Can Cameron resist the siren calls of the Tory right?

At the start of a new year, the Coalition reaches an important milestone. On Monday, David Cameron and Nick Clegg will publish the Government’s “mid-term review” – a progress report on the Coalition Agreement struck in 2010 and its agenda for the second half of the five-year parliament.

It will not be the ambitious “Coalition 2.0” programme envisaged during more harmonious times. Nor will their joint press conference in Downing Street repeat their lovey-dovey Rose Garden event after the 2010 election. Too much blood has been spilled during the day-to-day fighting that is inevitable in a coalition. The Conservatives remain sore that the Liberal Democrats blocked new parliamentary boundaries, making it much harder for them to win next time. Liberal Democrat wounds caused by Mr Cameron’s own hands on electoral and Lords reform have not healed.

Nonetheless, No 10 insiders are calling the mid-term review a “proalition moment”. With almost two and a half years to go until the next election, the two party leaders want to show the Coalition has not run out of steam. They think radical education and welfare reforms have been eclipsed by headline-grabbing rows between the two parties, and want to blow a joint Coalition trumpet. They will insist the Government’s core mission to reduce the deficit remains as crucial as it was in 2010. Without announcing the detail, the leaders will promise meaty policies soon on issues such as social care and childcare, two of the Coalition’s biggest challenges because they affect millions of people.

Mr Cameron was in “proalition” mode yesterday. “The Conservative and Liberal parties work very well in coalition, the Coalition is performing well, we are dealing with the deficit, we are cracking long-term problems that faced this country for too long,” he told BBC Radio 5 Live. “I think that both parties will succeed if the Coalition succeeds. Nick Clegg and I work well together…. We don’t spend our time in private bickering with each other.”

Similarly, Mr Clegg marked the new year with an attack on Labour that could have been drafted by Conservative campaign HQ, challenging Ed Miliband to say where he would cut spending to tackle the deficit.

The Prime Minister and his deputy share a difficult balancing act: making the Coalition work to show competent rather than shambolic government, while watering their party grass roots, who fear the joint enterprise is a drag anchor on their electoral prospects.

Inevitably, the two leaders send conflicting signals. Contrast Mr Clegg’s public attack on Labour with the new-year script he issued to party members. “Labour can’t be trusted to manage the economy. The Conservatives can’t be trusted to build a fair society,” it says. Aha, our old friend “the nasty party” returns, and it’s the Tories’ coalition “partners” saying it, trailing their pitch for 2015.

From now on, the Liberal Democrats will become more vocal, not just about what they have persuaded the Tories to do (such as raising tax thresholds) but also about what they have stopped them doing. As the Clegg script says: “We have blocked Tory plans to: allow bosses to fire staff at will; let local schools be run for profit; cut inheritance tax for millionaires; introduce lower rates of pay for public sector workers outside the South-east.”

Although some Liberal Democrat activists have walked away, those who remain seem to be growing up and facing up to the harsh realities of power. A new survey of more than 500 members by the Lib Dem Voice website found that three in four believe being in coalition will be bad for the party’s prospects at the next election, with only nine per cent saying it would be good. Despite that, 77 per cent support being in coalition and only 19 per cent oppose it. More worryingly for Mr Clegg, members are split down the middle on whether the party enjoys influence inside the Government. And one in three members thinks the party is on the wrong track.

This highlights the hard sell needed to allay grassroots’ fears, and limit party infighting which can easily spiral into damaging tit-for-tat politics inside the Coalition. The Lib Dem doubts mirror Tory whingeing that, to show there is life in the Coalition dog, Mr Cameron allows the Lib Dem tail to wag it. The Prime Minister is happy to diverge from his deputy on Europe, believing that the public are on the Tories’ side. “They [Liberal Democrats] don’t really want to change any aspect about our relationship with Europe,” he said yesterday. That’s the easy bit. Satisfying his backbenchers and grassroots members on Europe will be much harder, as Mr Cameron will doubtless discover when he makes a long-awaited speech on the issue soon.

Tory pressure on the Prime Minister to tack right on other issues will grow. But if he bows to it, and allows Mr Clegg to portray the Liberal Democrats as the Coalition’s conscience, he will risk suffering the fate of two earlier Conservative leaders, William Hague, below, and Michael Howard. They promised modernisation to reach out to new voters, but allowed the party to show its “nasty” side by election time. They lost.