Lib Dems laugh off Ed Balls' call for a new coalition

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The Liberal Democrats have dismissed a plea by Ed Balls for them to quit the Coalition with the Conservatives and form one with Labour.

In an interview with The Independent, the shadow Chancellor sought to exploit Liberal Democrats' dissatisfaction with the Government's policies on Europe, the economy and NHS by urging Nick Clegg's party to link up with Labour.

But yesterday, senior Liberal Democrats rejected the olive branch, insisting the Coalition would last until the next general election in 2015. Simon Hughes, the party's deputy leader, said: "Ed Balls is free to say what he likes, but the Labour Party is not a credible party of government and has no credible plan for our country."

Tom Brake, a Liberal Democrat MP, said: "It is the season of goodwill, but I fear Ed Balls may have been at the mulled wine when he said this. This Coalition exists to clean up the mess Labour left behind. Not only are Ed Balls and Ed Miliband in denial about the economy, over 13 years they trampled on our civil liberties, launched an illegal war in Iraq, pandered to big business and the City, and left a huge gap between the richest and the poorest. So, thanks but no thanks."

Lorely Burt, who chairs the Liberal Democrat parliamentary party, said: "I can't think of a single reason why Liberal Democrats would want to jump ship into a Labour boat which has no captain and no credible plans to get us out of the economic difficulties that we have." But some Liberal Democrats adopted a different stance in private. They said the offer was significant because Mr Balls, unlike Mr Miliband, had never been keen on co-operation between Labour and the Liberal Democrats. One minister said: "We've more in common on Europe with Labour than the Conservatives and that could still prove a Coalition-breaker."

Other Liberal Democrats said the party would stick with the Tories but "put out feelers" to Labour in the run-up to the next election. "We'll keep our options open," one said.

Labour's anger at the Liberal Democrats' decision to join the Tories last year has gradually faded.