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The Paradox Of The Quad – Agreement About Policy But Disagreement About Politics. The Liberal Democrats Have Adopted A Strategy Of Leaking Its Proceedings For Electoral Gain. It Will Continue.

Last Updated: Friday, March 23rd, 2012

As the budget’s contents started to be leaked almost exactly two weeks before its presentation, I wrote on ConservativeHome that George Osborne was losing control of it, and wondered what he would do to get this back.  But I confess that after writing the article I had second thoughts.  After all, the Chancellor has the final word on his budget.  And however much of it he briefs out in advance, he usually saves up a big item for the end of his speech – the so-called “white rabbit”.  I later predicted that Osborne would haul one out of his hat with a flourish on Wednesday: given Monday’s bad news for motorists over coming road tolls, I suspected that it would be some boondoogle for drivers.

I was wrong about that specific prediction because I was right about the budget as a whole.  By mid-morning on Wednesday, there was no good news of substance left unleaked.  That this was so casts a fascinating light on the workings of “The Quad” – or, as you might call it, the Real Cabinet – and thus on the future relationship between the Conservatives and Liberal Democrats.  Once upon a time, the Cabinet was a real forum for strategic political discussion.  It can still be so when Governments have small majorities – the Cabinet was important under John Major – but the trend over the last 25 years has been for strong, long-serving Prime Ministers to by-pass it: think Thatcher and Blair.

To borrow a phrase from the latter, Coalition means that “the rules of the game have changed”.  David Cameron and Osborne were always likely to work as closely together in government as in opposition, and to take key decisions together with a tight group of trusted advisers.  Going in with the Liberal Democrats meant giving the same status to Nick Clegg.  That the second Liberal Democrat member of the quad is a relatively lowly figure in the party – Danny Alexander, rather than Vince Cable, who as an iconic figure for the party’s liberal left would have provided internal balance for Clegg, or (before his resignation) Chris Huhne – vividly illustrates the power and reach of the department in which the former serves alongside Osborne, the Treasury.

The post-Government diaries of any one of the four will be fascinating, and there are doubtless books to be written about the Quad.  But for the time being I will offer a single paradoxical observation in the wake of the budget.  On policy, relations between the Quad’s members can seldom have been better and on politics they can seldom have been worse.  Let me explain.  First, policy.  The disagreements within the Quad over the budget seem to have as much within the parties as between them – or, to be specific, between Cameron and Osborne.  For example, it’s evident that the Prime Minister had reservations about the Chancellor’s long-standing child benefit plan, and vetoed an Osborne-supported deal that would have seen the 50p rate cut further in exchange for a fully-fledged mansion tax.

By contrast, Clegg and Alexander seem to have been relatively relaxed about cutting the rate as long as taxes for top earners were hiked elsewhere.  This happened, and the rise in tax thresholds and the cut in the 50p rate will be part-funded by those taxes – the promised crackdown on avoidance and the introduction in effect of a “tycoon tax”.  As I wrote in the Financial Times earlier this week, it is now possible to glimpse the emergence of a Coalition tax philosophy to join the approach to Government borrowing (the structural deficit should be eliminated speedily) and quantitative easing (there should be a lot of it) – namely, further downwards pressure on income tax rates at the top while more poorer people are taken out of tax at the bottom, funded by welfare savings as well as wealth taxes.

The politics of the workings of the Quad, however, are as disharmonious as policy discussion is (mostly) happy.  Conservative Ministers were complaining yesterday that Clegg and Alexander were responsible for the leaking that left the Chancellor white rabbit-less.  Osborne, of course, is not above a little judicious pre-briefing himself, and those apparently angry Tory Ministers may have been playing a blame game.  None the less, the Chancellor would not have wanted to leave himself without a new announcement to help lead Thursday morning’s papers, and it is claimed that he was particularly exasperated by the appearance in the media of details about his stamp duty and “tycoon tax” measures.

Whoever was responsible, one conclusion is inescapable.  Since AV went down in last year’s referendum, the relationship between the two parties has changed.  The sunny days of the Cameron/Clegg rose garden have given way to a long winter of distrust.  It is significant the row over the NHS accelerated after the AV proposals went down.  But as well as a relationship of suspicion there is a race for ownership.  Authorship of the policy of taking more people out of tax is now fought over by the two parties, as that of the idea of council house sales was once claimed by different Tory politicians.  The Deputy Prime Minister has been making a big point of stressing its desirability since January, when we made a major speech on the subject, accompanied by a series of interviews.

