Can the centre hold?: The Lib Dems are tumbling in the polls as Tony Blair steals their clothes. Stephen Castle and John Curtice report

THE NAME of Tom Chandos is better known in the world of merchant banking than in politics. In the early 1980s, however, this hereditary peer enjoyed a fleeting moment of fame by becoming the first member of the House of Lords to join Roy Jenkins' Social Democratic Party.

This weekend, Lord Chandos is at his Hampshire home pondering another portentous move. He is planning a letter to the Labour Party's Chief Whip in the Lords, which will ask if he can serve Tony Blair's new-look party.

As in the 1980s, he may not be the only one - politician or voter - who is thinking such thoughts. For in the past couple of months, while all eyes have been on Labour's election contest and on the Cabinet reshuffle, a minor earthquake has shaken the political centre ground. As the dust has settled, Paddy Ashdown's Liberal Democrats have found themselves in a very precarious position.

THERE had been warning signs. In June there was the defection to Labour of Alec Kellaway, the Liberal Democrat candidate in the Newham North-east by-election. Then came Mr Ashdown's disappointing European election results, when after a familiar succession of near-misses the party ended up with just two seats. More recently there have been rumours that David Owen's great SDP benefactor, David Sainsbury, had tapped his supermarket fortune to bankroll some of Mr Blair's Labour leadership campaign.

When Lord Rodgers, Lord Jenkins and Lady Williams, three of the Gang of Four, bestowed their blessings on Mr Blair, it was obvious something was up, but perhaps the clearest proof of the Liberal Democrat crisis came in last Friday's Gallup poll in the Daily Telegraph. Labour captured the headlines with a remarkable 56.5 per cent support and the largest lead over the Conservatives on record. But the figures also showed that support for Paddy Ashdown's party had slumped to just 14.5 per cent in July.

As recently as May, when they had their best ever set of local election results, the Lib Dems stood at 21 per cent. Now they are back where they were before their remarkable double by-election triumph in Newbury and Christchurch last year.

Labour is storming ahead, and as it does so it is stealing the Liberal Democrat's clothes. In recent years the party has embraced much of the constitutional reform agenda that was once the exclusive preserve of Liberals and Social Democrats.

Now under Tony Blair Labour is stealing much of the Liberal's language too. He talks of 'community', a word previously associated with Liberal pavement politicians of the 'community politics' school. He argues the role of the state is to enable individuals to help themselves, a tune that nearly every Liberal Democrat would happily sing. Even the idea of a minimum wage is one the old Liberal Party backed in the days of Jeremy Thorpe. In the eyes of many, the line dividing the two parties is becoming blurred.

Suddenly, too, the gloss has come off Paddy Ashdown. Once the most dynamic of the party leaders, he is now the oldest and longest-serving. His craggy features, which once bespoke a certain ruggedness and virility, now suggest more than a hint of age. He is 53; John Major is 51; Tony Blair is 41.

For the party, there is more bad news to come. Labour is conducting qualitative polling in the South and the Midlands which is showing the public responding positively to Mr Blair. The Liberal Democrat party conference this autumn may well be dominated by a debilitating debate over how to react to the new threat. And Labour's conference is likely to boost their leader still further. As one MP put it: 'It will be very emotional. Elizabeth Smith will be there. People will be queueing up to pay tribute to her late husband. There will be special commemorative videos of John Smith's speeches. If Blair reads out the telephone directory he will get a standing ovation.' There is no disguising it: the arrival of Tony Blair as Labour leader is bad news for the Liberal Democrats.

LAST week, Mr Ashdown was in Sarajevo, which he has visited often in recent years and whose plight he has made a personal matter. When he returned he called a press conference and reported on his impressions and his view of Bosnia's prospects. Such events usually show the Liberal Democrat leader at his best - passionate, humane and active. Instead, to his intense annoyance, he found the headlines stolen by Lord Rodgers.

