Time for a reality check as Kennedy takes the stage

`There are overtones of The Life of Brian - "What have the Romans ever done for us?" '

NO DOUBT prolonged exposure to the Liberal Democrat conference is bound to be deranging. But there are times when some of even the party's most senior spokesmen appear to have descended from the planet Zog. Yesterday it was announced that Malcolm Bruce had vacated his job as Treasury spokesman and become the chairman of the parliamentary party. It was high time, to judge by his "keynote" economic speech.

Mr Bruce is not a stupid man. Yet listening to him address the conference this week you would be forgiven for thinking that the current British economy was in a deep crisis. At one point Mr Bruce said that if a Liberal Democrat had been in charge at the Treasury we would have had an independent Bank of England "sooner". Excuse me? Sooner than what? Sooner than the five days after the election it took Gordon Brown to make the Bank independent? But, of course, Bruce's speech went down a storm. This is, after all, a conference which not that long ago debated, without a jot of irony, an amendment to delete the word "sensible" from the phrase "sensible economic policy".

OK, it's a cheap sneer. But it makes an important point. If you want to attack the Chancellor of the Exchequer it helps, at least outside the virtual world of the Harrogate conference centre, to show a scintilla of awareness of a fact that is acknowledged across the rest of the political spectrum, ie that Gordon Brown is at the peak of his authority, and that the City can hardly contain itswonder at the combination of growth and low inflation.

If Charles Kennedy does nothing else in his speech this morning he should, and almost certainly will, inject a certain sense of reality into his party's approach to Labour, after the long period of drift since Paddy Ashdown decided to stand down. As it happens that applies whether Kennedy chooses to maintain a large measure of the co-operation with the government skilfully sustained by Ashdown, or whether to adopt a sharper tone towards it. Criticism has to be credible if it is to bite.

In squaring up to this task, Kennedy has some handicaps, not least the fact that he fought an unheroic leadership campaign which failed to deliver him the mandate he ideally needs to confront his activists with some of the home truths they ought to hear. He is also, in a party that badly needs originality to make a difference, much less of an ideas junkie than his predecessor. But his leadership also has some advantages that were denied Ashdown when he took over the party in 1988. One, oddly enough, is the attribute for which he has been most derided - the high profile that he has built up in some of the larger audience TV shows, and which, according to one poll, means that he is recognised by more electors than most of the Cabinet. Another is that he is more genuinely classless than Ashdown - or Tony Blair. One of the more interesting questions is how he defines his mantra of "social justice" today. There are echoes of John Smith here, and indeed in other parts of Kennedy's make-up: the Highland background, the apparently visceral commitment to Europe, the sharp wit and the gregariousness. But how Smithite is he about tax? How will his aspirations sit with Kennedy's intention, which he will state today, not to attack Labour from the left?

By fixing on the formula that the surplus at Brown's command should be spent on public services and not on tax cuts, the Kennedistas believe they have got round the party's previous commitment to raise income tax to fund education. But this does not take account of the fact that Brown may well be in a position to do both. If Kennedy is looking out for the poor, he can hardly oppose a Brown decision to take more of the lowest- paid out of tax altogether. One of Ashdown's more telling points on Tuesday, moreover, was that delivery of public service matters as much as funding. Partly this means, as Ashdown's old ally Menzies Campbell pointed out this week, that if - say - the NHS buys hernia surgery from a private hospital, so much the better, especially if it can save money. But it also means that taxpayers may only support tax and spend when they believe it delivers value for money. Sensibly, Kennedy will say on spending that "better" matters as well as "more".

But two other likely aspects of Kennedy's speech today will more unequivocally sharpen the party's profile in the real world. The first, and easily the most important, is Europe. By doing what no other party leader is doing, and placing his party at the vanguard of the campaign for euro entry, Kennedy is rightly preparing the ground for what cannot fail to be the dominant issue of the times. He has put himself transparently on one side of the one fault line that will most clearly bisect British politics, certainly the Tory party, perhaps the Labour Cabinet, perhaps even, in time, dividing the Chancellor from the Prime Minister. Automatically Kennedy becomes an actor in the first great drama of the new century.

The other is his slogan of "reconnection". This is partly a matter of adopting causes such as the environment, which may reach parts of the electorate conventional politics is failing at present. But it also has a clinically modernising, practical dimension. He plans to end the absurdity of leaving the policy-making machinery of his party in the hands of the activists who dominate the conference and make it electable by the wider membership. By doing so he can hardly fail to make the party more responsive to the forgotten constituency in the leadership election: Liberal Democrat voters and would-be voters.

Membership democracy is an unpredictable beast, as Tony Blair has found. But on present polling evidence the knock-on effect of such reconnection may well be to make the policy-makers friendlier to maintaining links with Labour, since the voters are much keener on them than the activists. And this matters. It can't be repeated too often that almost half the 30 seats that the Lib Dems gained from the Tories in 1997 were thanks to tactical voting by Labour supporters. Yet rehearse to a Lib Dem representative the litany of Liberal Democrat policies that are now part of Labour's programme - the epoch-making incorporation of the European Convention of Human Rights, PR for the European elections, probable PR for local government (all of which the Liberals failed to secure in return for propping up the Callaghan government) and he or she is likely to say that Blair would have done that without co-operation from Ashdown. That isn't wholly true - but, even if it were, are we saying that they don't matter on their own merits? There are unmistakable overtones here of the Monty Python's Life of Brian - "what have the Romans ever done for us?"

This doesn't mean at all that Kennedy shouldn't be criticising the Government, and criticising it harshly, not least for its constitutional control freakery. Nor should he shrink from his golden opportunity to make his conference feel good today. But he also urgently needs to inject a dose of reality into its increasingly unworldly deliberations.