Ian Birrell: The Lib Dems don't need a new leader. They need a point

Searching for cheap populist policies and silent on issues long held sacred, what do they stand for now?

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It may be the post-Olympic euphoria, but a spirit of harmony has descended on the Coalition. Insiders say that, for all the froth and fervour between the parties in public, a decent working relationship has been restored among key operatives after the Liberal Democrats suffered the failure of House of Lords reform, then lashed out against the Tories' treasured plans for boundary changes.

It won't last, of course, once the summer holidays end. Party conference season is looming, and both parties face rising unrest in their ranks as the next general election approaches. Curiously, the mood is angrier in the Conservative grassroots, whipped up into rage against their leaders by loudmouthed right-wingers despite the quiet radicalism of the Government.

Nick Clegg's troops have been more sanguine, despite poll figures bumping along the bottom. After the heady excitement of the 2010 election campaign, their ratings dropped from 23 per cent after entering government, fell again after the tuition fee fiasco and have since flatlined at around 10 per cent pretty much regardless of events at Westminster.

Such insouciance may be down to the fact that one in four of them walked away in disgust last year. Latest figures show that the party now has fewer members than the number of football fans who fill Sunderland's Stadium of Light – or, perhaps more pertinently, than members of the British Psychological Society. But their commendable calm may not last much longer.

In an article asking if the third party was on death row, Peter Kellner, the president of YouGov, has warned that it is on course to win just 10 seats in the next election. It will almost certainly do better than this, since Lib Dem MPs are hard to winkle out once dug in locally. But even a partial recovery to 15 per cent in the polls could halve their number of seats, a terrible blow for a party that has enjoyed steady growth in recent decades.

Meanwhile, the ambitious Vince Cable is on manoeuvres, limbering up for a crack at the leadership he has long coveted. Publicly, he has dismissed the idea that his age counts against him and refused to rule out standing; privately, friends predict he will soon be in charge, ready to break the Coalition and lead his party into power with Labour in 2015. Seditious talk in tearooms will be boosted by a survey for the Liberal Democrat Voice website showing that half of party members want Clegg out by the next election.

This is unsurprising. Put two political nerds in a room and chatter soon turns to how and when the Coalition will end. Clegg is a decent, dignified and likeable man, but has had a disastrous time since becoming Deputy Prime Minister. It is not just that long-held liberal dreams of proportional representation and constitutional reform were dashed in such humiliating style. He has torpedoed his party's brand.

Having campaigned to restore trust in politics, he breached the public's faith by voting to raise tuition fees after campaigning vociferously against them. Having taken over his party as an economic liberal, determined to unleash market reforms on sclerotic public services, he panicked and backtracked when the going got tough on NHS reforms. And having set out to prove in power that coalition politics could work in Britain, his party's frantic search for a distinctive voice undermined this core concept for third-party politics.

After two torrid years in office, a fundamental question hangs heavy over the Liberal Democrats: what is the point of them these days? The party has long been ill-defined, split between social democrats on the left and market liberals on the right. In many ways, their brilliance as they grew under successive leaders over the past four decades was this blurred brand, ensuring disgruntled voters of any persuasion could see their own views reflected back when looking at the party.

There were, however, certain issues that stood out: support for civil liberties, opposition to the Iraq war, espousal of the European ideal, flirtation with drug reform, focus on the environment, a refusal to join the main two parties in their fuelling of fears over immigration and crime. Such stances were courageous, controversial – and often correct. But as they flail around now in search of cheap populist policies, and stay silent on issues long held sacred, can anyone truly say what they stand for today?

Clegg and the Orange Book liberals sought to remake their party in the mould of its greatest leader, William Gladstone, as both socially and economically liberal. This gave them definition when the Tories, shell-shocked by Tony Blair's success, turned right – and that is why coalition felt such a powerful idea under a more progressive Conservative leader. Meanwhile, Cable, more in tune with party members and core voters, wants to return them to their comfort zone on the soft left – even though Ed Miliband is staking out much of this terrain.

Government is about choices, sharpening issues that remain blurred in opposition. This is a problem for both coalition members. But for the smaller partner, it is forcing to the surface deep fissures buried during its rise to power. Negativity is not enough; it should stand for something other than the prevention of another party's policies. As they confront electoral devastation, the dwindling band of Liberal Democrats must ask themselves an awkward question: when they look into the soul of their party, can they see anything there?

twitter.com/@ianbirrell

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