After one bark, Deputy Dawg will go back to nodding

Inside Politics
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When Nick Clegg deputised for a travelling David Cameron at Prime Minister’s Questions (PMQs) last month, he left 10 Downing Street through the front door so he could be filmed by the television crews camped outside.

Nothing strange about that, you might think. But feathers were ruffled. Mr Cameron has made it clear that leaving for PMQs by the front door is his privilege. Mr Clegg is not supposed to do it. But while the Top Cat was away in the Middle East, Deputy Dawg came out to play at being PM.

Such tensions, however trivial they might seem in the real world, are inevitable in a coalition.  Nuances matter. When Mr Cameron appears at PMQs, Mr Clegg usually sits next to him. In the Coalition’s early months, the Liberal Democrat leader would often nod in agreement with the PM, especially when he (successfully) blamed the deficit on Labour.

But as the months ticked by, and the spending cuts were implemented, many voters viewed Mr Clegg as a mere nodding dog because that was how they saw him on the TV news bulletins. So it was time to “differentiate”, to remind the public that the Liberal Democrats have their own identity.

Our politicians are learning that coalitions do not stand still; they evolve. The priority for the Liberal Democrats in the first year was to show that “coalition works”, after the Tories (and most newspapers) told voters during the 2010 election campaign that a hung parliament would be a recipe for chaos and instability.

On Thursday, the Coalition entered another phase. We could call it “differentiation plus”. Mr Clegg took the dramatic step of making a separate Commons statement from the dispatch box welcoming Lord Justice Leveson’s report, immediately after Mr Cameron had rejected its key proposal for a new press regulator to be underpinned by legislation.

Liberal Democrats describe Leveson as a unique issue. Yet I have a feeling that, a year ago, Mr Clegg would not have taken this route. It was an honest one, not a piece of positioning. A delayed response to Leveson might have closed some of the differences between him and Mr Cameron.  But there was a fundamental disagreement between the PM and his deputy on statutory underpinning that they were unlikely to resolve. On that, Nick agrees with Ed, not Dave.

But we shouldn’t get carried away with the idea that this spells the end of the Coalition, as some Conservative MPs hope. The discussions between Mr Cameron and Mr Clegg and their respective ministers have been business-like and amicable. There is an honest disagreement between them on Leveson, and it is healthier for it to be played out in public rather than in whispering campaigns against each other. In continental countries more used to coalitions, airing differences between parties is the norm, not the exception.

The Coalition would fall apart if the two parties were constantly at war on the central issue of the economy. That is why the Liberal Democrats and Tories are being united and disciplined in the run-up to next Wednesday’s autumn statement by George Osborne. It also balances their dispute over Leveson. So far, there have been few leaks, in sharp contrast to the Budget in March.

The Chancellor has read the riot act to the Liberal Democrats. He has blamed them for the Budget shambles, accusing them of trailing key measures in advance in the hope of getting the credit for a rise in the tax threshold and higher taxes on the rich.

His cut in the 50p top tax rate also leaked out, leaving the media to focus on relatively small measures like the taxes on grannies, charities and pasties on and after Budget day.

While the leaks played a part, Mr Osborne can’t blame it all on Mr Clegg: his actual measures were a big part of the problem.

Reducing the top rate, dubbed a “tax cut for millionaires” by Labour, was his decision – and has undermined his “we’re all in it together” mantra, perhaps fatally. His decision to join Mr Cameron on a visit to the United States in the week before the Budget was a mistake. He is said to have learnt his lesson, and to be poring over the small print of next Wednesday’s statement.

It will be a big moment, both for the Chancellor and the Coalition. It will be much more than a holding statement before the next Budget, and will shape the agenda for the second half of the parliament.

Mr Osborne needs to restore the credibility he lost in March. To show that the Coalition has not run out of steam, its two parties need to strike a deal. 

I suspect they will agree a trade-off in which Mr Osborne wins more welfare cuts, possibly including a freeze in some state benefits in April, while the Liberal Democrats ensure the wealthy pay more tax.

Despite the tons of newsprint devoted to the Leveson Report, the Chancellor’s measures will matter a lot more in the Dog & Duck.