There are three things I want to begin with:
I would say that I am personally supportive of pacts (although this is a minority view among Conservatives)- a major factor in making me take this view was how in the Oldham West & Saddleworth by-election of January 2011, pro-Government candidates got 923 votes more than Labour, yet a Labour MP was elected.
I'm not suggesting that there should be single Coalition candidatesn in every seat, like the 1918 "Coupon" election, but, like the 1950s there are natural neighbouring pairs of constituencies where pacts could be tried. The first one that springs to mind is in Hull, where- unless a Conservative MP in Humberside steps down- the battle in the new Kingston-upon-Hull West & Hessle would be between the Conservative former Shadow Home Secretary, David Davis (currently the MP for Haltemprice & Howden) and Labour former Home Secretary Alan Johnson (currently the MP for Hull West & Hessle). Now, I appreciate why the Liberal Democrats have contested Haltemprice & Howden since the seat was formed for the May 1997 general election, and have come close to unseating Davis a couple of times, as they have been the major challengers to him. But the new Kingston-upon-Hull West & Hessle is a different matter altogether, as notionally the Liberal Democrats are in third place and could stand aside. In teturn, the Conservatives could stand aside in Kingston-upon-Hull North to help the Liberal Democrats unseat Labour there.
Let's face it, if Liberal Democrat voters unhappy with the decision to set up a Conservative/Liberal Democrat coalition are going to switch, it is reasonable that they will go to Labour.
As a start, let's equalise the Conservative and Labour vote on 36.97%- if the Labour increase comes solely from Liberal Democrats switching, then the Liberal Democrat vote falls to 16.25% (so nearly 1 in 3 Liberal Democrat voters switch to Labour), then we get the Conservatives just 1 seat ahead of Labour and the Liberal Democrats falling to 20 seats. Actually, the Liberal Democrats would be very close to the position they were in at the April 1992 general election.
The Conservatives would pick up 18 seats from the Liberal Democrats, including defeating Government ministers David Heath (Deputy Leader of the House of Commons), Andrew Stunell (Minister for Communities & Local Government) and Steve Webb (Minister for Pensions), while losing 36 to Labour, including Work & Pensions Secretary and former leader Iain Duncan-Smith. Labour would also pick up 10 seats from the Liberal Democrats- unseating Sarah Teather, the Minister for Children, and former party leader Ming Campbell- in the process, as well as Caerfyrddin from Plaid Cymru, leaving that party with just Gwynedd.
When you do the maths, it appears this goes beyond a May 2010 style hung Parliament to a February 1974 style one thanks to MPs beyond the 3 main parties. A Conservative/Liberal Democrat coalition would have 299 MPs, a Labour/Liberal Democrat coalition 298. So, looks like neither coalition would have an overall majority. However, we have not taken Northern Ireland into account, where Sinn Fein are safe in 4 seats. In an expanded Fermanagh & South Tyrone, Sinn Fein is defending a small majority- note that in 2010, Michelle Gildernew had a majority of 4 votes (the smallest in the country) over an Independent candidate running with the support of both the Democratic Unionists and the Ulster Conservatives & Unionists (as the Conservative/Ulster Unionist joint ticket was called). The notional figures give Sinn Fein a lead of 2911 over Independent- however this assumes that unionist voters transferring over fom Tyrone West remain with their parties. Now, if the 2010 election had been on the new boundaries, and Unionist parties stood aside for an Independent, then we should throw those 1177 Democratic Unionist and 800 Ulster Conservative & Unionist voters into the Independent tally, and bring the Sinn Fein majority down to 934.
In addition. tactical voting by SDLP voters in Belfast North could enable Sinn Fein to unseat the Democratic Unionists there.
So, it is reasonable to assume that after the 2015 election there will be between 4 and 6 Sinn Fein MPs adopting an sbstentionist policy again, and so a Conservative/Liberal Democrat or Labour/Liberal Democrat coalition would have the support of the majority of sitting and voting MPs.
We have seen something interesting and bizarre. The new boundaries have a bias towards Labour, but as Labour starts drawing support from the Liberal Democrats, that pro-Labour bias disappears. The reason appears to be that once Labour starts drawing support from the Liberal Democrats, more Liberal Democrat seats fall to the Conservatives than to Labour.
Indeed for small Liberal Democrat to Labour swings, such as 1% (where the Conservatives gain 5 seats from the Liberal Democrats but lose 6 to Labour), 2% (where the Conservatives gain 7 seats from the Liberal Democrats but lose 11 to Labour), or 3% (where the Conservatives gain 9 seats from the Liberal Democrats but lose 15 to Labour) then the Conservative losses to Labour are nearly offset by the Conservative gains from the Liberal Democrats.
So, at one level, the Conservatives need not be concerned at the Liberal Democrats losing support to Labour- if it means the Conservatives being a handful of seats worse off. Conservative minority government still possible. But, we are still in hung Parliament territory, and if we want another majority adminstration, then the Labour gains (from both the Conservatives and Liberal Democrats) should be a cause for concern- every Labour gain from the Liberal Democrats hits the Government.
However on a 3.5% swing from the Liberal Democrats to Labour something interesting happens. The Conservatives have the same number of seats (288) as the combined tally of Labour (256) and the Liberal Democrats (32). Now, if Sinn Fein hold on to Fermanagh & South Tyrone and gain Belfast North, then there are 594 MPs, and 298 MPs are needed for a majority- the 6 remaining Democratic Unionists, along with the sole remaining Plaid Cymru, an Independent in Down North, 2 SDLP MPs and a sole Alliance Party of Northern Ireland MP- give them 11 MPs who could conceivably back a Labour/Liberal Democrat minority coalition.
But isn't this similar to 2010? Labour and the Liberal Democrats not having enough seats to form a majority and deals with minor parties and one-woman bands being out of the question as they would make the government unstable, relying on too many others.
By the time we get to a 10.33% swing from the Liberal Democrats to Labour (which sees Labour 3.02% ahead of the Conservatives and about 44% of Liberal Democrat voters having switched to Labour) then we have a Labour majority. The Liberal Democrats are down to 10 seats Bath, Bristol West, Caithness, Sutherland, Ross & Cromarty, Ceredigion & Pembroke North, Deeside & Gordon, Inverness & Skye, Kingston & Surbiton, Norfolk North, Orkney & Shetland and Yeovil.
So, would it be good news for the Conservatives if the Liberal Democrats lost support to Labour? Naturally, we wish to see the Conservatives get that magic 301 number of seats and be able- if it wants to- form a single-party Government. However, we also need to have some sort of third-party insurance (pun intended) which helps limit the Liberal Democrat losses to Labour- losses which would make a Labour-led government more likely.