A stock-take of Conservative and Liberal Democrat compromises

By Tim Montgomerie

Since the Coalition Agreement was signed, Cameron and Clegg have agreed a number of new policy positions, some involving significant trade-offs. Let's take a stock-take of all compromises.

COMPROMISES SETTLED IN FAVOUR OF THE LIBERAL DEMOCRATS

• Five Cabinet places and Liberal Democrat ministers in most departments.
• A referendum on the introduction of AV without a legitimacy threshold.
• A reformed House of Lords elected by PR. Although this was also a Tory manifesto promise it was not a first term priority. Use of proportional representation is also a LibDem win.
• No British Bill of Rights of the kind that might have stopped votes for prisoners.
• No repatriation of powers from the EU. Some of us have, for some time, doubted the determination of Cameron and Hague on this front but pressures of the Coalition have made Eurosceptic action even less likely.
• Suspension of all major family policy initiatives including long-grassing of the introduction of a tax allowance for marriage. There is provision in the Coalition Agreement for this tax allowance to be introduced on the back of LibDem MPs abstaining but I am doubtful that government time will be found for the vote. Overall, social conservatives are the big losers from the Coalition as I noted in last week's Times (£).
• A delay to Trident renewal until after the next General Election. This, says the PM, is justified on cost grounds but some Tory MPs suspect the influence of the Liberal Democrats.
• Greater local government involvement in healthcare provision.
• Greater use of community sentences, less use of prison. Although this policy is backed by Ken Clarke the Tory manifesto promised greater use of prison and probably wouldn't have happened if the Tory Right held the balance of parliamentary power.
• Higher rates of Capital Gains Tax.
• No reduction in inheritance tax although the fiscal situation might have necessitated this anyhow.
• Yesterday's referral of NewsCorp's takeover of BSkyB to OfCom (although it probably would have happened anyway).

Five other policy areas settled in the LibDems' favour will be applauded by most Conservatives:

• Lifting low-paid workers out of the income tax system. Overwhelming numbers of Tory activists welcome this policy.
• Greater emphasis on tackling tax-dodgers.
• Reform of the welfare system to 'make work pay'. Insiders say Clegg was decisive in helping IDS secure the nature and scale of welfare reform that was delivered, overcoming Treasury resistance.
• A universal pension of £140 (draft idea).
• The introduction of a Pupil Premium for disadvantaged children. Again this is something Michael Gove wanted but the Premium's size and extention into extra benefits for pre-school and pre-university reflects Liberal Democrat influence.

In addition certain policy options are probably closed off by the Coalition, including profit-making free schools and abolition of the 50p tax band.

COMPROMISES SETTLED IN FAVOUR OF THE CONSERVATIVES

• The Conservatives won the most important battle of all. The Liberal Democrats u-turned to support early deficit reduction and George Osborne's goal of eradication of the deficit by the end of the parliament. In the process the junior Coalition partner have swallowed politically unpalatable decisions on, for example, housing benefit reform, freezing the BBC licence fee and cuts to the arts. A majority of Tory members say they are willing to accept concessions to the Liberal Democrats on other issues if the economy is fixed.

Other significant Liberal Democrat concessions:

• Equal-sized seats, including a reduction in the number of MPs to 600.
• The introduction of a cap on economic immigration and the abandonment of the LibDem policy favouring an amnesty for illegal immigrants.
• Vince Cable's pledges on a mansion tax were abandoned.
• A large increase in tuition fees. The LibDems are, however, likely to secure a cap on fees and a more progressive repayment regime including a penalty for early repayment of student loans.
• A green light for nuclear power.

In last week's Evening Standard Anne McElvoy incorrectly suggested ringfencing of the international development budget was a victory for Clegg. It was a long-standing Tory policy commitment - as was protection of the NHS budget.

David Cameron's overall assessment is that Conservative voters will get 80% of the 2010 party manifesto.

What compromises have I missed? I'll update the list tomorrow.