December 7, 2014 by Paul Goldsmith
Bearing in mind their financial need to get things right, it is interesting to see that there isn’t a single bookmaker who believes that there is a likelier result than a hung Parliament next May. Although the vagaries of our election system makes a Labour majority more likely, the odds on that are still around 7/2, which means there is about a 28% chance of that happening. Given that the likelihood is that there will be a coalition, we need to start passing all policy announcements, particularly by the Conservative and Labour Party, through a ‘Coalition lens’. That is, we should view all policies in terms of whether they make a coalition with another party more palatable to that other party, and what policies would be jettisoned in the coalition negotiations.
Coalitions have many advantages for democracy. They normally represent over 50% of the popular vote when you add together the vote share of the parties involved and they encourage parties to work together more for the national interest and be less adversarial. But their disadvantages are clearer to see. First of all, the policies visited on the electorate are those that the parties agree on during behind closed door negotiations. Second of all, it gives minor parties a disproportionate influence on government policy. Thirdly, and most importantly for the issue I would like to explore, they can cause parties to float unrealistic policies that appeal to populism, in the knowledge that they can abandon them in the name of coalition ‘compromise’.
Let me give you a good example from the past two months of Conservative party policies. They want the electorate to vote for them as they can apparently be trusted more with the economy than Labour and the Lib Dems, in particular for bringing the deficit down. Yet they have announced billions of pounds of tax cuts, including the raising of the higher rate of tax threshold to £50,000, the lifting of the personal income threshold (£7bn cost) plus the ending of air passenger duty, as well as changes to stamp duty that will cost almost £1 billion. There has been an end of the tax on Isas passed between spouses on death. David Cameron has mentioned looking at cutting back inheritance tax too). The cuts that they are then refusing to talk about and explain (interesting how much publicity and fame George Osborne wants to court without being prepared to deal with any proper scrutiny) would have to be so large to meet their stated deficit target that they would have to cut the size of the state back to pre- welfare state and NHS levels. It all seems a bit extreme.
That’s because it is. It’s extreme for a reason. The aim is to use populist policies that don’t add up economically in order to win as many seats as possible to make the party as strong as possible in any coalition negotiations IN THE FULL KNOWLEDGE that they can jettison some of these during those negotiations. The Conservatives may need the Lib Dems, and if they do you can bet the Lib Dems are going to make them rethink some of those tax and spending cuts. But some policies , particularly on immigration, are there with a possible role for UKIP in mind, which again can be abandoned if convenient during coalition negotiations.
It won’t just be the Conservatives up to this. Every party will be. Labour will continue to talk about policies like their economically devastating energy price freeze, rise back to 50% income tax, mansion tax and possibly the introduction of the Financial Transactions Tax (FTT) knowing that those will help in negotiations with the SNP for a confidence and supply agreement if not for coalition. They can abandon some of them if in negotiations with the Lib Dems. They might oppose the abolition of air passenger duty as well, given the possibility the Greens may be involved in negotiations too.
UKIP, meanwhile, will keep some of their zanier policies to pick up their share of the populist vote in the knowledge that they can be abandoned should they ever be faced with the responsibility, compromise and accountability of government.
Accountability, there’s a word. In the new UK political world of coalitions it is accountability that will disappear. The electorate will have to get used to the fact that manifestos are not programmes for government any more, but opening negotiation positions. That’s the coalition lens we need to look through from now on.