The realities of power have caught the U.K.’s Liberal Democrats unprepared. Their treatment of the students loan issue demonstrates how not to deal with a critical leadership issue
In May 2010 Nick Clegg, leader of the Liberal Democrats, became head of a minority party in coalition government in the United Kingdom. Six months later, his party found itself under extreme pressure dealing with accusations of abandoning election pledges in order to gain power. A critical issue has resulted in a series of demonstrations amongst student groups, formerly among the party’s strongest supporters and activists. These became more violent as the debate took place [Dec 9th 2010].
Higher education policies and problems
Agreeing a policy on higher education was always going to be difficult for the new coalition. The parties had realised the financial problems of funding tertiary (University level) education and had signalled the need for changes during election campaigning, offering different approaches. When the result of the election was inconclusive, a deal with the Conservatives was established as the better option for the Liberal Democrats. Mr Clegg’s party found itself sharing power for the first time in living memory.
The arrangement was always seen as potentially dangerous. Actions to deal with the tough steps towards economic recovery were going to lead to unpopularity for the coalition. In particular, the minority party was vulnerable to accusations that they had acted out of ambition for power. Clegg maintained from the outset that the actions placed the interests of the country first. The coalition government under conservative David Cameron has lost some popular ground but the opinion polls are signalling strongly that opposition (Labour) gains have been at the expense of the Liberal Democrats.
With the benefits of hindsight 
In hindsight, the dilemmas Nick Clegg faced were never clearly addressed. Vince Cable, another political asset was equally vulnerable, having to make a U-turn on his advocated financial policies. Their duties remained as leaders of their party and to work in its best interests. But they also now had undertaken to work towards a common policy with one-time political opponents, having recently campaigned as vigorously as was possible to establish the fundamental differences of policy between the parties.
Even in the hasty negotiations as the deal was being set up post-election, the need for wriggle room was recognised. Liberal Democrat MPs would be permitted freedom to vote where new policies were believed to cut across election pledges. This freedom was not extended to ministers of the new Government.
The first hostage to fortune
The first hostage to fortune was the Lib Dem pledge over higher education. The Government has accepted the main thrust of a report commissioned under Lord Browne by its predecessors. The outcome was an extension of the policy initiated by that administration of charging students admission fees payable up-front. In effect these were nominal payments leaving students to pay of the charges under longer term financial arrangements. The parties largely agreed on the need to deal with a funding gap for University education, but not with the means of dealing with it.
By December  the issue had become a near crisis for the Liberal Democrats . The political problem stems from their election pledge to oppose the conservative plans for the student fee approach, favouring a graduate tax instead.
The Institute for Fiscal Studies says that, for about half of graduates, the plan is essentially a 9% graduate tax for 30 years, because they will not finish paying off the debt by the 30-year cut-off point…[and that] about 10% of graduates will pay back, in total, more than they borrowed.
With the benefits of hindsight 
How might the issue have been treated differently? Perhaps by examination of how ‘tough to resolve’ dilemmas call for creative leadership.
The broad principle is to explore whether issues have been too quickly reduced to to one of two unpalatable ‘either-or’ options. In this case, it seems to me, the ambiguities inherent in the conditions emerging after the election. In particular the Lib Dems had made it a core election pledge (one of four) to oppose the very education policy they accepted once in power. This required considerable effort at communicating their continued commentment to, and concern for their affected and disenchanted stakeholders, while working and negotiating with their coalition partner to meet broader economic goals within a financial crisis. The situation is one which politically astute individuals are distinguished from the less able. Former Lib Dem leader Paddy Ashdown turned up on a phone-in yesterday [Dec 8th 2010]. Herather effortlessly demonstrated the required skills. Danny Alexander and Nick Clegg in contrast continue to wriggle on public exposure. Cruelly, at the moment, their wriggle-room seems to be that of worms impaled on hooks.
The issue was highlighted by the unrest and violence around Parliament as the tuition fee vote was passed through.