Daniel Davies analyses the LibDem’s failings:
This is, to a large extent, why the vote share has collapsed. The median LibDem voter between about 2002 and 2010 was quite likely someone who believed (sensibly, a respectable case could certainly be made for this) that they were to the Left of Labour. Their signature policy was a hypothecated income tax increase for education, along with did-they-or-didn’t-they opposition to the Iraq War. Now, their electoral support consists of electoral reform trainspotters, about a dozen people who read the Orange Book and daydream about being Gerhard Schroeder, plus that part of the West Country that doesn’t get regular newspapers and believes that it is still voting for Gladstone. They have lost precisely that set of voters who they have spent the last year more or less intentionally losing.
Had Clegg made use of his Dutch heritage other than flattering Dutch newsmedia by talking to them in their own language, he could’ve boned up on the example of D66, like the LibDems a centrist party in some aspects to the left of the (Dutch) Labour Party. in the Dutch system coalition governments are of course the standard rather than the exception and D66 has had long experience with the opportunities and perils they offer.
D66 always has troubles in government because while usually the centre of a coalition, it’s also the smallest party, caught between two bigger ones with more opportunities to let their own voice be heard. So you’d have the CDA or VVD on the right fighting their corner, the PvdA on the left doing the same and D66 being crushed in the middle. As a rule of thumb, government participation leads to losing the next election. D66 knows this and therefore is careful to get something back for it; when they don’t and let the desire to be in government overrule their principles, they get punished even harder for it. Luckily for them the Dutch voter is more forgiving than the British and they have usually been able to quickly rebuild their following once back in opposition. Even so the party has been careful in getting concrete results in return for their support.
Something the LibDems forgot. If the best you can do is to get a referendum on a voting system you don’t actually want yourself, you haven’t really bargained all that well. Had I been Nick Clegg my two set in stone demands would’ve been getting the ministery of finance and getting a vote in parliament for proportional representation. It was the Tories who needed the LibDems, not the other way around. Instead Clegg traded everything for a chance to feel important and is now paying the price. Had he paid attention to Holland, he would’ve known better.