Political parties need distinctive policies. The Liberal Democrats had them in the 2005 election, with their own policy in foreign affairs (opposing military intervention in Iraq) and their own policy at home (supporting modest tax increases to pay for public services, something Labour had run away from ever since it lost the 1992 election).
Five years later, the Liberal Democrats went into Coalition government. That wasn’t a mistake in itself, but Nick Clegg did not insist upon one of the three ‘great posts’ – Chancellor, Home Office or Foreign Office. Compare the moment when Germany’s Greens went into coalition with the Social Democrats. Joschka Fischer became the Foreign Minister and had a clear impact on German foreign policy. As Deputy Prime Minister, Clegg may have had the effect of modifying government policy and making it less ‘excessive’ – like other deputies before him (Whitelaw? Prescott?) – but having a general watering-down effect on government policy does not mean giving it a distinctive flavour. Fischer was able to make a policy area his own (up to a point) and the Greens didn’t suffer too much electorally as a consequence. Clegg, despite some achievements, was not associated with a specifically Liberal vision and was punished heavily in 2015.