Why Clegg's head is no longer the price of a Labour-Lib Dem coalition

With Labour uncertain of winning a majority and the Deputy PM certain to be around in May 2015, Miliband and Balls can no longer afford to treat him as a barrier to an agreement.

In the aftermath of the 2010 general election, senior Labour figures wasted little time in signalling that Nick Clegg's departure would be a precondition of any future Labour-Lib Dem coalition. As Ed Miliband told the New Statesman in August 2010: "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."

Ed Balls similarly suggested that there was little or no prospect of Labour working with Clegg, stating as recently as September 2012: "Nick Clegg made his decisions and I think the way he’s gone about his politics makes things very difficult [to form a coalition with him]". Just as Clegg demanded Gordon Brown's head in 2010, so Labour would demand his if it won in 2015. 

But as my interview with Balls in this week's NS revealed, the shadow chancellor has had a dramatic change of heart. After telling me that he had a "friendly chat" with the Deputy PM in the Commons a few hours before we met, he said of the possibility of a coalition with Clegg: 

I think what you always have to do is deal with politics as you find it. We’re fighting hard for a majority, who knows how things will turn out, I think, look, very many Labour Party members, voters, supporters, would find that very difficult and some Liberal Democrat voters would find that very difficult as well, but we’ll deal with the situation as we find it. I saw that subsequently he made a further statement to one of the newspapers that these things weren’t about personalities, and I think he’s right about that.

While criticising Clegg's support for an accelerated deficit reduction programme in 2010, for the abolition of the 50p tax rate and for the bedroom tax, he also told me that he "understood" his decision to enter coalition with the Conservatives and his need to support "a credible deficit reduction plan", because "it was necessary in 2010". 

Miliband has not gone as far as Balls in seeking rapprochement with the Lib Dem leader, but it is notable that he no longer suggests that his departure would essential for a coalition agreement between the two parties. 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 in 2010. 

So what's changed? First, Labour's poll lead is no longer large enough for the party to be confident of winning a majority in 2015. At the end of 2012, its average lead in YouGov surveys stood at 10 points, it now stands at six with over a year still to go until the general election. As a result, Labour cannot afford to ignore the significant possibility of another hung parliament and of coalition negotiations with the Lib Dems. One shadow minister recently told me that he had been encouraged to look for "points of agreement" with the Lib Dems and to consider constitutional reforms that would appeal to the party, citing the example of proportional representation for local elections. 

Second, Clegg is now almost certain to lead his party into the general election. Until last year's Eastleigh by-election (defeat in which would likely have been terminal for the Deputy PM) and the humbling of Vince Cable at the 2013 Lib Dem conference, it was far from clear that this would be the case. As Balls told the Times in September 2012: "I would be very surprised if Nick Clegg fights the next election for the Liberal Democrats — I don’t think it’s in the Liberal Democrat or the national interest."

But the Eastleigh victory, which reassured the Lib Dems that they are not destined for electoral wipeout in 2015, and the return of economic growth, which raised hopes that they could derive some political benefit from the coalition, combined to shore up Clegg's position. The Lib Dems' subsequent decision to endorse his stances on deficit reduction, tuition fees and the 50p tax at their conference finally confirmed him as master of his party. 

Third, defining politics by individuals, rather than ideas, sits uneasily with the more principled approach that Miliband is a tireless advocate of. It is not personalities but policies that will determine how and whether Labour strikes a deal with the Lib Dems in the event of a hung parliament. As Harriet Harman recently noted, Clegg and Miliband have worked together on issues including the boundary changes and press regulation. She said on Question Time: "He's [Miliband] 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."

Labour MPs have been struck by the increasing degree of policy overlap between the two parties. In the last year, Labour has called for the introduction of a mansion tax on property values above £2m, a 2030 decarbonisation target for electricity, the removal of Winter Fuel Payments from the wealthiest 5 per cent of pensioners, higher capital investment (in preference to a temporary VAT cut) funded by a rise in borrowing, and a reduction in the voting age to 16. What all of these policies have in common is that they have all either been proposed or championed by the Lib Dems.

This is far from the only motive for their adoption but Miliband and Balls are too shrewd not to know that this shift will greatly enhance their chances of reaching an agreement with the third party in 2015. One of the most popular reads among Labour MPs last summer was Andrew Adonis's 5 Days in May in which the Labour peer and former transport secretary laments the party's failure to prepare for the 2010 hung parliament and urges it not to repeat this error. His advice has not been ignored. 

