Will the Lib Dems reach for the eject button?

As Cameron and Clegg relaunch the coalition, the Lib Dems plan an early exit.

Two years on from their famous love-in at the Downing Street rose garden, David Cameron and Nick Clegg have chosen the appropriately sober setting of an Essex factory for their post-election "relaunch". All the talk is of the pair "renewing their vows" but that's not quite right. Cameron's betrayal of Clegg during the AV campaign meant that the marriage was dissolved long ago. It's not personal, it's just business, is the coalition's new mantra.

Despite Cameron's fear of his government being seen as a "bunch of accountants", the pair will insist that the coalition's raison d'être remains deficit reduction. As the PM will say:

Two years ago our two parties came together to form a strong Coalition. We agreed that our number one priority was to keep Britain safe from the financial storm and to rescue our economy from the mess left by the last Labour Government. That was and remains our guiding task.

But if deficit reduction is the coalition's "guiding task", it's worth pointing out that it hasn't been very good at it. The government borrowed £126bn in 2011-12, £10bn more than Osborne predicted in his "emergency" Budget, and the national debt is set to reach £1.4 trillion by 2014-15. Of course, it's hard to borrow less when the economy is shrinking. In this respect, the government's biggest mistake was to prioritise defict reduction above all else. As Keynes once remarked, "look after unemployment and the Budget will look after itself".

There will be some token references to growth in the speech, with Clegg promising a "renewed sense of urgency" and a "redoubling of our efforts" on getting more credit into the economy and building infrastructure. Yet the refusal of Osborne's "fiscally neutral" Budget to endorse stimulus meant that the real chance to boost growth was missed. Cameron and Clegg will insist that the damage done by the financial crisis was "greater than anyone thought" but to the voters, who have seen their living standards plummet at the fastest rate since the 1920s, this will just sound like another excuse.

Osborne's toxic Budget means that the pair can't even fall back on the old saw that "we're all in this together". Spying a political opportunity, Ed Miliband will also be in Essex today, calling for the reintroduction of the 50p tax rate and the repeal of the "granny tax".

The next election may still be three years away (although it doesn't feel like it, we're not even halfway through the coalition's term) but both parties already have their eyes on 2015. Two years ago, there was talk of a Tory-Lib Dem pact at the next election. Now, figures on both sides suggest that the coalition may not even make it that far. Today's Times (£) reports that the Lib Dems are considering withdrawing from the coalition "well before" May 2015 to allow the party to "reassert its independence". Given the scale of their losses last week (the Lib Dems now have fewer than 3,000 councillors, the lowest number since the party was formed in 1988), that's no surprise. As Matthew Oakeshott, Vince Cable's representative on earth, has warned, if the Lib Dems suffer more defeats like that one, they will not be able to fight the next election as a national party.

Senior Lib Dems say the party needs to leave the coalition "well before" May 2015. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo:Getty
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Why isn't Labour putting forward Corbynite candidates?

Despite his successes as a candidate, the organisational victories have gone the way of Corbyn's opponents. 

The contest changes, but the result remains the same: Jeremy Corbyn’s preferred candidate defeated in a parliamentary selection. Afzhal Khan is Labour’s candidate in the Manchester Gorton by-election and the overwhelming favourite to be the seat’s next MP.

Although Khan, an MEP, was one of  the minority of Labour’s European MPs to dissent from a letter from the European parliamentary Labour party calling for Jeremy Corbyn to go in the summer of 2016, he backed Andy Burnham and Tom Watson in 2015, and it is widely believed, fairly or unfairly, that Khan had, as one local activist put it, “the brains to know which way the wind was blowing” rather than being a pukka Corbynite.

For the leader’s office, it was a double defeat;  their preferred candidate, Sam Wheeler, was kept off the longlist, when the party’s Corbynsceptics allied with the party’s BAME leadership to draw up an all ethnic minority shortlist, and Yasmine Dar, their back-up option, was narrowly defeated by Khan among members in Manchester Gorton.

But even when the leadership has got its preferred candidate to the contest, they have been defeated. That even happened in Copeland, where the shortlist was drawn up by Corbynites and designed to advantage Rachel Holliday, the leader’s office preferred candidate.

Why does the Labour left keep losing? Supporters combination of bad luck and bad decisions for the defeat.

In Oldham West, where Michael Meacher, a committed supporter of Jeremy Corbyn’s, was succeeded by Jim McMahon, who voted for Liz Kendall, McMahon was seen to be so far ahead that they had no credible chance of stopping him. Rosena Allin-Khan was a near-perfect candidate to hold the seat of Tooting: a doctor at the local hospital, the seat’s largest employer, with links to both the Polish and Pakistani communities that make up the seat’s biggest minority blocs.  Gillian Troughton, who won the Copeland selection, is a respected local councillor.

But the leadership has also made bad decisions, some claim.  The failure to get a candidate in Manchester Gorton was particularly egregious, as one trade unionist puts it: “We all knew that Gerald was not going to make it [until 2020], they had a local boy with good connections to the trade unions, that contest should have been theirs for the taking”. Instead, they lost control of the selection panel because Jeremy Corbyn missed an NEC meeting – the NEC is hung at present as the Corbynsceptics sacrificed their majority of one to retain the chair – and with it their best chance of taking the seat.

Others close to the leadership point out that for the first year of Corbyn’s leadership, the leader’s office was more preoccupied with the struggle for survival than it was with getting more of its people in. Decisions in by-elections were taken on the hop and often in a way that led to problems later down the line. It made sense to keep Mo Azam, from the party’s left, off the shortlist in Oldham West when Labour MPs were worried for their own seats and about the Ukip effect if Labour selected a minority candidate. But that enraged the party’s minority politicians and led directly to the all-ethnic-minority shortlist in Manchester Gorton.

They also point out that the party's councillor base, from where many candidates are drawn, is still largely Corbynsceptic, though they hope that this will change in the next round of local government selections. (Councillors must go through a reselection process at every election.)

But the biggest shift has very little to do with the Labour leadership. The big victories for the Labour left in internal battles under Ed Miliband were the result of Unite and the GMB working together. Now they are, for various reasons, at odds and the GMB has proven significantly better at working shortlists and campaigning for its members to become MPs.  That helps Corbynsceptics. “The reason why so many of the unions supported Jeremy the first time,” one senior Corbynite argues, “Is they wanted to move the Labour party a little bit to the left. They didn’t want a socialist transformation of the Labour party. And actually if you look at the people getting selected they are not Corbynites, but they are not Blairites either, and that’s what the unions wanted.”

Regardless of why, it means that, two years into Corbyn’s leadership, the Labour left finds itself smaller in parliament than it was at the beginning.  

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.