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.
Show Hide image

Whisper it, but there's almost nothing Labour and the Lib Dems disagree on

Compared to the New Labour years, the degree of policy overlap between the two parties is remarkable.

Yesterday's PMQs bout between Harriet Harman and Nick Clegg was one of the most quietly revealing for months. Berated by Harman over the Lib Dems' support for the NHS reforms, the bedroom tax and the abolition of the 50p tax rate, Clegg chose not to respond by defending his party's conduct or by dismissing Labour as a juvenile opposition unprepared for "grown up" government. Instead, he devoted almost all of his time to condemning the last Labour government: "the party of 40p [tax], sweetheart deals in the NHS, the party of Fred Goodwin, and the party against apprenticeships". 

Clegg's nostalgia for the pre-2010 era is understandable. Back then, the Lib Dems were able to draw a series of progressive and politically beneficial dividing lines with Labour: the Iraq war, civil liberties, tuition fees, electoral reform, tax, banking regulation and NHS privatisation. But owing to Ed Miliband, these differences have expired. In his first speech as Labour leader, which I described at the time as "a love letter to Lib Dem voters", Miliband condemned the Iraq war ("I do believe that we were wrong"), denounced New Labour's approach to civil liberties ("government can itself become a vested interest"), criticised the introduction of top-up fees ("stuck in old thinking about higher and higher levels of personal debt"), the refusal to tax the rich fairly and the "light touch" system of financial regulation ("responsibility in this country shouldn’t just be about what you can get away with.") Far from being the party of 40p, sweetheart deals in the NHS and Fred Goodwin, Labour has become the party of 50p, anti-privatisation deals in the NHS and Glass-Steagall.

Compared to the Blair-Brown years, the degree of policy consensus between Miliband and Clegg's parties is remarkable. The Labour leader's support for an in/out EU referendum following any new transfer of powers from Britain to Brussels (a stance identical to that of the Lib Dems) is the latest in a long list of areas where the reds and the yellows have converged. Both parties now support: 

- A referendum on EU membership the next time any powers are transferred (and support for an "in" vote)

- The introduction of a mansion tax on property values above £2m 

- The reduction of the voting age to 16 

- The removal of Winter Fuel Payments from wealthy pensioners 

- A 2030 decarbonisation target 

- An elected House of Lords

- Greater oversight of the intelligence services 

- Radical devolution from Westminster to local authorities and city regions

- Party funding reform

- An end to unqualified teachers in state schools 

- A ban on for-profit free schools 

- Tougher banking regulation and the potential separation of banks' retail and investment arms 

- A mass housebuilding programme, including new social housing 

- The Human Rights Act

After all of these, the remaining differences between the parties (with the possible exception of deficit reduction and electoral reform) are largely trivial. Labour, for instance, has pledged to reintroduce the 10p tax rate, while the Lib Dems are committed to a higher personal allowance of £12,500. The Lib Dems are resolutely opposed to Miliband's planned energy price freeze. But it is easy to imagine the parties coming to an agreement ("we'll give you your energy price freeze if you give us our £12,500 personal allowance") in the event of coalition negotiations.

While it suits both sides to play up their differences for political purposes (the retention of Lib Dem defectors is crucial to Labour's election chances), the reality is that, beyond the bluster, there is now very little they disagree on. As party president Tim Farron (and the party's likely next leader) told me last year: "I think he [Ed Miliband] is somebody who is genuinely of the Robin Cook wing of the Labour Party, from their perspective what you’d call the 'soft left'. Somebody who is not a Luddite on environmental issues, somebody who’s open minded about modernising our democracy, somebody who’s instinctively a bit more pluralistic than most Labour leaders and a bit more internationalist as well." Certainly it is impossible to imagine Clegg, or any other Lib Dem, ever delivering a Labour-facing version of his 2013 conference speech in which he listed 16 Conservatives policies he had blocked.

What is now clear is that it would be far easier for Labour and the Lib Dems to come to an agreement in 2015 than it would be for the Tories and the Lib Dems to do so. And if, as is possible, both of the main parties win enough seats to form a majority government with Lib Dem support that may prove very significant. 

George Eaton is political editor of the New Statesman.

Photo: Getty Images
Show Hide image

Autumn Statement 2015: George Osborne abandons his target

How will George Osborne close the deficit after his U-Turns? Answer: he won't, of course. 

“Good governments U-Turn, and U-Turn frequently.” That’s Andrew Adonis’ maxim, and George Osborne borrowed heavily from him today, delivering two big U-Turns, on tax credits and on police funding. There will be no cuts to tax credits or to the police.

The Office for Budget Responsibility estimates that, in total, the government gave away £6.2 billion next year, more than half of which is the reverse to tax credits.

Osborne claims that he will still deliver his planned £12bn reduction in welfare. But, as I’ve written before, without cutting tax credits, it’s difficult to see how you can get £12bn out of the welfare bill. Here’s the OBR’s chart of welfare spending:

The government has already promised to protect child benefit and pension spending – in fact, it actually increased pensioner spending today. So all that’s left is tax credits. If the government is not going to cut them, where’s the £12bn come from?

A bit of clever accounting today got Osborne out of his hole. The Universal Credit, once it comes in in full, will replace tax credits anyway, allowing him to describe his U-Turn as a delay, not a full retreat. But the reality – as the Treasury has admitted privately for some time – is that the Universal Credit will never be wholly implemented. The pilot schemes – one of which, in Hammersmith, I have visited myself – are little more than Potemkin set-ups. Iain Duncan Smith’s Universal Credit will never be rolled out in full. The savings from switching from tax credits to Universal Credit will never materialise.

The £12bn is smaller, too, than it was this time last week. Instead of cutting £12bn from the welfare budget by 2017-8, the government will instead cut £12bn by the end of the parliament – a much smaller task.

That’s not to say that the cuts to departmental spending and welfare will be painless – far from it. Employment Support Allowance – what used to be called incapacity benefit and severe disablement benefit – will be cut down to the level of Jobseekers’ Allowance, while the government will erect further hurdles to claimants. Cuts to departmental spending will mean a further reduction in the numbers of public sector workers.  But it will be some way short of the reductions in welfare spending required to hit Osborne’s deficit reduction timetable.

So, where’s the money coming from? The answer is nowhere. What we'll instead get is five more years of the same: increasing household debt, austerity largely concentrated on the poorest, and yet more borrowing. As the last five years proved, the Conservatives don’t need to close the deficit to be re-elected. In fact, it may be that having the need to “finish the job” as a stick to beat Labour with actually helped the Tories in May. They have neither an economic imperative nor a political one to close the deficit. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.