With this month’s upcoming Budget speech, the coalition between the Conservatives and the Liberal Democrats has rarely looked more vulnerable.
The two parties are struggling to find common ground over a range of issues, says Elizabeth Rigby in the Financial Times, from deputy prime minister Nick Clegg’s desire for a “tycoon tax” to “whether or not to reduce pension tax relief for high earners”. Senior Lib Dem David Laws has warned that infighting risks “a policy paralysis that would undermine the coalition, sour relations between the parties and be very bad for Britain”.
Vince Cable should shoulder a major part of the blame, says The Daily Telegraph. “A dedicated advocate of state intervention,” he “would like to tax people more highly.” He backs a mansion tax, and for all this talk of loosening credit conditions, “does not have an affinity with the owners of small businesses” – he has opposed attempts to reduce regulation on small companies. Since both these stances put him at odds with Conservatives, “what is he doing as Business Secretary in a Conservative-led administration?”
Both sides are at fault, says Philip Stephens in the FT. Cutting the top rate of income tax, as many Conservatives want, would be unfair. But “there is a case for a shift in the tax burden from enterprise to accumulated wealth… Cable’s mansion tax doesn’t do it”.
Nor does the “childishly-named tycoon tax”. The fact is, says Stephens, that “the two parties have run out of things on which they can agree”. That doesn’t mean the coalition will crumble. “Loveless marriages often endure. Things, though, are not going to get easier. As for a coalition vision of Britain’s future, forget it.”
But it’s not just about the Budget, says Jackie Ashley in The Guardian. The NHS reforms are deeply unpopular with Lib Dem party members, while MPs and peers may yet rebel.
However, the most important issue may be reform in the Lords. Conservative opposition to the move is likely to stop any changes. Yet failure to get an elected second chamber means that the Lib Dems “will likely leave office electorally shattered and with nothing to show for it in terms of their longer-term future”.
It’s all panning out as former Lib Dem MP Mark Oaten predicted, says Peter Oborne in The Daily Telegraph. Oaten, the author of a book analysing coalition governments through history, notes that coalitions are “always disastrous for the smaller party” and that “a danger moment comes approximately two years” into government, when the coalition agreement runs out and parties fail in their attempts to renew it.
“Just under two years have passed… and nothing since suggests that Mr Oaten’s analysis was wrong.” The coalition seems likely “to break apart by 2013 at the latest”. Lords’ reform may indeed be “the final battlefield” upon which it will fail.
That is a great shame. Although the coalition disagrees on a great many key issues, vital steps have been taken towards tackling the deficit, and essential reforms made to welfare and education that “will soon be irreversible”. “Plenty of mistakes have been made since 2010, but this has nevertheless been the best government for a generation, led by men and women for the most part of decency and goodwill.”