Clegg should take the high ground with Miliband and shame the Tories into action

If he wants to solve his party's funding problems, the Lib Dem leader should form an alliance with Labour.

"A principle isn’t a principle until it costs you money", wrote Bill Bernbach, generally acknowledged to be the greatest adman of the 20th Century (which readers of the New Statesman may not necessarily view as the most worthy of monikers, but you’d have to admit, he knew how to turn a phrase).

It’s a sentiment that I suspect Ed Miliband would concur with. And more to the point, I suspect the public would concur with.  If Labour can show they have made a decision that will cost them millions – and they'd better be sure that the New Statesman is right on that, and that the FT is wrong- then the public will reward them for a principled decision. And how deftly Ed Miliband has turned the tables on Cameron, who now has to make some pretty tough decisions himself on party funding and second incomes for backbench Tory MPs (and if he does ban the latter, you’d suspect a few more letters will be heading Graham Brady's way). 

But where does all this leave Nick Clegg and the Lib Dems? The answer is - facing both an opportunity and a threat. Being perennially stuffed for cash, made much worse by the removal of short money when we went into government, funding reform has been high on the priority list for the Lib Dems for some time. It seemed that the chance to do something about it this parliament had gone – but now suddenly it’s back on the table again, an opportunity Nick Clegg was quick to point out in DPMQs yesterday.

More than that,  Nick’s spotted a bit of an opportunity too; why not, as part of the 'opt-in' system let union members name the party they would like their political levy to go to? For example, the majority of Unite members don’t vote Labour. It's quite a thought isn’t it, Unite, Unison and the GMB posting off cheques on behalf of their members to the Lib Dems, the Greens, the Tories…

However, there are downsides to this wheeze; when one party is in the process of costing themselves a fortune on a point of principle, trying to instigate a get rich quick scheme may not play well to the gallery. In fact, you look like a bit of an ambulance chaser. Especially when you have a Michael Brown- shaped rock your opponents can throw back at you.

Far better, I think, for Nick to take the high ground and form an alliance with Labour on party funding reform, shaming the Tories into action. To quote Bill Bernbach again: "If you stand for something, you will always find some people for you and some against you. If you stand for nothing, you will find nobody against you, and nobody for you".

Nick should leave the tactical stuff on party funding to the troops and go climb the high ground with Ed. After all, who knows where such teamwork may lead…

Nick Clegg and Ed Miliband attend a ceremony at Buckingham Palace to mark the Duke of Edinburgh's 90th birthday on June 30, 2011 in London. Photograph: Getty Images.

Richard Morris blogs at A View From Ham Common, which was named Best New Blog at the 2011 Lib Dem Conference

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Why relations between Theresa May and Philip Hammond became tense so quickly

The political imperative of controlling immigration is clashing with the economic imperative of maintaining growth. 

There is no relationship in government more important than that between the prime minister and the chancellor. When Theresa May entered No.10, she chose Philip Hammond, a dependable technocrat and long-standing ally who she had known since Oxford University. 

But relations between the pair have proved far tenser than anticipated. On Wednesday, Hammond suggested that students could be excluded from the net migration target. "We are having conversations within government about the most appropriate way to record and address net migration," he told the Treasury select committee. The Chancellor, in common with many others, has long regarded the inclusion of students as an obstacle to growth. 

The following day Hammond was publicly rebuked by No.10. "Our position on who is included in the figures has not changed, and we are categorically not reviewing whether or not students are included," a spokesman said (as I reported in advance, May believes that the public would see this move as "a fix"). 

This is not the only clash in May's first 100 days. Hammond was aggrieved by the Prime Minister's criticisms of loose monetary policy (which forced No.10 to state that it "respects the independence of the Bank of England") and is resisting tougher controls on foreign takeovers. The Chancellor has also struck a more sceptical tone on the UK's economic prospects. "It is clear to me that the British people did not vote on June 23 to become poorer," he declared in his conference speech, a signal that national prosperity must come before control of immigration. 

May and Hammond's relationship was never going to match the remarkable bond between David Cameron and George Osborne. But should relations worsen it risks becoming closer to that beween Gordon Brown and Alistair Darling. Like Hammond, Darling entered the Treasury as a calm technocrat and an ally of the PM. But the extraordinary circumstances of the financial crisis transformed him into a far more assertive figure.

In times of turmoil, there is an inevitable clash between political and economic priorities. As prime minister, Brown resisted talk of cuts for fear of the electoral consequences. But as chancellor, Darling was more concerned with the bottom line (backing a rise in VAT). By analogy, May is focused on the political imperative of controlling immigration, while Hammond is focused on the economic imperative of maintaining growth. If their relationship is to endure far tougher times they will soon need to find a middle way. 

George Eaton is political editor of the New Statesman.