There will be no Lib Dem U-turn on boundary changes

The offer of state funding (or anything else) will not induce Clegg to change his stance.

Without the introduction of the proposed boundary changes, there's almost no chance of the Conservatives winning a majority at the next election - the party would need a lead of around seven points on a uniform swing. With the changes, however, it would need one of just four. So it's no surprise that some Tories are still hopeful that they can persuade the Lib Dems to renege on their opposition to the reforms. 

Today's FT reports that the Conservatives are planning a "cash-for-seats" offer under which the Liberal Democrats would approve the new boundaries in return for the introduction of state funding for political parties. So woeful is the Lib Dems' financial situation that the Tories believe Nick Clegg will have no choice but to withdraw his veto. "They are basically out of money," one minister tells the paper, while another adds: "There is a plot". That the Lib Dems' finances are increasingly strained is beyond doubt. As Rafael noted in August, the party's entry into government has seen it deprived of the "short money" made available by the state to opposition parties (something that will cost it £9m over the course of the parliament), while the loss of a quarter of its membership in 2011 helped result in a deficit of £299,964 last year.

But even with this in mind, it's hard to see the offer of state funding (or anything else) inducing Clegg to change his stance. In August, after the abandonment of House of Lords reform, he said:

Coalition works on mutual respect; it is a reciprocal arrangement, a two-way street. So I have told the Prime Minister that when, in due course, parliament votes on boundary changes for the 2015 election I will be instructing my party to oppose them.

In September, when rumours of a deal first surfaced, he declared: "Nothing will change my mind on that." His stance was overwhelmingly endorsed in a motion at the party's conference last month. For these reasons, Lib Dem Scottish Secretary Michael Moore was almost certainly right when he told the Today programme this morning that there is "no prospect of any kind of deal like that." A "cash-for-seats" agreement would only confirm Clegg's reputation as a turncoat, while making his party look irredeemably grubby.

Last month, whilst apologising for breaking his pledge not to support an increase in tuition fees, Clegg declared: "I will never again make a pledge unless as a party we are absolutely clear about how we can keep it." And the pledge to vote against the boundary changes is one that will be kept.

Nick Clegg has previously stated that "nothing" will persuade him to drop his opposition to the propsoed boundary changes. 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.