The Liberal Democrats have been trying to make a splash this week, and at first they may seem to be playing in right-wing waters. Nick Clegg announced that he is “sceptical that central, controlling government gets things right”, and he believes “that tax is a means to an end and government should not take a penny more than it needs”. For the leader of a party that has arguably not entirely come to terms with the abolition of proposals for across-the-board tax rises to fund substantial increases in public spending, that’s quite a statement, and an acknowledgement that, especially in today’s economic climate, the public simply can’t and won’t pay more tax.

The party leadership has realised that the credit crunch will have a huge impact – not only on this generation, but also on the next. At a Reform fringe event at conference this week, Vince Cable said “free everything isn’t a sustainable policy”. As public borrowing increases, Cable is to be commended for pointing out the intergenerational effects of “buy now, pay later” fiscal policy. As if a potential recession isn’t enough of a worry for “Generation Y”, they will also be saddled with the bills for today’s spending splurge in the years ahead.

This new drive for increased efficiency and value is certainly a step in the right direction, and it seems to be combined with a decentralising agenda; Clegg stated that “the government doesn’t know what’s best for us – and it never will” – radical stuff for the considerable left-leaning wing of the party. Sam Coates, Chief Political Correspondent at the Times, said that “a reduction in the size of the state is the party’s central message this week”. The Liberals’ declaration last week at the launch of Reform’s latest health paper that they now support top-up payments in the NHS is further evidence of this shift.

But if you look a little closer, the message blurs. If people show their true colours under pressure, then this week’s turmoil in the markets shows that the Liberals still have some way to go until they can truly call themselves economically liberal, with Vince Cable leading the charge for the Government to underwrite mortgages. This does little to remedy the lack of responsibility, which is the cultural problem that lies at the heart of the current crisis.

So the Lib Dems haven’t simply lurched to the right and adopted the “free market dogmas” that have been blamed for so many of the problems this week. But what the party’s conference has done is highlight how the progressive cause can move away from tax and spend, and abandon the notion that the best way to promote fairness is through big government: a re-affirmation of the market that is particularly welcome this week.

The Liberal Democrats have highlighted that the primary mechanism for addressing social inequality can shift from spending to tax policy. But to ensure a burden-free present and future for Generation Y, it is important to also focus on growth. Equity and efficiency are not mutually exclusive; rather, they can go hand in hand. Sensible, equitable tax policy can provide social redress and simultaneously stimulate growth. It’s a lesson any future government promising “equity” and “fairness” would be wise to learn, if it’s not to saddle future generations with an overburdened and stagnant economy.

Dale Bassett is New Media Politics Executive at Reform.