The other two Gang of Four members had already said their piece - Lady Williams called for the party to work towards a 'common programme' with Labour, and Lord Jenkins who argued for 'friendly relations' between the two teams. This was unhelpful, but still manageable.

Lord Rodgers, speaking on Radio 4's World at One programme, went rather further. Mr Blair was, he argued, 'the man for the second half of the 1990s'. He went on: 'Whereas at the last election, I could not honestly say Labour deserved to win under Mr Kinnock, all the indications are that Mr Blair could be a good prime minister, giving the country the leadership it needs and having the authority Mr Major lacks.'

Lord Rodgers is, perhaps most of all of the Gang of Four, a Labour man at heart. One colleague says: 'By leaving the Labour Party he believes that he committed original sin which he now wants to assuage. He wants to make his peace and return to Rome before the end of his political life.'

He tried to make a type of peace once before. After John Smith's election to the Labour leadership he wrote to him asking for greater co-operation between the two parties. Mr Smith never replied.

Liberal Democrats were furious with him. 'There are those of us,' said one, 'who wish Bill could find nice things to say about the Liberal Democrats instead of writing love letters to Tony Blair.'

But Lord Rodgers has done something more than commit an indiscretion: he has provoked a fundamental debate about the role and direction of the party. He has forced Liberal Democrat members and voters to ask themselves: 'What sort of party is this?'

As a senior Liberal Democrat said last week: 'If that is not resolved favourably we could be going back to the Sixties, to the role of a third party in a Butskellite political world, with about six MPs.'

SO IS the game up for Mr Ashdown? Well, things could be worse. There have been no defections of MPs or peers (Lord Chandos never joined the Liberal Democrats, staying a cross-bencher after the demise of the SDP). And the spectre of old SDP members drifting back to Labour is hardly terrifying, since just one in eight current Liberal Democrats are former members of the SDP, and only a minority of them were previously members of the Labour Party.

There is also, even in Labour circles, no hiding the fact that Mr Blair's poll ratings are way above anything likely to be achieved at a general election. MORI's polling shows that Mr Blair's ratings are very similar to those of Mr Smith immediately after he assumed the Labour leadership.

By 1996 Mr Blair will have lost his novelty value and will have put himself more on the line by spelling out policies. That, inevitably, will upset those on the left of the Labour Party. (One Labour left-winger last week said the feeling in the party was that 'the children have taken over the nursery' but added: 'I'm just keeping my head down for the moment.') The question, said one Liberal Democrat, 'is whether Blair has changed Labour or whether Labour will change Blair'.

Liberal Democrats can also take heart from the fact that support for constitutional change is what most distinguishes their members from the general public or other party activists. Tony Blair may say many Lib-Demmish things, but he has shown no sign of endorsing any more than John Smith did the item at the top of that agenda, electoral reform.

On the idea of co-operation with Labour, the dominant view in both parties is that pre- election pacts hold few attractions. The equation is complex because, while the evidence from by-elections is that Labour supporters will vote Liberal Democrat tactically, in order to oust the Conservatives, the opposite is not always the case. In a two-horse race between the Tories and Labour many natural Liberal Democrats simply will not vote Labour.

Putting up a combined Lib/Lab candidate also deprives the Liberal Democrats of the chance to point up differences with Labour. In last year's Newbury by-election an ICM poll asked people before polling day how they intended to vote and produced a reasonably accurate prediction, with the Liberal Democrats scoring 64 per cent. When the same sample was asked would they vote for a joint Lib-Lab candidate that figure fell to 48 per cent.

There is little doubt, however, that Mr Blair's election puts a ceiling on Mr Ashdown's hopes of gains in the South. But it would be unrealistic to expect his party to wither on the vine. Chunks of the South-west, where the party taps into support closer to Jeremy Thorpe's Liberals than David Owen's SDP, will stay loyal.

