Power has come at a colossal price that Clegg isn't ready to concede

The Deputy PM insisted there is space for "big and bold" projects to boost growth.

(Getty Images)

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 both strategy and his own leadership. Anyone who still believes Clegg might stand down voluntarily before the next election should think again. The address conveyed his determination to fight the 2015 campaign, implying that if he were to walk away before then it would be an act of weakness that would undermine his party’s new distinctive pitch, that it is 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 the Lib Dems, 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 to defend those post-election decisions and yet he was speaking at a point when the UK economy has moved back into 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 a business bank and further moves to boost house building. They should have been introduced after the election as a matter of urgency. The determined inactivity back then is one reason why the economy slipped back into recession and why there is so much anger at the Liberal Democrats.

Clegg was admirably solid in arguing that there was a false choice between economic growth and green policies

Even so, quite a lot of the speech was Blair-like in its attempt to claim the centre ground and, at one point, in its crude triangulation. First, Clegg 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, Clegg dismissed Liam Fox’s call for deregulation (Fox is now safely out of the Cabinet) and Ed Balls’ demand for additional 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 rewritten and the Coalition chose sweeping spending cuts 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.

None the less, he chose to draw two future lines in the sand with the Conservatives. Emphatically, he stated there would be no question of reducing the 45p income tax rate for high earners. Given the damage the cut from 50p has done to perceptions of Cameron/Osborne, it is unlikely the Conservative leadership would have dared such a move. Now they know for sure they cannot because Clegg would block it.

Clegg was admirably solid in arguing that there was a false choice between economic growth and green policies. Revealingly, this was the only 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.” And he described the Tories’ pre-election slogan “Vote blue, go green” as no more than a cynical re-branding exercise. The environment is surfacing as an important fault line in the Coalition.

Partnership with the Conservatives got no further direct mention, perhaps because the relationship is part of the deadly background that challenges the powerful arguments of the speech. He said instead of 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, it is easily underestimated that the Liberal Democrats have power and 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 question-and-answer session with Danny Alexander, an editorial decision that would never have been taken before the last election. Then, Alexander 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 when he and his party are slumped in the polls. It takes some chutzpah to claim that the Liberal Democrats have made a great leap forward when some polls place them behind Ukip.

Whatever the polls are suggesting, 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. 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 planning for the campaign.

If he manages to lead it, his overall pitch will be Blair-like, too. Yesterday, he echoed Blair by insisting that 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 2015 election as the Liberal Democrats’ leader with any hope.