In 1974 the Liberal Party leader, Billy Snedden, obtained some unintended notoriety when he declared that the Coalition was not defeated at the federal election. Rather, it did not win enough seats to form a government. That was all.

In contemporary Britain the reverse is the case. David Cameron prevailed over Labour’s Gordon Brown. But the Conservative Party did not win enough seats to form government in its own right. Hence the Conservative-Liberal Democrat coalition deal. And hence the appointment of the Liberal Democrat leader Nick Clegg as deputy prime minister. Last week in London the pro-Conservative Spectator proclaimed “Victory!” But many Conservatives are less than happy with the outcome.

Sure, Cameron now resides at 10 Downing Street. However, the Tories have had to make compromises with the left-of-centre Liberal Democrats. This is in spite of the fact that on some issues the Conservative Party is closer to Labour than the Liberal Democrats.

In some academic circles in Australia it is fashionable to blame the global financial crisis on what is termed neo-liberalism. This overlooks the fact that if any political leader was at the core of the boom and bust cycle, it was the social democrat Brown. He became chancellor of the exchequer in 1997 and prime minister a decade later. Brown proclaimed the need for financial regulation with a light touch. And Brown presided over financial profligacy during a boom, which meant there was no surplus to spend when the downturn occurred.

The current electoral boundaries in Britain do not favour the Tories. Even so, this was an election that Cameron should have won in his own right. The Conservative Party’s essential failure was its inability to win seats from Labour in England, particularly London. Also Cameron and his advisers made the political task more difficult by agreeing to debate both Brown and Clegg. Without Clegg’s fine performance in the first two debates, the Liberal Democrat vote probably would have been lower than it was and this may have resulted in an increase in the number of Tory victories. Cameron did not need to be so nice to his Liberal Democrat opponents.

There is a lesson in the Conservative Party’s performance for the Liberals and Nationals in NSW in the lead-up to next year’s state election. In Britain Cameron failed to distinguish himself sufficiently from Brown and New Labour. His major attempt in a speech to define a Cameron Tory leadership took the old form of the Hugo Young Memorial Lecture which was delivered last November. He ran with the concept of the “big society” which was all about “empowering and enabling individuals, families and communities to take control of their lives”. And so on.

The British electorate was never likely to warm to a Conservative leader equipped with what resembled a meaningless mission statement. On economic policy, Cameron decided not to square with the British electorate about the tough-minded policies necessary to solve Britain’s economic discontents. And on issues of crime and terrorism, Labour’s policies had more appeal in the electorate. This remains the case after the election. For example, the Conservative-Liberal Democrat coalition deal promises to water down the anti-terrorism legislation.

In Britain the Conservatives found that Labour was deeply embedded in many of its traditional seats. The same applies in NSW. Since World War II the NSW Liberal Party has won only twice from opposition – Robin Askin in 1965 and Nick Greiner in 1988. Both presented themselves as agents of change. The flamboyant Askin was different from the Labor ascendancy. And Greiner was committed to economic reform.

The opinion polls suggest Barry O’Farrell is heading for a comfortable victory. However, the sassy Kristina Keneally is popular. It may be that the NSW electorate is so tired of government by Labor mates that it will vote to change government irrespective of what the opposition has to offer. However, as Cameron has found out, the small-target strategy can backfire.

Over the past couple of years O’Farrell’s message has not always been clear. In 2008 he declined to support Morris Iemma’s attempt to privatise the NSW state-owned electricity generators. Here O’Farrell lined up with the Labor Left and Greens against the right-of-centre Iemma government. Politics aside, this was not good policy since this is the kind of reform that many would expect an O’Farrell government to make. Then last year the opposition effectively lined up with the Greens and the left-wing teachers’ unions in supporting the imposition of fines on media outlets that published tables based on the school tests.

Interviewed by John Hirst for the November 2008 edition of The Monthly, O’Farrell justified his privatisation decision with reference to the policies of the Liberal Party’s founder, Robert Menzies. But one of the early acts of the Menzies government involved the privatisation of the Commonwealth Oil Refineries in the early 1950s.

The Liberal Party’s three most successful leaders – Menzies, Malcolm Fraser and John Howard – all won elections from opposition by staking out Liberal Party positions that were dramatically different from those of the incumbent Labor government at the time. Margaret Thatcher did much the same in Britain in 1979. Cameron took a different tack. While the Conservative Party only narrowly failed to achieve a majority of seats in the House of Commons, it still failed.

It’s much the same in NSW. The Liberals and Nationals will only succeed if they win a parliamentary majority. This is most likely to occur if O’Farrell clearly differentiates the policy differences between himself and Keneally.