The Tories’ latest frustration with the Lib Dems

Nick Clegg’s interview in The Observer today highlights what is fast becoming one of the biggest tensions in the coalition: the Lib Dem desire to show that they are the governing party who cares.

Allies of Iain Duncan Smith have been infuriated by Lib Dem suggestions that the government would be doing little about youth unemployment if it was not for them. But Clegg repeats the claim to The Observer:

‘Whether it’s on youth unemployment, whether it’s on youngsters, whether it’s on getting behind advanced manufacturing and not putting all our eggs into the City of London basket, I don’t think that would have happened without the coalition.’

A growing number of Tories worry that this Lib Dem critique could revive the ‘nasty party’ tag. Adding to this frustration is that the Lib Dems are simultaneously acting as a brake on the supply side reforms that lots of Tories think could help revive the economy.
 
But these coalition differences will be small beer compared to the ones that might occur after the collapse of the euro. As I say in the Mail On Sunday, the government is coming to the view that the break-up of the single currency is fast becoming the most probable option. If that were to happen, the knock on effects for the European Union would be huge and Britain would have to rapidly decide what parts of the project it should attempt to save and how. The Conservative and Liberal Democrat answers to this question will be very different.