If Labour wins big, what happens to the Lib Dems?

Blair and Ashdown agree on many things, but not all. Yet a merger of the two parties is possible

Paddy Ashdown can go off to his spring conference in Cardiff this weekend in quite a satisfied mood. The pact reached with Labour on the most momentous programme of constitutional reform since women got the vote reflects especially well on the Liberal Democrats. It did not, as it might have done, look like his party being overshadowed by their political big brother.

Here was Labour going some way to meet Mr Ashdown on his own territory, being graceful about his commitment to electoral reform, and respectfully signing him up as the chief guarantor of its good intent towards Scottish devolution, a democratised London, an aristocrat-free Lords, a Freedom of Information Act and a Bill of Rights.

They didn't get it all their way: Blair didn't commit himself to backing proportional representation in the referendum which he has promised. And the Liberal Democrats haven't buried quite as comprehensively as they claim the least radical (and not genuinely proportional) option for electoral change - the alternative vote (AV) system. True, Robin Cook and Jack Straw both wanted to eliminate AV as an option - Cook because he favours a full- blooded system of PR, and Straw because he wants to maintain the status quo and fears that AV might tempt some who would otherwise resist reform. They were happy to agree a formula which says the voters will get to choose between the status quo and a "proportional" electoral system - which Blair himself has indicated AV isn't.

This certainly makes AV highly unlikely; though not, the Labour experts insist, impossible. But that's a wrinkle. Ashdown will not be going too far if he claims on Sunday that he has helped to start a momentum for electoral change. He believes that the European elections should be by PR in 1999, that the Commission charged with coming up with an alternative electoral system for the Commons need take no more than three months to report and that a referendum could be held before the end of next year.

This is important. Now they have abandoned equidistance between the two main parties and Labour is led by a moderniser, Ashdown has problems explaining what the Liberal Democrats are for. This weekend, he will stress some of the differences between his party and Labour beyond their well worked-out environmental policies unveiled yesterday. Having been rather vague in the past about the extra 1p in the pound tax rise to improve education, Mr Ashdown will spell out that this would cost the average taxpayer about 45p a week extra. He will also detail what that would buy in education spending - for example, in equipment and books for primary schools.

He will also attack what he sees as a creeping "moral authoritarianism". Explicitly, this is directed at the Tories and Michael Howard. But, thanks to Jack Straw's hawkish attitudes on law and order, it is an area where Ashdown can also differentiate himself from Blair. It isn't clear that being bolder on income tax or more liberal on crime than Blair is exactly helping to lift his party's popularity, still trailing below its pre-1992 election levels. (In an interview in yesterday's New Statesman, Ashdown refers ruefully to a remark by the US Democratic Presidential hopeful Adlai Stevenson. When told by a supporter that all good men will vote for him, Stevenson replied "That isn't going to be enough.")

He is also paying a price, in terms of his relations with Labour, for what its senior figures continue to complain are carping public criticisms on policy from spokesmen below the level of the two Liberal Democrat politicians Blair most admires - Ashdown himself and Menzies Campbell. This is so much the case that in the increasingly byzantine contingency planning for a TV debate between the party leaders, Labour are not going out of their way to fight Ashdown's corner in seeking equal air time. So there are limits to co-operation, but that may be worth it to preserve the distinctive identity which Ashdown needs to fight a national campaign.

But is this for always? Ashdown has managed to maintain a separate brand image - poll ratings may not be spectacular but the fact that its vote in the Wirral wasn't squeezed below four percent confirms that its support isn't going to implode. The real identity crisis is much longer term. The party's elder statesman, Lord Jenkins, was misreported as having called for a merger in a speech last Saturday. He did no such thing, and even if he had, every senior Lib Dem has ruled out the idea.

What's more, Ashdown is entitled first to say that Blair's politics remain an unfinished canvas - with the Labour leader both reassuring voters that he is safe and allies that he will be more radical than they think - and second that there is a ideological distinction between the social democratic roots of New Labour and the Liberal traditions of his own party. (Even though his party contains quite a lot of erstwhile social democrats whom Labour would like to hoover up if they could).

Suppose Labour gets a landslide. Ashdown said yesterday his party would sit happily on the opposition benches. But to what end? Suppose also that Blair's law and order policy, perhaps even his Home Secretary, is not quite as authoritarian as the electoral imperative now dictates it is. Suppose that savings elsewhere result in increased education spending at a level to dwarf anything which Ashdown is offering. Suppose that Blair becomes as environmentalist after the election as Ashdown is now. Suppose, above all, that Blair succeeds in projecting himself less as a social democrat than the inheritor of 19th-century liberalism, a coalition of interests on the centre and left, but non-corporatist, business friendly and less alienated from the establishment than previous Labour governments . Then, as the writer Ian Buruma has put it, we would be "on the threshold of a neo-Gladstonian age". Does the equation change? Not immediately. Not perhaps even in a first parliament. But in the much longer term, the possibility that Lord Jenkins, child of the Labour Party but biographer of Asquith and Gladstone inadvertently raised last weekend might not seem so outlandish as Ashdown now claims it is.