Farage says that "a couple of dozen" Tory MPs would be open to pacts with UKIP

The UKIP leader's figure is "spot on", says Conservative MP Philip Hollobone.

Nigel Farage is doing his best to steal the limelight from George Osborne today with a stringe of fringe appearances outside the Conservative secure zone. He quipped to cheers at one event: "If Godfrey Bloom disrupted my conference, I like to think I'm disrupting and ruining David Cameron's."

But it was on Radio 4 earlier today that Farage's most notable comments came. After reaffirming his support for local non-aggression pacts between Tory and UKIP candidates in today's Times, he told the World At One that he estimated that "a couple of dozen" Conservative MPs would be open to agreement. Tory MP Philip Hollobone, who won the backing of UKIP in 2010, went on to describe Farage's figure as "spot on".

Conservative ministers have done their best to play down talk of deals today, but Farage's comments are a reminder of why the idea won't go way, particularly if UKIP win the European elections next year, or at least outperform the Tories. At a fractious fringe meeting with Farage earlier today, Bill Cash warned that UKIP could cost the Tories up to 60 seats and hand Ed Miliband the keys to Downing Street. "Let us be realistic. Are we going to be allies or enemies? Lay off our marginals," he said.

While UKIP is unlikely to inflict as much damage on the Tories as Cash fears, the split in the right-wing vote (UKIP draws around half of its support from 2010 Tory supporters), will make it easier for Labour to dislodge the Tories in the marginals it needs to win to become the largest party. At the last election, with a UKIP share of just 3 per cent, there were 20 constituencies in which the party's vote exceeded the Labour majority (one shouldn't make the error of assuming that all those who supported the party would have backed the Tories in its absence, but many would have done). Should UKIP poll at least 5-6%, around half of its current support, it could well indirectly propel Labour to victory. And that is why talk of pacts will continue right up until May 2015.

UKIP leader Nigel Farage addresses the Bruges Group in Manchester Town Hall earlier today. 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.