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Clegg has made coalition work. Now he must show he believes in more than hung parliaments

The risk for the Deputy PM is of looking desperate to stay in office at any price.

Nick Clegg speaks at the Liberal Democrat conference in Glasgow earlier this year. Photograph: Getty Images.

There is a new puppy in Downing Street – plaintive-eyed, poorly house-trained and, no, it isn’t called Nick Clegg. Days before delivering his Autumn Statement on the economy, George Osborne announced that No 11 had acquired a bichon frise called Lola. She is a gift for the Chancellor’s children from which, no doubt, newspaper diary columnists will also benefit.

So far, the Liberal Democrat lapdog jokes have been few, which is noteworthy given that Clegg was once caricatured as a Tory poodle. The gag doesn’t work any more. The Labour reflex is still to deride the Deputy Prime Minister as a gutless accomplice in Tory wickedness but many opposition MPs are starting to accept what Conservative backbenchers have been complaining about all along: that Clegg’s role is much more than ornamental.

Proving that junior coalition parties wield real power is half a victory for the Lib Dems. It rebuts the old charge that there is no point in voting for them. It doesn’t prove that their contribution has been a good one. Clegg’s strategy relies on people thinking he has thwarted the Conservatives’ beastlier impulses, while imposing kinder – but still affordable – measures of his own.

Neither Labour nor the Tories wants to encourage that interpretation, while their actions reinforce it. David Cameron flatters the Lib Dems by claiming that their signature policy – lifting the income tax threshold for low earners – was a Conservative plan all along, although in 2010 he insisted it was an unaffordable luxury. Meanwhile, Ed Mili­band has accepted that voters see spending restraint as a mark of a party’s economic credibility, which makes it harder to attack Clegg for conceding the same point on day one of the coalition.

The economic case that there was a better, slower pace for cuts is now academic. There was a time when some Lib Dems, most prominently Vince Cable, looked queasy in their commitment to the government’s economic plan but that dissent was crushed at the party’s conference in September. Cable is now the spent cartridge from an anti-austerity shot that was fired into the air.

With growth restored, the debate inside government has shifted to the balance between rewarding voters for enduring years of hardship and reminding them that the job of repairing the public finances is not yet done. Too much pre-election generosity could signal that the crisis is over, which, as the Treasury sees it, amounts to “permission to vote Labour again”. Too heavy an emphasis on constant belt-tightening looks obsessive; militant accountancy trumping compassion.

Here, too, the Lib Dems see an opportunity to position themselves as guardians of the middle way. Clegg will not match Osborne’s pledge to keep cutting through the next parliament until the Budget is in surplus. Nor does he agree with the Chancellor that all future deficit reduction should be achieved without raising taxes. “It can’t be done,” a close ally of the Deputy Prime Minister tells me. “Or rather, it can be done but not if you care about distributional fairness.” The Lib Dems will let the Tories campaign for ever-stingier benefits, while they promise a “mansion tax”.

Not for the first time, Clegg is being helped by the Tories’ self-defeating – and arguably not very conservative – quest for doctrinal purity. Cameron once understood that voters like Budget discipline because it sounds practical, not because they see public expenditure as the thin end of a socialist wedge. These days, he asserts that the state should be leaner “not just now, but permanently”. Austerity, in the Prime Minister’s view, is no longer the response to a financial emergency but the enactment of Tory philosophy.

The Lib Dems think that allows them to pose as the steady-handed surgeons, wielding the knife because the patient needs it, not because it gives them pleasure. This they will contrast with what one cabinet minister describes as Osborne’s “ideological fetish” for cuts.

The question that then arises is why, if Clegg occupies what his strategists call “the liberal centre”, does his party still languish so low in opinion polls? One explanation is that, in a climate of voter contempt for politicians and economic insecurity, the centre has moved to somewhere less classically liberal. Some Tories see Ukip’s success as proof that politics is now about the survival of the toughest – on crime, immigration, Europe, welfare, the colour green; areas where the Lib Dems are liable to look soft. By contrast, Labour detects a renaissance of left populism, marked by the appetite for government to slap down greedy energy companies and raid bankers’ bonuses.

A more prosaic account of Clegg’s poll woes is that standard surveys of national voting intentions ask the wrong question where potential support for his party is concerned. In a close race, what matters is whether, in constituencies where Lib Dem candidates have a chance, people see them as a possible insurance policy against undiluted rule by whichever of the big two parties they like less.

Since Labour and the Conservatives will paint each other as wild-eyed ideologues, the offer to anchor either of them in moderation may not sound too far-fetched. The risk is of looking desperate to stay in office at any price. It is already a problem for the Lib Dems that many people don’t know what they stand for and many who thought they knew before the last election feel betrayed. Clegg’s closest advisers recognise that their “liberal centre” position needs to find expression in values that voters recognise before it becomes a campaign. Without that, it sounds like a plot to thwart other leaders’ ambitions. Left and right will accuse Clegg of obstructing progress by gaming for a hung parliament. He will be cast as the ideological mongrel in the manger, which is a lot better than being written off as Cameron’s dogsbody.