Away from conference, the prospect of coalition lives on

Inside Westminster

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David Cameron and Ed Miliband left their respective party conferences happy that their troops had been cheered up after receiving their marching orders. In public, the two leaders exuded confidence that they were on course for victory at the next general election.

Yet my abiding memory of three weeks on the conference trail is how politicians gave a much more honest appraisal of their party's prospects over dinner, coffee or champagne than they did in their speeches and interviews. Several senior figures, both Conservative and Labour, told me they thought we could easily have another hung parliament in 2015.

Mr Cameron may have ignored the Liberal Democrats and the Coalition in his keynote speech, as if it were too painful to remind his audience that he hadn't won an overall majority in 2010. But, after Nick Clegg vetoed parliamentary boundary changes that could have given the Tories an extra 20 seats, there is a growing feeling in senior Tory circles that the party might need the Liberal Democrats again in 2015 to secure a Commons majority. So, although the two coalition parties choreographed some differences to cheer their conference troops, they now intend to enter a "proalition" phase, with the publication of a progress report on what the Government has achieved and flagging up its priorities for the second half of the parliament.

Mr Miliband delivered the best speech of the three leaders and certainly set the agenda with the launch of One Nation Labour. The Tories denied that the Labour leader had forced Mr Cameron to rewrite his speech. But usually when politicians run around saying they are not rattled, it means they are. Ironically, Mr Miliband's raid into Tory territory raised the bar for the Prime Minister, forcing him to produce a good speech. He did, managing both to satisfy his party's thirst for Thatcherism and reassure voters he is a "modern compassionate Conservative".

However, I couldn't help feeling that such labels and slogans might leave many voters pretty cold. New Labour worked because Tony Blair illustrated it with policies such as ditching the party's Clause IV commitment to public ownership.

Surely, the public will judge the parties by their actions and policies, not their words. And they are more sceptical today than they were in the Blair era.

Although Mr Miliband's triumph delighted his party, in private senior Labour figures admitted that its average nine-point lead in the opinion polls could melt away in the heat of battle. Blairites are not sure why Mr Miliband pronounced New Labour "dead" when it was based on creating a One Nation coalition that reached beyond the party's core vote to the middle classes, a necessary ingredient for election victory. Significantly, some Blairites share the Tory analysis of the Miliband speech – that while he appeared to turn right, he was actually turning left.

Some Labour folk fear that there will be limited mileage in playing the class card against the Tories, even though they are seen as "the party of the rich". They worry that Mr Miliband, despite his comprehensive school background, will be viewed as just as much a member of the "political class" as Mr Cameron.

If the Tory and Labour figures who predict another hung parliament are right, it does not mean we will have another coalition in 2015. With the benefit of hindsight, some Liberal Democrats wish they had not opted for the "full Monty" of Coalition in 2010, even though it bought stability at a time of turmoil on the financial markets. They might have acted differently if a crystal ball had revealed how they would be the fall guys.

So don't rule out a looser "confidence and supply" arrangement in 2015, under which the Liberal Democrats would support either a minority Tory or Labour government in key Commons votes but would not serve as ministers.

Similarly, some Labour shadow ministers instinctively feel happier about such a pact than a full Coalition with the Liberal Democrats. Older Labour heads say a coalition would be more stable, recalling the chaos of the late-night, knife-edge Commons votes during the minority governments of the 1970s –currently revived at the National Theatre in This House, a brilliant new play by James Graham which is a good advertisement for full coalition. My other intelligence from the Liberal Democrat conference is that it is not just Vince Cable's left-leaning band who would prefer an agreement with Labour next time. Some Cleggites agree.

One whispered: "It was better to be in coalition with the Tories first. We would have been seen as a branch of Labour, a very junior partner with less influence than we have now. But it would be better next time to do a deal with Labour, or we will just be seen as a little segment of the Tory party."

So the Liberal Democrats are still in the game, and could still hold the balance of power in 2015 even if they lose seats. Don't be fooled by nasty attacks on Mr Clegg's party by Labour and the Tories. Mr Cameron and Mr Miliband know they might have to be very nice to the Liberal Democrats on the morning after 7 May 2015.

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