Vince Cable, the other party leader stepping down this summer, looks like a man ready to hand over. In the Twickenham home he has lived in for 45 years, a table is covered with piles of notes and clippings from the Financial Times – “horizontal filing,” he calls it – research for a new book he is working on. It is a study of how major politicians “have changed the way we do economics”, from Alexander Hamilton to Margaret Thatcher and, although he has not made a final decision on this – because who knows how the story will end? – Donald Trump. He will soon have more time for that project. Unlike Theresa May, the 76-year-old leader of the Liberal Democrats did not have to be dragged from politics’ front line. It was his decision.

But what a way to go. A few months ago, the Lib Dems were down to just 11 MPs. It seemed that theirs was a permanently ruined brand, rendered toxic by five years in coalition with David Cameron’s Tories. The decline was painfully obvious every Wednesday lunchtime, when Cable would have to wait the best part of 45 minutes to be called at Prime Minister’s Questions, long after the leaders of Labour and the Scottish National Party and a string of backbenchers. He and his party were a political afterthought.Any centrist energy was focused on the Independent Group, the breakaway of Labour and Conservative MPs who looked set to gobble up the Lib Dem vote and perhaps the party itself.

That changed last month, which began with the Lib Dems making big gains in the local elections in England and ended more spectacularly still, as the party beat Labour into third place in the European elections, grabbing 20.3% of the vote. Now the talk is of the Lib Dems as the obvious repository of the remain vote, the potential home for millions of one-time Tory and Labour supporters disaffected with their parties’ stances on Brexit. Several analysts, including some not given to hyperbole, are musing about a realignment, with the Lib Dems potentially replacing Labour as the lead opponents of Brexit and Nigel Farage’s Brexit party.

Does that mean Cable, handing over just as things are looking up, has had second thoughts? “No, I haven’t really,” he says. “I made a commitment to the party, to my wife and to myself that I would move on.” He admits that leadership takes its toll: “It’s not just the physical wear and tear – dashing around – it’s the mental pressure. Every time you get a bad opinion poll, it’s quite stressful.” He also means it when he says that he wants to spend more time with his family. “I’m one of those fortunate people who’s been happily married twice,” he says. His first wife, Olympia, died of breast cancer in 2001, and he married Rachel Wenban Smith in 2004. He speaks easily and directly about his love for both women. On the walls there are photos of both wedding days; on his finger there are two wedding rings. “We’re very happy doing things together,” he says of Rachel. “I want to enjoy that life rather than spend all my remaining days slogging round the political circuit.” Besides, he says, he always saw himself as “something of a stopgap” leader, right from when he took over in 2017, waiting until the next generation were ready.

Facebook Twitter Pinterest ‘We’re very happy doing things together’: Cable and his wife Rachel. Photograph: Antonio Olmos/The Guardian

He does not claim too much personal credit for the Lib Dem renaissance. The local advances, he says, were the fruit of old-fashioned Lib Dem graft: activists plugging away, on the ground, for years. And, undeniably, he adds, the party has benefited from the failings of the big two. The Tories have made “the most appalling Horlicks” of Brexit, while most Labour MPs privately concede, he says, that their party’s position is “hopeless as well as unpleasant”.

Will his parting shot to the Lib Dem faithful be a channelling of David Steel, urging them to “go back to your constituencies and prepare for government”? It won’t, but realignment is, Cable says, “becoming more than a possibility. Not least because the Tories and the Labour party appear to be doubling down on their existing strategy, which is suicidal in both cases.”

It is a big claim, but he sticks with it. Corbynism is not a sustainable strategy for a party of the left in the UK, he says, chiefly for economic reasons. Voters will always demand that Labour’s sums add up. “‘Two plus two equals five’ isn’t an election-winning formula, and I’m afraid that’s where they are. Old fashioned state socialism just isn’t remotely where the country is or what it needs.” He still believes in the same vision of a mixed economy he advocated back when he was in the Labour party – he was one of those who broke off to form the Social Democratic party (SDP) – describing himself even now as an “old-fashioned social democrat who used to work for John Smith. I probably haven’t moved on in some ways.” As for the Tories, they “seem determined just to dig in behind this kind of English nationalism. Brexit is a proxy for something bigger and deeper.” He fears Conservatives have “chosen to identify themselves with what Isaiah Berlin once called the ‘politics of the soil’”. It’s a trend that, for Cable, is not just “nasty, but dangerous”.

