Steve Richards: A hung Parliament may hang the Tories

Dialogue between some Labour MPs and a few Lib Dems is intense and serious

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The next election will be the first since the two contests in 1974 to be fought against the background of a frightening economic context. At the moment no party leader is sure of the path towards recovery or even precisely what form the recovery will take. As Gordon Brown has admitted, leaders here and elsewhere are in uncharted waters. Similarly in 1974 neither Harold Wilson nor Ted Heath had a clear idea what the consequences would be of the miners' strike and soaring inflation. They were in uncharted waters too.

In both the elections in 1974 the outcomes were unexpectedly close. The February election resulted in a hung parliament. The one that followed in October produced only a tiny majority for Labour, one that soon fell away. In effect, Labour ruled as a minority administration for more than five years, formally supported towards the end by the Liberals in the Lib-Lab pact.

I am still sceptical about the next election leading to a hung parliament. The close results in 1974 are the exception to the normal pattern. Nonetheless the arguments are starting to pile up in favour of an indecisive outcome. The Conservatives need to win a 1997 type swing in reverse to secure a majority. Currently they have fewer seats than Labour won under Michael Foot in 1983. The distribution of seats continues to favour Labour. The Liberal Democrats tend to perform well in the seats they already hold and will be hard for the Conservatives to remove.

The other day an expert in voting patterns told me to expect not only regional variations but variations within regions. The era of the uniform swing is over. He also suggested that the impact on voting at general elections of the devolved parliaments had not been fully thought through. To take one example Labour might do better at the general election in Scotland because by then there could be significant momentum away from the SNP. The anti-incumbent vote would be directed against the SNP, the rulers in the Scottish parliament.

But above all it is the economic crisis that makes me believe an outcome without clear resolution is possible. With David Cameron and George Osborne still playing student-like games, taking time last week to discuss whether it would be clever of them to make an "apology", it is not surprising they have yet to seal the deal with the electorate. Politically it will not get better than this for a main opposition – a long serving government that made competent economic management its main selling point afflicted by a deep recession.

Yet so far they have failed to rise to the challenge. Cameron's proposal yesterday to freeze the BBC licence fee was typical. The policy is a sensible one. The BBC still has layers of managers in ill-defined jobs and could cope with far fewer of them. But in the economic context the proposal is puny, suggesting that Cameron thinks in New Labour-like incremental terms when he leads in an era far removed from the mid 1990s.

At least the current opinion polls give Cameron some cause for optimism. Few, if any, Labour MPs expect to win next time. But a surprisingly large number still believe it is possible that they could form the biggest party in a hung parliament. This is where the Liberal Democrats not only become relevant in the future, but acquire relevance now. For perverse reasons senior Lib Dems never seemed to relish the prospects of a hung parliament, as if doing so would somehow challenge the purity of their uncompromising policy commitments, a purity of impotence.

But recently there has been a change of emphasis, a willingness to contemplate the possibility in public of working with other parties. At their recent spring conference, Vince Cable, said, perhaps with tongue in cheek, that he intends to prepare for various post-election contingencies by outlining possible scenarios on whiteboards, a technique he used when he was chief economist at Shell. Together with Chris Huhne, then a City analyst, they mapped out possible scenarios concerning political stability in Nigeria and the future of Norway's regulatory framework.

A hung parliament in Britain will not lend itself to such neat analysis. Political stability in Nigeria is much more straightforward. But at least they are talking about the possibility of sharing power.

For the first time in years the party leadership is genuinely "equidistant" between Labour and the Conservatives. Nick Clegg cannot see how he props up a Brown government, but he is no fan of Cameron's either. Copying the Tony Blair rule book, Cameron sought to form a relationship with Clegg early on. But Clegg was not interested in playing Paddy Ashdown to Cameron's Blair and the two of them have little contact.

What gives some senior Labour MPs hope is the continuing private interest being shown by senior Lib Dems in an arrangement with them after the election. One former cabinet minister, who is no fan of Brown's but who is convinced that the economic situation demands left of centre solutions, tells me that the dialogue between some Labour MPs and a few Lib Dem MPs is intense and serious.

The former minister has discovered recently a key factor in a hung parliament which I have cited in this column before. The leadership of the Lib Dems is committed to what is called a triple lock before entering any form of arrangement with another party. The leadership must get the support of its parliamentary party, the executive of the party and the membership. That is quite a lock. Lib Dem MPs are telling some of their Labour counterparts that there is no way their membership would support any arrangement with the Conservative party. Therefore the only conceivable option would be some kind of deal with Labour if it was the biggest party.

The Liberal Democrats' triple lock leads me to conclude that it is highly unlikely they will be able to formalise an arrangement with either of the two bigger parties. I suspect a hung parliament would produce a minority single party administration. But some of the private discussions taking place informally between MPs work on a significant assumption. If the Lib Dems were to make the leap it would be more likely with Labour and with both parties having to raise their game considerably.

s.richards@independent.co.uk

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