In response to the voting age pledge, Lib Dem MP Stephen Williams remarked: "If we can bank that as an agreement then if the next parliament does result in an inconclusive election, which I think is quite likely, the more issues that we know in advance that we're likely to agree on will make the negotiations swifter." His parliamentary colleagues are saying much the same thing. 

In 2010, the thought of Clegg and Miliband ever working together in government after 2015 seemed fantastical. But as so often in politics (recall that David Cameron described Clegg as his "favourite joke" before the 2010 election), all sides have been forced to think again. 

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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Everyone's forgotten the one issue that united the Labour party

There was a time when Ed Miliband spoke at Momentum rallies.

To label the row over the EU at Thursday’s Labour leadership hustings "fireworks" would be to endow it with more beauty than it deserves. Owen Smith’s dogged condemnation of John McDonnell’s absence from a Remain rally – only for Corbyn to point out that his absence was for medical reasons – ought to go down as a cringing new low point in the campaign. 

Not so long ago, we were all friends. In the course of the EU referendum, almost all of the protagonists in the current debacle spoke alongside each other and praised one another’s efforts. At a local level, party activists of all stripes joined forces. Two days before polling day, Momentum activists helped organise an impromptu rally. Ed Miliband was the headline speaker, and was cheered on. 

If you take the simple version of the debate, Labour’s schism on the EU appears as an aberration of the usual dynamics of left and right in the party. Labour's left is supposedly cheering a position which avoids advocating what it believes in (Remain), because it would lose votes. Meanwhile, the right claims to be dying in a ditch for its principles - no matter what the consequences for Labour’s support in Leave-voting heartlands.

Smith wants to oppose Brexit, even after the vote, on the basis of using every available procedural mechanism. He would whip MPs against the invocation of Article 50, refuse to implement it in government, and run on a manifesto of staying in the EU. For the die-hard Europhiles on the left – and I count myself among these, having run the Another Europe is Possible campaign during the referendum – there ought to be no contest as to who to support. On a result that is so damaging to people’s lives and so rooted in prejudice, how could we ever accept that there is such a thing as a "final word"? 

And yet, on the basic principles that lie behind a progressive version of EU membership, such as freedom of movement, Smith seems to contradict himself. Right at the outset of the Labour leadership, Smith took to Newsnight to express his view – typical of many politicians moulded in the era of New Labour – that Labour needed to “listen” to the views Leave voters by simply adopting them, regardless of whether or not they were right. There were, he said, “too many” immigrants in some parts of the country. 

Unlike Smith, Corbyn has not made his post-Brexit policy a headline feature of the campaign, and it is less widely understood. But it is clear, via the five "red lines" outlined by John McDonnell at the end of June:

  1. full access to the single market
  2. membership of the European investment bank
  3. access to trading rights for financial services sector
  4. full residency rights for all EU nationals in the UK and all UK nationals in the EU, and
  5. the enshrinement of EU protections for workers. 

Without these five conditions being met, Labour would presumably not support the invocation of Article 50. So if, as seems likely, a Conservative government would never meet these five conditions, would there be any real difference in how a Corbyn leadership would handle the situation? 

The fight over the legacy of the referendum is theatrical at times. The mutual mistrust last week played out on the stage in front of a mass televised audience. Some Corbyn supporters jeered Smith as he made the case for another referendum. Smith accused Corbyn of not even voting for Remain, and wouldn’t let it go. But, deep down, the division is really about a difference of emphasis. 

It speaks to a deeper truth about the future of Britain in Europe. During the referendum, the establishment case for Remain floundered because it refused to make the case that unemployment and declining public services were the result of austerity, not immigrants. Being spearheaded by Conservatives, it couldn’t. It fell to the left to offer the ideological counter attack that was needed – and we failed to reach enough people. 

As a result, what we got was a popular mandate for petty racism and a potentially long-term shift to the right in British politics, endangering a whole raft of workplace and legal protections along the way. Now that it has happened, anyone who really hopes to overcome either Brexit, or the meaning of Brexit, has to address the core attitudes and debates at their root. Then as now, it is only clear left-wing ideas – free from any attempt to triangulate towards anti-migrant sentiment– that can have any hope of success. 

The real dividing lines in Labour are not about the EU. If they were, the Eurosceptic Frank Field would not be backing Smith. For all that it may be convenient to deny it, Europe was once, briefly, the issue that united the Labour Party. One day, the issues at stake in the referendum may do so again – but only if Labour consolidates itself around a strategy for convincing people of ideas, rather than simply reaching for procedural levers.