It is a good thing that someone with Richard's knowledge and insight has engaged with the ideoligical issues surrounding the coalition and I very much welcome his triggering a useful debate. Yet I find myself out of sympathy with much of his argument, although in the interests of time and brevity, I will just engage with one of his core contentions, namely that the origins of the coalition:
can be found in the dominance of centre-right small state liberalism in the leadership of the Liberal Democrats
Richard of course will know the leading Lib Dem figures in the coalition better than I do and what makes them tick. But I don't get a sense that Clegg et al are wedded to small state Liberalism. Rather I suspect that they have been driven by political circumstances (the longest ever period of Labour government in Britain) to think about how the Lib Dems differ from Labour and how we would do things differently.
It is perhaps worth noting that in 1979, after Labour had been in power for 11 of the previous 15 years, the Liberal manifesto stated:
Liberals are concerned to simplify the personal tax system and reduce its burden to create a tax structure which encourages initiative and promotes a wider distribution of wealth, and above all to establish principles for a stable tax system which can command the respect of the electorate as a whole: wealthy, poor and average earners.
specifically 'a major switch from taxes on income to taxes on wealth and expenditure'. This has strong echoes of our stance in 2010. Yet, whatever the then Liberal leader, David Steel, few would label him as a 'small state liberal'. (Although John Pardoe, who was no doubt the author of the 1979 tax proposals is probably more a Laws than a Grayson Liberal.)
The Liberal critiques of Labour and Conservative governments are always likely to be different. I doubt very much whether Clegg would have supported a coalition with the Conservatives in 1997 nor felt uncomfortably with the party's call at the time for greater investment in public services. But once Labour had flooded the public sector with money, yet everything in the garden was still not rosy, it was hardly credible for the Lib Dems to say 'We still want just that little bit more public spending than New Labour', because it would have given us a political narrative of 'We're just like Labour only more so'.
Therefore the party needed to think through how it differed from the Labour government, with the Huhne Commission which Richard rightly praises being the start of this. We had to think ideologically and could hardly put forward a viable alternative view of how public services should be delivered if it was predicated on a non-negotiable assumption that the Lib Dems must always support a public sector at least as big as that proposed by Labour.
For what it's worth I think we should be bold and confident enough to put forward our own Liberal agenda without intellectual cap-doffing to Labour, old or new. There are many things Labour spend public money on that we don't agree with at all: Identity cards, the security agenda, the multifarious inspection regimes for local government. Likewise, it's hard to see their rhetoric on crime, drugs and civil liberties as in any way progressive. Equally, I see the Coalition's support for localism as more progressive, liberal, left-wing or whatever you want to call it than Labour's track record. Even free schools (of which I'm admittedly not a huge fan) are the sort of idea that might once have been put forward by the party's radical community politics wing.
It is important that we do have a continuing debate about the future of the Lib Dems. But I fear that social liberals will be heading up a dead end if the root of their argument is about matching the size of Labour's public sector.