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.

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How Theresa May laid a trap for herself on the immigration target

When Home Secretary, she insisted on keeping foreign students in the figures – causing a headache for herself today.

When Home Secretary, Theresa May insisted that foreign students should continue to be counted in the overall immigration figures. Some cabinet colleagues, including then Business Secretary Vince Cable and Chancellor George Osborne wanted to reverse this. It was economically illiterate. Current ministers, like the Foreign Secretary Boris Johnson, Chancellor Philip Hammond and Home Secretary Amber Rudd, also want foreign students exempted from the total.

David Cameron’s government aimed to cut immigration figures – including overseas students in that aim meant trying to limit one of the UK’s crucial financial resources. They are worth £25bn to the UK economy, and their fees make up 14 per cent of total university income. And the impact is not just financial – welcoming foreign students is diplomatically and culturally key to Britain’s reputation and its relationship with the rest of the world too. Even more important now Brexit is on its way.

But they stayed in the figures – a situation that, along with counterproductive visa restrictions also introduced by May’s old department, put a lot of foreign students off studying here. For example, there has been a 44 per cent decrease in the number of Indian students coming to Britain to study in the last five years.

Now May’s stubbornness on the migration figures appears to have caught up with her. The Times has revealed that the Prime Minister is ready to “soften her longstanding opposition to taking foreign students out of immigration totals”. It reports that she will offer to change the way the numbers are calculated.

Why the u-turn? No 10 says the concession is to ensure the Higher and Research Bill, key university legislation, can pass due to a Lords amendment urging the government not to count students as “long-term migrants” for “public policy purposes”.

But it will also be a factor in May’s manifesto pledge (and continuation of Cameron’s promise) to cut immigration to the “tens of thousands”. Until today, ministers had been unclear about whether this would be in the manifesto.

Now her u-turn on student figures is being seized upon by opposition parties as “massaging” the migration figures to meet her target. An accusation for which May only has herself, and her steadfast politicising of immigration, to blame.

Anoosh Chakelian is senior writer at the New Statesman.

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