New Liberal Democrats, new radicals

It is 15 long years since Sir David Steel told the Liberal Party faithful to "go back to your constituencies and prepare for government". It is said that after he stepped down, Sir David, with a rueful sense of self-parody, used to end speeches to party gatherings by exhorting them to "go back and prepare for local government". Whether that is apocryphal or not, it looked in the summer of 1994 as if Paddy Ashdown, coping first with disappointing European election results and then Tony Blair's accession to the Labour leadership, was facing extinction as a national force.

But the extinction did not happen. The watershed was not the party's triumph, impressive as it was, in consolidating its position as the second party in local government. The decisive moment was the Littleborough and Saddleworth by-election last year when, after having had everything thrown at them that new Labour could muster, the Liberal Democrats survived and won. In so doing, it proved to itself that it could hold territory even in a political landscape transformed by Tony Blair.

What's more, the Liberal Democrats now have a mission. And it is one that underlines a paradox of anti-Toryism, stemming as it does from the extreme care with which Blair is approaching the coming election. Once upon a time, it looked as if the Liberal Democrats' historic role would be to act as a comfortably centrist brake on a Labour government, preventing it from sinking back in the corporatist neo-Keynsian morass of the 1970s. Now this all seems rather different. Suddenly the party looks more like a radical goad to the studied, electoralist caution of new Labour. Ashdown believes that the minimalism of Labour's manifesto has given him space to move into.

Take this week's flurry of policy and thought for example. Yesterday the party produced bold but fiscally neutral plans for new, environmentally friendly carbon taxes. Tomorow night Paddy Ashdown will make a speech in which he questions defeatism over unemployment. He will draw a distinction between the "competitive value" economy in which industry needs brutally to cut its labour costs, and the "community value" economy in which social and consumer needs would be fulfilled by an increase, rather than a decrease, in jobs. Citing the apparently trivial but symbolic example of his own local rail station, which the elderly won't use at night because it is unmanned, Mr Ashdown will suggest that in the long run consumers may be prepared to pay more for better, sometimes labour intensive, services.

The speech will add, and deliberately so, to the perception that the Liberal Democrats are prepared to be more challenging than Labour on at least some issues. It comes, after all, on top of clear commitments to an additional pounds 2bn on education, financed if necessary by 1p on income tax; a new 50 per cent tax rate; and the probability of a clear pledge for a decisive referendum on Britain's future in Europe.

Partly of course this a matter of tactics, developed over several months but refined at a meeting of the party's MPs at meeting in Oxford over the weekend. First, it reflects a recognition by Ashdown that the party needs to be known for more than its commitment to constitutional reform. He knows that all the polling evidence is that the voters already understand that the party wants proportional representation for the House of Commons. He knows, too, that the fact that electors favour PR when asked doesn't mean that it is top of their individual priorities. Indeed instead of referring to "constitutional reform", the party now talks internally of "sleaze" to remind itself that dismantling the quango state which the Tories are running now, and Labour might do in the future, is a more immediately populist cause.

Second, having taken the momentous decision to rule out a coalition with the Tories, Ashdown believes he has to differentiate the Liberal Democrat product from Labour. That is helped, as it happens, by the crossness that even those of his MPs who are friendliest to Labour feel about not being consulted about Labour's commitment to a referendum on Scottish devolution. Ashdown wanted a referendum, too. But it was galling not to be told in advance, given that plans for devolution were hammered out in that model of inter-party co-operation, the Scottish constitutional convention. The Scottish Liberal Democrat MPs are asking: "What price co-operation now?" In September they will take their revenge when the party conference proposes that the referendum question should be (instead of the two-parter planned by Labour) a single one: "Do you want a tax-raising Scottish parliament?"

But it isn't just a matter of pre-election tactics. Mr Ashdown recoils, as Dracula from the cross, from the notion, mischievously encouraged by the likes of Ken Livingstone, that he is to the left of Blair. So let's stick with his preferred word: radical. But his insistence on a broad, but clear and costed programme poses an interesting question for Labour: does it have a hidden agenda or is it less ambitious for change than the Liberal Democrats? Is it a Trojan horse or an empty vessel?

The accusation against the Liberal Democrats, of course, will be that in the heat of any post election negotiations, they will simply throw over all these non-constitutional demands if Cabinet posts beckon. But the party has hardened since the Lib-Lab pact in the late Seventies damaged its support in the country without exacting any price to speak of. Ashdown thinks his programme will win him votes. And if he is right, he could yet have the mandate to press some or all of these policies on an incoming Blair-led government.