Matt Grimshaw: The Liberal Democrats are at risk of obliteration

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The Independent Online

Nominations for the Liberal Democrat leadership contest close today and the prevailing wisdom is that Ming Campbell's successor, either Nick Clegg or Chris Huhne, will revitalise the party's fortunes and return it to the totemic 20 per cent in the opinion polls. However, those who see this leadership election as the start of the recovery may yet be proved gravely mistaken – they have dangerously misunderstood the party's current predicament. Unless the Liberal Democrats realise that the problem under Campbell was the message not the mouthpiece, then 2005 could prove the high-water mark of the party's fortunes.

The leadership race is set to be one of the stalest in living memory. Both candidates have remarkably similar CVs and as yet neither has attempted to signal any meaningful policy differences between them. They could quite feasibly agree to a job share and no one would notice. At a time when the third party is crying out for a meaningful contest – a chance to answer that all-important question: what's the point of the Liberal Democrats? – the candidates, their party and the country could not be more ill-served by this non-event of a contest.

There are two situations in traditionally bi-partisan democracies that give rise to successful third parties. The first is where the political scene is polarised. The modern Liberal Democrat party takes its impetus from the success of the SDP-Liberal Alliance, which in the 1980s positioned itself between the extremes of old left and Thatcherite right. In doing so, it appealed to the swaths of voters who felt unrepresented and ignored by the two main parties.

The current political scene could hardly be described as polarised. Both main parties are desperately and shamelessly attempting to steal the other's policies, principles and voters. This obscene and prolonged electioneering has rendered meaningless the traditional left/right split that gave the Liberal Democrats their initial opening.

But this converged political situation offers a different opportunity to a third party. Whereas in the 1980s, the exceptional distance between the two parties left an unrepresented constituency, in the present converged scenario it is the remarkable closeness of the two main parties that causes voters to conclude that politicians are no longer listening to their concerns. There is an increasing dissatisfaction that "they're all as bad as each other", that political parties don't represent a proper choice and that politicians are disconnected from the priorities of the country at large.

For example, inheritance tax affects only 6 per cent of the population, but both main parties are making great play of cynically targeted tax reforms designed to appeal solely to those all-important swing voters. In contrast, on general fiscal policy, both parties promise to tax and spend exactly the same proportion of national wealth. Not a wafer's difference between the two.

The Liberal Democrat leadership candidates must now recognise this converged state of affairs and should capitalise on the high level of public dissatisfaction it has created. In 1992, the independent US presidential candidate Ross Perot tore up the political rule book, surging ahead of incumbent George Bush and eventual winner Bill Clinton, peaking at 37 per cent in the opinion polls. Perot's success was founded on a decisively anti-political campaign attacking the self-interest of the Washington political elite.

Crucially, neither of the two parties was seen to offer a solution to the escalating national debt. Perot's "no pain, no gain" fiscal policy combined tax rises with spending cuts and promised a return to balanced budgets. He captured the attention of millions of Americans. By US standards, his eventual return of 18.9 per cent of the vote was an outstanding success for a third-party candidate. The key factor was the perceived similarity between the Republicans and Democrats.

The bitter irony for the Liberal Democrats is that if they need a new Ross Perot they have just deposed the most suitable candidate. Ming Campbell had a personal hinterland and integrity that could have framed an anti-establishment narrative. In Clegg and Huhne, the Liberal Democrats could not find more on-message, political class modernisers.

In a climate of convergence, the Liberal Democrats can no longer afford to tip-toe between their rivals with the "all things to all men" tactics that have brought electoral success over the past 20 years. Instead of worrying about the 5 per cent of voters lost to Cameron, the Liberal Democrats should now concentrate on the 40 per cent of people who no longer bother to vote.

They must articulate a new vision of liberal democracy that creates new dividing lines in British politics. Unless Campbell's successor has the courage to sail against the prevailing political wind, the third party will be obliterated.

The author was formerly an adviser to Mark Oaten MP