Lib Dems hit back over boundary changes speculation

Source close to Clegg insists "election will be on old boundaries".

Yesterday I wrote this blog speculating about Conservative motives for keeping the boundary review in play, even when the Lib Dems have signalled their determination to vote against the plan.

The Tories, I surmised, are desperate to sustain the project on life support, even when all vital signs have gone, partly in the hope that it might yet one day be resuscitated but also because postponing its final extinction gives Conservatives a bargaining chip in other negotiations.

I have since spoken to a senior source close to Nick Clegg who, while not disputing my analysis of Tory motives, wanted to make clear that, as far as the Lib Dem leadership is concerned, the boundary changes are finished. That is non-negotiable and if the Conservatives think otherwise they "don’t quite get it".

"The next election will be fought on the old boundaries," my source said. "They [the Tories] need to accept that we are deadly serious about that … We are not going to allow boundary reform."

As for the idea of scraping together a majority in the Commons with votes from Ulster Unionists and Welsh Nationalists, Lib Dems politely point out that there are Tory MPs who would rebel in a vote on boundary changes. The whole concept of driving the whole thing through with pork-barrel promises to minor parties, say top Lib Dems, smacks of desperation on the Conservative side as the realisation dawns that winning a majority next time will be very, very hard indeed.

It is worth noting also that the "mid-term review" of coalition policy, due in November some time, has been postponed until January. This is the project that was once going to be grand renewal of vows under the Steve Hilton-esque "Coalition 2.0" rubric but was downgraded to a more modest audit of progress so far on policy implementation and outline of future priorities.

I am confidently assured that the delay says nothing at all significant about the state of relations between the two parties and that it is simply a function of the fact that the Autumn Statement (due on 5 December) is more urgent and takes up too much time, so the sequence of the two events changed. That is perfectly plausible.

Still, if there is to be a chapter on political or constitutional reform in the mid-term review the two sides clearly need to be communicating a bit more effectively about those boundary changes.

Nick Clegg pledged to veto the proposed boundary changes after David Cameron abandoned plans for House of Lords reform. Photograph: Getty Images.

Rafael Behr is political columnist at the Guardian and former political editor of the New Statesman

Photo: Getty Images
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There are risks as well as opportunities ahead for George Osborne

The Chancellor is in a tight spot, but expect his political wiles to be on full display, says Spencer Thompson.

The most significant fiscal event of this parliament will take place in late November, when the Chancellor presents the spending review setting out his plans for funding government departments over the next four years. This week, across Whitehall and up and down the country, ministers, lobbyists, advocacy groups and town halls are busily finalising their pitches ahead of Friday’s deadline for submissions to the review

It is difficult to overstate the challenge faced by the Chancellor. Under his current spending forecast and planned protections for the NHS, schools, defence and international aid spending, other areas of government will need to be cut by 16.4 per cent in real terms between 2015/16 and 2019/20. Focusing on services spending outside of protected areas, the cumulative cut will reach 26.5 per cent. Despite this, the Chancellor nonetheless has significant room for manoeuvre.

Firstly, under plans unveiled at the budget, the government intends to expand capital investment significantly in both 2018-19 and 2019-20. Over the last parliament capital spending was cut by around a quarter, but between now and 2019-20 it will grow by almost 20 per cent. How this growth in spending should be distributed across departments and between investment projects should be at the heart of the spending review.

In a paper published on Monday, we highlighted three urgent priorities for any additional capital spending: re-balancing transport investment away from London and the greater South East towards the North of England, a £2bn per year boost in public spending on housebuilding, and £1bn of extra investment per year in energy efficiency improvements for fuel-poor households.

Secondly, despite the tough fiscal environment, the Chancellor has the scope to fund a range of areas of policy in dire need of extra resources. These include social care, where rising costs at a time of falling resources are set to generate a severe funding squeeze for local government, 16-19 education, where many 6th-form and FE colleges are at risk of great financial difficulty, and funding a guaranteed paid job for young people in long-term unemployment. Our paper suggests a range of options for how to put these and other areas of policy on a sustainable funding footing.

There is a political angle to this as well. The Conservatives are keen to be seen as a party representing all working people, as shown by the "blue-collar Conservatism" agenda. In addition, the spending review offers the Conservative party the opportunity to return to ‘Compassionate Conservatism’ as a going concern.  If they are truly serious about being seen in this light, this should be reflected in a social investment agenda pursued through the spending review that promotes employment and secures a future for public services outside the NHS and schools.

This will come at a cost, however. In our paper, we show how the Chancellor could fund our package of proposed policies without increasing the pain on other areas of government, while remaining consistent with the government’s fiscal rules that require him to reach a surplus on overall government borrowing by 2019-20. We do not agree that the Government needs to reach a surplus in that year. But given this target wont be scrapped ahead of the spending review, we suggest that he should target a slightly lower surplus in 2019/20 of £7bn, with the deficit the year before being £2bn higher. In addition, we propose several revenue-raising measures in line with recent government tax policy that together would unlock an additional £5bn of resource for government departments.

Make no mistake, this will be a tough settlement for government departments and for public services. But the Chancellor does have a range of options open as he plans the upcoming spending review. Expect his reputation as a highly political Chancellor to be on full display.

Spencer Thompson is economic analyst at IPPR