But the two main parties repelling millions of voters was never going to be enough, on its own, to ensure a Lib Dem surge. It helped that the party had a catchy slogan. “Bollocks to Brexit” was not Cable’s own coinage: a Lib Dem staffer suggested it, he says, having seen it on a sign attached to Pimlico Plumbers near Waterloo station in south London. Cable was not sure about it at first, but he overcame his hesitation. “It’s more important to be clear than it is to be polite or whatever,” he says

Still, another condition had to pertain for the Lib Dems to make the European breakthrough: the party had to have the centre ground all to itself. Happily for the Lib Dems, Change UK (as the Independent Group had renamed themselves) obliged. So what does Cable think went wrong for that new grouping, which last week split in two?

“First of all, they went too soon.” A second problem, recalls this veteran of the SDP’s founding in 1981, is “if you contrast the leadership today of Change UK with the SDP leadership 30 years ago, we’re talking different league altogether. [Roy] Jenkins, [David] Owen, all the rest of them. And also [the SDP] was incredibly well planned. I mean, they had planned it for two years, and it was done in association with David Steel. It was a really serious attempt to break the mould. This [Change UK] just sort of happened at a fairly low level.“They rushed into an election without realising that you need an infrastructure to fight an election, and then made elementary mistakes. I mean, it’s sad in a way, because I like the people. We agree with them on almost everything.” (Which is slightly odd, because a moment earlier he had diagnosed Change UK’s greatest problem as “the fact that they were trying to launch a new organisation which didn’t have any intellectual or political coherence at the heart of it”.)

But there was another mistake, says Cable. “I did urge that we work together, but they decided to compete. Anyway, they’ve had, I think, a chastening experience, and we’ll see what happens.”

Facebook Twitter Pinterest Cable visits the National Renewable Energy Centre, at Blyth, Northumberland, as business secretary in 2010. Photograph: Mark Pinder/The Guardian

Surely the next step is obvious, and not just between the Lib Dems and Change UK. Isn’t now the moment for an alliance of the key, non-nationalist parties fully committed to remaining in the EU? Given the Westminster electoral system, isn’t that the only way to prevail?

If I was expecting equivocation or I’ll-leave-that-to-my-successor boilerplate, Cable doesn’t supply it. Instead, he recalls how his party and the Greens have had an electoral pact for Twickenham council contests that has worked out for both of them. “So I would be in favour, in principle, of extending that kind of arrangement” nationwide, he says. He knows there will be Lib Dem resistance, and “there will be Greens who will be going on about the coalition, but … I personally think that would be a sensible way to conduct an election.” So an alliance of Greens, Lib Dems and, in a handful of seats, Change UK? “Yes, if [Brexit] is the dominant issue of the day, it would be absolutely sensible to do it. And I would hope that we would have quite a lot of Labour and Tory [MPs] who would, at an individual level, go along with this as well.”

When I use the word merger, he initially resists. “Maybe we’re not talking about merging, we’re just talking about cooperation.” I’m about to rephrase, when he says, “But one thing leads to another, doesn’t it?” So perhaps a merger of Lib Dems and Greens, until Westminster elections are run under a PR system? “It could be, yeah.”

Let’s say a remain alliance got its way, and Brexit was averted. Does he not worry that will leave behind a furious, pro-Brexit constituency who will feel bitterly, even dangerously, betrayed? He agrees that there will be an angry, “truculent” minority, but says it’s “feeble” to suggest remainers should hold their nose and get on with leaving the EU just to pacify that group. “If anybody’s got any grievance about the democratic system, it’s probably my party, or the Green party, or Ukip for that matter. We’re horribly underrepresented, but we’ve got on with it and done the best we can.” Besides, remainers would have to win a second referendum before they could cancel Brexit and he reckons leavers “would be substantially mollified if we went through that process”.

