopped and there's got be robust action."

Although the Tories had traditionally been considered sympathetic to the City, Cable said: "We are committed to robust action. There has been some grossly unacceptable behaviour that the last government tolerated and we've got to do better." He is determined to get the state-controlled banks lending again, although this may put him at odds with Osborne, whose Treasury department might be more interested in pushing up their share prices to engineer a share sale.

"If the banks are just giving overriding priority to boosting their share prices in the long run then you're not going to get a delivery of lending to businesses. I'm going to have work alongside George Osborne to make sure the banks deliver credit," Cable said.

Cable was cited as an influential, if reluctant, voice in his party's historic decision to side with the Tories rather than Labour in the fraught internal discussions over whom to back.

It emerged yesterday that at least two former Lib Dem leaders, Lord Ashdown and Charles Kennedy, expressed concerns about the pact with the Tories at the crucial private meeting.

According to one Lib Dem present, Ashdown said that while he understood the logic he was "strategically unhappy" and he "wouldn't be part" of any Cameron-Clegg government.

He said the coalition deal upset him because it meant that the Lib Dems were "abandoning the realignment of the left" and feared it would open up the south-west of England to Labour, an area from which the Lib Dems had been driving them out for 30 years.

He added that he feared his party was helping Cameron to become Benjamin Disraeli – and he was not sure who was being cast in the role of Gladstone. However, reflecting the depth of his affection for Clegg and his admiration for the agreement, he ended by saying: "I cannot resist a fight, I'm with you."

According to the Guardian's sources, Kennedy was particularly concerned about the Lib Dems' future in Scotland and Wales, pointing out that there was only 51 weeks until elections in those two regions.

Ed Balls, a likely candidate for the Labour leadership this weekend, tells the Guardian today that as late as Tuesday afternoon the Lib Dems "were just playing for time, they were just scrabbling to try and reach an agreement with the Conservatives". Balls, the former schools secretary, who was present during the fateful calls in Downing Street, said: "Gordon said: 'If you want to reopen formal discussions with us and if you will stop formal negotiations with the Conservatives and start them with us then fine. If you can't tell me that, then I'm going to conclude there is no possibility of us forming a majority.' That is what Gordon said."

It was also claimed that in one call to Brown, Clegg said he feared if he went with the Conservatives members of his party would leave in droves, but Labour has come to a view that most of what Clegg said in the discussions was designed to strengthen his negotiating hand with the Tories.

He also complained: "To our surprise members of the Liberal Democrat party were willing to entirely rip up their manifesto on the economy and reach an agreement with David cameron. That suggests a desire for power which goes beyond principle. We are now the progressive party of British politics. But you can't assume we maintain that mantle by default."


Patrick Wintour, Larry Elliott and Allegra Stratton

The GuardianTramp

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