We can only achieve our aims by co-operating with Labour

We have no intention of allowing ourselves to be swallowed by Labour - we are too indigestible

THE PRICE of liberty, so they say, is eternal vigilance. Some observers, and indeed some Liberal Democrats, have felt that last week's Joint Statement on inter-party co-operation, by myself and the Prime Minister, has endangered the liberty of our party to act as an effective opposition and that the "stealth" alleged in your leading article yesterday requires increased vigilance.

People are asking: "What on earth are Blair and Ashdown up to? Where is this heading? Is there a hidden agenda?"

Let me begin by explaining what our co-operation is not.

It is not a coalition, overt or covert, nor is it a step toward some Labour Party strategist's dream of merger. As the Joint Statement made clear, we remain two sovereign and independent parties, and we shall continue to fight for votes and seats at election time, and to campaign robustly against each other in the myriad areas where we disagree. I am not interested in electoral pacts, having campaigned through the grim years of the Alliance carve-ups: I've been there, done that, got the T-shirt - I don't want to revisit that territory!

The Liberal Democrats are not signed up to supporting the Government on vast swathes of social policy, as some reports would have it. We shall try to negotiate limited, formal and tightly controlled areas on which we can work together, to achieve something concrete in the national interest - specific projects within a ministerial brief, where both sides agree and feel that co-operation would be fruitful.

Now to what we are trying to do - to honour our General Election promise to offer a more constructive approach.

May 1997 was a political earthquake, decisive enough to have produced an outright majority for the incoming government, either under "First Past the Post", or under the new Jenkins proposals for a more proportional voting system. The electorate chose to switch from a tired and discredited Conservative Government to new-look New Labour, with a hefty component of Liberal Democrat MPs as part of the millennial mix.

This represented a Great Leap Forward for those of us in the modern centre ground of British politics. A party held to ransom by its Europhobic extreme right wing was out, and the progressives were in the ascendancy. But it was not enough, in this transformed political landscape, for the Liberal Democrats to rest on our electoral laurels, and to act as the Government's liberal critics from the sidelines.

Many commentators condemned us to being marginalised, but it is now the Conservatives who are left on the political fringes. Our poll ratings have stayed healthy, we have won the by-election in Winchester with a huge majority, and we continue to make progress in the Labour heartlands at local level. Campaigning on the ground continues successfully, and at the national level we are demonstrating our relevance to the great political questions of the day, and exerting real influence over the business of government through the Joint Consultative Committee. Many of our long- cherished dreams are now an established or a coming reality: devolution for Scotland and Wales, with PR for both sets of elections, an Assembly for London, human rights legislation, reform of the House of Lords, and a Freedom of Information Act. The central plank of a modernised constitution, voting reform, has been given a fighting chance by a Prime Minister who, once famously "unpersuaded", now says the arguments for reform make a powerful case.

And now the Liberal Democrats have a great opportunity: to give the campaign for a "yes" vote on the Jenkins proposals for electoral reform momentum and focus by practising the kind of politics we preach.

You cannot argue, or indeed campaign, for proportional representation and object to the co-operative style of politics which it will usher in. We have to learn new habits, and we have to demonstrate to the public that they can work well. Co-operation on the Joint Consultative Committee has worked well for the Liberal Democrats, as a third party demonstrating our relevance and having influence with a government backed by an awesome Parliamentary majority. But we have to show that it can offer real benefits by delivering progress on the bread and butter issues which affect people's everyday lives.

You cannot support devolving power downwards, and then ask that a political party will function in the same way at local level as it does at regional or national level. That is why the Scottish and Welsh Liberal Democrats will make their own autonomous decisions on who they do business with, and how, when the elections to the Scottish Parliament have been held next May. It is also why we cannot be constrained from doing business with the Government at Westminster, where we believe it is in the national interest, by thoughts of how it might affect a local council by-election.

This is new territory, and we are rightly warned of the perils that lie ahead. But, as many before us have found, we must not be held back by the poverty of our own ambitions. Nor must we be dissuaded by the well- meaning advice of friends and observers - not even by the mighty Independent - if they wish us to remain merely a "liberal conscience" for the nation. One commentator has accused us of losing our chance to "influence the conversation of the country", because New Labour is trying to occupy our ground with Third Way rhetoric.

Well, of course they are. This is fertile territory, and the Labour Party may, at length, realise that Liberalism offers the only credible answers to the two great challenges of the age: namely globalisation of power on the one hand, and an increase in individual freedoms on the other. Liberal Democrats should be delighted at the opportunity that this gives us to drive liberal ideas on to the central agenda of government.

But we have no intention of allowing ourselves to be swallowed - we are far too indigestible.

Politics is about what you can do, not about who you are, nor, indeed, (academic theorists of Liberalism please take note) about having conversations.

The Liberal Democrats won more seats than ever before in 1997, by fighting on a slogan which challenged voters to "Make a Difference". This is what we are trying to do. We can make sure that British politics is dominated by a progressive liberal force - I want the Liberal Democrats to be at the middle of that movement, making it happen.