Mr Blair should be more generous to the Liberals

'Is John Prescott reallygoing to resign if Blairforces through PR for local government?'

What would Tony Blair like his premiership to be judged on, apart, of course, from a prolonged period of economic stability? There are probably four goals: the lasting peace and political settlement for Northern Ireland that eluded Gladstone, Asquith and Lloyd George; public services, especially health and education, good enough to make the alternatives politically unsustainable; entry into the single currency, as the decisive demonstration that the United Kingdom is, at long last, at ease with itself in Europe; and an end to what he has always seen as the destructive schism between Liberalism and Labour, which handed most of the last century to the Conservatives.

What would Tony Blair like his premiership to be judged on, apart, of course, from a prolonged period of economic stability? There are probably four goals: the lasting peace and political settlement for Northern Ireland that eluded Gladstone, Asquith and Lloyd George; public services, especially health and education, good enough to make the alternatives politically unsustainable; entry into the single currency, as the decisive demonstration that the United Kingdom is, at long last, at ease with itself in Europe; and an end to what he has always seen as the destructive schism between Liberalism and Labour, which handed most of the last century to the Conservatives.

Let's leave aside the first three, beyond saying that the first, while in some ways the most advanced, is still fraught with dangers, much of the second is still at the stage of planning - albeit in some impressive detail - and the third is still poised between total success and total failure. Let's instead commemorate Charles Kennedy's first year in office as Liberal Democrat leader by considering the fourth, Blair's undoubted desire to usher in an era of co-operation between Kennedy's party and his own that can mobilise what every general election result since 1945 has shown is a non-Conservative majority of voters.

The high-minded phase of that ambition is now dead. There was a period when Labour could have brought the Liberal Democrats into a coalition from a position of such strength that no one could have complained that it was being done from expediency. But those heady days before and after the election, when it seemed that Tony Blair might bring Liberal Democrats into the Cabinet for no better reason than that it would have ushered in a new kind of politics, already seem to belong to a different age.

Indeed, there is some apprehension in government circles about the forthcoming publication of Sir Paddy Ashdown's diaries, on the grounds that they may contain untimely testimony of how close Blair came to doing just that - or, if you believe the alternative version, how close he came to making Ashdown think he was going to do just that. If nothing else, Sir Paddy will be doing political history a service if he sheds some more light on why, in the immediate aftermath of 1 May 1997, the two leaders shrank from the compact that might have meant we would now have the Lib-Lab government they both seemed to aspire to. For that was a revolutionary moment, probably the best opportunity of all to break the mould of three-party politics.

Instead, the noble aspirations of the early Blair-Ashdown era have given way to a sober realisation among most politicians that if it is ever going to happen, it is going to be dictated by electoral arithmetic. The obvious case is a hung parliament; but it's not the only one. With a majority of up to 50, coalition might suddenly become a highly attractive prospect for the Labour leadership - either to insure against being held to ransom by a dissident left Labour minority or because the Liberal Democrat contingent in the Commons had increased its own bargaining power. In which case, the hard bargaining would have to await the outcome of a future election.

Given all that, why on earth should anyone worry about relations between the two parties in the meantime? Why has the Labour leadership already gone to considerable lengths to stitch up a compromise with the party's arch-tribalists that should - just - ensure that Labour repeats its manifesto commitment to hold a referendum on electoral reform, the minimum price exacted by the Liberal Democrats for informal co-operation? Why shouldn't Charles Kennedy bow to his dissidents and start knocking seven bells out of Labour, instead of maintaining his judicious role of treating Labour as the competition and the Tories as the enemy? And most of all, why should anyone suggest that Labour, with its huge majority, might profit by being even nicer to the Liberal Democrats?

The first two questions are easy to answer. For the two parties need a repeat of the tactical voting that helped to corral the Tories last time round. Which means, just as in 1997, a tacit non-aggression pact between the two parties in the run-up to the next election. The Liberal Democrats, under pressure from the Tories in the West Country, certainly need it. But in some ways it is an even sharper issue for Labour. Kennedy's triumph in Romsey showed that Labour supporters will still switch to the Liberal Democrats; whether Lib Dems are still as keen to vote tactically for Labour is not quite so clear.

But in any case, Labour should also start thinking a little more clearly about the medium term. At the moment, it's all too tempting to take the Liberal Democrats for granted. But suppose Labour wins another thumping majority - but also that it starts to become seriously unpopular in mid-term. Perhaps the euro referendum will have happened and a reunited Tory party will have begun to come back to the middle ground. There is an iron law that, left to their own devices, Liberal Democrat supporters, asked for their second preferences, divide according to the national opinion polls. In other words, Lib Dem voters might spontaneously start voting Tory to keep an unpopular Labour Party out - especially if the party's leaders were displeased with the lack of concessions from Labour and saw little reason to discourage voting for a pro-European, one-nation Tory party.

Fanciful? Perhaps. But it should at least remind Labour that Lib Dem support is not immutable. Indeed Kennedy, despite his skilful, pragmatic handling over the past year, does have problems. Last year, he boldly proposed that the party's key policy committee should be elected by a ballot of the entire membership, a reform that, among other things, would have probably made the party less resistant to coalition on the right terms. This year, that same policy committee kicked the proposal out in favour of keeping the present system of election by conference representatives. The less Kennedy has to show for his constructive approach to Labour, the more that situation is likely to prevail.

All this speaks, no doubt, for Kennedy being a tad pushier in his dealings with Blair - for example, by demanding a commitment to PR in local government. But it also speaks for Blair being even more generous in his dealings with Kennedy. Is John Prescott really going to resign if Blair forces through PR for local government?

And unless the Labour leadership believes it can keep the Lib Dems on board without Commons electoral reform - a doubtful proposition - some of the cabinet ministers who believe in it, from Mo Mowlam to Robin Cook, will have to start making the case with greater force in advance of a referendum that will be about as interesting to the electorate as a wet night in Wigan, and in which opponents such as John Prescott may well demand and get the freedom to oppose change. Blair's vision has as much inexorable logic behind it as it ever did. But those who believe in it will have to make it happen.

d.macintyre@independent.co.uk