April 19, 2010 11:36 pm

Policy options for Clegg the kingmaker

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Conservative officials on Monday joked that Nick Clegg’s “bubble has burst” after an opinion poll put the Liberal Democrats on “only” 30 points, behind David Cameron’s Tories on 33 and Labour 28.

But since the latest ICM/Guardian poll reflected a 10-point surge in Lib Dem support since Mr Clegg’s triumph in the first televised leaders’ debate, interest is building as to what role he might play in a hung parliament.

Mr Clegg has set out the ground rules: the party with the biggest mandate would have the “moral right” to form a government. He has not said whether he means the most votes or most seats.

The markets would also play a part. A hung parliament could result in market instability, putting pressure on Mr Clegg to come to an agreement quickly to allow the formation of a government able to tackle the £167bn deficit.

His party might lean instinctively to the left, but the Lib Dem leader says he could work with the Tories or Labour, although not necessarily in a formal coalition.

Some say he might choose to remain on the opposition benches and allow Gordon Brown or Mr Cameron to secure their first legislative programme and Budget in exchange for deals on policy.

But what are the possible areas of agreement and discord if the May 6 contest leaves Mr Clegg in the role of kingmaker?

Common ground with the Tories

Among the areas where Mr Clegg and Mr Cameron could work together are schools policy, including creating a “pupil premium” for disadvantaged children, and cutting public spending and reforming the banking system.

Both parties want to split the big banks to separate retail from investment operations, but in this case the Tories do want some kind of international agreement.

The parties both show an eagerness to tackle the deficit.

There could be common ground on restraining the public sector pay bill, paring back benefits and tax credits and cutting bureaucracy.

Dealbreakers with the Tories

Vince Cable, Lib Dem Treasury spokesman, disagrees with the Tory plan to start cutting the deficit this year. He also wants to cut the deficit by targeting spending, and could oppose any moves by a Tory chancellor to raise value added tax rates.

The Lib Dems are far more pro-European than the Tories but the most obvious problem in any deal is that Mr Cameron is firmly opposed to electoral reform – the key to Mr Clegg winning more seats at future elections.

Common ground with Labour

Mr Brown is dangling the promise of electoral reform in front of Mr Clegg and is committed to holding a referendum on the subject by October 2011.

The Lib Dems and Labour have a common view over when to cut spending. Mr Clegg also wants to change the tax system to make it more redistributive – a concession Labour might willingly offer.

Dealbreakers with Labour

The main problem for Mr Clegg would be the dangers of keeping a discredited Mr Brown in power, and to be seen to be supporting him as he swings the public spending axe.

Mr Cable attaches great importance to cutting the banks down to size, while Alistair Darling, the chancellor, insisted on Tuesday that “size is not the issue”, arguing that both big and small banks got into trouble in the credit crisis.

The second significant area of disagreement could be deficit reduction. The Lib Dems want to look at all aspects of spending for possible cuts; Mr Brown, however, wants to protect hospitals, schools, police and a range of middle-class benefits.


Campaign trail: Electoral arithmetic

chart: The Clegg bounce

The first nine days of the campaign made hardly any difference to public opinion about the three main parties. The televised leaders’ debate last Thursday, however, has boosted the Lib Dems more than 10 percentage points, at the expense of both Labour and the Conservatives.

Offspin: Election diary

Tories join Clegg fan club

Gordon Brown repeated the phrase “I agree with Nick” seven times in last week’s television debate. But has this cross-party admiration for the wisdom of Mr Clegg spread to the Tories?

Lord Mandelson, Labour’s campaign chief, says Mr Cameron’s election broadcast on Tuesday night contains seven phrases sounding “deliciously” like those previously used by Mr Clegg.

For example, Mr Cameron says that “our country also needs real energy and optimism”. Mr Clegg said in his acceptance speech as Lib Dem leader: “What I am interested in is projecting the message of optimism and energy.”

Not that Mr Brown is immune to plagiarism charges. He once gave a speech with phrases “borrowed” from Bill Clinton and Al Gore.

French torpedo ‘Big Society’

Proponents of Mr Cameron’s “Big Society” looked to the example of Dan Snow – historian son of broadcaster Peter Snow – who tried to organise a Dunkirk-style seaborne rescue of Brits in Calais, stranded by the no-fly order. Wasn’t this “Big Society” in action, with plucky citizens getting stuck in?

Alas, the venture has foundered at the hands of the French government, which blocked it on the grounds of “bad competition for the ferries”.

Campbell puts the boot in

Labour has produced a spoof news bulletin from 50 days into a Tory government, showing “savage” cuts, a diplomatic row with China and Anglo-German hostility, write George Parker and Jim Pickard. Reporting from the World Cup, sports reporter “Nick Boulton” – voiced by Alastair Campbell – says premier Cameron has been snubbed by chancellor Angela Merkel.

30-second catch-up

●The spotlight remained on Lib Dem leader Nick Clegg with a Guardian/ICM poll showing his party at 30 per cent – just 3 points behind the Tories and 2 ahead of Labour.

●David Cameron called Mr Clegg’s policy of a selective amnesty for illegal immigrants a “huge mistake”.

●Gordon Brown said Mr Clegg’s “honeymoon” would not last as voters thought twice about Lib Dem plans not to replace Trident.

●Mr Clegg, however, said the idea that a yellow vote would lead to a Labour government was a “tired old claim”.

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