Why are we talking about confidence and supply?

According to all major forecasters, neither the Conservatives nor Labour will win an outright majority in May's general election. Even the addition of the—likely much reduced—Lib Dem contingent of MPs probably won’t be enough to avoid a hung parliament. Between the extremes of coalition (too inflexible) and a minority government (too unpredictable) lies the goldilocks solution—the “confidence and supply” agreement. Smaller parties from Ukip to the Greens have said they are interested in forming such pacts with their larger rivals. “Confidence” refers to the supporting party providing backing on votes of no confidence, while the “supply” component refers to voting through the budget. There’s potential here for deals between the smaller parties too—the Greens, SNP and Plaid Cymru have already agreed to prop up a minority Labour government if it agrees to scrap Trident.

How is it different from coalition?

Confidence and supply agreements allow parties to preserve their identity and enjoy greater flexibility. Parties under a coalition theoretically agree to keep arguments behind closed doors and present a unified front as a government. There have been revolts in the coalition—in 2011, Clegg announced he would instruct his MPs to vote against a bill on House of Commons reform as a result of the Conservatives scrapping his proposed changes to the House of Lords, for example. The supporting party in a confidence and supply agreement retains the ability to be as disagreeable as it wishes (all in the name of retaining party integrity, of course.)  Confidence and Supply agreements have several subspecies. The closest to coalition is the “enhanced” version, modelled by New Zealand, which provides ministerial posts for the supporting party in their areas of interest. More common is the “simple” version, where the supporting parties remain outside the cabinet—Denmark’s minority coalition was supported by the Danish People’s Party from outside the cabinet from 2011-2011.

How often has this been tried before?

While Confidence and Supply agreements are the done thing in New Zealand and similar agreements are common in Denmark and Sweden, Westminster is allergic to minority government. The UK parliament tends to keep to traditions, and these arrangements have barely ever been tried—it’s “not the British way of doing politics," as Akash Paun, a Fellow at the Institute for Government, puts it. The last Confidence and Supply agreement in Britain was in 1977, a hastily assembled Lib-Lab pact designed to stop Labour being ousted in a no confidence debate. Thatcher took advantage of huge opposition to Labour’s proposed method of financing a 1976 IMF loan through public expenditure cuts to launch the debate, but the last minute arrangement came as a surprise to everyone. The agreement disintegrated the following year as ambiguity in the contract allowed Labour to avoid granting further concessions to the Liberals. A recent Institute for Government report concluded that the ability of party leadership to cooperate is key to the success of a C&S agreement.

What are the long term ramifications?

We’re seeing a trend in Britain towards minority governments, but forecasting the long term effects of introducing Confidence and Supply agreements is more speculation than prediction. New Zealand used to have a similar system to the UK, with a first past the post voting system and two major parties, but as the result of coalitions and agreements over several elections, it gradually evolved into a multi-party system and then to minority government. New Zealand’s agreements have tended to last full term, suggesting that supporting parties do derive benefit from them.

We might also see the rise of new populist parties, Paun suggests. Parties like Ukip, which garner some support from anti-government rhetoric, could risk their integrity by collaborating with the government. This would leave space for new anti-government parties to enter the fray. In other words, if Ukip falls, three look-a-likes will grow back.