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Leading article: Now the Liberal Democrats can show their real strength

There is new political space for the party and Nick Clegg must seize it

It has not been the best of years for the Liberal Democrats; that was probably 2005, when they achieved a record number of MPs. But nor has it been the worst of years, not by a long chalk.

The party, and its leader, Nick Clegg, go into their conference this weekend in pretty good shape, given the ravages wrought across the political landscape by the economic crisis and the MPs' expenses scandal. What is more, there is a clear space now for the sort of policies, economic and social, they have been espousing, as there is for their view of Britain's place in the world.

Mr Clegg has settled in as party leader and now looks thoroughly comfortable in the role. That his profile has not risen commensurately has less to do with any presentational inadequacy on his part than with the media's preference for adversarial left-right encounters. Unless the electoral system changes, the third party will always have to fight harder and shout more loudly to be heard. That is a cross – for the time being, at least – that Mr Clegg just has to bear, but shouting a bit louder would do no harm.

The Liberal Democrats deserve more attention than they have been getting – on good old-fashioned policy grounds. Over the past year they have made the running in a host of areas. In part this reflects the stature of their Treasury spokesman, Vince Cable, who has been consistently ahead of the pack on the banking crisis and everything that proceeded from it. Perversely, though, Mr Cable's guru status has not been the asset it might have been. It is not that he has eclipsed Mr Clegg as party leader, rather that he has been feted almost as a one-man economic think tank beyond all notions of party politics. The Liberal Democrats need to find a way of capitalising more effectively on the authority of this undoubted star.

But it is not just Mr Cable's ideas for tougher banking regulation, more redistributive taxation, and the – laudable – principle that any higher public spending must be paid for with savings elsewhere for which the party deserves credit; nor yet for embracing some unpopular, but probably necessary, cuts affecting tax credits for the better-off and pensions. Mr Clegg brings a great deal else to the political table.

Liberal Democrat MPs can pride themselves on being the staunchest defenders of civil liberties and the least tarnished by the expenses scandal. The party was also the first to reject the renewal of Trident – something the two major parties are now toying with. On foreign policy, the Liberal Democrats are looking, with the help of their elder statesman, Lord Ashdown, at how best to redirect the costly mission in Afghanistan. And now that France and Germany are leading the euro-zone out of recession, the Lib Dems' pro-Europe stance looks as persuasive as it has ever done.

In policy terms, of course, they have one signal advantage: they are further from power than Labour and the Conservatives and can float ideas with relative impunity. But the party is not so far from power that it can risk appearing irresponsible. And that in itself creates difficulties. Their goal of replacing Labour as the second party will be hard to achieve without alienating the Conservative voters they need in the south and west. Nor, paradoxically, is it in their interests for Labour to do too badly; only a hung Parliament would give the Liberal Democrats a slice of power. This must be their immediate aim, and the next few days give them the chance to show they are ready to be what Nick Clegg calls the "progressive force" Labour once was.