Steve Richards: Kennedy has kept the show on the road but failed to resolve the Lib Dem differences

His style of leadership reminds me of Harold Wilson's approach in the 1970s

In some ways Mr Kennedy's vulnerability is the most surprising. Under his leadership the parliamentary party is bigger than it has been since the 1920s. Of the three main leaders only he managed to make the correct assessment about the deadly dangers of invading Iraq. No wonder the appalling situation there took up a substantial part of his speech yesterday. The deaths and near anarchy are a bloody vindication of a stance adopted tentatively, but with some political courage.

Even so, incremental gains and a distinctive stand on one or two issues are not enough to galvanise a political party. The Liberal Democrats' conference this week has exposed potentially irreconcilable divisions. They are extremely fortunate that they were not more closely scrutinised at the last election.

Imagine if they had performed better last May and had held the balance of power in a hung parliament. Which section of their party would have prevailed in government - those who believed in the top rate of tax for high earners or those who did not, those who support the Blairite reforms of public services or those who do not? Coalition government is complicated enough at the best of times, but when the smaller party is split down the middle it becomes impossible.

On a tinier canvas Mr Kennedy's style of leadership reminds me of Harold Wilson's approach in his final phase as Labour's leader in the 1970s. Mr Wilson rarely declared his own hand in policy debates. His elusiveness reached the point where no one was entirely sure if Mr Wilson had any hand to declare. His purpose was to keep his divided party united. In a way that is still underestimated, he kept the ramshackle show on the road.

Mr Kennedy also keeps the show on the road. But Wilson performed his tricks in power or as the main opposition leader. A smaller third party needs a leader who can do more than paper over the cracks.

This is a challenge underrated by some of Mr Kennedy's internal critics. If a party is divided a leader risks a nightmarish civil war by coming down on one side rather than the other. But the Liberal Democrats would benefit more from coherence than an artificial unity. One side in their internal debate has to win.

Mr Kennedy's speech yesterday was the best by some margin since he became leader. He tends to perform well when his back is against the wall and is complacently lacklustre when things are looking up. But he did nothing to resolve the party's divisions. He got the biggest cheer when he declared that he did not want the Liberal Democrats to be a "third Conservative Party". Yet he implied support for proposals that most of his activists and some of his MPs regard as a leap to the right.

Mr Kennedy described controversial policies as "liberal" rather than being on the left or right, but failed to define precisely what that means. It is a conveniently evasive adjective. Mr Blair used to deploy the term "modern" when he lacked detailed policies or wanted to disguise their significance. Mr Kennedy supports liberal economics and social justice. Where does that leave his party's policies for the NHS and tax? He dare not say because to do so would provoke a mini-civil war.

The Liberal Democrats could learn some lessons in deft political choreography from the experts gathering in Brighton for Labour's conference next week. In announcing his resignation long in advance Mr Blair and his party are in an unprecedented situation. The potential for explosive tension remains, not least because Gordon Brown would like to be Prime Minister sooner rather than later. But both know they are better served by a display of harmony.

When Gordon Brown was recently interviewed on the BBC he had carefully prepared in advance a distinctive answer to the inevitable questions relating to his desire for the leadership. To his amazement the questions were not asked.

He had planned to say that what matters is how the Government approaches the long-term challenges in relation to the economy and other matters such as pensions, demands on public spending and the rest in the context of the rise of new economic powers, especially China. Mr Brown would have been wholly supportive of Mr Blair, but there would have also been a broader message. Politicians who plan to be around for the long term are better equipped to address the long-term questions.

There are suggestions that Mr Brown wants to take over towards the end of this term so he is still on a political honeymoon at the next election. They are wrong. By this time next year he wants the job or wants Mr Blair to spell out a timetable for his departure.

But there will not be a whiff of this in the Brighton air next week. For now Mr Blair and Mr Brown sing the same tunes: Listen to them talk in unison of China, public service reforms and the importance of economic stability. Mr Brown's speech next week will be newer than New Labour. So will Mr Blair's.

It is almost as if they have hit upon a new working arrangement. Mr Brown is in charge of the long term. Mr Blair focuses on the more immediate while seeking to define an enduring framework that will shape the policy agenda when he is gone. Whatever the underlying tensions - and watch them grow over the next year - their political purpose has a neat symmetry now.

At least Labour and the Liberal Democrats still have a leader. The authority of Mr Howard's leadership has drained away and he cannot wait to step down. He performs one more role, seeking next week to get agreement on a rule change that will enable MPs alone to elect the new leader. Ken Clarke's supporters find themselves in the contorted position of hoping now that Mr Howard fails and Conservative Party members retain a vote in the leadership contest.

This is the reverse of where most of them stood a few weeks ago, but to their amazement they know now that it is Mr Clarke's only hope of victory. As for Mr Howard, he does not want David Davis to win, but finds he is advocating a rule change that will almost certainly lead to a Davis victory. Mr Davis is well ahead in the parliamentary party.

The 1980s are reversed. A Labour government holds its nerve in testing times. The disarray of the two main opposition parties obscures its uncertain sense of direction.

s.richards@independent.co.uk