Steve Richards: The Liberal Democrats are flailing around in the wilderness, despite their electoral success

Normally, most of them behave as if national power is just round the corner. Some even believe it
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There is a slight difference in Blackpool this year. I detect a hint of impatient desperation in the air. Normally most Liberal Democrats act as if national power is just around the corner. Some of them even believe it. Policies are proclaimed headily or debated heatedly almost on the misplaced assumption that they are on the verge of implementation. This week, a few of the MPs and activists act in a similar deluded fashion hailing the conference as a victory rally. On the whole though the mood is more subdued - and with good cause. What exactly have they won? The Liberal Democrats form a bigger parliamentary force but play the same powerless role at a national level. Another apparently pivotal election has passed. Now they stumble.

The Liberal Democrats are hardly able to breathe politically while the two bigger parties are in a state of flux. The current situation shows the degree to which the Labour and Conservative parties define the smaller third. Charles Kennedy should have made more of the uniquely propitious circumstances at the last election but the dilemmas now would be the same whoever is in charge. While Labour and the Conservatives await new leaders, the Liberal Democrats do know what to do. The successors to Tony Blair and Michael Howard will determine their fate. Most obviously Ken Clarke will have a very different impact on them compared with David Davis.

The third party dances to the tunes of others. At the moment no one is sure what those tunes will be so the Liberal Democrats dance in a strangely awkward silence. They hold a policy review but without any clear sense of where they will be when it is over. Perhaps they will dump most of the policies from the last election. Perhaps they will not.

The new twist this year is that a few Liberal Democrats contemplate a leap in a rightward direction. Of course this new twist is not new at all. Deals with the Conservatives have been considered before and one of their former leaders, Jeremy Thorpe, had brief talks with the Tory Prime Minister, Ted Heath, after the February 1974 election.

Nothing happened then. Nothing will happen in the next few years. Unless Ken Clarke becomes Conservative leader and manages to transform his party there is virtually no common ground. Listen to most Tories put the case ardently for sweeping tax cuts and Euroscepticism. No Liberal Democrat puts a similar case. Some argue against proposing additional tax increases, but that is a different matter to calling for sweeping cuts in spending.

For all the various contortions, the Liberal Democrats have more in common with the modern Labour Party. Consider the parallels. The Liberal Democrats have an ultra-Blairite wing that calls for greater involvement of the private sector in providing public services. So does the Labour Party. Like Labour, they also have a significant section of the party that is to the left of Mr Blair. As one influential, newly elected Labour MP put it to me recently: "I look at the Liberal Democrats in the Commons and see very little difference with what most of us stand for."

Not surprisingly, Mr Blair and his allies look on approvingly at the ultra-Blairite wing of the Liberal Democrats. Mr Blair is far from pleased when the cabinet minister, Peter Hain, warns that some Liberal Democrats are lurching to the right. It is the ones who are lurching in that direction whom Mr Blair supports.

Meanwhile those on the left in the Liberal Democrats shaped an agenda that appealed to former Labour supporters at the last election. Both parties have their ultra-Blairites and their left-wingers. The main difference between them is that the bulk of the Labour Party is focused on power and staying there.

Until the 1990s Liberals were able to cite the dominance of over-mighty trade unions, the attachment to state ownership and stifling corporatism as reasons why Labour was beyond the pale. None of these apply now. Naturally, Liberal Democrats claim that their support for civil liberties and their opposition to Iraq are reasons enough for their own separate existence. But at least half the Labour Party also opposed the war and are worried about Mr Blair's rushed and ill-defined list of anti-terrorist proposals. They are not reasons for a separate party.

Early in his leadership Mr Blair recognised that more constructive relations with the Liberal Democrats were necessary to build what he called a radical 21st century. Mr Blair turned away when he realised to his alarm that most Liberal Democrats were to the left of his own position. He will attack them with almost the same ferocity as the Conservatives next week in his speech to the Labour Party conference.

The Liberal Democrats have turned away from Labour too. But they should note that they matter when they work with other parties and are peripheral when carving out a route on their own.

One of the great myths of modern politics is that Mr Blair took their former leader, Paddy Ashdown, for one of the biggest rides in recent history. According to mythology Mr Blair held out the prospect of coalition and electoral reform in order to keep a naïvely gullible Mr Ashdown on board. In reality, Mr Blair could have swallowed the Liberal Democrats alive in the mid-1990s when he was at the height of his popularity. By staying close to Labour Mr Ashdown made his party seem more important than they were, close to power and a central force in the reshaping of the political landscape. Briefly during Mr Ashdown's leadership there were far fewer questions at Liberal Democrat conferences about their overall purpose.

Now they are doing better than ever in electoral terms but are flailing around in the wilderness. They require a bigger project than a series of policy reviews. The answer to the question posed at this conference and at the top of this column is relatively straightforward. At some time, leading Liberal Democrats on the Blairite or the social democratic wing of their party willhave no choice but to pay some attention to Gordon Brown's much-proclaimed progressive consensus and seek in some way or another to be part of it. The alternative is to remain the perennial vehicle of protest agonising eternally over which direction to take next.