sqad,
This coaltion Government is going to have to implement some very unpopular policies. Unlike previous Governments, disgruntled voters have two parties to reject which will greatly boost the Labour vote. If the LibDems are now calling themselves a party of the right, and not the left, they will either haemorage votes to Labour, or take votes from the Conservatives. Either way, rebranding the Labour Party as not occupying the same right of centre ground as the other two, would seem astute.
With the Unions backing Ed, a lot will rest on who the public blame for the inevitable industrial unrest that we will see over the winter. If the public blame the Unions, then that could go against Labour, but if unemployment shoots up and the public blame the policies of the two parties in power, then Labour could benefit. We shall see.