When two tribes go to war....

At the beginning of this year, I wrote that if the Coalition government survived 2011, it would in all likelihood achieve its original objective of serving out a full five-year Parliamentary term.

What I was trying to say was not so much that it will all be plain sailing from 1 January 2012 onwards, but that if there was a point of maximum danger for the Cameron-Clegg government, it will come this year rather than any other.

The past few weeks seem to have proved the point, as tensions have erupted between the Coalition partners over a series of issues ranging from the NHS to immigration.

A year on from the opening TV debate between the party leaders which shaped the 2010 election campaign, serious commentators have started to pose the question whether another election might not be so very far off.

Last week I focused on the health reforms, and the ongoing Lib Dem-inspired backlash against health secretary Andrew Lansley's plan to hand control of the NHS budget to GPs.

Although they refrained from saying as much, the Lib Dems will doubtless have been privately rubbing their hands with glee at Mr Lansley's humiliation at the hands of Royal College of Nursing conference on Wednesday.

The yellows showed no such restraint however when Chancellor George Osborne suddenly enlivened what has thus far been a sleep-inducing campaign on whether to change the voting system.

Mr Osborne criticised the role of the Electoral Reform Society in simultaneously receiving taxpayers' money to run some of the referendum ballots and helping to fund the Yes campaign, saying: "That stinks frankly."

The comments earned the Chancellor a rebuke from his own Lib Dem deputy, chief secretary to the treasury Danny Alexander, who accused his departmental boss of "pretty desperate scaremongering."

It showed that, although the two sides have agreed to disagree on the subject of voting reform, it is very hard to have a civilised disagreement when the whole future of how we conduct our politics is at stake.

Predictably, however, the week's biggest Cob-Lib bust-up arose over Prime Minister David Cameron's decision to make a speech highlighting the impact of immigration on local communities.

Lib Dem Cabinet colleague Vince Cable said his words were "very unwise" and that the PM risked inflaming extremism.

Partly this was down to the timing of the speech, three weeks before some local elections in which the British National Party will once more attempt to make inroads.

But it also exposed real disagreements over the issue at the heart of the Coalition, with business secretary Dr Cable consistently arguing that putting a cap on immigration will limit firms' abilities to recruit key workers.

The Lib Dems have pointed out that Mr Cameron's wish to take net migration back to the levels of tens of thousands a year rather than hundreds of thousands is Conservative, as opposed to government policy.

The Coalition Agreement speaks merely of an "annual limit" on people coming to the UK from outside the European Union for economic reasons, making no reference to specific numbers.

One of the commentators who openly speculated this week that the Coalition might not see out its five-year term was the constitutional expert Vernon Bogdanor.

He pointed out that while the leaderships of both parties will almost certainly want to hug together until the end, the fate of coalitions is determined by restless, committed party members whom leaders cannot always control.

Mr Bogdanor is right to point out that it is the wildly differing nature of the two parties' memberships that gives the Coalition its inherent instability, while the good relations between their respective leaderships have hitherto been its biggest strength.

If this week's events are anything to go by, however, that may not always be the case.

Dave's useful idiots

Of all the many insults hurled at Gordon Brown during his troubled premiership, perhaps the most wounding was the one delivered by the then Lib Dem acting leader Vince Cable during Prime Minister's Questions in November 2007.

"The House has noticed the Prime Minister’s remarkable transformation in the last few weeks from Stalin to Mr Bean," he told guffawing MPs.

But three years on, the now former Prime Minister may well have permitted himself a wry smile or two at the transformation in Mr Cable's own political fortunes.

In the space of less than 12 months, he has gone from Saint Vince, the most trusted politician in Britain, to a man now widely regarded as little more than a useful idiot for the Tory-led coalition.

Some of it is purely by virtue of his having swapped the luxuries of opposition for the harsh realities of power, at a time when the government was bound to be unpopular whoever was in it.

Yet even within that context, Mr Cable has demonstrated an unusual ability to shoot himself in the head.

His 'declaration of war' on media baron Rupert Murdoch, after being honeytrapped by a pair of female undercover reporters into speaking too frankly about his government role, has backfired more spectacularly than a turbo-charged boomerang.

The end result was that Tory culture secretary Jeremy Hunt this week nodded through a deal which will make Murdoch the dominant player in UK print and broadcast media, with even more financial clout than the BBC.

