Why the Coalition is still doomed... to last until 2015

Inside Westminister

Nick Clegg and David Cameron talked intensely in St Paul's before Margaret Thatcher's funeral (Getty Images; PA)

Nick Clegg and Ed Miliband talked intensely at St Paul’s Cathedral as they waited for Margaret Thatcher’s funeral to begin.

They walked away from the other mourners and brushed away aides who tried to interrupt them. A funeral was a rather strange event at which to cement their improving relationship. The catalyst was their shared instincts on the Leveson report about press regulation. They did not share David Cameron’s hostility to “statutory underpinning” a new system. Mr Clegg sided with Mr Miliband rather than the man with whom he is in Coalition and stuck to his guns.

Mr Clegg’s stance was an ice-breaker. Until then, many Labour politicians could not forgive him for joining the Conservatives in Coalition three years ago today. Now Mr Clegg and Mr Miliband realise they have much more in common than their views on the newspaper industry. Labour has embraced the long-standing Liberal Democrat policy of a mansion tax on homes worth more than £2m. The two leaders are on the same page on Europe. They believe that Mr Cameron’s promise of an in/out referendum by 2017 could put job-creating foreign investment at risk and lead to the EU exit door.

The Labour and Liberal Democrat leaders know their personal relationship would matter in the event of another hung parliament after the 2015 general election, a prospect that looks more likely after the UK Independence Party’s arrival as a serious force. The present Coalition was built on the solid foundation of Mr Clegg’s relationship with Mr Cameron. As the Labour peer Lord Adonis notes in his revealing new book 5 Days in May about the negotiations after the last election: “Cameron and Clegg cultivated good relations in opposition before 2010. This was crucial to the formation of the Coalition, as it has been to the weathering of vicissitudes since.”

The Cameron-Clegg relationship is certainly being tested now. The past week was supposed to be what their aides call a “proalition moment”, as the two parties promoted their joint Queen’s Speech. It was anything but. Although the Coalition is not going to crash and will probably stay on the road until 2015, we may look back on this week as the moment when the wheels started to come loose. The Speech was notable for what was left out because the Coalition partners could not agree. Mr Clegg vetoed the so-called “snooper’s charter”, while Mr Cameron blocked a law on overseas aid spending.

It looked like tit-for-tat politics and there was more to come. Mr Clegg disowned government plans to increase the number of children that can be looked after by individual nursery staff and childminders. Furious Tories claim he crossed a rubicon because he had backed the move last December. Mr Clegg is equally furious – about being accused of breaking Coalition rules. He has raised his doubts about relaxing the childcare ratios with Mr Cameron on several occasions recently. A leaked email shows his previous backing made clear the Government “will take account of the results of the consultation”, an exercise which found overwhelming hostility among parents, providers and experts.

In turn, Mr Cameron gave Tory MPs and ministers the green light to back an amendment to the Queen’s Speech regretting the absence of an EU referendum bill – in other words, blaming it on Europhile Liberal Democrats. The Speech is already frayed.

The two parties were always going to diverge before the 2015 election but it has started a year earlier than most insiders expected. “The mood is very scratchy,” one Cabinet minister admitted. “There are lots of rows. Things have changed.”

The Cameron-Clegg relationship is now described by their aides as “professional” and “business-like” rather than close. Neither man wants an election before 2015 with the economy flat, so the Coalition is still doomed to last.

The Coalition’s other crucial strength, as Lord Adonis notes, has been agreement on economic policy. This is about to be tested amid huge tensions over the £11.5bn of spending cuts to be announced by George Osborne on 26 June. It won’t all be about rows between the Tories and Liberal Democrats as departmental ministers defend their own turf. “There will be blue-on-blue attacks as well as blue on yellow and yellow on blue,” one insider said. Mr Miliband will be watching how his new friend plays it.

In public, the Labour leader is sticking to his line that it would be “difficult” to be in coalition with Mr Clegg after he had been Deputy Prime Minister in a Tory-led Government. But Mr Miliband is careful not to use the word “never.”

The Labour leader will not start saying nice things about the Liberal Democrats in public. He desperately needs to keep the voters who have switched from Mr Clegg’s party to Labour since 2010, without whom he would have no hope of outright victory in 2015. Until then, the growing mutual respect between Mr Miliband and Mr Clegg will be the love that dare not speak its name.