Continuity Coalition

In the first of a three-part series, we look at the possible programmes of government following #GE2015

Which policies would define The Coalition 2.0?

While the Lib Dems seem keen to distance themselves from the prospect, with Danny Alexander leaking ‘secret’ plans to cut welfare and the party structures set against it, there is still a chance of the election resulting in a repeat of the Coalition.

In fact, in the flurry of endorsements that came out last week, the FT stated they would like to see that exact result – Cameron as PM as part of a Tory/Lib Dem Coalition.

So what would their programme of government look like? If it were to pass, it is likely that Lib Dems would be more assertive this time around and they are in the process of releasing their ‘red lines’ – the policies that would define any coalition agreement for them.

Deficit reduction/economy

The Lib Dems have been working hard to frame themselves as the choice for a stronger economy and a fairer society. While they are committed to balancing the books, they will see their role to put the brakes on Tory exuberance to shrink the state. The second of their announced red lines is a pledge to increase the personal tax allowance to £12,500 by the end of the parliament, which will need to be balanced with a further red line pledge to increase public sector pay.

Their core economic commitment is a ‘stability budget’ in the first 60 days to set out how a government will balance the books and increase investment in public services – a measure you can see appealing to George Osborne’s sense of political theatre.

Retail

The Coalition decided to postpone this year’s planned business rates revaluation until 2017, but it is unlikely that this subject would go untouched until then. The issue is causing too many problems in too many areas of the country.

The Conservatives have pledged a review to “help high street businesses that are “striving and grafting and trying to do their best”. It is likely that some form of extending rates relief would be the result ahead of a revaluation, a messy subject that will deliver winners and losers.

Long-term, business rate reform could become the signature policy of Coalition 2.0. Danny Alexander kicked off a review of the entire system as one of his last acts as Chief Secretary to the Treasury. It is due to report back by the Budget of 2016. If agreement can be reached, reforming the 30 year-old system would be a significant achievement.

Education

The Lib Dems signalled that their first red line was about education – a pledge to raise education funding in England from £49bn to £55.3bn over the next Parliament. This goes further than their manifesto, which we have previously flagged seemed to signal their ability to work with either main party, but it does build on their ‘cradle to college’ pledge. Fortunately it chimes with the Conservative’s manifesto.

But in terms of the major education reforms – from free schools to tuition fees – these would remain the same.

Europe

Cameron has of course committed to an in/out referendum on Europe in 2017. This seemed at odds with the Lib Dem position but they appear to be boxing clever here and refused to rule it out, signalling instead several conditions, including that EU nationals living in the UK can also vote in the referendum.

Having learned the lessons of AV plus, they will also look to influence both the timing and the question asked and extract a big price – rumoured to be proportional representation in local government elections (which would help both parties in metropolitan areas).

Housing

Both parties want to build more houses, although only the Lib Dems have put much meat on the bones. Their pledge to build garden cities is the sort of thing Conservative leaders can get behind. The Conservatives flagship extension of the right to buy is unlikely to survive coalition negotiations as the pay off is simply too small.

Both have small-scale reforms to the planning system in their manifestos, but nothing as sweeping as the National Planning Policy Framework. Both the Conservative “right to build”, requiring councils to allocate land to locals to build a home and the Lib Dem “community right of appeal” for when planning decisions go against the approved local plan, could work together as a package.

NHS/health

Both parties have pledged to provide an extra £8 billion for the NHS.
Neither have threatened significant reforms to health, keenly aware of the damage they risk to their reputations by doing so.

Food/drink

During the five years of Coalition 1.0 Defra was controlled by both the Conservatives and Liberal Democrats. Despite the changes, the department managed to maintain a consistent strategy, highlighting that food is an area where there is a major overlap between the two parties.

Both have signalled support for the role of the Groceries Code Adjudicator but neither has indicated they are compelled to enhance the office’s remit. The South-West of England, where dairy and lamb production is strong, is a traditional scrapping ground between the Liberal Democrats and the Conservatives. It is perhaps surprising therefore, that neither party has sought to make hay by committing to steps take significant steps to protect farmers from deflation of the price of food.

Defence

The big bone of contention here is a like for like replacement of Trident, which the Lib Dems would like to dilute – although their position is clearly not as entrenched as the SNP. It is unlikely to feature as a core element of their programme for government.

Politics

Of course, the core element of any coalition is the people at the centre looking to make it work. With Nick Clegg now benefiting from Tory support and looking increasingly safe, the coalition architect most at risk of losing their seat is Danny Alexander. Without his involvement in coalition negotiations, the Lib Dems are likely to pull slightly more left in their negotiations, particularly keen to avoid the pitfalls they faced in the first time around.

Read our second piece in this series: Right to Rule?