Nick Clegg has resigned as leader of the Liberal Democrats. Photo: Getty
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Nick Clegg resigns as Lib Dem leader. Who will replace him?

Tim Farron is the most likely candidate.

Nick Clegg has resigned as leader of the Liberal Democrats. In his statement, he made a passionate defence of his party's record in government, saying that "There can be no down that the government of Britain is far stronger . . . and more liberal country than it was five years ago." He went on to say: "I hope at least our losses can be endured with a little dignity."

It was a terrible night for the Lib Dems, who have seen their parliamentary party dwindle from 57 seats to just 8. They lost some longstanding MPs and big hitters - Simon Hughes, Vince Cable, Ed Davey, Lynne Featherstone. As pundits have been saying ad nauseam all night, in coalition it’s always the little party that gets smashed.

Now that Clegg has gone, who will lead the much-reduced Lib Dems? There are two likely candidates:

Tim Farron

The MP for Westmorland and Lonsdale was one of the few Lib Dems to have a good election night - he defied the national swing against his party and was re-elected for his north-west constituency with a nearly 9,000-strong majority.  He’s been considered as the likely next leader for a while now (he served as party president 2011 - 2014), even though he’s a very different kind of politician to Nick Clegg. As George Eaton wrote after spending the day with Farron in March:

Farron is neither politically nor personally close to Nick Clegg, his party's leader. Indeed, perhaps no two senior Lib Dem figures are less alike. One is left-leaning, northern (Farron grew up in Preston), comprehensive-educated, Christian and folksy, the other is right-leaning, southern, privately-educated, atheist and technocratic. It is unsurprising that Farron was chosen to play Nigel Farage during Clegg’s preparation for his debates with the Ukip leader: the pair are natural antagonists.

The party is bound to feel like they need a change of direction in order to put the toxicity of their coalition years behind them, making Farron the most likely successor to Clegg.

Norman Lamb

A slightly longer shot for the leadership would be Norman Lamb, the MP for Norfolk North since 2001. He managed a majority of 4,000 this time. Lamb  is more closely associated with Nick Clegg and the coalition years than Farron, as he served as a minister since 2012 and was even Clegg’s PPS for a while. But he has impressed in his role as minister of state for care and support, talking a lot of sense on the looming elderly care crisis and spearheading their work on mental health. He’s from the right of the party, a so-called Orange-Booker, and is respected in Westminster by colleagues and the media. He represents continuity for the party - he would continue the “Clegg Project”, if there is such a thing.

But given how badly things have gone for the Lib Dems in this election, the party’s activists are surely going to want a chance of direction. Enter Tim Farron.

Caroline Crampton is assistant editor of the New Statesman.

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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.