Do parties making deals supply you with confidence? Photo: Flickr/
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What is confidence and supply and how does it work?

As alternatives to a formal coalition are being considered, we outline what a confidence and supply arrangement entails.

Confidence and supply is an agreement between political parties that is looser than a formal coalition.

A smaller party (or number of parties) makes a deal to back a larger party in government on a vote-by-vote basis, in exchange for policy concessions.

They agree to support the larger party’s budget and other such key votes that would otherwise potentially bring a government down if they didn’t pass. The Queen’s Speech is another example of this. They could also abstain.

This arrangement allows a minority administration to govern without conceding ministerial positions to the junior partner or partners, and in turn, gives smaller parties the opportunity to achieve some of their manifesto commitments without having to sign up wholesale to the leading party’s programme.

The “confidence” applies to the agreement to back the governing party on no-confidence votes, and the “supply” refers to the bills required for the party in power to receive money to enable it to implement its policies. It’s a common misconception that “confidence” means the trust between parties, and “supply” the concessions given to the smaller party/parties.

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Lord Geoffrey Howe dies, age 88

Howe was Margaret Thatcher's longest serving Cabinet minister – and the man credited with precipitating her downfall.

The former Conservative chancellor Lord Howe, a key figure in the Thatcher government, has died of a suspected heart attack, his family has said. He was 88.

Geoffrey Howe was the longest-serving member of Margaret Thatcher's Cabinet, playing a key role in both her government and her downfall. Born in Port Talbot in 1926, he began his career as a lawyer, and was first elected to parliament in 1964, but lost his seat just 18 months later.

Returning as MP for Reigate in the Conservative election victory of 1970, he served in the government of Edward Heath, first as Solicitor General for England & Wales, then as a Minister of State for Trade. When Margaret Thatcher became opposition leader in 1975, she named Howe as her shadow chancellor.

He retained this brief when the party returned to government in 1979. In the controversial budget of 1981, he outlined a radical monetarist programme, abandoning then-mainstream economic thinking by attempting to rapidly tackle the deficit at a time of recession and unemployment. Following the 1983 election, he was appointed as foreign secretary, in which post he negotiated the return of Hong Kong to China.

In 1989, Thatcher demoted Howe to the position of leader of the house and deputy prime minister. And on 1 November 1990, following disagreements over Britain's relationship with Europe, he resigned from the Cabinet altogether. 

Twelve days later, in a powerful speech explaining his resignation, he attacked the prime minister's attitude to Brussels, and called on his former colleagues to "consider their own response to the tragic conflict of loyalties with which I have myself wrestled for perhaps too long".

Labour Chancellor Denis Healey once described an attack from Howe as "like being savaged by a dead sheep" - but his resignation speech is widely credited for triggering the process that led to Thatcher's downfall. Nine days later, her premiership was over.

Howe retired from the Commons in 1992, and was made a life peer as Baron Howe of Aberavon. He later said that his resignation speech "was not intended as a challenge, it was intended as a way of summarising the importance of Europe". 

Nonetheless, he added: "I am sure that, without [Thatcher's] resignation, we would not have won the 1992 election... If there had been a Labour government from 1992 onwards, New Labour would never have been born."

Jonn Elledge is the editor of the New Statesman's sister site CityMetric. He is on Twitter, far too much, as @JonnElledge.