Spurs jangling and lances poised, the coalition partners are off, tilting at each other for the delectation of their party conferences. So far, it's only ornamental jousting, not war. So far. David Cameron charged first with his party-pleasing speech calling for another round of 17 new benefit cuts that the Lib Dems will not agree. In retaliation, here comes Nick Clegg charging down the lists with a wealth tax on the tip of his lance that the Tories will never agree.

These great autumn "differentiation" games don't signify an imminent split – not yet. Hanging together for fear of hanging separately, both sides hang on hoping something will turn up, above all an upturn in the economy. Clegg gives Lib Dem discontents a wealth tax to appease those stunned by the austerity they voted for – and at how little their leader won in exchange. Paddy Ashdown's high-flown support, also in Guardian comment, is out of date. Those who thought they were in an uncomfortable coalition to save the country in an emergency now find Chancellor George Osborne's disastrous policy has made that emergency worse, the deficit rising, growth dead. Nor has the Lib Dem presence prevented the pain falling almost all on the poorest, in cuts the Institute for Fiscal Studies calls "without historical or international precedent".

Meanwhile, Tory backbenchers' cup of loathing for the Lib Dems overflows. Their headbanging idiocy has inflicted a serious self-injury. By voting down Lords reform they have (almost certainly) lost the one really important prize – boundary changes in their favour, yielding 20 extra seats. With that, the Tories could have won a parliamentary majority on a 7.6% lead, but now need a 10.5% lead. Surely they could have negotiated some acceptable Lords reform for such a prize? Or they could have tolerated AV electoral reform instead of throwing all their resources behind a no vote. But visceral detestation got the better of them. The sheer pleasure of bullying Clegg was better than a Bullingdon night out.

Now it's hangover time. The full import of their folly dawns on some of the brighter sparks. When Clegg said he would block boundary change in revenge for their reneging on the Lords, the Tories blustered in indignation. But you can hear them puzzling how to get out of this hole. Could they offer Clegg anything else? Might he consider party funding? State funding goes against every fibre of the Tory soul, but it could be a price worth paying for 20 seats.

The boundary change is a skilful gerrymander. Technically it's fair, the only kind of fairness Tories ever like, one that does them good. But its rigid 76,000 voters per constituency leads to absurdities that abandon subtle boundary commission work balancing the number of voters with constituencies that make sense, keeping within one local authority and natural communities. Strict numerical dictatorship was like drawing colonial boundaries in Africa, with districts split from natural neighbours. The bill ordained this great earthquake every five years, breaking the "sacred" link between MP and constituency – which is the Tories' great excuse for opposing proportional representation.

So we wait to see if Clegg sticks to his guns, avoiding the extra losses boundary change inflicts. On a 10% vote, his party shrinks to just 10 MPs; even on 15% it only holds 28. His conference activists see their councillors executed by the tumbril-load. As for party funding, reform is long overdue, but the next scandal may tip the balance anyway.

Labour look on with glee at coalition jousting, relishing the lion's share of fleeing Lib Dem voters, 1.6 million defectors so far. Labour's conference will be less fractious than the others, with good poll ratings and relative unity. But the time for tribal trashing of the Lib Dems is over. The shadow treasury team's response to Clegg's wealth tax proposal was an infantile ya-boo of the kind that makes voters cringe: "Nick Clegg is once again taking the British people for fools. He talks about a tax on the wealthiest, but he voted for the tax cut for millionaires in George Osborne's budget." True, but no longer to the point. Since Ed Balls backed Vince Cable's mansion tax, Labour should have seized this easy chance to embrace Clegg's wealth tax and build on it – it's popular and right to tax immovable wealth. They must never again let the Lib Dems pretend to voters to be the more radical.

Any chance Labour gets to suggest a future phalanx with the Lib Dems further isolates Osborne and Cameron on the failing economy. Labour can steal the moral high ground by taking any policy agreements with the Lib Dems seriously. Wiser Lib Dems should stop repeating Danny Alexander's mendacious "the mess Labour left us with" mantra. Britain's public spending did not crash the global economy, and those who listen to Cable know the damage Osborne is doing. Nor does staying in the coalition require the Lib Dems to oppose Labour except where there are genuine disagreements.

With a little more dignity and less knee-jerk tribalism, both sides should anticipate a possible future coalition which, shorn of Clegg and Alexander, would suit both well enough. All Labour's firepower should have the Tories in its cross-hairs: too many in the shadow cabinet lack street-fighting gut outrage. Whingeing at Lib Dem collaborators misses that target, while a more respectful tone on both sides greatly threatens the Tories.

Leaders rarely walk the plank when they should – but thoroughly broken by what he has led his party into, Clegg should step down some months before the election to give Cable – during a leadership honeymoon – a chance to save what's left of their party. Labour might capture fewer Lib Dem votes as a result, but it needs the Lib Dems to hold seats that otherwise fall to the Tories: that's the hard electoral arithmetic.

Take Norman Baker, Lib Dem transport minister, MP for Lewes, a little yellow enclave in the great blue of Tory Sussex. Boundary changes would abolish it, carving two new Tory seats. He needs Clegg to hold firm, and he is adamant: "It's quite clear the Tories have broken the coalition contract." End of story, end of boundary change. Labour can never win such a seat – so needs its Lewes supporters to keep lending their votes to Baker. Easing off anti-Lib Dem bile is an electoral necessity – unless Labour tribalism renders them as stupid as the self-destructive Tory backbenchers. Lib Dem MPs have voted for terrible things, but small centre parties are destined to be Play-Doh in coalitions. Labour must learn to forgive, and Ed Miliband knows that. Grown-up politics are difficult.