But if Dr Cable's ambitions in the field of media policy have been well and truly thwarted, the same would seem to apply to his conduct of regional policy.

After the election last May, Dr Cable put it about that he was going into bat to ensure that those English regions that wanted to would retain a region-wide political and economic voice.

Such a stance was, after all, in keeping with a Lib Dem election manifesto that promised to "reform" regional development agencies rather than abolish them wholesale as the Tories' did.

At one stage, Dr Cable was privately telling regional political leaders that the RDAs in the North East, North West and Yorkshire would be effectively be preserved, under the new guise of Local Economic Partnerships.

On the face of it, it hardly seemed Dr Cable's fault that this did not end up happening, and that communities secretary Eric Pickles prevailed in his determination to dismantle the entire regional political infrastructure.

Yet a Freedom of Information request by the Newcastle Journal has since revealed that, far from putting up a huge show of resistance, Dr Cable met his Tory counterpart just twice to discuss the issue.

In terms of the bigger picture, the RDA abolition and the Murdoch bid for BskyB point to a wider political reality - the inability of the Lib Dems to influence major policy decisions taken by this government.

And if proof was needed that this is now a widespread perception among the public, the result of Thursday's Barnsley by-election, which saw the party slumping to sixth place, surely provides it.

For some of us, the result brought back memories of those dear, dead days when world-weary Lib Dem activists used to sing a song called 'Losing Deposits' on the last night of their annual conference, to the tune of 'Waltzing Matilda.'

But for Dr Cable and his fellow Lib Dem ministers, there will be no such wallowing in nostalgia for more innocent political times.

Evidence is mounting that membership of this Coalition government is destroying the Lib Dems as a political force – possibly permanently.

How much more of it the party can take before it is obliged to go its own separate way will continue to be the defining question in British politics over the coming months.

'Gunboat diplomat' leaves Coalition in a pickle

More than 20 years ago, a young , Conservative council leader gained a measure of notoriety after unexpectedly seizing control of the hitherto safe Labour authority of Bradford.

Storming into office at the May 1988 local elections, he announced a five-year plan to cut the council's budget by £50m, slash the workforce by a third, and outsource most council-run services to private operators.

For a while, 'Bradford-style Toryism' became something of a by-word in local government circles, with some like-minded authorities modelling themselves on it, while others cited it as a warning of what happened when Tories took control.

After its brief flirtation with uber-Thatcherism, Bradford soon returned to the Labour fold - but that Tory council leader went on to become probably the most influential politician to emerge from local government since Labour's David Blunkett.

His name was of course Eric Pickles and, as Secretary of State for Communities and Local Government in the coalition administration, he is now in ultimate charge not just of Bradford but of every town and city hall in the country.

Among grassroots Tories, Mr Pickles is a hugely popular figure – but it is fair to say those feelings are not always shared by his Liberal Democrat Cabinet colleagues – or by political leaders in the North-East region.

During the early months of the Coalition, he fought a running battle with Business Secretary Vince Cable over whether the North-East should retain a distinctive regional voice – a battle characterised by briefing and counter-briefing on both sides.

It did not help that Prime Minister David Cameron was bored by the stalemate and told the protagonists to sort it out between themselves rather than taking sides.

What sort of regional political institutions will emerge from that process is still unclear. Many hope the proposed local economic partnership covering Durham, Northumberland and Tyne and Wear will be able to take on at least some of the role of axed regional development agency One NorthEast.

But the limitations of the scorched earth approach to all things regional employed by Mr Pickles and others in the Coalition's early days are already becoming clear.

As was revealed in a parliamentary answer this week, Dr Cable's department for Business, Innovation and Skills is having to create new local offices to carry out work previously carried out by the regional government offices.

This provides further proof of what some of us were saying all along: that if the regional tier of governance did not exist, it would be necessary to invent it.

But if Mr Pickles' pathological hatred of regionalism has caused controversy in the North-East, his attitude to local government spending has caused ripples on a far wider scale.

Newcastle council leader David Faulkner was only one of more than 90 Liberal Democrat councillors who signed a letter to The Times this week protesting at the scale and pace of cuts to their authorities.

Part of their anger stems from Mr Pickles' uncompromising political style, which they described as 'gunboat diplomacy.'

