Will Labour still love the Lib Dems tomorrow?

In perhaps 30 seats the Lib Dems already reach parts of the anti- Tory electorate that Labour cannot
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Consider the hopes and fears of the Liberal Democrats this week. A year or so after trying - and failing - to smash them at Littleborough and Saddleworth, here are three of Labour's biggest hitters, Robin Cook, Donald Dewar and Jack Straw sitting down with them for joint talks of a sort that have never before taken place between rival British political parties. Is this it? Does coalition finally beckon? Or are the Lib Dems about to be taken, by some of the shrewdest operators in the business, on a long ride to nowhere?

Burnt into Liberal folklore is the party's loss of political virginity in the Lib Lab pact of the Seventies, when David Steel got nothing whatever, not even Proportional Representation for the European elections, in return for propping up Jim Callaghan's government. They know that Labour, intent on squeezing the Lib Dem vote in constituencies where Labour is the main challenger to the Tories, has quite a lot to gain from cosying up to them. Talks on constitutional reform are seductive. But will Labour still love them tomorrow?

First things first. There is serious and practical short-term politics in the talks announced on Tuesday. On devolution, for example, it's in the interests of both parties to thrash out a common approach - including the related question of how and when to reform the Lords. Grown-up politicians in both parties know that it isn't going to be easy to withstand John Major's unionist assault in the election campaign. And having done that, even more difficult to get the Scottish Parliament through the Commons and the Lords, especially if Tam Dalyell and a few English Labour rebels cause trouble. Mr Major will exploit every difference between the two parties. Two against One will make Mr Major's attack less effective.

Second, the Lib Dems have every reason to test to destruction Tony Blair's commitment to constitutional change. On the electoral reform referendum to which Mr Blair is committed, the preliminary talks between Bob McLennan and the pro-PR Robin Cook have made a surprising amount of progress. There is already a rough consensus between the two men that the referendum should be early enough in the Parliament to allow for a Bill to change the system by the next election but only if the country votes for change. Also, they agree that it should be a multi-option question allowing voters not only to say if they want change, but also what form it should take if it happens. So far, so good. But what they now want is a firm agreement on the referendum's form and timing. They would like Mr Blair to declare for electoral reform before the election, but are likely to be disappointed.

They should, nevertheless, be patient. Mr Blair's long-held hostility to electoral reform has been primarily based on what Marxists used to call an "inner party" argument: namely, that as long as Labour gave itself the short-cut of a new electoral system, there was no need for the party to change in order to secure the middle ground. The Lib Dems, as the minority coalition partner, would take care of the floating voters. And the Labour Party could get on with being socialist. That argument does not vanish after the election. But it will be counterbalanced by another, at least as powerful: the Lib Dems may be crucial, first in securing a majority in future elections and then in maintaining them. The first point is that in perhaps 30 seats the Lib Dems already reach parts of the anti-Tory electorate Labour cannot. Second, their MPs may be needed to absorb Labour revolts on Europe, on economic policy, perhaps even on devolution. And that means the case for a concession on electoral reform starts to look much less resistible. If you doubt it, just try setting yourself this simple exercise: write a speech by a modernising and self-confessedly pluralist Labour prime minister, to be delivered again and again in a referendum campaign, passionately defending the "First past the Post" system. And the best of luck.

For this to work, the Lib Dems may also have to lower their sights. And that's looking more likely than it once did. This hasn't been a problem in the talks between Cook and McLennan. Cook is as sceptical about AV - the incremental change that has been backed by Mr Blair's lieutenant, Peter Mandelson, and could yield the Lib Dems another 20 or 30 seats - as the Lib Dems, because it fails to unlock the Southern Labour vote in a way that full PR would. But if Mr Blair were to back AV in a referendum that still included the Lib Dems' cherished option of a Single Transferable Vote, it would be an offer a serious party would find hard to refuse.

In this context, whether Mr Blair offers Paddy Ashdown, Menzies Campbell and perhaps a couple of others Cabinet seats as part of a post-election deal becomes a huge, but essentially second order, question. It could well happen, and it would help to cement an alliance. But there is certainly an alternative: that the Lib Dems vote issue by issue but promise, on the Ulster Unionist/Tory model, not to bring Labour down in any confidence motion. And in the meantime await a second election that could double their seats and allow them to enter a coalition from strength. The Lib Dems are right to be guarded. But the pre-election statement of shared aims that is likely at the end of the process begun on Tuesday looks as if it will open up a big opportunity. Mr Blair wants to lead from the centre and the centre left. He wants to head a government with more than 50 percent of the popular vote - something not once achieved under the current system in the past 41 years. He wants to be in power for a very long time. Mr Ashdown and his colleagues have every reason to expect that Mr Blair will still respect them in the morning.