Against the odds, the Liberal Democrats have held a successful conference. Tumultuous events elsewhere meant media attention was limited, but they managed still to convey, with some success, a new message. They wish to be seen as Britain's new radical tax-cutting party, one that is still committed to social justice.
The fact that the message got anywhere at all was remarkable, as they have yet to offer any precise details about how they will cut the overall amount paid in tax. Nonetheless, they have conveyed the same message to themselves as well, the equivalent of conjurors falling for their own trick. Senior figures told me throughout the week that their debate on tax on Monday was a seminal moment, as big for them as Tony Blair's abolition of Clause Four, a dramatic repositioning of their party that, as far as they are concerned, changes everything.
Yet stand back from the impact of the magician's wand and it is not quite like that. The overall package is without doubt radical, but the Liberal Democrats do not plan to give as much money back to the taxpayers as some of the headlines have suggested. It is important to spell out for a moment what precisely the party is proposing in order to appreciate more clearly where it is heading, or where it would like to head, given the chance.
Two years ago, long before Nick Clegg became leader, the Liberal Democrats agreed a package of big tax cuts for low earners. This was to be paid for by tax rises on the wealthy and the introduction of green taxes. The package was fiscally neutral, in other words there was no overall cut in the level of taxation being proposed. Instead, the measures were openly redistributive. Mr Clegg hailed them as such in his speech yesterday.
Earlier in the week, the Treasury spokesman, Vince Cable, told The Independent's fringe meeting that his political hero is the late Labour leader, John Smith. Mr Cable argued that Mr Smith would have supported these proposals, or at least the principles that shaped them. The tax cuts amount to £20bn to be paid for largely out of tax increases elsewhere.
Separately, the Liberal Democrats plan to find savings out of public spending worth another £20bn. This is the proposal that was debated this week. Apparently, it is a coincidence that the figure happens to be the same as the party's earlier proposal on tax redistribution. Not surprisingly, this is causing some confusion. One £20bn package is daunting enough. Having to deal with two £20bn packages is the equivalent of Basil Fawlty realising that there were not one, but two, psychiatrists staying at his hotel.
Two proposals with the same colossal price tag attached to them are bound to lead to misunderstandings. Indeed, some senior Liberal Democrats have urged for a change in one of the figures to avoid further confusion. "Let's say the second package is worth £18 bn," said one, suggesting the figures being bandied about have at best a casually provisional quality.
More importantly, this new set of "savings" is not aimed solely at providing cash for overall tax cuts. Most of it would be targeted at other areas of public spending, such as the important proposal to spend more on pupils in poorer areas, a policy that meets the private approval of several cabinet ministers. Any cash left over from the public spending plans would finance tax cuts. That is the single vaguely defined proposal that could bring about an overall reduction in tax.
I do not believe for one moment that there will be scope for any overall tax reductions after the next election in the light of the current economic crisis, and more specifically in relation to the Liberal Democrats' still ambitious programme for public investment. But of course the one certainty is that the party will not be forming the next government with an overall majority. Instead, it needs to send out signals in what for them is a highly complex and changed political situation, needing to defend themselves against a more popular Conservative party while seeking to make the most of a decline in support for Labour. At the broadest strategic level, they have pulled it off, with an offer of tax cuts while retaining a commitment to social justice.
They have done it in such a way to make nonsense of claims that the party is moving rightwards. There were two challenges for Nick Clegg as he delivered his first address to the party conference. One related to a question of style. Could he pull off the daunting task of delivering a big speech at his annual conference? The answer was an unequivocal "Yes". He looked at ease as he wandered around the stage aided by the invisible autocue.
In terms of substance, he more or less pulled it off as well, stressing that he was as committed to social justice as previous leaders and yet outlining a distinctive pitch far removed from the Conservatives and Labour in its current plight. On the stage, although not in all the interviews he has given this week, he looked entirely comfortable, much more so than his immediate predecessors.
In the current circumstances, Mr Clegg is in the only place available to him. Yes, he will cut taxes. Tory voters take note. Yes, he is committed to redistribution and social justice and will spend more on education. Labour voters take note. Where he was much less assured this week is in conveying in simple terms a complicated policy ("two twenty billion pounds!") and in spelling out the details.
Even the deified Vince Cable was vague, admitting in a BBC interview that the figures indicate the direction of travel and no more. If the Shadow Chancellor George Osborne made the same claim about his figures, he would be slaughtered, even in the current media environment, which treats the Conservatives gently.
Again, in reality I doubt if it will be possible to cut overall spending even at the margins and improve public services. The Lib Dems and the Conservatives are right to argue that the current government could have spent some of the money more effectively, but to cut the level points Britain back towards the 1980s and 1990s, when it spent less than equivalent countries in Europe and – surprise, surprise – had much worse public services. I can understand, though, given the disillusionment with the Government, why Mr Clegg has decided to opt for a lower overall spending figure.
What he will not get away with for much longer is the suggestion that the lower figure is merely indicative. A third party must be credible in order to be heard. If it sacrifices credibility in an attempt to be loudly distinctive, few will listen. Such wooliness at next year's pre-election conference will be torn apart.
Nick Clegg has made a good start, relaxed and tactically wise. But perhaps it was fortunate for him that few voters were paying too much detailed attention this week.Reuse content