After the Oldham East and Saddleworth by-election, where we grew our vote share and didn't collapse as a party, the Liberal Democrats have proved that they will not fade away and the front page of the Spectator, depicting a dying yellow bird, is a bit premature.
But unless we begin to build a distinct identity with the public again we will lose seats and influence nationally even if we get the same share of the vote. First of all, let me say that I would rather remove myself from politics than sanction a merger or permanent coalition with the Tories (or indeed the Labour party in the future). Britain needs a Liberal voice and we must provide it.
Oldham has shown that in Lib Dem – Labour marginals, as things stand, it is likely we will pick up a share of previously Conservative voters impressed at our fiscal responsibility in government (now we have proved we are not the irresponsible “tax and spenders” depicted by the media). However we will gradually lose the left wing fellow travellers who have voted for us, dismayed as they were with the awful New Labour project. Ed Milliband is now able to promise them a more left wing agenda. These voters have always been hard for us to retain. Their instinctive home is with the Labour party.
The problem is that in Lib Dem – Labour seats, a shift as described above will result in a similar result to that in Oldham – i.e. a similar level of the vote to the Lib Dems but a higher Labour vote. That is because in the crazy world of FPTP (and still to a certain extent in AV), a vote transfer between the top two parties is worth twice as much as a vote “squeezed” from the third party.
In Lib Dem – Conservative seats, we will lose some votes to Labour but may find Conservative voters less motivated to get us out. The end result is less certain but it still poses a challenge to us.
To succeed, we need to give people a reason to vote for us and get new supporters. The Conservatives will be able to stand on the record of the coalition and offer their voters a more full bodied Conservative government. We will be able to put the myth to bed that we are a bunch of amateurs who can't be part of government and can point to successes in government. On it's own, this is not enough. If people want to vote for the coalition, they will usually vote Conservative.
At the next election, we need a distinctive message and some distinctive policies. I believe that we need to build upon our hard won reputation for making hard choices but also emphasise the fact that we have fought for fairness – i.e. measures that help the poorest in society have more opportunities for them to advance their lives. In addition it is essential that we work on radical measures to reduce the power of the central state by passing power to local communities. So I would argue for an fiscally conservative agenda combined with a highly socially liberal agenda.
What this means in terms of policy is debatable. But I have a few thoughts. Economically, we should commit to never having a structural deficit and for national debt to be reduced over every economic cycle. Socially we need to continue to push for a pro-work benefits system, a removal of the regressive council tax and considerable investment in infrastructure and education.
Constitutionally, I think we should give local authorities much more tax raising ability and only use the central government grant to equalise spending power (to remove problems like East St Louis in the USA, where the council had virtually no income and couldn't even collect the rubbish). Policing, public health, local infrastructure, business promotion, benefits administration and planning should be fully devolved and the DCLG and BIS should be scrapped at a national level. If House of Lords reform hasn't happened we should campaign for it and whether the AV referendum is won or not, we should push for a properly proportional system at all levels of government.
Of course 2015 is a long way away and our record in government will only be clear in a few years but we will only do well with distinctive policies.