Recently I bumped into Michael Heseltine and exclaimed to him with banal excitement: "Politics is really interesting at the moment." He paused and replied with a mischievous smile: "Politics is always interesting." He is right, of course. Politics is about human beings seeking to resolve differences through words rather than force, pursuing ambition, attempting to win ideological battles, manoeuvring, projecting through the media, implementing policies. The vocation is inherently fascinating at all times. Those who are tired of politics are tired of life.

Nonetheless, I stand by my simplistic declaration to Michael Heseltine. The vocation becomes more darkly compelling in a hung parliament with an economy that might fall into a second recession. We are not used to peacetime coalitions and most voters have not lived through such bleak economic times. In such circumstances, politics comes to matter even more. We need it to work and, yes, it has been a really interesting year.

So interesting, in fact, that this column will inaugurate a new award: Politician of the Year. It obviously cannot be based on whether or not I agree with them. The judgement must be made on the basis of how well a politician has adapted to the often impossibly daunting external circumstances around them. Leaders or aspiring leaders must try to give the impression of overwhelming dominance, when mostly they are trapped in a tiny amount of space with nowhere to go.

There are three candidates who have transcended the limits that might have manacled lesser figures. The first is Alex Salmond, the most talented and self-assured politician in the UK. His dominance of Scottish politics remains breathtaking and might have historic consequences. Labour is now struggling to recover in a land they once ruled with ease. The Conservatives are nowhere to be seen, and now Salmond contemplates holding a referendum on independence. He will only hold the plebiscite if he is confident of victory, meaning the break-up of the United Kingdom is suddenly a possibility. Salmond is a master and beneficiary of the devolution settlement that he passionately opposes, which is one of the forms of his genius.

The second candidate is the shadow Chancellor, Ed Balls. The fact that he is shadow Chancellor is testimony to his wilful determination to keep going through the ups and downs of politics. Ed Miliband was wary of appointing him when Alan Johnson resigned, and yet he was the obvious choice. Since then, his bold predictions about what would happen if George Osborne pressed ahead with his speedy cuts have been proved right. At the beginning he had the support of a few perceptive economic columnists, but was largely on his own. Being on your own is, by definition, a lonely place to be. In politics it can be career-threatening. But Balls has political courage and a capacity to mix an expertise in economics with the tactical game that forms a part of politics. David Cameron called him the most annoying figure in British politics, another form of vindication.

Cameron is the third candidate. He leads on the narrowest of stages. To the one side of him are the increasingly stroppy Liberal Democrats, on the other is an assertive parliamentary party that cannot be easily appeased with the promise of ministerial jobs. Prime ministerial patronage is a powerful weapon in controlling a party, but Cameron has fewer jobs at his disposal in a coalition. Meanwhile, economic storms are brewing on a scale that makes those of the 1970s and 1980s seem little more than minor breezes.

Other leaders in comparable circumstances were exhausted and demoralised. Harold Wilson leading a hung parliament in the 1970s, John Major in the economic doldrums in the early 1990s and Gordon Brown in 2008, all lost their humour and political guile partly because there was no cause for laughter and they felt trapped politically. Cameron remains vivacious and witty and is implementing a radical Tory agenda without having won the election. In policy terms, he is skating on thin ice and I suspect the ice will crack next year, but, for now, we are looking back.

Salmond holds sway on a smaller canvas. Balls has yet to persuade the wider electorate and some in his party that he has all the answers. Cameron ends the year in a stronger position than he should be, still evasive as a political figure to the point of being almost uninteresting. This is a triumph of sorts in such a turbulent context and when, as Michael Heseltine observed, politics is inherently interesting. So David Cameron is my Politician of the Year.

s.richards@independent.co.uk / twitter.com/steverichards14