The duopoly that dominated British politics in the 20th century is dying on its feet. In the 1951 General Election, only 2 per cent of voters chose a party other than Labour or the Conservatives. At the local elections last month, that figure had risen to nearly 40 per cent. The glue that held the duopoly together has disintegrated. Class divides have shifted. Geography no longer maps allegiance. Ideological differences once so important feel immaterial in the post-Cold War world. And because of globalisation and technology – not least the internet – identity has become more fluid and more complex.

People now define themselves in different ways. It's possible for individuals to find multiple homes in an ever-growing number of communities – real and cyber – where people are bound by their interests, principles and experiences, not just by geographical location. At the same time, in our increasingly atomised society, the traditional mass-membership parties no longer speak to people.

So you can't bank on someone's support because of where they were born, or how their parents voted. You have to earn their support; you have to prove yourself. That breakdown has created opportunities for real change in British politics; moments in which the Establishment has been extremely vulnerable. The first was in the early 1980s, when the alliance came tantalizingly close to breaking the mould in British politics. The second was in 1997, when the whole country turned its back on 18 years of Conservative rule.

The third is now. And in the battle of ideas the Liberal Democrats are winning. The first party to identify the dangers of an overleveraged banking system. The first to advocate radical political reform. Consistent in our defence of civil liberties. Principled in our defence of the international rule of law. Outspoken in correcting our woefully imbalanced tax system. Radical on the need to make Britain environmentally sustainable. Brave in standing up to failed populism on law and order. Determined to use childcare and education policies to break cycles of deprivation handed down from one generation to the next.

From the Liberal Democrat leader's speech to the National Liberal Club, marking the 150th anniversary of the first Parliamentary Liberal Party caucus