Mr Kennedy deserves his applause at the Lib Dem conference

It h as been a good week for the Liberal Democrats. This is slightly peculiar, given that they are the party most strongly committed to the environment, and the party that has executed the sharpest hairpin turn in response to the fuel protest. Charles Kennedy inaugurated his party's conference by publishing a book in which he called for higher duty on petrol; yesterday he confirmed that the new policy was to freeze the duty for five years.

It h as been a good week for the Liberal Democrats. This is slightly peculiar, given that they are the party most strongly committed to the environment, and the party that has executed the sharpest hairpin turn in response to the fuel protest. Charles Kennedy inaugurated his party's conference by publishing a book in which he called for higher duty on petrol; yesterday he confirmed that the new policy was to freeze the duty for five years.

It is also slightly surprising that Mr Kennedy's party is riding so high, given that he was so widely expected to squander the golden inheritance bequeathed to him by Paddy Ashdown, who seemed - this time last year - to be quitting at a time when the only way for the party to go was downwards.

Mr Kennedy showed in his speech yesterday what a fine communicator he is: he did not reduce the delegates to a trembling ecstasy, but they liked him and he came across well on television. He has the most important attributes for a modern politician: he seems sincere, sensible and human; and he is lucky.

Equally, older hands will have seen third-party revivals come and go before. Despite some excitement about one opinion poll that put the Liberal Democrats at 22 per cent, their average rating last week was only a so-so 19 per cent. The Lib Dems and their predecessors have always been vulnerable to a two-party squeeze, and simply being a makeshift reception centre for incompatible protest voters is not enough. That is a present danger, when such a large chunk of the fuel protest vote has taken refuge in the Lib Dems' green-tinged camp. Hence Mr Kennedy's repeated refrain to the effect that the country "needs" the Liberal Democrats.

He makes a good case. The party has courageously stood up for liberal values on asylum-seekers, the right to jury trial and equality for gays, and yet still managed to win a by-election from the official Opposition, which has been trying opportunistically to exploit precisely those issues.As Mr Kennedy said, the Conservative leader, William Hague, is an unusually unpopular populist.

Mr Kennedy has gone further than any other party leader, and further than his predecessor, in calling for limited liberalisation of the law on cannabis. This too is brave in the present climate.

What is more, the Liberal Democrats find themselves at the heart of the debate about taxes and public spending. Even after their U-turn, they are more right about fuel taxes than either the Government, which will cut duty in due course, or the Tories, whose opportunism is transparent. The demand for a higher state pension will add to pressure on Labour's second front next week. The details are wrong, but the Lib Dems are pushing in the right direction. A 50p-in-the-pound rate of income tax is not necessary, and could be seen as a disincentive to enterprise. But a rise in the state pension would be an efficient way to get money to poor pensioners, provided it is clawed back in tax from rich ones.

Thus the Liberal Democrats enter the election campaign, which starts now, on a high note. The party is in a better position to defend and to add to its 47 seats than seemed possible at any time over the past three years. This is a vindication of its defence of liberal principle, and an encouragement to the party to hold its nerve over the next seven months.