Over the Rainbow

In the third of our three part series, we look at the possible programmes of government following #GE2015

What would a rainbow coalition of the left look like?

Spending and the economy

As discussed in What’s Left, Labour will have to do some serious negotiating with the left-wing parties if they don’t come out of the election with majority. There is clear common ground between the left-wing parties on a number of issues – house-building, fewer welfare cuts and abolition of the bedroom tax, a slower and more gradual approach to deficit reduction, and higher departmental and infrastructure spend.

However, a Labour minority government may struggle to get through any material savings, meaning Miliband’s ‘responsibility lock’ will be harder to maintain. This could be tricky if they need the support of the Liberal Democrats, who have made a big play for being Labour’s ‘brains’ on the deficit in any coalition – while interestingly making their own electoral demands for increased public sector spending on the NHS and education. However, there is enough wriggle room in both manifestos for this to be reconcilable.

The SNP has made clear their support would be based on a rejection of austerity measures, and although Ed Miliband has ruled out any deals it is unlikely that the SNP would vote down a Labour programme in its entirety as this could pave the way for another Conservative-led Government.

Europe

Labour has made a point of refusing to concede to the Conservative plan for an EU referendum and so we can expect that this would not take place under any left-wing coalition – the SNP is against pulling out of Europe and the Liberal Democrats are natural Europhiles.

Retail

Liberal Democrats have committed to the review of business rates but it is not a major point for either side so it remains to be seen whether it will survive the negotiations. Labour has committed to further relief for small businesses, which will be funded by maintaining corporation tax at 21 per cent. The Scottish National Party already has devolution over business rates and town centre regeneration. Increases to the National Minimum Wage are likely to be pushed for by all parties on the left.

The likelihood of staying in the EU (see above) may be the biggest positive for retailers.

Devolution

The constitutional question around the Barnett formula and greater devolution would become a policy issue with even bigger teeth should the nationalist parties make gains. The Plaid Cymru leader Leanne Wood has restated her claim that Wales should get an extra £1.2bn of UK Treasury funding to achieve parity with Scotland in recent weeks.

Education and Health

The Liberal Democrats have made it a red line that they would expect increases in education and health funding.

The Labour manifesto commitment to end the free schools programme is likely to be seen through as part of any agreement with other parties and Labour has promised that the money will be used to cap infant class sizes at 30 pupils or fewer.  It also heralds a return to an element of local education control by introducing new Directors of School Standards which will provide local oversight.

On health, it will be interesting to see what the Liberal Democrats would make of Andy Burnham’s pledge to repeal the Coalition’s Health & Social Care Act. However his language around integrating health and social care certainly has synergy with the Lib Dems’ focus on achieving parity for mental health within the NHS.

The spectre of a tuition fees cut would also be difficult for the Liberal Democrats to swallow given their history on the issue. However, they have proposed a review of higher education finance within the next Parliament to consider any necessary reforms which provides a window for negotiation.

Education and health are devolved and Nicola Sturgeon has indicated she is unlikely to intervene in policies which do not affect Scotland – though arguably large increases in the health and education budgets in England could be a point of contention if not matched by the Scottish budget.

Housing

All the parties have committed to increasing supply. The Liberal Democrats have pledged to build 300,000 homes a year, including 10 new Garden Cities in areas where homes are needed most. Labour will build 200,000 homes a year by 2020 and will leverage funding from George Osborne’s policy of Help to Buy ISAs to fund some of this. The SNP backs investment in a house-building target across the UK of 100,000 affordable homes a year.

The other left-wing parties could support Labour on other policies such as ‘use it or lose it’ rule for developers and private sector rents capped in line with inflation.

Defence

Defence could be a key area of disagreement – renewing Trident is a red line for the SNP.  This is a major reason why Ed Miliband has been clear that he would continue in opposition rather than do a deal with them. Less well covered is the fact that the Liberal Democrats also differ, with a proposal to end the policy of having at least one submarine armed with nuclear weapons at sea at all times. However, there is space for some degree of negotiation as Labour has said that technological developments might allow for a drop to three (rather than four) submarines while maintaining the continuous-at-sea policy.

Food and drink

Labour has committed to ending the badger cull and replacing the Agricultural Wages Board with a new taskforce to tackle low pay and protect conditions for agricultural workers. It will also expand the role of the Groceries Code Adjudicator, a policy which Plaid Cymru would welcome as they have committed to widening its role to include dairy farmers, a recommendation made by the Efra Select Committee in January. Labour has also committed to taking action on high strength, low cost alcohol and setting caps on the maximum amount of fat, salt and sugar in products marketed at children. The Lib Dems, Greens, Plaid Cymru and SNP all back minimum pricing and the SNP has already tabled legislation in Scotland setting a minimum unit price for alcohol of 50p.