Explainer: what is a confidence-and-supply government?

Miliband might have to canvas some more after the election. Chris Radburn/PA

The Westminster political system is entering uncharted territory. It seems increasingly likely that neither the Conservatives or Labour will be in a position to form a majority government after the election on May 7. They may not even be able to form a working coalition with any single minor party.

In such a scenario, a minority government could be formed and kept in office through what is known as a confidence-and-supply agreement with one or more of the minor parties.

As the title suggests, a confidence-and-supply agreement has two distinct strands. By convention, in order to remain in office, a government must retain the confidence of the House of Commons. When a minor party signs a confidence-and-supply deal, they are agreeing to vote with the government or abstain on any motion of confidence or no confidence brought to the house.

The supply in the title refers to support on certain votes. In order to spend money governments have to pass money bills (most notably, the budget). A signatory to a confidence-and-supply deal agrees to support the government in the passage of these bills.

In exchange for confidence-and-supply support, a minor party would expect some influence over government policy, which is usually announced in a Queen’s speech at the opening of parliament. This may be a specific policy or simply evidence of influence on an existing policy. As with a full coalition, minor parties need to be wary in their negotiating strategy. Ask too little and be viewed by their supporters of selling themselves too cheaply. Demand too much and it may prevent a deal, destabilise the agreement and prove undeliverable.

The level of cross-party co-operation can vary in these deals but the minor party would remain officially part of the opposition and would sit on the opposition benches.

Has it worked in the past?

There has only ever been one formal confidence-and-supply agreement in the UK. Between 1977 and 1978 the Liberal party, under David Steel, entered into the “Lib-Lab pact” with Jim Callaghan’s Labour government.

Callaghan is the only British PM to preside over a confidence-and-supply government. PA

In exchange for their support, the Liberals were granted a number of minor concessions. Most notably an “understanding” that Labour MPs would be given a free vote on the electoral system to be used in the forthcoming European parliamentary elections. Steel had hoped this would result in the House of Commons supporting a proportional system. When this was not delivered, partly because more than 70 Labour MPs abstained, the pact was effectively over. The only substantive policy achieved by the Liberals was the implementation of a profit-sharing scheme for business. Understandably this was largely overlooked by the public and the Liberals’ electoral support nosedived.

The pact did provide political stability, though. It kept the Labour Party in power, during which time there was a modest economic recovery. It was supported by the City of London and, according to contemporary opinion polls, enjoyed significant public support.

The Liberals eventually broke off the pact in August 1978 and were left licking their wounds. Labour reverted to a minority government and negotiated agreements on a policy-by-policy basis with various minor parties until it finally lost a vote of confidence in March 1979.

Elsewhere, the SNP governed with a minority in Scotland between 2007 and 2010 and Labour currently presides over such an arrangement in Wales. In both cases deals are made on a policy-by-policy basis.

What might happen this time?

Whether a deal like this could work in 2015 depends very much on arithmetic and political sentiment. Current seat projections suggest both Labour and the Conservatives could be around 30 to 40 seats short of an overall majority. In practice, the magic figure – taking out Sinn Fein MPs and the Speaker – looks set to be 323.

David Cameron, as the incumbent, would be given first chance to form a government but Labour is in a stronger position to secure the confidence of the house, whether it is the largest party or not. It could feasibly rely on the support (or abstention) of the SDLP, the Greens, Plaid Cymru, Independents and even the DUP. This could account for ten to 15 votes. On top of that, Labour may even be able to find support from the SNP and the Liberal Democrats.

With so many parties, a lot could go wrong. PA

On this basis, Ed Miliband could, at least to begin with, form a minority government. In this case, he would be safe in the knowledge that the Conservatives, presumably in the midst of a leadership election or with a new and potentially more right-wing leader, would be unable to muster a rainbow coalition. The Conservatives would also be limited in their actions by the Fixed-Term Parliaments Act, making it more difficult to bring governments down and force a second general election.

The big problem

The trouble with this type of agreement, which generally involves several parties, is that it is inherently unstable. Trust between effective inter-party go-betweens would have to be quickly established. Meanwhile, the power of the Labour backbenchers to cause trouble should not be overlooked.

A more formal confidence-and-supply agreement may therefore be needed in 2015. Labour has explicitly ruled out a deal with the SNP but it may find it has no choice.

Confidence and supply for Labour

In this scenario, around 280-290 Labour MPs could combine with as many as 50 SNP MPs to ensure a working majority – and more importantly for day-to-day business, a substantial majority over the Conservatives.

Angus Robertson, leader of the SNP in Westminster, has specifically stated the party’s preference would be confidence and supply, with conditions set to include consultation on the Queen’s Speech and places on select committees. In practice the most significant discussions look set to be over the content of the Budget and the severity of spending cuts. SNP’s demands for full fiscal responsibility “as soon as possible” may also cause difficulties.

Potentially, Labour could promise action on this or a similar issue in order to bind the SNP to a deal, potentially for the majority of the lifetime of the parliament. As seen with the Lib-Lab pact, once policy objectives have been met, it can be difficult to retain the support of minor parties.

There are risks for the minor party in entering a confidence-and-supply agreement. This would not be a formal coalition so the SNP would have no automatic access to policy documents or the civil service, nor would it have any additional financial support. The parties might, as the Liberals did in 1977, produce a document outlining the rules of engagement or establish a consultative committee to administer the agreement.

Personal relationships matter in such an agreement. the Lib-Lab pact of the 1970s was formed around the special “uncle-nephew” rapport that developed between Callaghan and Steel. Whether Miliband can work effectively with Nicola Sturgeon, Alex Salmond or Angus Robertson is more open to question.