Oliver Wright: A week that exposed the damaging divisions at the very top of the Lib Dems

Internal disagreements on tax could undermine Clegg's negotiating position in the longer term

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Party discipline has never been a Liberal Democrat strong point. Asked to describe their two parties in the Coalition negations, William Hague said the Tories were like "an absolute monarchy, moderated by regicide", while David Laws replied the Liberal Democrats were like an "absolute democracy, moderated by very little".

And so it proved again this weekend. On both health reform and his idea for a tycoon tax on the very wealthy, Nick Clegg came up against his party's unruly tendency. The conference vote on health is not binding and will make little difference to the Coalition's Bill as it makes its slow progress through Parliament.

But the defeat is still embarrassing for Mr Clegg as it reinforces a perception that the Liberal Democrats' leadership are doggedly pursuing a piece of unpopular legislation for the sake of showing political strength rather than being fully signed up to the merits of the changes.

On tax, the divisions are perhaps more damaging. Mr Clegg and Danny Alexander are currently engaged in final wranglings with the Tories over what will and what will not be in the Budget later this month.

Last week Vince Cable appeared to suggest that some kind of mansion tax was being actively considered. But no sooner had he done so then Mr Clegg's aides poured cold water on the prospect. Then Mr Clegg came out in an interview with his idea of a tycoon tax, only for Mr Cable to fail to support him.

In truth, it is unlikely that either of the proposals will make it into this year's Budget. The most the Liberal Democrats can realistically hope for is some further movement on taking the low paid out of tax and some further clampdown on tax avoidance loopholes.

But damagingly for Mr Clegg, the internal disagreements on tax could undermine his negotiating position in the longer term.

They also suggest that not only is party discipline not a Liberal Democrat strong point, they also have problems with cabinet discipline as well.

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