The rush to brief out the budget’s implementation of the policy – like its hike in stamp duty and its anti-evasion measures – is thus part of this battle for ownership.  Clegg and this party want to prove to voters that they’re not the seven-stone weaklings of British politics, endlessly being bossed and bullied around by the Conservatives, but muscle-bound wonderkids, who are winning the battle to implement Liberal Democrat policies, rein in those troublesome Tories and civilise the Coalition.  Whether the Quad remains in its current form as 2015 approaches, we can expect the rush of leaks to turn into a torrent, as the two Coalition partners jostle for position.  No wonder the Chancellor was left with a weasel to pull out his budget hat rather than a rabbit – that tax hike on pensioners.

by Paul Goodman

 

HIGHLIGHTS OF THE WEEK FROM CONSERVATIVEHOME

Robert Halfon MP: It’s time for Conservatives to make friends with mainstream trade unionists.
Conservatives need to re-engage: they should not be afraid to praise the union movement or even encourage people to join unions. In fact, I think we should make joining the Conservative Party a little more like joining a union, charging 50p a month for them to join, for example. We need to show them we share similar values, and we value them. I want Conservatives to campaign in the union movement again, standing for election as officials, just like they did under Thatcher. This way we could oppose subsidies, funds to the Labour party and tougher strike laws, but do it standing shoulder-to-shoulder with millions of union members that agree. Read more: http://is.gd/jOqcyq

George Trefgarne: How did a Conservative Chancellor deliver 7% growth after the 1930s Depression?
“Perhaps the biggest prejudice one has to discard is that the architect of this recovery was a politician who has since become reviled for his role in appeasement: the then Chancellor, Neville Chamberlain. He bestrode the era like a colossus and his successful political and economic strategy led to two of the biggest ever Conservative landslides, in 1931 and 1935…Whatever his subsequent failings as a Prime Minister, Chamberlain was for six years a great reforming chancellor, perhaps as great as Gladstone or Nigel Lawson. He was also a skilful politician, who invented the Budget broadcast on radio and in the cinema, reduced the length of Budget speeches and even featured on the front page of Time magazine in America.” Read more: http://is.gd/TU1NVv

Louise Mensch MP: Cutting aid means fewer vaccines, more mothers giving birth in appalling conditions and risking progress in conflict-affected states
” When I listen to people online complaining about just 0.7% in aid, all I hear is “Am I my brother’s keeper?” It wasn’t an attractive slogan first time around.New analysis published today by ONE, shows just what an impact our aid will have on the poorest people in the world between now and 2015. Amazingly our decisions mean that 80 million children will be vaccinated over the next four years, saving 1.4 million lives. That’s 1.4 million mothers who won’t have to see their children die from a preventable disease, knowing that if she lived in a different village or earned just a bit more money from the produce she sold at market, her child could still be alive..” Read more: http://is.gd/dKhpKp

Tim Montgomerie: A fresh statement of ConservativeHome’s purpose
“Over the last few weeks you may have noticed that ConservativeHome has gone through a bit of an evolution? Positions I have taken on the NHS Bill, the taxation of wealth, devolution for England and working class candidates haven’t appealed to every reader. Some think this site only exists to represent the grassroots. Some think it should only ever be the authentic voice of true Conservatism (whatever that is). My focus has shifted somewhat. ConHome will continue to be the things I set out below but I see plotting a road to a majority at the next election as a central mission. On the Majority section of this website, from now until polling day, we’ll be looking at the kind of manifesto, machine and message that will help deliver a Conservative majority.” Read more: http://is.gd/OH0FAH

Tim Montgomerie: George Osborne is still eating far too much of the pie
“Strategically I can only agree with Paul Goodman. There has been far too little focus on the size of Britain’s bloated state. Cuts have been too timid. Two weeks ago ConservativeHome ran a five part series which identified tens of billions of pounds of extra cuts. Some of the cuts were much more politically realistic than others but if a fraction of them had been pursued the Chancellor would not have had to introduce so many job-threatening revenue measures over the last two years. The reality is that Britain was over-taxed when the Coalition came to office and is more heavily-taxed now. 38% of deficit reduction in this coming year comes from higher taxes but Britain doesn’t have a tax problem but a spending problem.” Read more: http://is.gd/fiUDR9

Andrew Lilico: Five things that mattered from the Budget
“This Budget embeds the most radical tax reforming aspect of the Coalition – the huge rise in the personal allowance and thus removal of millions from income tax…Connected with the rise in the personal allowance is the large rise in the numbers of higher-rate taxpayers…Planned spending cuts are getting deeper all the time…The OBR downgraded its estimate of the sustainable growth rate of the economy again…Oil prices are forecast to be much higher than the OBR previously thought…If I’m right and it happens slightly slower and then anything else goes wrong, unless there is very high inflation households will default on their mortgages, the banks will go bust, and the UK sovereign will go bust.” Read more: http://is.gd/JKiycn

Lord Ashcroft: Anti-NHS Bill candidates would boost the Conservative Party
“Interviewees were then told: “Some doctors opposed to the coalition government’s policies on the NHS have suggested they may put up candidates at the next election on a non-party, independent ticket of defending the NHS.” When we asked how they would vote in such a scenario, the NHS candidates came third, with 18%. This included 4% of those who would otherwise have voted Tory – but 15% of Liberal Democrats and fully one fifth of Labour voters. Labour’s five-point margin became a Conservative lead, of 33% to 30%. The Liberal Democrats fell to 7%. According to UK Polling Report’s ‘Swingometer’, (which should be taken with a considerable pinch of salt in this case, since we do not know how the NHS candidates’ votes would be distributed), the effect of Dr Peedell’s intervention would be to transform a comfortable outright Labour victory into a hung parliament with the Conservatives just four seats short of a majority.” Read more: http://is.gd/NfvJge

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