"The secretary of state's role should be to facilitate necessary savings while promoting the advance of localism and the Big Society. Unfortunately, Eric Pickles has felt it better to shake a stick at councillors than work with us," said the letter.

The reference to the Big Society was illuminating, in the context of Labour-run Liverpool's recent refusal to co-operate with Mr Cameron's flagship initiative.

But the wider political significance of the row over local government spending is that it plays into the area of relations between the two governing parties.

Lib Dem leader Nick Clegg needs to be able to take his party with him if the Coalition is to survive long-term, and on this issue he is clearly some way from succeeding.

And there is only one place that will ultimately leave the government: in a pickle.

Why 2011 is the Coalition's make-or-break year

Two weeks ago I concluded my review of the political year 2010 by posing a question which will, in my view, determine how the next 12 months in British politics ultimately pan out.

It was: can the Coalition government as a whole withstand the dramatic loss in popularity suffered by the Liberal Democrats since their decision to go into partnership with David Cameron’s Tories.

As Ricky Ponting can no doubt testify, a team is only as good as its weakest link, and with public support for the Lib Dems now barely registering in double figures, Nick Clegg’s party are clearly the weakest link in this government.

The big question for Mr Clegg is how much lower he can afford to allow that support to drop before continuing membership of the Coalition simply becomes politically unsustainable.

If any further proof were needed of the Coalition’s inherent instability, then the Vince Cable affair in the run-up to Christmas surely provided it.

There were several ironies about this episode, not least that a newspaper which shared Dr Cable’s hostility to Rupert Murdoch’s takeover of BSkyB managed to shoot itself so comprehensively in the foot.

But surely the biggest irony of all is that, for all the humiliation he heaped upon himself, Dr Cable turned out to be correct in his estimation that he was, in effect, unsackable.

Whatever you think of the methods used to ‘entrap’ him, any other minister who displayed such appalling naivety and lack of judgement would surely have been out of the door.

But because Mr Cameron dare not weaken the Lib Dem element of the Coalition for fear that the whole edifice will collapse, he survived - thought not without having his wings severely clipped.

So much for the events of the week before Christmas. What of the year ahead?

Well, since this is traditionally the time of year for crystal ball gazing, I’ll make a prediction. If the Coalition gets through the next 12 months, it will more than likely achieve its ambition of serving a full five-year parliamentary term.

Why is 2011 likely to prove the Coalition’s make-or-break year? Well, for starters, it is likely to become significantly more unpopular as the cuts bite, unemployment continues to rise, and the full implications of some of its more radical experiments become clear.

I have in mind here Andrew Lansley’s NHS reforms and Michael Gove’s de-municipalisation of schools, neither of which can claim much of a popular mandate.

But the biggest single threat to the Coalition’s survival is the time-bomb that is due to detonate underneath it on Thursday 5 May – the referendum on the alternative voting system.

If, as many now expect, the referendum is lost, it will remove the Lib Dems’ main incentive for having entered the partnership in the first place.

For Labour leader Ed Miliband, too, this will be a critical 12 months, as he seeks to demonstrate to a sceptical public why he, and not his elder brother, is the right man for the job.

At least he now has a clearer opposition strategy, seeking to brand this a Conservative-led government supported by reluctant Liberal Democrats rather than the marriage of true minds Messrs Clegg and Cameron would like to portray.

Yet for all that, Mr Miliband is probably no more keen to bring the government down right now than Dr Cable: his party is broke, he hasn’t had time to overhaul the policies that lost it the last election, and the public doesn’t really know him.

If the Coalition does manage to survive the year, it might simply be because none of the three main parties really wants to have another election just yet.

Clegg has played a blinder

Okay, so I would have preferred a Lib-Lab coalition, but the numbers were never really there, the dangers for the Lib Dems in being seen to prop up a defeated party were obvious, and as it became clear today, elements of the Labour Party were not really fully signed up to it anyway, be that out of ideological purism (Diane Abbott), a desire to rub Gordon Brown's nose in it (John Reid, David Blunkett), or positioning for the forthcoming party leadership election (Andy Burnham.)

So instead we have the LibServative option, and on paper, it doesn't seem like a bad outcome. Whatever my own personal feelings, I have said on more than one occasion during this election that the will of the public was probably towards some sort of Con-Lib coalition, and as such I don't think there will be anything like the kind of backlash towards this deal that a Lib-Lab agreement might have attracted.

