Is Clegg's head no longer the price of a Labour-Lib Dem coalition?

Harriet Harman suggests that Ed Miliband would not force Nick Clegg to stand down before forming a coalition with the Lib Dems in 2015.

With another hung parliament looking ever more likely in 2015 (Labour's lead stands at just one in today's YouGov poll), the question of whether Ed Miliband and Nick Clegg could ever work together is being asked again. At one point, it looked doubtful that Clegg would lead his party into the next election, but the Eastleigh by-election, the economic recovery and the wane of Vince Cable's star have combined to create an unlikely political rebirth. 

In interviews at the Lib Dem conference, Clegg, unsurprisingly, left the door open to a partnership with Miliband: "If the British people say that the most legitimate outcome of the next general election would be a Labour-Liberal Democrat coalition, of course I would be prepared to play my part in that."

But what of Miliband? Back in 2010, when hatred towards the Lib Dems ran raw, he suggested that, just as Clegg insisted on Gordon Brown's departure, so the Deputy PM's head would be the price of a Labour-Lib Dem coalition. He told the New Statesman: "Given what he is supporting, I think it is pretty hard to go into coalition with him."

Asked again, "so you wouldn't work with Nick Clegg?", he replied: "That's right. No."

But when David Dimbleby reminded Harriet Harman of this on last night's Question Time, she replied: 

I'm sure that must be a misquote? I mean, he's worked with him on, for example, tackling the problems of all the phone-hacking and the Tories trying to rig the boundaries, so actually when we've put forward a proposal that the Lib Dems are prepared to support then they do work with us. But we want an overall majority. 

A misquote, as my former NS colleague Mehdi Hasan stated on Twitter, it was not. But it is striking how Miliband's rhetoric towards Clegg has softened since 2010. Last summer, for instance, he told the Independent, "I would find it difficult to work with him", which is some distance from the unambiguous "no" he offered two years before. 

Much will, of course, depend on how great the Lib Dem losses are and how close Labour is to a majority. But judging by Harman's words, it seems the party has decided that it no longer afford to go into the election ruling out any deal with Clegg. 

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.

George Eaton is political editor of the New Statesman.

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Scotland's vast deficit remains an obstacle to independence

Though the country's financial position has improved, independence would still risk severe austerity. 

For the SNP, the annual Scottish public spending figures bring good and bad news. The good news, such as it is, is that Scotland's deficit fell by £1.3bn in 2016/17. The bad news is that it remains £13.3bn or 8.3 per cent of GDP – three times the UK figure of 2.4 per cent (£46.2bn) and vastly higher than the white paper's worst case scenario of £5.5bn. 

These figures, it's important to note, include Scotland's geographic share of North Sea oil and gas revenue. The "oil bonus" that the SNP once boasted of has withered since the collapse in commodity prices. Though revenue rose from £56m the previous year to £208m, this remains a fraction of the £8bn recorded in 2011/12. Total public sector revenue was £312 per person below the UK average, while expenditure was £1,437 higher. Though the SNP is playing down the figures as "a snapshot", the white paper unambiguously stated: "GERS [Government Expenditure and Revenue Scotland] is the authoritative publication on Scotland’s public finances". 

As before, Nicola Sturgeon has warned of the threat posed by Brexit to the Scottish economy. But the country's black hole means the risks of independence remain immense. As a new state, Scotland would be forced to pay a premium on its debt, resulting in an even greater fiscal gap. Were it to use the pound without permission, with no independent central bank and no lender of last resort, borrowing costs would rise still further. To offset a Greek-style crisis, Scotland would be forced to impose dramatic austerity. 

Sturgeon is undoubtedly right to warn of the risks of Brexit (particularly of the "hard" variety). But for a large number of Scots, this is merely cause to avoid the added turmoil of independence. Though eventual EU membership would benefit Scotland, its UK trade is worth four times as much as that with Europe. 

Of course, for a true nationalist, economics is irrelevant. Independence is a good in itself and sovereignty always trumps prosperity (a point on which Scottish nationalists align with English Brexiteers). But if Scotland is to ever depart the UK, the SNP will need to win over pragmatists, too. In that quest, Scotland's deficit remains a vast obstacle. 

George Eaton is political editor of the New Statesman.