Clegg has killed the Tories' hopes of a majority

The loss of the boundary changes is disastrous for Cameron.

A mournful Nick Clegg has just confirmed that the coalition will not proceed with House of Lords reform after David Cameron failed to persuade enough Tory MPs to renege on their opposition to the bill. "Part of our contract has now been broken," he lamented. Clegg went on to announce that the Lib Dems would retaliate by voting against the boundary changes, which would gift the Tories an extra 20 seats, when they reach Parliament. Without the support of Clegg's MPs, who, after all, account for 100 per cent of the government's majority, the reforms are effectively dead.

The key political consequence of this is that it will now be even harder for the Conservatives to win a majority in 2015. As I've noted before, with the boundary changes, the Tories would have needed a lead of seven points (on a uniform swing) to win a majority. Without them, they need a lead of 11 points. Conversely, Labour, which would have required a lead of four points with the boundary changes, now needs a lead of just three.

The reason Labour retain their electoral advantage is that the electoral bias towards the party owes more to differential turnout (fewer people tend to vote in Labour constituencies) and regional factors (the Tory vote is poorly distributed) than it does to unequal constituencies (the coalition planned to fix constituency sizes at around 76,000 voters).

Even with the boundary changes, a Tory majority in 2015 was looking unlikely. No sitting prime minister has increased their party's share of the vote since 1974, and Cameron is failing to make progress among those groups that refused to support him last time round. Now, with the loss of the reforms, the challenge of building a Tory majority has moved from "difficult" to "impossible".

Ironically, after the opprobrium heaped on him by Labour, it is Clegg, in blocking the boundary changes, who has done Miliband's party the greatest possible service.

Nick Clegg said the Conservatives had broken the coalition agreement by refusing to support House of Lords reform. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Why relations between Theresa May and Philip Hammond became tense so quickly

The political imperative of controlling immigration is clashing with the economic imperative of maintaining growth. 

There is no relationship in government more important than that between the prime minister and the chancellor. When Theresa May entered No.10, she chose Philip Hammond, a dependable technocrat and long-standing ally who she had known since Oxford University. 

But relations between the pair have proved far tenser than anticipated. On Wednesday, Hammond suggested that students could be excluded from the net migration target. "We are having conversations within government about the most appropriate way to record and address net migration," he told the Treasury select committee. The Chancellor, in common with many others, has long regarded the inclusion of students as an obstacle to growth. 

The following day Hammond was publicly rebuked by No.10. "Our position on who is included in the figures has not changed, and we are categorically not reviewing whether or not students are included," a spokesman said (as I reported in advance, May believes that the public would see this move as "a fix"). 

This is not the only clash in May's first 100 days. Hammond was aggrieved by the Prime Minister's criticisms of loose monetary policy (which forced No.10 to state that it "respects the independence of the Bank of England") and is resisting tougher controls on foreign takeovers. The Chancellor has also struck a more sceptical tone on the UK's economic prospects. "It is clear to me that the British people did not vote on June 23 to become poorer," he declared in his conference speech, a signal that national prosperity must come before control of immigration. 

May and Hammond's relationship was never going to match the remarkable bond between David Cameron and George Osborne. But should relations worsen it risks becoming closer to that beween Gordon Brown and Alistair Darling. Like Hammond, Darling entered the Treasury as a calm technocrat and an ally of the PM. But the extraordinary circumstances of the financial crisis transformed him into a far more assertive figure.

In times of turmoil, there is an inevitable clash between political and economic priorities. As prime minister, Brown resisted talk of cuts for fear of the electoral consequences. But as chancellor, Darling was more concerned with the bottom line (backing a rise in VAT). By analogy, May is focused on the political imperative of controlling immigration, while Hammond is focused on the economic imperative of maintaining growth. If their relationship is to endure far tougher times they will soon need to find a middle way. 

George Eaton is political editor of the New Statesman.