Andrew Grice: A coalition with the Tories comes with huge risks for Clegg

One of the ironies of being the third party is that it wanted and yet feared a hung parliament
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The Independent Online

When I interviewed Gordon Brown during the general election campaign, he spoke of his hopes of creating a "progressive alliance" against the Conservative Party. Well, he did it, but it lasted for only a few hours.

There was a brief bubble of euphoria after Mr Brown announced he would stand down as Labour leader on Monday, removing one roadblock to a Lib-Lab deal and ensuring a dignified exit for the Prime Minister at the same time.

When the negotiating teams sat down to do business a few hours later, the atmosphere was friendly but far from euphoric. Insiders say it was the Liberal Democrats, not the Labour Party, who were going through the motions. Earlier, Nick Clegg had had a decidedly mixed response when he presented an outline deal to Liberal Democrat MPs; several wanted to let their heart rule their head and do a deal with Labour.

It seems that Mr Clegg needed to reassure these pro-Labour MPs that an agreement with Labour had been explored and exhausted, before they would swallow a coalition with David Cameron.

A string of Liberal Democrat policies were rejected as unrealistic by the Labour team, led by Lord Mandelson. If Mr Clegg expected to bank the offer already made by the Tories, he was wrong. Labour wanted to go back to square one to ensure any new policies were properly costed. Ed Balls, the Schools Secretary, told the Liberal Democrat team he would be delighted to implement their £2.5bn "pupil premium" to channel spending to primary schools in poorer areas – but asked where the money would come from.

The talks were not helped by noises off. Labour MPs highlighted the painful truth: Labour had not won last week's general election and the parliamentary arithmetic of the proposed "progressive coalition" barely created an overall majority.

Labour sources deny that "the numbers" were the real problem. They are convinced that the make-up of Mr Clegg's negotiating team was a revealing sign of his true intentions all along – to do a deal with the Tories.

The prime mover David Laws was (like Mr Clegg) a member of the "Orange Book" brigade who favoured market-based reforms of public services and had been wooed by the Tories as a possible defector. Danny Alexander, Mr Clegg's chief of staff, and Andrew Stunell, the party's former chief whip, did their leader's bidding, in the eyes of the Labour team, while Chris Huhne, who might have been more sympathetic to a deal with Labour, played a low-key role.

Conspicuous by his absence was Vince Cable, the Liberal Democrats' deputy leader and once an adviser to John Smith, the former Labour leader. He has had a remarkably low media profile in recent days.

When the talks with Labour were still alive, he was due at the Treasury at 11am yesterday for a meeting with the Chancellor Alistair Darling but the plug was apparently pulled on Mr Clegg's orders.

The anti-Tory alliance is now dead and buried but there are some crumbs of comfort for Labour as its 13-year spell in power ends. It will now position itself as the only progressive party aspiring to government at the next election. If it avoids a civil war and a divisive leadership election – easier to do after a less severe defeat last week than many expected – it could potentially win over many of the 6.8 million people who voted for Mr Clegg's party.

For now, some of these people will be perplexed or angry that he has thrown in his lot with the Tories, although how they vote next time will obviously depend on how the Con-Lib government performs.

For the Liberal Democrats, the new coalition government offers both a huge opportunity and a huge risk. One of the ironies of being the third party is that it wanted and yet feared a hung parliament at the same time. It is the biggest double-edged sword in British politics. As one Liberal Democrat put it, the party could now be in a "lose, lose" position.

Whatever has been said during their talks with the Tories, the Liberal Democrats know Mr Cameron's party will oppose it at the next election, the fear of which will cast a shadow over their joint working. There are some in his party who already worry that Mr Clegg may end up with half as many MPs after the next election, instead of twice as many – his target when he became party leader in 2007.

The new government offers a very different alliance to the one Mr Brown had in mind during the campaign. Instead, after an agonising wait, it is Mr Cameron who has an opportunity to create a "new politics" and to prove what he has always claimed – that he is a liberal, progressive Conservative.

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