The last time the Liberal Democrats were looking to elect a new leader was in 2007. Vince Cable, who steered his party deftly through the traumatic period following Menzies Campbell’s resignation, chose not to stand because, at 64, he felt he would not be “competitive” against the more youthful Nick Clegg – who has revealed himself to be a politician of the right – and Chris Huhne. Nearly five years later, he has indicated that, should his party need him, he is ready to serve. As he told the Financial Times: “I don’t exclude it – who knows what might happen in the future?”

In retrospect, Mr Cable’s decision not to put himself forward in 2007 was shrewd. Mr Campbell was an unconvincing leader and often seemed older than his 66 years. It was inevitable his party would seek someone who was significantly younger. In choosing not to stand, Mr Cable avoided rejection. Now 69, he rightly contends that “the worship of youth [in our culture] has diminished”. Like his fellow cabinet minister Kenneth Clarke, a sprightly 72, the Business Secretary is admired by voters for his candour and experience and, as he puts it, his “insight into what’s going on”.

Mr Cable remains one of the few senior politicians to have emerged from the scandals of recent years with his reputation enhanced. Long before the financial crisis, he counselled against the Panglossian economics espoused by Labour and the Conservatives, observing that the boom rested on an unsustainable expansion of private credit. He argued that it was neither ethical nor sensible for our leaders to court Rupert Murdoch and was vindicated when the phone-hacking scandal forced the abandonment of the BSkyB bid.

For all this, it is unsurprising that some on the left question his progressive credentials. Mr Cable has been critical of George Osborne’s failure to develop a coherent growth strategy, yet he remains a committed supporter of the government’s deficit reduction programme, the excessive pace of which partly explains why the economy shrank by a disastrous 0.7 per cent in the second quarter of 2012. In an essay for the New Statesman last year, Mr Cable contended that “[John Maynard] Keynes would be on my side”. But as Robert Skidelsky, Mr Keynes’s pre-eminent biographer, and David Blanchflower, our economics editor, argued in response, he placed too much faith in “the confidence-boosting effect of fiscal contractions” and underestimated “the costs of prolonged underactivity”.

Yet as progressives confront the need to refashion British capitalism for a post-crash age, it would be myopic not to recognise that Mr Cable has much to offer. He is leading the government’s plan to ring-fence banks’ retail operations and has called for part of the 83 per cent state-owned Royal Bank of Scotland to be converted into a national investment bank. He has also been the most articulate advocate of the need to rebalance the tax system away from income and towards wealth and static assets, which we support.

There is much potential for Mr Cable to work constructively with Ed Miliband, a fellow social democrat, on this agenda. In coalition with the Conservatives, he has done little to disguise his preference for Labour, the party he sat for as a councillor before joining the Social Democratic Party in 1982. Now, like David Owen, a former SDP leader, he is increasingly impressed by Mr Miliband’s commitment to “responsible capitalism”, praising his 2011 conference speech in a text message to the Labour leader as “one of the best arguments for social democracy made in years”.

In the early months of the coalition government, it was often said that we were witnessing a realignment of the centre right as the Conservatives and the Lib Dems united around an ostensibly centrist programme. It did not happen. Now, the growing ideological affinity between Mr Cable and Mr Miliband raises the possibility of another realignment, this time of the centre left. It is worth pursuing.