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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.

The remarkable degree of policy overlap.
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.

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.