In terms of policy positions, the initial signs are good, with the Tories have dropped their absurd regressive stance on inheritance tax in favour of the Lib Dem policy of raising thresholds for the worst off, and of course the guarantee of a referendum on the alternative vote which, even if it is likely to be opposed by both main parties, stands a good chance of winning a yes vote from the public.

There also appears to have been a very broad level of agreement between the two parties over civil liberties issues, with the prospect of a 'Freedom Bill' to scrap not only ID cards, but many of Labour's little-used criminal justice measures of the past 13 years.

On personnel, I am obviously delighted to see Nick Clegg as Deputy Prime Minister and it is no less than he deserves for having not only fought a brilliant election campaign, but also for his conduct of the negotiations over the past few days. I am less delighted to see George Osborne move into the Treasury - Ken Clarke, Vince Cable or Phil Hammond would all have been preferable in my eyes - but you can't have everything.

The one outstanding mystery as we approach the early hours surrounds the post of Home Secretary. The absense of any briefing from No 10 clearly indicates that the job is not going to go to Chris Grayling, but may not necessarily mean it is going to Chris Huhne either. Could it be David Davis? If so, that would get the biggest cheer of all from me - the icing on the cake of what looks set to be a liberal government in the classical sense of the term.

Will Vince Cable be the next Chancellor?

IN an election where the state of the economy is likely to be more central than ever to the outcome, it is not surprising that the identity of the next Chancellor is almost as burning an issue as that of the next Prime Minister.

From being seen at one time as a weak link in Labour’s armoury – not least by Gordon Brown himself who wanted to replace him with Ed Balls – Alastair Darling has unexpectedly emerged as one of the government’s few genuine assets.

Okay, so his third Budget ten days ago contained no new ideas and few positive reasons to vote Labour on May 6 save that of ‘better the devil you know.’

But that was not the point. Somehow, Mr Darling seems to have established himself in the public’s mind as that rare thing in 21st Century Britain – a politician who tells it like it is.

So the TV confrontation this week between Mr Darling and his opposition shadows Vince Cable and George Osborne was one of the more eagerly awaited events of the seemingly interminable pre-election countdown.

It was given added spice by the fact that Mr Osborne’s political trajectory has been almost the diametric opposite of Mr Darling’s over the past two and a half years.

Back in the autumn of 2007, he was the Tory hero whose bold promise to raise inheritance tax thresholds was seen as largely responsible for putting the frighteners on Mr Brown’s election plans.

But just as that IT pledge has become something of a millstone around the Tories’ necks in these more straitened times, so Mr Osborne has become increasingly perceived as their ‘weakest link.’

It was very clear from the Tory Shadow Chancellor’s performance in Monday night’s debate that he had been reading the findings of Labour’s focus groups which called him “shrill, immature and lightweight.”

But in his efforts to appear statesmanlike, he rather over-compensated, leading one pundit to describe he and Mr Darling as “the bland leading the bland.”

Instead, it was Mr Cable who earned the lion’s share of the audience applause on the night, for instance over his refusal to indulge in impossible promises on NHS spending.

So which one of them, if any, will be Chancellor? It’s not necessarily as straightforward a question as it may seem.

Sure, if Labour wins outright, Mr Darling will stay on. Mr Brown has already been forced to say as much, putting his old ally Mr Balls’ ambitions on hold once more.

But in the event of a Tory victory, or a hung Parliament, the situation becomes much less clear cut.

There have long been rumours in Tory circles that Mr Osborne won’t go to 11 Downing Street even if they win outright.

The talk is that David Cameron could give the job of sorting out the economic mess either to old-hand Ken Clarke, or to right-wing axe-man Philip Hammond.

Most intriguing is the fate of Mr Cable. Clearly he will not be Chancellor in a Lib Dem government – but could he hold the role in a Labour or Tory-led coalition?

The short answer to that is yes. For all Lib Dem leader Nick Clegg’s refusal to play the ‘kingmaker,’ securing the Treasury for Mr Cable is likely to be central to any post-election deal in a hung Parliament.

The opinion polls continue to point to this as the likeliest election outcome, with the Tory lead still insufficient to give them an outright majority.

The race for Number 10 clearly lies between Mr Cameron and Mr Brown. But in the race for Number 11, it is the Liberal Democrat contender who is in pole position.