Steve Richards: Determined Clegg steadies Lib Dems

Nick Clegg's speech to his party's conference was one of solid determined resolution. As such the short address was more significant than it seemed, containing important indications of his future intentions in terms of strategy and in relation to his own leadership. After this speech anyone who believes Clegg might stand down voluntarily before the next election should think again. He conveyed his determination to fight the 2015 campaign, implying subtly that to walk away before then would be an act of weakness that would undermine his party's new distinctive pitch, that they are now a party of government capable of staying the course and facing the tough choices of power.

His message was strong, the only one available to him, but seriously undermined and challenged by the unacknowledged context in which he was speaking. First he argued that they and we were on a journey from austerity to prosperity. When the end was in sight he suggested voters would recognise the wisdom of the early tough policies. Obviously he has no choice but to defend those post-election decisions and yet he was speaking to his conference at a point when the UK economy is back in recession. The economy was growing immediately after the 2010 election.

Belatedly the Coalition is becoming more active, thanks partly to pressure from Clegg and others. This week there have been genuinely significant announcements including the introduction of a business bank and further movers to boost housebuilding. They should have been introduced immediately after the election as a matter of urgency, but the determined inactivity then is one reason why the economy slipped back into recession and why there is so much anger with the Liberal Democrats in allowing it to happen.

Even so, quite a lot of the speech was Blair-like in its attempt to occupy the centre ground. First he claimed there was no "silver bullet" to revive the economy, but no one is claiming that there is. Tony Blair used to love knocking down obstacles that did not exist. Next he dismissed Liam Fox's call for de-regulation (Fox is now safely out of the Cabinet) and Ed Balls' demand for addition borrowing, suggesting "If you're attacked by Fox and Balls you're in the right place". As a political device this would be more effective if the economy was growing.

He was more interesting on Plan A which he portrayed, with some justification, as more flexible than was widely assumed, stating explicitly that if it was a rigid course he would oppose it. There was space he insisted, again with conviction, for "big and bold" projects to support growth. But the past cannot be re-written and the Coalition chose sweeping spending cuts and state inactivity in 2010 at a point when the private sector was moribund, banks were not lending, and the UK's main export market in Europe was in decline.

Nonetheless he drew two future lines in the sand with the Tories. Emphatically he stated there was no question of reducing the 45p income tax rate for high earners. Given the damage the cut from 50p has done to Cameron/Osborne it is unlikely that the Conservative leadership would have dared to make such a move. Now they know for sure they cannot do so.

In more general terms Clegg was admirably solid in arguing that there was a false choice between economic growth and green poli cies. Revealingly this was the only policy area where he chose to mock the Conservatives. He was clear too: "Be in no doubt we will hold them to their promises on the environment". As he described the Tories' pre-election slogan "Vote blue, go green" as no more than a cyncial re-branding exercise the environment is surfacing as an important fault line in the Coalition.

His partnership with the Conservatives got no further direct mention, but the relationship is also part of the deadly background that challenged the powerful arguments of the speech. Perhaps that is why the Tories did not get any further references. He said instead about the Coalition: "Our mettle has been tested and we haven't been found wanting … we work to keep this government anchored in the centre ground … if voters want a party of opposition they can look to plenty of other parties".

Again this is a strong argument. In a way that is easily underestimated the Liberal Democrats have power and, to some extent, acquire the aura of a party with power. Earlier at the conference BBC News 24 broke off from their coverage of the latest raging news stories from across the world to broadcast live from Brighton a Q&A session with Danny Alexander, an editorial decision that would never have been taken before the last election when he would have been lucky to get 10 seconds on a bulletin in the middle of the night. It was the correct call. Alexander is Chief Secretary to the Treasury and with Clegg is part of the quad that makes the key decisions in this Coalition. They matter.

But power has come at a colossal price. Clegg made his case that they were now up with the two bigger parties when he and his party are slumped in the polls. It takes chutzpah to claim that the Liberal Democrats have made a great leap forward when some polls place them behind UKIP in terms of popular support, the broader deadly context of the speech.

Whatever the polls say now Clegg has every intention to lead them in the next election. His announcement that Paddy Ashdown would head the campaign is as much about buttressing Clegg's leadership now as it is about preparing for 2015. In effect Ashdown has endorsed Clegg to be leader in that campaign. It is a move well beyond Ashdown's inevitable public declarations of support. At the same time Clegg has shown he wants to remain leader and intends to be. There was no need to make the Ashdown announcement now other than to convey the message that Clegg – not Cable – is already making plans for the campaign

If he manages to lead it his overall pitch will be Blair-like too. Yesterday he echoed Blair by insisting only his party could be "trusted on the economy and relied upon to deliver a fairer society too". But when Blair made precisely the claim of New Labour the economy was booming and public spending soaring. The context needs to change dramatically if Clegg is to fight the election as the Liberal Democrats' leader in 2015 with any hope.