Where next for the coalition?

Yesterday’s announcements by Nick Clegg that Lords reform plans were being dropped in the face of Conservative opposition, and that the Lib Dems would veto the Tories’ boundary changes in return, has triggered another bout of speculation about whether the coalition can survive till 2015, and what can be done to avoid collapse. One clear lesson is that it’s vital to get the terms of the initial coalition agreement right. Back in May 2010 there was a feeling that goodwill and trust would enable the coalition to resolve differences as they came up, and the precise wording of the agreement was not seen as the vital issue. Today, however, a debate is raging about who is breaching which clause of a document now described as a “contract”. Tories claim they were not bound to support the Lords reform legislation, since the coalition agreement committed only “to establish a committee to bring forward proposals” on reform. Lib Dems retort that their revenge is equally within the letter (if not spirit) of the coalition deal, since they fulfilled their promise to back the boundary reform legislation but that there was no explicit commitment to implement this by 2015. In any future round of coalition negotiations, those involved should look back to this period (as well as to previous policy debacles such as NHS reform) and seek to nail down precisely what each side is committing to do and by when, if necessarily taking a few weeks to do the deal (as in many other countries). So much for a hypothetical next time, but where does the current government go from here? In many ways the easiest path for the Coalition would be to enter a period of outright ‘tit-for-tatism’, where the two parties focus on blocking each other’s initiatives rather than seeking common ground. The likely result of this would be policy deadlock – dangerous at a time of pressing economic and social ills, and politically foolhardy too, since voters are unlikely to reward either part of a dysfunctional administration. To their credit, the PM and DPM appear determined to avoid this route – but whether their restless parties (and Conservative backbench MPs in particular) will follow them is less certain. The leaders’ plan appears to be to walk briskly away from the smouldering wreckage of their once-proclaimed political reform agenda, and to concentrate instead on the areas where they continue to agree – on public service reform and fiscal consolidation. The Institute for Government recently recommended that the Coalition should negotiate a renewed programme for government for the second half of the term. Arguably the case in favour has just been strengthened. To avoid drift and conflict, the government needs a clear statement of shared purpose for the next two years, with a clear sense of policy priorities and a timeframe for implementation. As part of this process, the two parties should reflect frankly on the government agenda as a whole and be honest about what is not going to be delivered this side of an election – due to lack of time, money or agreement. Are we really going to see a British Bill of Rights, for instance? Are the parties genuinely close enough to consensus on party funding reform? Are tax cuts for married couples still on the cards? Is there going to be a final decision on renewal of Trident? Are further welfare cuts politically palatable? How far is the coalition realistically going to go on radical reregulation of financial services? What about long-term energy strategy? As we have said, coalition government is a game of two halves and the next half will be less predictable, so better to be clear with the public now where progress is possible so that each party can start to set out its own stall for the next election while still working together on the areas that can't wait.