Menzies Campbell: Clegg has to steady the nervous Lib Dems

Coalition is the only way forward for a country in such deep trouble, but supporters of its junior partner need to be reassured
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Last year was for reflection. This year is for realism. Twelve months ago at the Liberal Democrat conference in Liverpool you could still smell the rose petals from the Downing Street garden. But the heady novelty of coalition has been replaced by the brutal experience of government.

We should have expected it. In opposition you can harness discontent but in government you harvest it. Even in times of economic plenty it is impossible to satisfy every one of those who have supported a party of opposition into power. How much more true that is when you have not one but two parties drawn from different political traditions, coupled with an economic crisis of unparalleled proportions.

I continue to support the coalition not out of conviction but of the same necessity I identified in the days immediately after last year's election. That I had to vote for the first time in 24 years against my party over tuition fees brought neither pleasure nor relief but rather a deep sense of fatalism. It had such an inevitability about it. Sooner or later in government there will be issues where individuals feel they have to rebel.

But this is not confined to coalitions. It is endemic in all political parties, some more than others. Consider Labour rebellions during the Blair government over such things as single mothers, Iraq and the replacement of Trident, or instability over Europe caused by John Major's disloyal "bastards". It is trite to say that political parties resemble coalitions. It is equally true that coalitions resemble political parties.

So what to expect from Birmingham? These modern conference centres have an antiseptic air. You feel that if there were any bloodletting an attendant with a mop and bucket would immediately clear it up. But there will be bruising, if not among the leadership certainly among the delegates.

Andrew Lansley's health reforms caused anxiety not only among Liberal Democrats but with David Cameron himself. Much of the party's anxiety was justified before extensive amendments were made during the period when the Health Bill was temporarily withdrawn from Parliament. The reservations still remain in some quarters. Nigel Lawson's dictum that the British people are more likely to worship the National Health Service than God holds more sway in the Liberal Democrats than just about anything else. Nick Clegg and Paul Burstow, the care services minister, will still need to be at their most persuasive in Birmingham.

Look out for the vindication of Vince. How right Cable was, they will say, about News International even if he was unwisely provoked by two winsome Telegraph journalists. That he continues to fight the good fight with the bankers will be hugely popular in the hall, even if it disturbs some members of the Government. Where he will be on even stronger ground will be speaking against abolition of the 50p tax rate. His proposed alternative "mansion tax" on, say, houses worth more than £1m may be well received by northern delegates, but less so by those from the South-east from places like Twickenham.

Europe has an unfortunate habit of disrupting Liberal Democrat conferences. It did so in 1992 when the UK was hounded out of the ERM, and John Major's government was irretrievably holed below the waterline. Anything similarly apocalyptic during the conference in respect of Greece, for example, would be destructive and could easily trigger heated and distracting exchanges between Liberal Democrats and the phalanx of Tory MPs who are increasingly vociferous and wear their Euroscepticism on their sleeves.

But there will be one area where the unanimity of the Liberal Democrats will be palpable. If the Liberal Democrats worship the NHS they prostrate themselves before the European Court of Human Rights. While they agree with the Tory proposals for a UK human rights charter it should not be at the expense of the European Convention but as a supplement to it. At the Tory conference in two weeks' time any speaker who criticises the ECHR will be received enthusiastically. In Birmingham anyone who supports it is liable to be carried out shoulder high. But they should read Nick Clegg's recent balanced newspaper article for a more realistic analysis.

But the issue which will hang over the conference will be the management of the economy. Necessity was acceptable as justification for austerity but only if the latter produced results. How much easier to face down disputes about public service pensions, for example, if it is possible to show that private sector growth is improving, that there is light at the end of the tunnel.

The problem is that the light seems to be getting further away rather than closer. Having to revise growth estimates is bad for domestic morale but a retreat now from the only plan in town – or in the City – could slide fragile markets into a spin.

Outlandish comparisons with Greece, Italy or Spain could acquire a patina of credibility. Rising unemployment, coupled with rising inflation, will test the resolve of the Treasury. This, in turn, will test the cohesion of the coalition, cohesion which will be more difficult to sustain as MPs on the government benches, Liberal Democrats and Tories alike, contemplate the disruption to their political and personal lives to be caused by the proposals of the Boundary Commission.

Nick Clegg's task at Birmingham is to steady the ship. Expect implicit or even express references to what it would have been like if Labour, with its economic credibility irretrievably fractured, had been returned, or the Conservatives had been able to form a majority government without the moderating influence of the Liberal Democrats. He will be greatly assisted in this task by the plaintive frustration of the Tory back benches. He can point to the complaints being made from those who believe the Liberal Democrats have too much influence in government and who want more cuts, less Europe, and even less human rights – all anathema to Liberal Democrats. He will not himself wish to claim victories but will have no objection if others do so.

There will be some edginess in Birmingham and particularly in the fringe meetings. But no one remotely credible will be arguing for withdrawal from the coalition or for the general election which would inevitably follow. Nick Clegg will be able to tell his troops in a partial echo of David Steel to "go back to your constituencies and prepare to continue in government".

Sir Menzies Campbell is MP for North East Fife and was leader of the Liberal Democrats between March 2006 and October 2007