Potential partners size up room for manoeuvre

ANALYSIS:The idea of a formal coalition is a divisive one for both the Lib Dems and the Conservatives

SO FAR much is unclear about the efforts to form a government in the United Kingdom, bar one essential point – Conservative leader David Cameron wants an administration that will last.

Facing into some of the toughest economic times for years, Cameron will tonight brief newly elected Conservative backbenchers in the House of Commons, though a deal with the Liberal Democrats is unlikely by then.

During an intensive weekend of talks, Cameron and Liberal Democrat leader Nick Clegg have attempted to gauge their room for manoeuvre with each other and with their own parties.

Cameron, it seems, may have more freedom than he first thought. The Conservatives deeply resent demands for electoral reform, particularly the grassroots; but MPs are now divided about the idea of a formal coalition with the third-largest party.

Last night, Cameron went to the House of Commons and made himself available for meetings with his backbenchers, both to sense the winds among his own and to counter accusations that he has run his leadership too tightly up to now.

Given that he is the man most likely to become prime minister, some in his own ranks will have to stifle their real feelings lest they damage their own hopes for preferment subsequently.

Clegg, meanwhile, is not going to get anything like the level of electoral reform he sought during the campaign from Cameron, if a deal is to be done. Indeed, there is no guarantee that Cameron will go much beyond his offer on Friday of a parliamentary inquiry.

Clegg’s ability to stand to the colours on this issue may weaken today if the financial markets, which are already in frenzy over the euro, react badly to the perceived instability in the UK.

The Liberal Democrats have a number of options in front of them.

Firstly, they could join a full coalition, receiving a number of cabinet posts and a commitment to a full-term parliament. In turn, they will have to be bound by collective responsibility.

The first two years of any such government would be brutal. Savage spending cuts will occur, while the differences between the parties on the European Union, taxation and defence would poison the environment.

If drastic government action worked, the danger for the Liberal Democrats is that the Conservatives would be the ones to get the credit in the longer-term from voters – if the cuts worked, and that is a big if.

The Liberal Democrats could limit their exposure by agreeing to the confidence and supply arrangements spoken about by Cameron on Friday, where they get a few minor posts in return for co-operation on a limited number of policy areas.

This would be enough for Cameron to introduce a Queen’s Speech on May 25th and a subsequent budget, but the Liberal Democrats, who would have to agree with the broad terms, would then be able subsequently to pick and choose on other issues.

Finally, the Liberal Democrats could stay out of ministerial positions entirely, but agree to vote for, or abstain on the emergency budget that has been promised by the Conservatives within 50 days of taking office.

Everything else would be up for grabs subsequently. It would keep the Liberal Democrats’ identity distinct, and maintain their ability to put pressure on the Conservatives at times of their choosing. Few would bet on such an alliance lasting.

The Liberal Democrats, too, are deeply divided about what to do next.

Party grandee Shirley Williams yesterday was far from alone in her belief that they let the Conservatives rule as a minority government, supporting them only where they wish to do so.

The fruits of any talks with the Conservatives will have to go before Liberal MPs and the party’s governing body; and it could have to be put to a vote of the party’s membership if those first two groups fail to agree in sufficient numbers.

Privately, Liberal Democrats made clear that the Conservatives’ plans to ease inheritance taxes would have to go, though it is instructive that senior Tories yesterday said that this was never more than an ambition over the course of a full parliament.

In addition, left-leaning Liberal Democrats issued their own “red lines” for the negotiations: no measures that increase the gap between rich and poor; no cuts in frontline services; no tightening of asylum laws and no watering down of the Human Rights Act.

However, Clegg is not without his own cards to play. Labour, desperate for power, will offer more to him at a moment’s notice; including the changes to the first-past-the-post system that Clegg has for so long desperately yearned.

Reflecting the work still to be done, and in an effort to slow down the frenzy, both Conservative MP William Hague and Liberal Democrat negotiator Danny Alexander said that the next round of talks would take place in 24 hours.

Leaving the meeting before 6pm, the two men separately emphasised that the main focus was on the efforts needed to deal with the UK’s overspending. Electoral reform has not disappeared, but neither is it the foremost item.

The current occupant of 10 Downing Street, Labour’s Gordon Brown, holds onto his desire to stay in office, proven once more by his decision to secure a meeting with Clegg in the Foreign Office yesterday – one held with Cameron’s knowledge.

The meeting has the salutary value for the Liberal Democrats of emphasising to the Conservatives that they have another place to go: even if it would probably need Gordon Brown’s departure for it to happen.

Following his return from Scotland yesterday, Brown stayed in conclave with senior colleagues, including Peter Mandelson and Labour deputy leader Harriet Harman, bar him leaving at one point through a back door for meetings elsewhere.

In the wake of some calls by low-ranking Labour MPs for him to stand down, the parliamentary Labour Party, now reduced in numbers by nearly 100 MPs, will meet in the Commons on Tuesday night.

The prospect of a full internal revolt may remain in the distance while there is any chance that Labour could be brought back into play, though the rumblings will undoubtedly get louder today.

Even if it agreed a deal with the Liberal Democrats, Labour would be still short of a majority in the Commons, unless it roped the SDLP, Plaid Cymru, Alliance MP Naomi Long and the Green leader Caroline Lucas.

Even then, it would get only to 323 seats – three shy of a majority in the existing make-up of the Commons; though, in reality, the deciding figure is lower because of the abstention by Sinn Féin MPs.

Given the bias of much of the British press, the charge that Brown is now “squatting” in No 10 is both predictable and entirely ignorant of the conventions that govern the handover of power in the United Kingdom. Under the unwritten constitution, Brown must stay in office. Negotiating coalitions is always difficult. Media frenzy, and biased frenzy at that, does not help. The UK may regret that business is done in such haste.