Wednesday 23 June 2010

Tory 'big beasts' show that Coalition Agreeement not sacrosanct

Paul Goodman on ConservativeHome has a significant piece on How Conservative backbenchers won the battle on the Capital Gains Tax rate.

Because of the scale of Tory backbench advocacy, the debate over the last few days had become where the compromise would be struck. As Goodman reports, the Tory right sees containing the increase to 28% as a job well done.

The significance surely goes beyond the merits of the CGT issue itself. The "big beasts" on the Tory backbenches have already shown - after little more than a month of government - that even commitments in the Coalition Agreement are susceptible to backbench pressure.

As Next Left noted, as this debate began, in looking at the competitive politics of coalition rebellion

Presumably the central organising principle of the Coalition government must be that the two frontbenches will make every effort to protect significant and politically sensitive commitments hammered out in the Coalition Agreement itself against pressure from their backbench MPs.

But perhaps not. There have been earlier retreats - notably on rape anonymity - but on that issue both parties tacitly acknowledge that they misjudged the issue.

This was the first time that there was a more politically salient and contentious clash over something set down in the deal. It seems very significant that the Coalition Agreeement did not hold without very significant concessions to the right.

Recall how Vince Cable seemed confident of the outcome as the first protests were raised, as he said: ""It's very important that we have wealth taxed in the same way as income ... It's not actually an argument between the coalition partners, as I understand it, it's an argument between a few Conservative backbenchers and others", while Chris Huhne warned that the parties could not pick and choose without the Coalition deal unravelling:

“One of the things people might say is: I don’t like that. So they pull at that little piece of string and you find that all the rest of the woolly jumper is unravelling,” he said. “You have to be very, very careful. If you move something, everything else changes.”

Yet the LibDem frontbench seems to have been outmanouvered by the Tory backbench, smartly aligned to its media allies.

It was always likely that the Coalition Agreement itself would mark the point of maximum Liberal Democrat influence within the Coalition.

They were able to get the inheritance tax policy ditched, though trading in their mansion tax, and (quietly) to scupper the Tory policy on a referendum lock in return for allowing the Tories to enjoy saying there would be no preparations to join the euro! They had to swallow major marriage tax break, nuclear power and university funding concesssions, sometimes with symbolic abstentions to let the Tory policy pass under formal protest.

It will be much harder for the LibDems to exert as significant a counterweight to the Conservatives as new decisions emerge, as they could when the question was whether the government would be formed or not. And they now have a significant self-interest in the success of the joint enterprise, especially as most believe the junior partner would suffer most if it broke up.

The successful Tory rebellion on CGT could see some LibDems consider making at least a symbolic protest over a high-profile issue - most obviously university funding.

But it is a dangerous road to go down. The Conservative backbenches might then threaten the delicate concordat over the voting reform referendum.

So perhaps the LibDems will mainly be looking for assurances from their Coalition colleagues that the next rebellion from the Tory right will be faced down.

But have the 'big beasts' been emboldened by their success?

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