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What must Cameron give to Clegg for the Lib Dems to stay loyal?

Education and tax policy may be on the table — along with state funding of political parties

19 October 2013

9:00 AM

19 October 2013

9:00 AM

Ten days before polling day in 2010, it was clear that a hung parliament was the most likely result of the election. But when interviewed by The Spectator at the time, David Cameron refused to discuss what parts of the Tory manifesto were up for discussion in any possible coalition. He said simply that ‘all the things in our manifesto are what we want to achieve’. When pressed, he rather irritably replied, ‘I am not going to go through the manifesto in that way. The manifesto is what we believe in, that’s what we want to achieve and that is what matters.’

Even the offer of a pen and a copy of the manifesto, so that he could underline his core commitments, didn’t tempt the Tory leader. As the train whistled towards his Southampton campaign stop, he said: ‘I only have a certain amount of minutes and certain amount of days between now and polling day, I want to use those minutes to persuade people not to vote for a hung parliament but to vote for a Conservative government. It seems to me that spending a lot of time trying to fillet your own manifesto is not a particularly good use of time in the actual campaign.’

The next election is going to be different. The Tory manifesto isn’t even written, but Cameron has already started filleting it. He made clear after his speech on Europe in January that an in/out referendum would happen if he remains Prime Minister — with or without a majority. With that, he marked out the first red line of any 2015 coalition negotiation.

Between now and polling day, every Tory policy will have this test applied to it. Anything that doesn’t have this promise attached will be considered up for discussion.

This worries those at the heart of government, both Tory and Liberal Democrat. They fret that it could lead to so many red lines as to make a second Tory-Lib Dem agreement impossible. This fear is acute because of the expectation that the Tory manifesto will emphasise the things that they would have done if the Liberal Democrats had not stopped them. We can expect further welfare reforms, a gutting of the green taxes that the Liberal Democrats are defending ahead of George Osborne’s autumn statement and a change in Britain’s relationship with the European Court of Human Rights.


It is the last of these that worries Nick Clegg’s circle most. One Lib Dem source says that his concern is that both leaders are being pushed to make such firm commitments on the ECHR that it will prove a stumbling block for any deal.

Even without this pressure, insiders worry about what Cameron and Clegg could discuss in another set of coalition negotiations. ‘Nick and Cameron have had every conversation there is to have about 500 times,’ as one Clegg confidant observes. ‘How do we keep having those conversations?’

Set against this is the glue that holds the coalition parties together, the economy. Both parties expect next week’s economic figures to show that the recovery is gathering speed and both want to take the opportunity to stick it to Labour. Ministers from both parties will be saying that this vindicates the government’s approach and that Labour was wrong to claim these polices would lead to higher unemployment.

This mutual desire to claim credit for the recovery is drawing the two sides closer. Senior Tories are starting to conclude that if they are going to claim credit for increasing the personal tax allowance to £10,000 — an idea that was in the Lib Dem, not the Tory, manifesto — they need to promise to take this idea further so that no one on the minimum wage pays income tax. Increasing the personal allowance to £12,500 is already Liberal Democrat policy. The Tories signing up to it would make the fiscal part of any future coalition that much easier to negotiate. It also reminds the Liberal Democrats which party is more likely to help them entrench their flagship policy. Those close to Clegg were much struck by a pre-conference missive from a trusted friend of Ed Miliband, who urged the Lib Dems not to support a rise in the threshold. Instead, Labour encouraged them to back a ‘more progressive’ expansion of universal childcare as a key part of any Lib-Lab coalition.

The importance of this Tory shift is that there is quite a lot of Lib-Lab overlap on tax. Both parties agree on a mansion tax, which Cameron resolutely opposes. Indeed, given how the Tories are using the threat of a mansion tax to raise money, it is hard to see how they can soften their position. (‘Think how much you’ll pay in mansion tax and then write us a cheque for half of it’ is one Tory fundraising chat-up line.) The Tories moving towards the Liberal Democrats on the income-tax threshold would go some way to offsetting their opposition to a mansion tax.

It would not be easy for Clegg to enter into another coalition with the Tories, given the hoops his party rules oblige him to jump through. Those who advise him calculate that it would have to include a big political reform offer — something like state funding of political parties — as well as Lib Dem policies on tax and education to be approved.

Those at the top of the Liberal Democrats might be busy thinking about their priorities for a second coalition, but some senior MPs argue that a deal with either main party carries the risk of extinction. Ten years of governing with the Tories could erode their identity. But if they join a Labour-led government, they would endanger their Tory-facing seats. Their nightmare scenario is losing to Labour in the cities and the North in 2015 and to the Tories in the South in 2020, reducing the party to rump status.

This hesitation on the Lib Dem backbenches won’t be enough to stop the other two parties being asked what their non-negotiable demands are. After five years of coalition, it won’t be credible to stonewall on this. Cameron and Miliband are going to have no choice but to fillet their manifestos.


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