The essential issue is the budget.The outgoing Labour government refused to hold a full spending review, or to supply the detail of their spending plans for the post Election period. Any new incoming government has to get on with that task quickly.
Mr Cameron is right to say to the Lib Dems that any agreement to work together has to start from the proposition that we need a new budget which sorts out the public spending, within the next fifty days. The Lib Dems at the very least have to agree to abstain on the votes to get that through, so we can start to reassure the markets that the UK intends to control its deficit before the deficit swamps us.
The Lib Dems could agree to support a Conservative Queen’s Speech programme which centred on abolishing ID cards and other attacks on civil liberties, and legislated for school reform. Not seeking too much legislation could be an improvement, and avoids the need for so many cliff hanger votes.
A minority Conservative government could insist on no new powers transferring to Brussels and could negotiate for the UK on any new EU legislative proposals. The fact that it could not guarantee to get any measure through the Commons would be an added good argument against agreeing to anything that did require new law or extra spending in the UK.
In the end Mr Clegg’s busy day will revolve around the extent and the credibility of Mr Brown’s offer on changed voting systems, and the degree to which Mr Clegg understands his responsibilities now to help the country through the next worrying phase of the rolling debt crisis.