As our Coalition Government moves inexorably towards its end, what are the factors and events that will determine how and when the formal dissolution takes place? Speculation is starting to build, says Prof Colin Talbot, not least because of obvious ‘distancing’ tactics being adopted by both the partners to the Coalition.
We have 15 months to go before the General Election of May 2015. So, first, what are the foreseeable ‘milestone’ moments that might break the Government?
There are very few legislative challenges that are likely to cause a final separation. Indeed the legislative agenda seems to be almost grinding to halt. As the Election draws nearer there are less and less reasons for the Tories and Lib Dems to agree new legislation – but agreement not to pursue new legislative initiatives because they can’t agree them is hardly likely to cause a fatal breakdown.
The most important political event is the European (and local) elections in May of this year. Speculation is reaching fever pitch about UKIP’s prospects and whether they will come 1st (unlikely), second to Labour (more possible) or third after the Tories (most probable on current polling evidence). Only the first or second of these would cause panic in the Tory ranks, possibly sufficient to break up the Coalition. But that seems an unlikely, but possible, scenario.
The effect of a wipe out in the Euro elections on the Lib Dems is rather more unpredictable. Europe is part of their core belief system. Decimation in the EU elections would also bring out the fears of a more important decimation to come in the general Election. Pressure for them to exit earlier rather than later from Coalition would certainly increase, although it is unlikely to sway their leadership – yet.
There are three other possible ‘break points’ worth noting. George Osborne has two more Budgets (March 2014 and 2015) and one more Autumn Statement (sometime between Oct and Dec 2014) to deliver. The first of these – Budget 2014 – is unlikely to cause much of a problem as the spending parameters have already been set, and agreed by the Coalition partners, in Spending Review 2013.
The Autumn Statement 2014 – technically the “Pre Budget Report” – is a bit more tricky. It will be delivered with only about 6 months or so to go before the General Election and in a highly politicised environment. Chancellors – Gordon Brown, Alistair Darling and George Osborne – have increasingly used the Autumn Statement as a sort of “mini-Budget”, announcing significant tax and spending changes when it is supposed to be merely a statement about the broad state of public finances.
George Osborne is, it is generally agreed, much more of a politician than an economist – the temptation to use the Pre Budget Report to make a highly political statement will be very strong. And an element of that will certainly be a desire to draw dividing lines with the Lib Dems and placate the Tory heartlands.
But even a highly political Autumn Statement that alienated the Lib Dems would not necessarily cause an immediate breach, because there are usually no votes that could trigger a crisis following on from it. Even if Chancellor Osborne made a really provocative announcement – for example his desire to reduce the top rate of tax to 40% – it would probably have to wait to Budget 2015 to be enacted.
So we come to Budget 2015, delivered sometime in March and less than 10 weeks from the General Election. The Budget will cover tax and spend policies for the year April 2015 to March 2016. It will be the subject of a series of debates and votes in the House of Commons (the Lords have no say in these matters).
Can the Tories and Lib Dems really agree a tax and spend set of policies that close to the General Election? Won’t the desire to put clear blue/orange water between them be overwhelming by then?
It’s time for a small detour into the arcane innards of Parliamentary process. A myth has grown up and been sustained that a Government has a right to get its “finance and supply” motions through, or it’s an issue of confidence. The factual basis of this myth is the House of Commons Standing Order 48, that says only the Crown (i.e. the Government) can propose to spend public money. This was transmuted into the myth that any defeat for the Government on any Finance (tax) or Supply (spending) motion was an issue of “confidence”.
This was always nonsense – governments have been defeated on amendments to Finance or Supply about 20 times over the past hundred years without it triggering a ‘confidence’ crisis. Since 2011 the myth is a zombie – the Fixed Term Parliament Act defines precisely what a confidence motion is, and defeat on Finance or Supply isn’t a confidence issue.
Given this, and the proximity of the General Election so soon after Budget 2015, does anyone seriously think the Coalition will actually hold together to force through Budget 2015’s provisions?
Budget proposals that will almost certainly have been designed by George Osborne to give the Tories maximum advantage in the Election. Indeed it is quite possible – given that Budgets have to go through a whole process of negotiation before they are announced – that a serious rupture could occur before Budget 2015 even happens.
Danny Alexander – Chief Secretary to the Treasury and Osborne’s Lib Dem deputy – has recently said that a reduction of the top rate of tax to 40p will happen “over my dead body”. He may well find that is truer than he expected, come early 2015.
