Cameron U.K. Coalition May Be Rattled in Referendum Face-Off, Local Votes

Britons vote today in elections, including the first national referendum in 36 years, that may rattle Prime Minister David Cameron and his deputy, Nick Clegg, and boost the Scottish nationalists.

Both Cameron’s Conservative Party and Clegg’s Liberal Democrats are set to lose seats in local elections across England, polls suggest. One will lose the plebiscite on overhauling the voting system.

Liberal Democrats backing a “Yes” vote for change accuse the Conservatives of lying in their campaign for a “No” to preserve the status quo. A plan is in place to boost whichever party loses, to help hold the coalition together. Polls indicate a “No” is the likely outcome.

“Some of the Liberal Democrat activist base will be saying: ‘What have we gone into coalition for?’ Especially if a ‘No’ vote on the referendum is accompanied by a poor showing in the local elections,” Andrew Russell, who teaches politics at the University of Manchester, said in a telephone interview. “The coalition will survive, but it could be part of a long- term process of destabilizing support for the leadership.”

Local-election results will start coming in overnight. The votes from the referendum won’t be counted until tomorrow afternoon.

The head of the opposition Labour Party, Ed Miliband, may also suffer a setback, with polls suggesting Labour won’t regain power from the nationalists in elections to the Parliament in Scotland, its stronghold for almost 50 years.

Softening the Blow

In the local elections, 9,458 of the 18,249 council seats in England are being contested today. Both the Liberal Democrats and Conservatives have been managing expectations to soften the blow of losses one year after ousting Labour Prime Minister Gordon Brown from power and forming their coalition.

Labour’s support in national opinion polls has risen as the coalition has embarked on the deepest budget cuts since World War II to narrow a deficit that swelled to a record under Brown. Clegg’s party has been hardest hit after policy U-turns that included the ditching of a pledge not to increase college tuition fees.

The Conservatives have told activists to expect to lose as many as 1,100 seats, and they see Labour gaining between 1,300 and 1,800, according to a person familiar with the calculations.

“For the Conservatives, less than a 1,000-seat loss would not be too bad. Over that number isn’t good after one year in,” said Robert Waller, co-author of “The Almanac of British Politics.” “Labour need to gain over 1,000 seats to confirm a national lead, and over 1,300 would be very good. If the Lib Dems lose less than 400, that counts as getting away with it, while over 600 would be very bad.”

Voting System

Polls also suggest a defeat for Clegg in the referendum on a new system for electing House of Commons lawmakers. The Liberal Democrat leader made the holding of a national vote a condition for joining Cameron’s government.

An ICM Ltd. poll published in today’s Guardian newspaper put the “Yes” vote at 32 percent to 68 percent voting “No.” ICM surveyed 1,035 adults May 2-3. A YouGov Plc poll for The Sun newspaper found “No” ahead by 60 percent to 40 percent. YouGov questioned 5,725 people May 3 and yesterday.

The referendum campaign has exacerbated tensions within the coalition. Energy Secretary Chris Huhne, who lost to Clegg by 500 votes out of 41,000 in the race for the Liberal Democrat leadership in 2007, was forced to deny he is making a new bid to head the party after outspoken criticism of the Tories.

Goebbels Comparison

Huhne compared the “No” camp’s tactics to those of the Nazi propaganda chief, Joseph Goebbels, and threatened to sue over allegations of financial impropriety in the “Yes” campaign.

The BBC and other U.K. media reported that the energy secretary clashed with Conservative ministers during a Cabinet meeting two days ago. Huhne called suggestions he might challenge Clegg “a completely ridiculous bit of hypothesis” in a May 1 interview with Sky News television.

Under the current “first past the post” system, voters mark a single candidate, and the person with the most votes in each district wins. This means smaller parties that can’t concentrate their support in a single place don’t win seats. In 2010 the Lib Dems won 23 percent of the vote and 9 percent of the seats in Parliament. The Conservatives, with 37 percent of the vote, got 47 percent of the seats.

Alternative Vote

Under the “Alternative Vote,” the system the Liberal Democrats are backing, people can mark their candidates in order of preference. The candidate receiving the least support is eliminated, and their votes are redistributed according to people’s second choices. This process continues until someone has more than half the votes.

A study by the Electoral Reform Society suggested the Liberal Democrats would have won 22 more seats and the Conservatives 26 fewer in the 650-member House of Commons under AV in last May’s elections.

If the polls are wrong, though, and the Conservatives lose the AV vote, it will fuel unrest among lawmakers who already feel that their party has lost out as a result of the coalition. Some also blame Cameron for failing to deliver outright victory over Brown last year.

Scottish Vote

In Scotland, polls suggest losses for both coalition parties. A YouGov Plc poll published last night showed that First Minister Alex Salmond’s pro-independence Scottish National Party, bidding for a second term, may win 54 seats in the 129- seat Parliament in Edinburgh to Labour’s 46, according to the Glasgow-based Herald newspaper.

Though Labour support is up from the last elections in 2007 at the expense of the Conservatives and Liberal Democrats, the polls suggest, the SNP has done even better.

In 2007, Labour won only one fewer seat than the SNP, which formed a minority government. The Liberal Democrats are set to drop from 16 members of the Scottish Parliament to seven, according to the poll, adding to Clegg’s woes.

“The pressure on Clegg will be considerably higher after the AV vote, particularly if it’s a strong ‘No,” Steven Fielding, the director of the Centre for British Politics at Nottingham University, said in a telephone interview. “The idea of electoral reform is at the heart of the Liberal Democrats’ very being. This could make him look like a complete idiot.”

To contact the reporters on this story: Thomas Penny in London at tpenny@bloomberg.net; Robert Hutton in London at rhutton1@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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