Things fall apart

David Cameron and Nick Clegg

Could David Cameron opt to go it alone with a blue-collar, populist agenda, asks Anthony Painter

Assuming that the boundary review proposals do not now become law, David Cameron has a big strategic headache. Following defeat of proposals to reform the House of Lords, the prime minister aggressively confronted one of the key organisers of the rebellion, Jesse Norman. In the light of Nick Clegg’s U-turn on supporting the boundary review, we now know why. The changes were reliant on the safe passage of reform of the second chamber. That night, Conservative chances of a majority became even more remote. The question is what, if anything, Cameron can now do within the context of coalition to build a majority in 2015.

The task was already incredibly difficult. Very few governments build support between one election and the next. Disillusion gradually takes its toll. YouGov’s Anthony Wells calculates that on the new boundaries the Conservatives would have required a lead of 7.4 per cent to secure a majority compared to 11 per cent on the old boundaries. That rebellion in July was a disaster for the Conservatives – little wonder that Norman got a tongue-lashing.

Beyond the basic electoral arithmetic, the decision of Tory backbenchers to rebel and Clegg to refuse to support the boundary review has two further consequences. First, Tory backbenchers will now continue to behave very badly. The lesson they will take from this is that they can get what they want through rebellion. If that riles Clegg – or Cameron for that matter – then so be it, they are not that keen on the coalition anyway. This weakens the prime minister’s authority. Second, this changes the nature of the coalition. It is no longer an experiment in pursuing a common purpose – the coalition agreement. It is now an almighty horse-trade with winners and losers. The losers are quite willing to let off steam in public.

This means that there are two antagonisms within coalition politics as it moves away from its cooperative and productive stage (which had been unravelling slowly but surely after Cameron’s conduct in the AV referendum campaign). One is a government versus backbench antagonism while the other is an intra-coalition antagonism. Some would argue that all governments face such tensions, and they have a point. The degree and nature of these tensions is of a whole different order, however. It is a race against time to see what comes first – the 2015 election or the coalition becoming unsustainable as a formal arrangement. Whatever happens, the dynamic is now one of destructive rather than creative tension.

Senior Liberal Democrats and Conservatives plead a common cause in ‘dealing with the economic situation’. Given their self-evident failures, it can only be a matter of time before this is jeopardised too. Essentially, in terms of constructive coalition government, the Conservatives and Liberal Democrats have blown it. So what happens next?

There are the unforeseens, of course. It might be a eurozone situation and summit. It might be Tory backbenchers using their newfound strength to push for a renegotiation of or referendum on European Union membership with the Labour party happy to take tactical advantage (remember ratification of the Maastricht Treaty and Labour exposing Tory divisions in parliament over and over again under John Major?). All of these situations will be beyond Cameron’s control. One would expect a more assiduous cultivation of his backbench colleagues over the coming months.

Let’s assume he manages to avoid one of these moments becoming fatal. The prime minister still has to navigate three budgets and, in all probability, a spending review before 2015. There will be a cosmetic coalition relaunch in the autumn as coalition agreement 2.0 is put together. Expect it to be an anodyne affair. The explosive moments centre around the economy and fiscal policy. The prospect of another budget process like the last one, conducted mainly in public, and a different type of arrangement with the Liberal Democrats becomes more tempting. Such an arrangement would involve the Conservatives becoming a minority administration with their former partners agreeing to a ‘confidence and supply’ arrangement on the basis that it would not be in their interests to face the electorate until the very last possible moment in the hope that something might turn up. That might quell the Tory backbenches for a time.

By far the bigger challenge is the spending review. The current review period lasts until 2014-15. The overall fiscal direction was established in the 2012 budget for the period 2015-16 and 2016-17. Theoretically, a pre-election spending review could be avoided through a one-year bridge or going beyond the period in the 2015 budget. That could be a missed political opportunity for Cameron and George Osborne, however. The chancellor has laid down the gauntlet. Without an additional £10.5bn per year saving in annual managed expenditure – welfare, in reality – by 2017, departmental cuts will have to be even greater from 2015-17 than they were in 2010-15. It is a potential trap for Labour and the Liberal Democrats.

As recent research from Michael Ashcroft has shown, the best and only way for the Conservatives to have any chance of a majority is to recover their reputation for economic and governing competence. A spending review in advance of the general election (in November 2014, say) that resolved the issue of the £10.5bn cuts is a very difficult agreement for the Conservatives and the Liberal Democrats to come to.

Back in June, Cameron floated ideas such as limiting housing benefit for under-25s, limiting child benefit for those with more than three children and gradually making benefits less generous through minimal uprating. The calculation that the Conservatives have made is that this has populist appeal. It would make sense for the Liberal Democrats to be removed from government, voluntarily or not, prior to the spending review for this course to be pursued.

The political advantage that the Conservatives see here is that Labour and the Liberal Democrats would have either to agree to match the plans, say that they would fail to meet the Tories’ fiscal consolidation, or say what they would cut instead of welfare. The notion that Labour can just avoid this challenge without taking a political hit is a fanciful one and the same goes for the Liberal Democrats.

This says something about where the Conservatives under Cameron are heading. None of this is about demonstrating economic and governing competence, things which Ashcroft has identified as priorities. Perhaps they have given up on being in control of these factors and instead it is about tactical manoeuvring and blue-collar populism. There is an even bigger point here. This course marks the end of the project that Cameron embarked upon in 2005 to modernise the Conservative party. He is retreating to the same sort of strategy pursued by Iain Duncan Smith, William Hague and Michael Howard. It resembles the agenda he drafted for the 2005 Conservative manifesto. Combined with the fear politics of 1992, this will be a nasty campaign from Cameron – so much for the optimist.

The electoral headwinds are strong, the economy is weak, the coalition is pulling apart, and the backbenches are vengeful and rebellious. Cameron’s room for manoeuvre is constrained. A Conservative majority in 2015 currently seems unlikely. That does not mean that it is in the bag for Labour – far from it. However, the combined failures of Cameron and Clegg have given Ed Miliband an opening. Progressive, liberal Conservatism is now just words – perhaps it always was. We are back to the traditional Conservative will to power. Cameron might want to remember that his parliamentary colleagues share the same carnivorous instinct.

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Anthony Painter is a contributing editor to Progress

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Photo: Cabinet Office

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  • Alan Giles

    I think it is safe to bet that Labour will be in Government after the next election. A Labour majority is not in the bag but a Labour plurality of seats might be. Gosh, I love Progress. If Tony Blair was around we’d win four, five, maybe even six or seven terms in office without a doubt. Keep Brother Blair’s Blairite flame burning.

  • John Slinger

    I would add to the ‘unforseens’ that could topple the Government something from the international sphere, such as an attack by the US and/or Israel on Iran’s nuclear programme. Cameron would come under pressure immediately after such an attack to back the US. He may even wish to provide British assets such as Diego Garcia. The ensuing Iranian response may plunge the region into instability which in turn might precipitate the need for further British involvement. The Lib Dems will in all likelihood oppose any of this. At this point, Cameron may feel that being statesmanlike is more important than holding together the coalition. @johnslinger

  • David Spector

    “Labour will be in government after the next election” – With whom may I ask ? Tartan Tories and/or Tory toy-boys? Both are too vile to contemplate.