James Forsyth

David Cameron heads to the Tory conference in Manchester in a far better position than he would have dared hope a year ago. Labour’s opinion poll lead is shrinking, the economy is finally recovering and Ed Miliband is running out of time to persuade the country that he’s a potential Prime Minister. Ordinarily, the Tory tribe would be in high spirits — but there is a spectre haunting this conference, which almost no one dares name: Ukip. Nigel Farage’s insurgent party is fast becoming an existential threat to the Tory party. The right in Britain is fractured — and fractured movements don’t win elections. In the 1980s, Margaret Thatcher romped to victory against a left that was split between Labour and the SDP.

The next election is going to be the big, post-crash debate that the country didn’t have in 2010. Ed Miliband, as his speech yesterday demonstrated, believes that radical state intervention is needed to deal with the ‘living standards crisis’. His answer to the fact that there’s no money left is to get companies to pick up the tab for redistribution. There’ll now be clear red water between Labour and the two other main parties at the next election. This raises the question of how the Lib Dems fit into all this. Miliband barely mentioned them in his speech yesterday and has steered clear of attacks on them this conference season.

Today we saw why Ed Miliband ran for the Labour leadership. This was not a speech that his brother could have delivered. It was the most left-wing speech I’ve heard from the leader of a British political party. It was, without a doubt, authentic Miliband and delivered with passion. Politically, I suspect the speech now turns on the freeze on energy prices that Miliband announced a Labour government would introduce. The Tories are out to ‘kill it’ rather than ‘adopt it’, warning of the lights going out if it is introduced. The energy companies, whose profits would be hit hard by it, are also up in arms. The issue for Miliband is that he is proposing freezing prices and the decarbonisation of the energy sector by 2030.

Ed Balls has just taken the scalpel to HS2 in an interview with Steve Richards. He talked about the project having ‘huge fiscal implications’ and questioned whether the ‘benefits are really there’. He then went on to stress that the question was not just whether HS2 provided value for money, but whether it was the best use of £50 billion. As he emphasised, £50 billion could be used on other transport projects or new housing, hospitals and schools. One could see Balls gleefully contemplating just how much fiscal wriggle room cancelling HS2 would give him. Now, Balls did say that Labour had not reached a final decision on what to do about HS2.

If you want to know just how much anger Damian McBride’s book has created in the Labour party—and particularly its Blairite wing, just watch Alastair Campbell’s interview with Andrew Neil on The Sunday Politics. Campbell doesn’t scream or shout but the anger in his voice as he discusses McBride’s antics is palpable. He did not sound like a man inclined to forgive and forget. This whole row is, obviously, a massive conference distraction. Those close to Ed Miliband had hoped that this year, the Labour leader would get a free run at conference now that his brother has quite politics. But as one of his colleagues said to me late last week, ‘it used to be all about David, now it’ll be all about Damian.

This is not the backdrop that Ed Miliband would have wanted for Labour conference. Labour’s poll lead has—according to YouGov—vanished, Damian McBride is dominating the news agenda and there’s talk of splits and division in this inner circle. But, as I say in the cover this week, you can’t write Ed Miliband off yet. He has three huge, structural advantages in his favour. The boundaries favour Labour: Type Thursday’s YouGov poll, the best for the Tories in 18 months, into UK Polling Report’s seat calculator, and it tells you that Labour would be three short of a majority on these numbers. It is a reminder that if the parties are level pegging, Labour is winning.

Tory MPs are currently heading off to Oxfordshire for an away day. But the Tory leadership is keen to emphasise that this isn’t just another BBQ-style event. There will, they say, be a substantial policy element to it as well which could make things interesting as regular rebels Sarah Wollaston, Adam Afriyie and Peter Bone will all be in attendance. George Osborne, Theresa May and Jeremy Hunt will all hold policy surgeries. Backbenchers will be invited to offer their views on what the government should be thinking about doing in all these areas. They’ll also be presentations on the media environment by Craig Oliver and the new Number 10 press secretary Graeme Wilson. Lynton Crosby will update the MPs on the party’s campaign strategy.

Normally, a party that was down in the polls and on course to lose around a third of its parliamentary seats would be in a grim mood, with the leader under pressure. But we don’t live in normal times; we live in coalition times. So, the Liberal Democrats have just had a remarkably chipper conference thanks to their belief that there’ll be another hung parliament. This, they calculate, will ensure that they get another five years in government. Nick Clegg’s speech today — and its confidence — was predicated on this assumption. There is a danger for the Liberal Democrats that the public rebel against the idea that a party that loses seats and votes and comes third should carry on in government.

This Liberal Democrat conference is demonstrating that the last election result was actually a relatively simple one for the Liberal Democrats. The parliamentary arithmetic meant that the party only had to decide whether it wanted to be in government or not. No one in the party could accuse those who backed the idea of being ‘closet Tories’ because there was no Labour option. Most Liberal Democrats, and particularly older ones, instinctively — and rather unthinkingly — rebel at the suggestion that they might actually want to govern with the Tories.

A rather irritable Paddy Ashdown has just told Andrew Neil that the Lib Democrats are ‘a left-wing party’ but that their next coalition would be determined by the voters. Ashdown, whose chairing the Lib Dem election campaign, claimed that it simply wasn’t accurate to say that Lib Dems had a preference for who they’d like as their coalition partner. This is, to put it mildly, a dubious statement and Ashdown did feel the need to concede that senior Lib Dems did have ‘private likes and dislikes’. But he claimed that this wouldn’t influence their decision about who to go into government with.

The Lib Dem conference rally was never going to be the same without Sarah Teather and her comedy routine. With Teather persona non grata following her decision to step down, it was duly a much tamer affair. The only risqué jokes were about Lembit Opik being bitten in the nether regions by a sausage dog. But seeing as Lembit has infuriated party loyalists by again calling for Clegg to go, they got a laugh from the leadership. The message of the conference rally was that the Liberal Democrats are the party of jobs. Nick Clegg claimed that the Tories weren’t the party of jobs, but the party of fire at will; a reference to the Beecroft proposals. But Clegg seemed much happier when he moved on to attacking the Labour party.

Look at the polls and you’d think that Nick Clegg’s circle would be down in the dumps. But, as I say in the magazine this week, they actually head to Glasgow in good spirits. Why, because Clegg’s position as party leader is secure and another hung parliament remains the most likely result of the next election. If in May 2010, you’d said that Clegg would back a strike on a Middle Eastern country without a UN mandate and then lost a House of Commons vote on the issue with 24 of his 57 MPs not backing him on it, we’d have assumed that he’d have been toast. But Clegg’s position is so secure at the moment that this hasn’t even caused any leadership chatter. Another thing pleasing the Liberal Democrats is how likely a hung parliament looks.