The most natural coalition in British politics is between the Liberal Democrats and...Labour

By Paul Goodman
^{Follow Paul on Twitter}

The Liberal Democrats: now closer to their Coalition partner on economic matters...

I studied the durability of a Conservative-Liberal Democrat coalition as the last election campaign drew to a close. Three points quickly became clear.  First, changes made to the Conservatives under David Cameron's leadership had drawn the parties closer together: a new stress on the environment, a sympathy for civil liberties, the commitment to spend at least 0.7% of GDP on overseas aid (this last shift took place under Michael Howard, but Mr Cameron projected it in a way that his predecessor had not).  Second, the two parties were now closer on the economy.  The rise of the Orange Bookers - David Laws, Nick Clegg, Chris Huhne, Ed Davey, Vince Cable, Steve Webb - was a sign of a change of heart among the Liberal Democrats.

This shift turned out to be substantial, by the way.  Messrs Huhne, Cable and Clegg may have been respectively difficult for their partners over AV, Beecroft and nearly everything, but they cannot be accused of flinching from George Osborne's Plan A.  Mr Huhne was a convinced supporter of deficit reduction even before the election.  And Mr Cable, perhaps the most senior representative of the party's social democrat wing, has not wavered from the Treasury course since it took place.  It would probably have been fatal to the Coalition had he not stood shoulder-to-shoulder the Chancellor.  He has done so, and Tories should honour it.

...But as far away as ever on "gut" ones: the EU, the ECHR, constitutional reform

However, Liberal Democrat movement on economic issues was more than offset, to my mind, by the party's outlook on a whole set of other ones.  These could be labelled social or constitutional ones, but citing them shows that a more atavistic label is in order: the EU, the ECHR, law and order, immigration control, electoral reform, Lords reform, English votes for English laws.  These are gut issues: views on them tend to be less thought than felt.  And the fact is that when it comes to these matters the instincts of Conservatives pull one way and those of Libereal Democrats the other.  The latter remain, emotionally, a centre-left party.

So it has turned out.  Nick Clegg ended any possibility Mr Cameron off from following up his EU summit veto last year.  Liberal Democrat sympathisers on the commission examining a British Bill of Rights have booted it into the long grass.  English votes for English laws is frozen in aspic. The two parties quarrelled over AV, as they were bound to do (not to mention the NHS).  They have now fallen out over Lords reform - and the boundary review, which could deliver some 20 seats to the Tories, may well go down in consequence.  As the Commons breaks for the summer, rain is washing away sunny memories of that Rose Garden press conference summer of 2010.

So overall, a Lib-Lab Coalition would be far more natural...

Unlike Tim Montgomerie, I don't believe that the formation of the Coalition was a mistake, for one reason: if the Liberal Democrats had forced a second election, David Cameron wouldn't have won it on present boundaries (any more than he won that of May 2010); and if they hadn't forced such an election, they would simply have joined with Labour to vote down radical Tory legisaltion in any event.  Better to have a solid platform for deficit reduction.  But the high hopes of those who originally floated making the Coalition permanent - step forward, Nicholas Boles - were never going to be realised, because the hearts of the two parties pulse to different drumbeats.

Now try a thought experiment.  Suppose that the last election had handed Labour twenty more seats, and Gordon Brown was still hanging on as Prime Minister, governing with Ed Balls as Chancellor and Mr Clegg as Deputy Prime Minister (now there's a surprise).  Would a Lab-Lib coalition differ on the EU in any meaningful way?  No.  On staying in the ECHR? No.  On Lords Reform? No: Ed Miliband's party voted for the second reading of the Lords Reform bill.  On English votes for English laws? No.  On immigration control or law and order? No - or certainly no more than the Liberal Democrats disagree with their present Coalition partner.

...Especially since the Liberal Democrats and Miliband could patch up their differences on the speed of deficit reduction

Only over AV would there have been any serious difference (and even here, Labour are better placed than the Conservatives to make common cause with Mr Clegg: not a single senior Tory backed AV, while change to the system was supported by Mr Miliband himself, as well as Mr Balls).  Ah, I hear you say: but what about the economy?  I'm afraid the answer is discomforting, to Conservative ears at least.  In the event of Labour and the Liberal Democrats having had the Commons numbers to make a shot of Coalition, Clegg & Co would simply have agreed a Darling-style deficit reduction programme with Mr Balls.

After all, the party's election manifesto declared: "If spending is cut too soon, it would undermine the much-needed recovery and cost jobs".  Isn't this exactly the song that Mr Balls is singing now?  Such a deal would have suited both him and Mr Clegg.  It would have delivered Mr Clegg the keys to the Deputy Premiership.  (He really had his options covered, did the Liberal Democrat leader.)  And it would have delivered Mr Balls the Treasury, which he has always coveted, plus a nice line for Labour backbenchers: "Sorry I can't do everything that you want - because Nick Clegg just won't have it."  Heard that one anywhere else recently?

In an age of likely coalitions, the most natural one is Lib-Lab

A falling share of the vote for the main parties means a rising chance of coalitions.  Possibilities abound.  This Parliament has already seen a great small-c coalition of Tory and Labour voters join to crush AV.  Some Conservatives would like to see a formal Tory-UKIP coalition, but that's a horse of a different colour - a pre-not-post-election coalition.  There is this Conservative-Liberal Democrat coalition.  And then there is a possible Labour-Liberal Democrat one.  39% of Conservative backbenchers have rebelled against this Government.  Their actions are followed closely.  But - startlingly - 60% of Liberal Democrat backbenchers have done so too.

Would a Labour-Liberal Democrat coalition have spurred such a high strike rate?  I doubt it.  Historians may look back on the Coalition as a bold but flawed attempt by Messrs Cameron and Osborne to frustrate the realignment of the Left of which Roy Jenkins dreamed: Mr Cameron's Sunday Times (£) article yesterday was a valiant attempt to keep it going.  But Mr Miliband has already swallowed up the left-wing half of the Liberal Democrats' 2010 vote.  He has a natural platform of some 35% of the vote.  All he'd need to be Prime Minister with a workable majority, in the event of failing to win much more than that percentage, is a deal with the Liberal Democrats.

And in the meanwhile, Mr Cameron needs an eight or so point lead over Labour on those boundaries to form a majority next time round.  Can he do it? Yes.  Is it likely? No.  And if there is no overall majority, will the rump of Liberal Democrats who remain in the next Parliament prefer to stick with Mr Cameron or to take their chance with Mr Miliband?  I don't know, but to stay with the Tories would be to risk permanent amalgamation - the fate of the National Liberals.  At any rate, a lesson of the last two years is that the instincts of Tory and Liberal Democrat hearts are different.  Those of Labour and Liberal Democrats ones are less so.  Draw the obvious conclusion.