Friday, 7 May 2010

Hannan: An entente with the Lib Dems

Guido has been proposing a Lib-Con pact for some time now, but Daniel Hannan has been dutifully toeing the party line throughout the election campaign, and is only now beginning to expound the virtues of such collaboration.

His primary concern, rightly, is for our economy:
While we’ve been snarled in our domestic quarrels, Greece has been falling to pieces. Unless we take immediate and drastic measures, we might find ourselves in the same position. Our deficit is projected to overtake Greece’s next year, and our economy has until now been propped up, at least in part, by the markets’ confidence that a new government would bring spending under control.
Is it possible to reach an accommodation with the Lib Dems based on fiscal tightening? I think so. The two parties are divided over timing, not principle. On the campaign trail, Nick Clegg claimed that deferring the cuts was a whizz-bang piece of Keynesian pump-priming. But he is privately aware that postponement will make the cuts more painful when they come – as the Greeks are now discovering. With polling day out of the way, Cleggie no longer has any reason to deny the truth.
Like Guido, Hannan also sees a common desire to roll back some of the worst features of New Labour's Big State, and to give power back to the people:
Both parties, meanwhile, want to scrap ID cards and reverse some of the more statist legislation passed by Labour in the guise of anti-terrorism measures. Both agree that our political system needs renewal. Both want recall mechanisms, popular initiative procedures, reform of the Upper House, fewer MPs, a shift in power from Whips to backbenchers and from executive to legislature. These things would have a far more tangible and benign impact on our political system than proportional representation.
Most libertarian-minded Conservatives, like Hannan, will not object to tax relief for the poor:
As for tax, I rather agree with the Lib Dems that, when cuts become possible, they should first be directed at low earners. My guess is that most of my fellow Conservatives sympathise: lifting the poor out of tax, as Lords Saatchi and Tebbit propose, would do more to incentivise work than any number of tweaks to the benefits system.
The key to cooperation here will be to counter the self-destructive Lib Dem instinct to "soak the rich" — to fund tax relief for the poor by increasing taxes on corporations and higher earners — which would have a devestating impact on jobs, employment, and aspiration. Instead, tax reduction should be funded by immediate and drastic action to reduce the size and scope of the public sector.

Hannan even sees a glimmer of hope on the EU:
On Europe, both parties say they want a referendum on future treaty changes. The difference is that the Lib Dems would treat a “No” vote as a vote against EU membership. Here, at least, the Lib Dem position is preferable to the Tory one. The trouble is that the party has fibbed before on this issue before (see here). Which is [why] we should aim for a binding agreement between the two parties on an In/Out referendum within the next 18 months, with front benchers allowed to campaign on either side.
However, he recognises that there will be activists and MPs on both sides who will object to Lib-Con collaboration:
None of this is to say that an agreement – let alone a full coalition – will be possible. The Lib Dems might refuse to do a deal that doesn’t include a particular preferred voting system, though I suspect that the electorate would punish them for such egotism. Or they might split into, as it were, Asquith and Lloyd George factions on the issue of whether to collaborate with the Tories. But Cameron is right at least to explore the options generously and open-mindedly. Our national debt rose by nearly a million pounds while you were reading this blog. We can’t afford much more of this.
I recommend the full article.

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