Olympics Offer No Break for Cameron as Coalition Rift Widens

As Britain celebrates the triumph of its athletes at the London Olympics, Prime Minister David Cameron is struggling to contain rifts in his two-year-old ruling coalition.

Relations hit a new low this week as his Liberal Democrat allies avenged their failed bid to overhaul the House of Lords by vowing to block electoral boundary changes seen as vital for the Conservatives to win an outright parliamentary majority.

The new constituency map could have delivered Cameron as many as 20 extra seats at the 2015 general election. The dispute has highlighted splits not just within the coalition, but within the Conservatives -- almost a third of Cameron’s lawmakers voted against him over House of Lords reform last month.

“This is yet more evidence that Cameron’s project to detoxify his party is incomplete,” Tim Bale, professor of politics at Sussex University, said in an interview. “Too many people in his party never accepted they lost the 2010 general election. They still seem to be laboring under the illusion that there’s some way they can get the leadership and policies they want without a majority in Parliament.”

The International Olympic Committee said yesterday that 88 percent of Britons had watched some of the Olympics as their country headed for its best medals tally in a century, and the event proceeded without significant disruption for the capital city. As the medal haul increased yesterday afternoon, Cameron hailed “a truly golden summer” for the British Olympic team.

‘Pleasure Dome’

In an interview with LBC radio this morning, Cameron said the Olympics “will inspire generations” and he paid tribute to Chris Hoy, who yesterday won a sixth gold medal on the final day of track cycling to surpass rower Steve Redgrave as the most successful British Olympian. “The Velodrome has been the pleasure dome, hasn’t it?” the prime minister said.

Cameron yesterday described the political situation as “frustrating” after he failed to persuade rank-and-file Conservatives to support Liberal Democrat plans to introduce elections to the 700-year-old upper chamber of Parliament.

He insisted he will push ahead with boundary changes and urged every lawmaker to support the plan. With the Liberal Democrats and the Labour Party opposing it, Cameron will need to bring his own party into line and win over the backing of smaller Scottish and Welsh nationalist parties.

Broken Promises

The review of parliamentary boundaries is designed to reduce the number of lawmakers in the Commons to 600 from 650 to save money and create seats with roughly equal numbers of voters. The Tories would have been just short of a majority with 299 seats if the May 2010 election had been contested on the proposed new boundaries, according to Anthony Wells, of polling company YouGov Plc. (YOU) They won 306 of 650 seats in 2010.

The move still faces opposition from some Conservatives who may lose their seats or see their majorities shrink.

The demise of the House of Lords Reform Bill is the latest blow to Deputy Prime Minister Nick Clegg, who has seen his poll ratings plummet since he went into coalition with Cameron. The Liberal Democrats had the backing of just 8 percent of voters in an Aug. 4 poll by YouGov, which gave the Conservatives 33 percent and Labour 44 percent.

In 2010, the Liberal Democrats broke a pre-election pledge not to vote for increases in university tuition fees. Last year, they lost a referendum to change the voting system. If Clegg stays as leader, he will face voters in 2015 without having delivered any of the constitutional changes he promised in 2010.

Defiance

His decision to oppose boundary changes raises the unprecedented prospect of Liberal Democrat ministers voting against government policy. Ministers who defy the government usually face being fired, though Cameron is unlikely to take such action as it would cause the coalition to collapse.

Clegg said he wanted to show the Conservatives there will be consequences for breaking the coalition agreement between the two parties. Cameron today denied the deal had been breached, saying he believed the link with boundary change was with the referendum on the voting system, not House of Lords reform.

He insisted the pair still enjoy a “good working relationship” and said they will use the extra parliamentary time to step up efforts to lift the economy out of recession.

“We were never going to agree on everything,” Cameron said. “There will be arguments, there will be disagreements, but the British public don’t want to see that.”

Cameron faced more bad news today as the Bank of England lowered its growth forecasts to show the U.K. economy at a standstill this year.

`Total Commitment'

“It is to our Olympic team that we should look for inspiration,” Governor Mervyn King told a press conference in London after the central bank published its quarterly Inflation Report. “They have shown us the importance of total commitment when trying to achieve a goal that may lie some years ahead.”

The dispute over the House of Lords may only encourage rebellious Conservatives to vote down more measures.

That means Clegg isn’t the only leader under threat, according to Bale. “Conservatives may take the view that Cameron was the leader for a coalition government,” he said. “If a coalition government isn’t working, this could encourage them to look at getting rid of Cameron.”

To contact the reporters on this story: Robert Hutton in London at rhutton1@bloomberg.net; Kitty Donaldson in London at kdonaldson1@bloomberg.net

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

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