And today's Liberal Democrats have something that the Liberals then did not: nearly 4,500 councillors and majority control of 40 local authorities. That means that, in areas where Labour is weak and the Tories are vulnerable, the party has an infrastructure with an active campaigning membership. One Labour MP said: 'They have built up a tremendous network. Any Labour Party member who thinks that can be replaced overnight is being foolishly

triumphalist'.

While the European elections showed the limitations of Mr Ashdown's progress through the South, they also proved a contrary point. Labour's revival in the South, drawing votes away from the Liberal Democrats, actually kept some seats in Tory hands because it split the opposition vote.

As one well-informed Labour source said last week: 'The fact is that there is considerable Liberal Democrat strength in the South-west and parts of the South where they are the natural challengers. If you live there and you want to get the Tories out, you vote Liberal Democrat. Ultimately we need the Liberal Democrats to do well in some seats.'

LAST month Mr Ashdown took his parliamentary colleagues to a retreat at Kiddington Hall, a stately home in the Oxfordshire countryside. The atmosphere was suprisingly upbeat; over a long evening dinner and the following morning's seminars there was fairly general agreement that the party should quietly let 'Blair-mania' run its course. In the meantime the party ought to concentrate on developing and promoting some specific and distinctive policies of its own.

That plan of campaign was spectacularly derailed by Lord Rodgers. As one senior Liberal Democrat put it: 'What Rodgers has done is to open up the central strategy, to ask the question 'what is the point of the Lib Dems?' at a moment when Ashdown did not want that asked.'

This question looms over Mr Ashdown's choice of strategy in the next election. To argue that the party hopes to win outright would be to court ridicule. In 1992 his position was one of 'equidistance' between the two main parties, and last week he appeared to be sticking to that line. The trouble is, that strategy now seems to lack credibility. As Labour and Liberal Democrat policy positions inch closer, equidistance looks more and more of a fiction. In any event, doing a deal with John Major to keep a defeated Conservative government in power would seem electoral suicide. And if Labour looks capable of winning an overall majority anyway, then the Liberal Democrats' prospects of exploiting a 'hung' parliament once again disappear in smoke.

Instead, many senior Liberal Democrats favour a strategy whereby the party would present itself as a coalition partner which would neutralise Labour's left. Mr Ashdown's party would present itself as the guarantor of sensible middle- of-the-road Labour politics, becoming 'the tail that wags Labour's dog'. Mr Ashdown is not yet convinced of the merits of this strategy, although many believe he is working towards this position. He realises that any such admission would provoke huge strains. The bulk of the Liberal Democrat party, particularly in rural areas, attacks the Conservatives and presents itself as a moderate alternative. But its urban and Northern contingent - including MPs like Liz Lynne in Rochdale - see themselves as an alternative to Labour against whom they devote most of their campaigning.

To bring this contingent around to the concept of coalition with Labour will take careful management. As one source put it: 'The moment you get the party to adopt that proposition is the moment you have to be particularly muscular about Labour.' Put simply, Labour and the Liberal Democrats will, for internal reasons, have to get further apart before they can get closer together. Lord Rodgers's intervention is no help at all to such a strategy.

More fundamentally, Mr Ashdown's party needs to reinvent itself yet again in the public mind, this time to establish its identity as separate from Blairism. That means more detailed, costed and specific policies in education, training and employment (which, incidentally, would put Mr Blair on the spot). For example, a commitment to reducing unemployment by a target figure over a specific time frame looks likely. As one source put it, if the party is to convince the public that, in the words of one source, 'Lib and Lab is better than Lab on its own', it has to make clear what are the things Mr Ashdown would demand as the price of coalition. That will be an uphill battle. For Mr Ashdown this is, writ large, the problem with which he has grappled since he took over the leadership in 1988.

Six years on, the Liberal Democrats still lack a clear identity. Not for nothing did Mr Ashdown once remark that, for a bit of political definition, he would happily sell his grandmother.

John Curtice is senior lecturer in politics at Strathclyde University.

(Photographs omitted)