A minority Conservative government could struggle to implement David Cameron’s pledge to cut the number of MPs but should be able to introduce much of its manifesto through informal alliances with smaller parties, according to senior Tories and Liberal Democrats.
The Tories, while publicly refusing to contemplate anything short of a working majority, are privately preparing for potentially messy negotiations as the largest party in a hung parliament.
Ken Clarke said on Tuesday there was only “a slim change we can get an overall majority”. The shadow business secretary warned of the prospect of “trying to negotiate with the Scots about how much less the public spending cuts are going to be north of the border, or with the Liberals about various tedious kinds of electoral reform”.
“In the end you can always do a deal with an Ulsterman, but it’s not the way to run a modern sophisticated society,” Mr Clarke told the website politics.co.uk – a quote that could return to haunt his party leader, given the Tories’ preference for trying to cut a deal with the unionists and nationalists, ahead of the Lib Dems.
George Osborne would play a pivotal role in any talks with the Lib Dems or other smaller parties, according to Tory insiders. Owen Paterson and David Mundell, the shadow secretaries for Northern Ireland and Scotland, would also be involved in talks with the unionists and nationalists.
Any deal is likely to stop short of a formal coalition. Instead, the Westminster expectation remains an agreement by smaller parties to provide “confidence and supply” – backing motions of confidence and funding for government business – in return for policy concessions. Alternatively, the Tories could opt for a series of ad hoc coalitions to back specific bills.
The Tories believe a minority government could work. “If David’s got more than 300 [seats], he can broadly govern … that’s the credibility and practicality barrier,” one shadow minister said. But what programme could such an administration enact – and what concessions might it be forced to offer?
Constitutional reform: Proportional representation would be too high a price for Mr Cameron to pay for Lib Dem support, Tory insiders warn. The Conservative party would be wary of voting for any change to the first-past-the-post system. Constitutional reform is a prime candidate for extensive haggling in any Tory-Lib Dem deal. Mr Cameron’s plan to cut the number of MPs by 10 per cent could be an early victim of a hung parliament. One Tory MP said: “He’d be in trouble on this – would new MPs, who’ve just won their seats, vote to abolish them?”
Spending: The Tory plan for an independent Office of Budget Responsibility, auditing and overseeing the public finances, is close enough to the Lib Dem proposal for an all-party Council for Financial Stability to allow scope for a deal. The Lib Dems would not vote down a finance bill cutting spending next year.
Spending pledges for Northern Ireland, Scotland or Wales to sweeten a deal with the unionists and nationalists, could be politically embarrassing for Mr Cameron. But the party would live with modest giveaways to retain power.
Tax: The Lib Dems would be unlikely to vote down the Tory plans to partially reverse Labour’s planned national insurance increase. The third party could try to cut a deal to use the Tories’ planned £25,000 annual levy on non-doms to fund redistributive tax breaks, rather than an inheritance tax cut.
Banks: The Tories and Lib Dems want tougher action on bank remuneration, regulation and lending targets, but they differ over how to achieve these aims. Many of these differences should be easy to resolve. But the fate of the Tory plans to dismantle the tri-partite regulatory system is harder to call.
First Queen’s Speech: The Tories’ planned “repeal bill”, axing identity cards, and assorted quangos and red tape, should sail through a hung parliament. School reforms should win qualified Lib Dem backing; as a quid pro quo the third party would look for funding for its “pupil premium” to support disadvantaged children.
Trident: Mr Cameron’s support for an independent nuclear deterrent is non-negotiable. But as one Tory pointed out, Trident’s funding is under review – a deal on the timing of its replacement may be achievable.
Immigration: Tory plans for a cap on migrants from outside the European Union can probably be effected by tightening the points system, bypassing the prospect of a legislative clash.
Get alerts on UK politics & policy when a new story is published