How Labour is preparing for a coalition with the Lib Dems

Shadow ministers have been encouraged to look for "points of agreement" with the party and to consider constitutional reforms that would appeal.

To win a majority at the next election, both Labour and the Conservatives will need to defy recent history. No governing party has increased its share of the vote since 1974; no opposition has achieved an overall victory at the first attempt for more than 80 years. Faced with these odds, it is unsurprising that many on both sides consider another hung parliament the likeliest outcome in 2015. 

Earlier this week, the Telegraph reported that David Cameron is preparing for a second coalition with the Lib Dems by discussing new rules to allow Tory MPs to vote on a new power-sharing agreement. Impressed by the discipline of Nick Clegg’s backbenchers compared with that of his truculent troops, Cameron wants his party’s hands "dipped in blood".

But what of Labour? In my politics column in this week's NS, I reveal that the party is making its own preparations for another hung parliament. One shadow minister recently told me that he had been encouraged to look for "points of agreement" with the Lib Dems and to consider constitutional reforms that would appeal to the party, citing the example of proportional representation for local elections. One of the concessions made by Labour when it entered coalition with the Lib Dems in Scotland in 1999 was the introduction of the Single Transferable Vote for local council elections and many Lib Dem activists now believe the party should have pushed for similar reform for England during the coalition negotiations in 2010. 

Labour MPs have also been struck by the increasing degree of policy overlap between the two sides and improved personal relations. In recent months, Labour has called for the introduction of a mansion tax on property values above £2m, a 2030 decarbonisation target for electricity, the removal of Winter Fuel Payments from the wealthiest 5 per cent of pensioners and higher capital investment (in preference to a temporary VAT cut) funded by a rise in borrowing. Earlier this week, it committed to a reduction in the voting age to 16. What all of these policies have in common is that they have all either been proposed or championed by the Lib Dems. This is far from the only motive for their adoption but Miliband and Balls are too astute not to know that this shift will greatly enhance their chances of striking a deal with the third party in 2015. One of the most popular reads among Labour MPs this summer is Andrew Adonis's 5 Days in May in which the Labour peer and former transport secretary laments the party's failure to prepare for the 2010 hung parliament and urges it to not to repeat this error. His advice has not been ignored. 

In response to the voting age pledge, Lib Dem MP Stephen Williams remarked: "If we can bank that as an agreement then if the next parliament does result in an inconclusive election, which I think is quite likely, the more issues that we know in advance that we're likely to agree on will make the negotiations swifter." His parliamentary colleagues are saying much the same thing. If the Tories want the Lib Dems to gift them the majority they will surely fall short of in 2015 (the party needs a seven point lead over Labour on a uniform swing), they should start to think just what baubles they could offer Cable and co. 

Nick Clegg and Ed Miliband attend a ceremony at Buckingham Palace to mark the Duke of Edinburgh's 90th birthday on June 30, 2011 in London. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty
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Can Philip Hammond save the Conservatives from public anger at their DUP deal?

The Chancellor has the wriggle room to get close to the DUP's spending increase – but emotion matters more than facts in politics.

The magic money tree exists, and it is growing in Northern Ireland. That’s the attack line that Labour will throw at Theresa May in the wake of her £1bn deal with the DUP to keep her party in office.

It’s worth noting that while £1bn is a big deal in terms of Northern Ireland’s budget – just a touch under £10bn in 2016/17 – as far as the total expenditure of the British government goes, it’s peanuts.

The British government spent £778bn last year – we’re talking about spending an amount of money in Northern Ireland over the course of two years that the NHS loses in pen theft over the course of one in England. To match the increase in relative terms, you’d be looking at a £35bn increase in spending.

But, of course, political arguments are about gut instinct rather than actual numbers. The perception that the streets of Antrim are being paved by gold while the public realm in England, Scotland and Wales falls into disrepair is a real danger to the Conservatives.

But the good news for them is that last year Philip Hammond tweaked his targets to give himself greater headroom in case of a Brexit shock. Now the Tories have experienced a shock of a different kind – a Corbyn shock. That shock was partly due to the Labour leader’s good campaign and May’s bad campaign, but it was also powered by anger at cuts to schools and anger among NHS workers at Jeremy Hunt’s stewardship of the NHS. Conservative MPs have already made it clear to May that the party must not go to the country again while defending cuts to school spending.

Hammond can get to slightly under that £35bn and still stick to his targets. That will mean that the DUP still get to rave about their higher-than-average increase, while avoiding another election in which cuts to schools are front-and-centre. But whether that deprives Labour of their “cuts for you, but not for them” attack line is another question entirely. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to domestic and global politics.

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