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Director of Finance Online - Blogs - The Edge » Blog Archive » Cameron now faces two opposition parties: the Libs and Labour

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Richard Northedge takes on corporate finance

Cameron now faces two opposition parties: the Libs and Labour

When David Cameron and Nick Clegg publicly renew their vows you know it is because the UK coalition faces trouble. In the two years to the next general election, their parties will be as keen to display their differences as to promote their common interests.

From now on, the prime minister has two oppositions – the Liberal Democrats in his own cabinet as well as Labour. This will make governing difficult. Increasingly the Liberals will fail to vote with the Conservatives – and increasingly its MPs will side with Labour to vote against the government.

That will make Cameron reluctant to pursue bold policies. That can mean proposing more centrist objectives rather than extreme aspirations, but it will more likely mean directionless government. Think of John Major’s administration in the 1990s, cobbling together deals with backbenchers simply to survive in power for another day.

The current coalition was always a marriage of convenience – agreed with a five-year time limit. But in practice it will fall apart by its fourth year with the couple living together uncomfortably until the end unless the strain is so great that Clegg flounces out. During the last years before the agreement ends, the Liberals need to assert their independence so that they can fight the next election as a distinctly separate party.

The Libs – whether or not Clegg fights the next election as leader – may even cynically hope that it can again be kingmaker but next time be as willing to ally itself with Labour as with Cameron.

The run up to the election is going to be difficult for the government. More austerity measures are necessary, the main state-sector jobs cuts are yet to come, balancing the public finances has been delayed until after voting day, economic growth will turn negative – possibly even returning Britain to recession – and the UK will lose its AAA credit rating.

If the Libs oppose tough action aimed at improving that situation they may damage their own reputation. The Conservatives’ standing may be damaged too if it is unable to implement its policies. Those are their problems. But if Britain has to suffer two years of non-government, then we all lose.

An early election is unlikely – not least because Labour is ahead in the polls – but we risk treading water and wasting another two years if the two sides of the government are going to fight each other rather than fight to make Britain better.



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