Liberal Democrat leaders seem fated to have their big speeches overshadowed: in 1992 by Black Wednesday; in 2001 by the aftermath of 9/11 and Afghanistan; in 2002 by the Iraq dossier; last year by Northern Rock; and yesterday by the rescue of HBOS. Not only is this a reminder of how inward-looking and ephemeral most party conferences are, it also sets a test of relevance: do leaders rise to the seriousness of the events in the real world?

Turmoil usually favours a prime minister. He or she can appear statesmanlike by talking to important people: the message that 10 Downing Street was putting out yesterday about Gordon Brown over the Lloyds/HBOS deal. Opposition leaders often appear irrelevant.

By this test, Mr Clegg gets perhaps five or six out of ten. He does not have the authority or instinctive feel on financial matters of Vince Cable. Yesterday’s speech, like his hectic media activity this week, was mainly about establishing his identity as leader. In that, he has had a reasonably successful week. He has also showed that he is very different from David Cameron.

His “Fairer future” economic recovery plan amounts to a populist and redistributive approach: “the freewheeling, bonus-driven, short-termism of the City must come to an end” and “a wholly new approach to regulation: limiting, not encouraging, the excesses of the market”. This could tap a likely backlash against the globalised City. This is a tricky area for the Tories given their close links with and big donations from hedge funds and private equity. The danger, of course, is of overreaction, stifling innovation and competitiveness.

Mr Clegg presented tax cuts not as a Tory “trickle-down” measure but as a squeeze on the very wealthy to assist people on low and middle incomes, “to help make nine out of ten taxpayers better off”. This week has shown that most of the details about where the money to implement the measures would be found have still to be worked out.

As significant is how questioning rising public expenditure – the “£20 billion that is not working effectively” – may shift the debate in a way that could help the Tories.

Yet there was little sign in Mr Clegg’s speech of the tough choices ahead, of the tensions between being green and enhancing competitiveness. Hence public transport expansion is supposed to be funded through charges on road haulage. Moreover, there is no way that energy security can be secured by a big extension of renewables when “dirty coal” as well as nuclear power stations are opposed. This is gesture policymaking.

The Lib Dems seek to be a larger opposition party, not a contender for power. Having credible alternative policies is, perhaps, secondary. That means the Lib Dems will continue to be treated as a protest party.

Times Recommends

• Treat Africans as part of the human jigsaw
• Too bitter a pill for me to swallow
• This Bill is a panic measure in a tarnished age