Time for a u-turn?

In the run-up to Britain’s historic election on May 6, many jittery commentators and politicians warned about the dangers of a “hung parliament” – an outcome where neither party has a clear parliamentary majority (see p.15 for our special report on infrastructure plans in the election’s aftermath).  

Hammond: private capital
for new roads, not

Such a result, they warned, could lead to untold hand-wringing, shady backroom deals, and outright instability as different parties struggled in vain to reconcile their policy differences. It was no small irony, many observers said, that the UK’s first coalition in 70 years conjoined two apparently unlikely bedfellows in the form of the Conservatives and the Liberal Democrats – parties that sometimes seemed to find it hard to agree policy approaches within their own ranks never mind with another party occupying a different place on the political spectrum.    

Many commentators have expressed surprise that, in these still-early days, the senior members of the coalition seem to be rubbing along together rather well (even if there may be some rumblings of discontent among grass-roots party activists).    

Nonetheless, through the bonhomie, it is possible to glimpse just how confusing coalition governments can get. “We would be open to delivering new road infrastructure with private capital and some form of tolling system,” said new transport secretary Philip Hammond, of the Conservatives.

However, “we draw a very clear distinction between the existing road network, which is publicly owned, and future extensions. We have ruled out a national road pricing scheme, which makes the privatisation of the [existing] road network a non-starter,” he added.

All sounded pretty clear. And then along came these comments: “I thought the principle was right. I think the principle in that report, which is using assets more creatively, is something we have to look at across government,” said business secretary Vince Cable, of the Liberal Democrats.

Cable: potential
to release
income from
state assets

The report Cable referred to is a pre-election proposal from investment bank NM Rothschild urging the government to privatise Britain’s road network – a plan that could net the UK some £100 billion (€116 billion; $144 billion). His comments do not date back to the pre-election period – they were made in a newspaper interview on May 23, roughly one week after Hammond had put his thoughts on record.

“There is no ideological opposition to asset sales,” Cable continued. “If we can get good value for money for something, then we will look at it. There is undoubtedly potential for releasing an income stream from government assets. There are no inhibitions; we want value for money and we want income,” he added.

So will the apparent differences become problematic? As is the way with coalitions, perhaps there’s still time for someone to do a u-turn.