Sad for Mr Kennedy, but his dream shimmers tantalisingly out of reach

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The Independent Online

The big question for the Liberal Democrats is an old one, but posed in a new form. Are they on the left or in the centre? Oh do give over, moan the veterans of many years of not answering precisely this question. We had "neither left nor right but forwards", in the days of Asquith. What has changed since then is that the slogan was stolen about 10 years ago by Tony Blair, whose Third Way was "beyond left and right".

The big question for the Liberal Democrats is an old one, but posed in a new form. Are they on the left or in the centre? Oh do give over, moan the veterans of many years of not answering precisely this question. We had "neither left nor right but forwards", in the days of Asquith. What has changed since then is that the slogan was stolen about 10 years ago by Tony Blair, whose Third Way was "beyond left and right".

That is the problem. Paddy Ashdown had "equidistance" to describe the Liberal Democrat position between Labour and Conservative. At one news conference he even had "more equidistant than ever". Then he had to accept that Blair had moved Labour so effectively to the centre ground that equidistance made no sense. Blair had trumped him with "triangulation", a tactic borrowed from Bill Clinton. Blair "triangulated" a New Labour position that was roughly halfway between both Old Labour and the Conservatives.

Ashdown responded to the challenge of occupying the same patch of centre ground by trying to join forces with Blair. For several years, he pursued the mirage of The Full Monty, or TFM as he called it in his diaries, which was code for Liberal Democrats taking seats in the Cabinet as part of a coalition with New Labour.

After Blair won a majority of 179, however, the point of The Full Monty became far from obvious, and Ashdown had to settle for a meaningless talking shop called the Joint Consultative Committee. Two Liberal Democrat MPs voted against taking up seats on the committee: one of them was Charles Kennedy.

When Kennedy became leader five years ago, his election completed the realignment of British politics - a rather different form of realignment from that long dreamt of by the SDP in which Kennedy began his political career in 1981. The Liberal Democrats popped out like jelly squeezed in wet hands and escaped into the empty space to the left of New Labour. Some Lib Dems are uncomfortable about this, and try to pretend it isn't so. Old assumptions about left and right are breaking down, they say, the labels aren't helpful any more. They point out, for example, that they and the Tories are both committed to abolishing university tuition fees. For very different motives, however. The Tories want to preserve a form of elitism that implies a subsidy enjoyed largely by the better off. The Liberal Democrats espouse the rhetoric of free higher education for all.

Other Lib Dems are unapologetic. We appear to be on the left because we have remained true to our values, they say, while Blair has taken Labour so far to the right that he has come out the other side. And it is true that being the anti-war party of civil liberties and higher taxes on the rich does not seem to prevent the Lib Dems from picking up Tory votes. (Although we have to go back to Romney, won by the Lib Dems in 2000, for a parliamentary by-election in a Tory seat.) I would say, though, that the Lib Dems are more left wing than they used to be. No wonder there are tensions between free-market liberals and old-fashioned social democrats. The most fascinating of those tensions are not found in the pages of the hyped Orange Book, but are contained within the person of the party's unexpected star, Vince Cable, its "shadow chancellor". He is sometimes described as the leader of the free-market Young Turks who are challenging Kennedy's soggy social democracy, despite the fact that he is 61 and author of the party's left-wing policies of tax and spending.

The former left-wing firebrand Glasgow councillor used to work for John Smith, and the present Lib Dem policies of tax and spend most resemble those of Labour's disastrous shadow budget of 1992, presented by Smith as shadow chancellor. The Lib Dem plan to impose a 50 per cent tax rate on annual incomes above £100,000 would appear to affect a tiny minority. But the replacement of the council tax by a local income tax would hit many more and impose a combined income tax rate of about 45p in the pound on people earning more than about £35,000 (40p income tax, 1p National Insurance, plus about 4p local income tax). Cable says most people would be better off and only a small minority would lose out, but that is what Smith said about his shadow budget, and swing voters of the centre ground did not buy it.

That may not matter yet. The Liberal Democrats are not trying to win an overall majority under the present electoral system, as Labour was in 1992. For the moment, the urgent requirement is to find a costed way of paying for populist promises of free universities, higher pensions, free personal care for the elderly and abolishing the council tax. Cable's plans do that, with only a bit of fudging round the edges of the savings from abolishing the Department of Trade and Industry.

But the strategic problem for the future is whether the Lib Dems can ever succeed as a niche party of the left. Because the likely outcome of the next election must be that Labour's majority will fall; that the Conservative share of the vote will increase, but not by enough to instil confidence that the party will win next time; and that the Liberal Democrats will continue their steady advance.

Coming third is not what most people go into politics for. But Charles Kennedy may be able to turn bronze into a moral victory. From the depths of 1992, when the party secured 18 per cent of the vote and 20 seats, to 2001, it increased its share of the vote by a mere percentage point, but its number of MPs rose to 52 seats. That was the Long March. Surely it is now time for the Great Leap Forward?

I am afraid not. Even though the Lib Dems go into this long campaign in better shape than at any time since the SDP bubble, at an average of 22 per cent in the opinion polls and with their policy formation more robust than usual, they are still a long way from the big breakthrough. That dream shimmers just out of reach, as it has done with varying intensity ever since 1974.

However, the rise in the number of seats held by the Liberal Democrats has had a profound effect on the country's electoral geography. Two other changes have helped to create a new landscape. One is that the Tories are now "locked out" of nearly a third of the country. There is only one Tory MP in Scotland, whose seat is vulnerable to boundary changes, none in Wales and none in Liverpool, Manchester, Newcastle and Sheffield. The other change is the bias in the electoral system that gives Labour more seats in relation to votes than any other party.

The combined effect of these changes is that it has become harder for the opposition parties to deprive Labour of its majority, but, when they do, the chances of a hung parliament are greater. And then do the Lib Dems really want to be a left-wing party negotiating with a centrist Labour Party that dominates the centre ground? I wonder.

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