It was supposed to be the killer question that would floor the favourite. “Has David Cameron already cornered the market in young, but inexperienced, political leadership?” giggled a member of the Question Time audience on Thursday in a dig at 40-year-old Nick Clegg, the Liberal Democrat contender.

Back home in front of his Notting Hill telly, Cameron must have yelled the answer: “Yes, I have. Keep out!” The Conservative leader once told me that he was a founder member of the “Save Menzies Campbell” campaign. Every time poor old Ming fluffed his lines at prime minister’s questions, Cameron had to restrain himself from punching the air. Under Ming, undecided middle England voters have been drifting away from the Lib Dems to the Tories. The last thing Cameron wants is a challenge from a centrist, telegenic rival, blocking his assault on marginal seats in the south.

The veterans who run ruthless campaigns on the ground for the Liberal Democrats tend to agree. A young leader (“inexperienced” or “fresh”, according to choice) is just what the spin doctor ordered. They may privately approve of his greying rival Chris Huhne’s gentle tack to the left on policy but hey, policy, schmolicy. They see the Tories as the real enemy and back the candidate they believe is most likely to damage them: Clegg, the housewives’ handsome choice.

The next election threatens a squeeze of the Lib Dem vote: a fortnight ago it was down to a dismal 11% (today 13%), half the 22% gained in the last election. There are 63 Lib Dem MPs, the highest number for 80 years. If they can even hold their numbers above 50 seats and Labour falls back to 310 seats, they have a realistic chance of holding the balance in a hung parliament. Old party fixers would like to do a deal with Labour. Paddy Ashdown, who has played footsie with both Brown and Blair before him, is a keen Clegg supporter.

Iraq is no longer salient as a political issue, so unless Bush bombs Iran there will be no easy Lib Dem gains to be had from opposing war. A Tory revival must also be a dead cert after more than a decade of Labour rule. So what will be the unique selling point for the Lib Dems? Their green agenda has been purloined by the other parties. They have abandoned their pledge to punish the better-off by raising their income tax to 50p in the pound, although it arguably helped them to their greatest gains from Labour since 1945. The once authoritarian Conservatives have become born again civil libertarians, too. Like the Lib Dems, they also oppose extended pretrial detention for terrorist suspects.

Many Lib Dems believe that their best defence is to pick a leader with charisma. Ashdown and Charles Kennedy had that rare commodity in contrary forms: one was Action Man with a weakness for birds, the other was Chatshow Charlie with a weakness for the bottle.

Clegg has charm in spades and has the old trick of making you feel for a milli-second that you are the most important, interesting person in the room – before moving on to the next one. “Gosh, Martin, I could go on talking to you about this for hours,” he told me last week. This column has strictly no room for personal prejudice, of course, but flattery will get you somewhere.

Politics, goes the cliché, is showbiz for ugly people. Not quite; because even if all politicians are ugly, then some are more ugly than others. The late Robin Cook admitted that he had to write off his Labour leadership hopes because he had a face fit for radio. This is tough on Huhne, an economist who has grown in stature these past 12 months and shows a mature grasp of policy. On Question Time he even dared to be a little nasty in a programme that otherwise edged perilously close to Cilla Black’s Blind Date: “Hi, I’m Nick/Chris, and if you were to pick me I’d take you for the ride of your life . . .”

Beyond the ambitions of a few centrist political minnows, is there anything important at stake here? Actually, yes. Even if some of Clegg’s backers are cynical, the contender is not. What divides him from his rival over public service reform has implications outside his party for there really is a gap in the political market. All pretend to the title of the radical centre but none of them is the real thing.

Tony Blair’s domestic political tragedy was that he spent too long pretending to be a merchant of change without delivering. In his last two years in office he tried to put flesh on his rhetoric, but by then his authority had been lost in the back streets of Basra and Baghdad.

Too late Blair came to realise that the state did not need to provide one-size-fits-all services. Choice of schools, hospitals and services should put us, the consumers, at the heart of decision making. Blair made a lot of mistakes but by the end at least he had seen sense on this. Gordon Brown’s government, however, looks soggy, to use the late Nico Colchester’s distinction.

“Crunchy systems,” wrote Colchester, “are those in which small changes have big effects, leaving those affected by them in no doubt whether they are up or down, rich or broke, winning or losing, dead or alive.”

Brown soggily doesn’t want to be nailed for killing off Blair’s choice agenda outright, but he has set firm limits as to how much choice you are allowed to have. As a result, it is hard to see how he, or the rest of us, will get more value out of the billions that he has poured into the public services. It is hard to see a pattern other than sogginess; it is hard to see yet whether this government is dead or alive.

If paying above the European norm for health is sufficient to cure all ills, then why does high spending Scotland fare so poorly? Ministers talk about “personalisation” of their bog standard services while narrowing the real choices available. Last week city academy schools were sent back for review and the number of private sector contracts for diagnostic and surgical treatment centres was slashed in half by Alan Johnson, the health secretary for “pragmatic reasons.” On the sidelines, the ideological soggies who want a return to one-size-fits-all cheer. The soggies are backing Huhne to win.

Nor is Cameron proving much bolder. The Conservative leader talks the talk on reform but has been soggy in practice. He praises innovation in health, but prefers the votes of hundreds of thousands of NHS workers who understandably want a quiet life after Blair’s endless tinkering. On grammar schools he suffered a disastrous defeat at his party’s hands last August. The Tories fight shy of doing anything that smacks of “privatising the public services”. Lady Thatcher may be enjoying a late renaissance, but real Thatcherism is shunned. A crunchy education policy, say, might teaching subject to competitive entry or back new private schools for all with public cash, as in Sweden.

A few modernising mavericks in all parties try to challenge the torpor of Westminster. Last week, for instance, Frank Field, the independently minded Labour MP, argued in this newspaper against the received wisdom on welfare reform. Among many interesting proposals, he urges that young people on New Deal programmes should be given the power to choose the training that suits them rather than have it imposed on them.

Clegg cites Field as one of his favourite politicians. Perhaps he even means it. Like everyone else these days he talks of decentralisation, but unusually for a Liberal he seems to accept that just handing power over to local bureaucrats rather than the Whitehall variety isn’t good enough. Huhne wants to frighten Lib Dem members by accusing him of radicalism. We can only hope the accusation is true.

It is a tall order to claim that Clegg will confront state socialism head-on. But by moving in that direction Clegg could force the Tories to embrace reform more wholeheartedly. He might also remind Brown that new Labour once stood for something more than the status quo.

Clegg is a mixture of Blair and Cameron. I bet the old, Scottish Brown can’t wait to face another self-confident, smooth public school and Oxbridge educated leader with an intuitive rapport with aspirational middle England.

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