Still, the European election might have been a one-off, a protest vote: for any kind of alliance to succeed at Westminster, surely the Lib Dems would have to do deeper penance for their complicity in austerity. Cable does not agree. If by austerity you mean the macro-economic policy of reducing the deficit, Cable will defend that with vigour. He believes the coalition was right about that and that a Labour government would have had to do the same. (At one point in our conversation, he confesses that he thinks often of what a Lab/Lib coalition in 2010 might have done: “I do fantasise about that scenario,” he says. But “we hadn’t got the numbers”.) Put to him the anti-austerity counter arguments, and the trained economist will come right back at you: “The Keynesian multipliers just didn’t apply in an economy where the banking system didn’t function.”

But if by austerity you mean the deep spending cuts that have left Britain’s public services reeling, the argument is more nuanced. He says the really damaging cuts came after 2015, once the Lib Dems were ejected from power. But he agrees that the coalition should have cut spending less and raised taxes more. He doesn’t blame the Tories for all of that: “We [the Lib Dems] had committed ourselves to raising income tax thresholds, so we had already boxed ourselves in to some extent to a tax-cutting, as opposed to a tax-raising, agenda.” But he says he very nearly got a mansion tax through: George Osborne agreed, Cameron said no. Still, he concedes: “There were particular things that were done – the bedroom tax is an obvious one – which were just awful, and we should never have signed up to.”

He laments how the government he belonged to “slashed local government spending” by front-loading cuts rather than phasing them in, but he blames that on the Tories in charge of that ministry. “We were outnumbered five to one in the government, and people forget that.” Shouldn’t they have done the DUP trick, propping up Cameron rather than becoming his coalition partner? No, says Cable. If they’d done that, the Tories would have called an election a few months later and the Lib Dems would have been swept away.He offers some contrition, too, on the issue that dogged the Lib Dems in coalition and since – tuition fees – though it takes an unexpected form. The fees increase was necessary, he says, and the basic principle of financing universities through a fee loan system was widely “accepted”. He says he had “a blazing row” with the then party leader Nick Clegg over making a pledge not to raise fees that he regarded as “ridiculous”. These days, his campus visits make him confident that the issue has faded among young people: “They think they’re paying the first stage of what is an effective graduate tax.”

Facebook Twitter Pinterest Nick Clegg helps Cable in his effort to retain his Twickenham seat in the 2015 general election. Cable lost and Clegg resigned as leader. Photograph: James Gourley/Rex Shutterstock

Cable often talks like this, offering an account of events in which he was right and everyone else was wrong. After the financial crash, it became part of his brand: the wise seer vindicated by events. But it is a style that irritated some of his colleagues. He can seem shy and diffident in person, even a little stiff, more retired academic than frontline politician. But his detractors detect a quiet self-satisfaction, even pomposity. One party defender, meanwhile, says that what his critics really disliked was “the York accent, being older and less effusive in style”.

We come on to the Tory leadership contest: who would be best for the Lib Dems? He has no hesitation: “Dominic Raab would be a perfect adversary.” As would anyone on the “crackpot extreme” of the Tory spectrum, a category that, for Cable, includes Boris Johnson and Andrea Leadsom. Who would be best for the country?

He praises Michael Gove as a formidable debater, “a very insightful, interesting guy, actually”. He is warm about Matt Hancock, too, a former subordinate when Cable was business secretary: he might be suitable for the top job in 10 years’ time, he says, but “he’s not ready for that” now. When Cable lost his seat in 2015 only two Conservatives wrote “nice, personal” letters of consolation. One was Hancock. And the other? Johnson. The two men had no direct dealings with each other. “I mean, either the guy had a flair for that kind of old-fashioned courtesy, which people think kindly of, or it was just a good gesture. I don’t know what it was, but I did remember it. You know, it did say something about him.”

He won’t say anything about Jo Swinson and Ed Davey, now duelling to succeed Cable as leader of the Lib Dems. Indeed, his praise for them is lukewarm. “They’re both OK. I mean, they’re both good, and they’ve both been ministers in my department in government, so I know them in that capacity as well as political campaigners, and you know, they’re good people.”

Facebook Twitter Pinterest Cable entered a few ballroom tournaments in Blackpool during his two years out of the Commons between 2015 and 2017. Photograph: Antonio Olmos/The Guardian

Could one of them end up being in coalition, just as he was? He doesn’t think it likely, not because he is against coalitions in principle – although, given what it did to the Lib Dems last time, you wouldn’t blame him – but because, he says, his party could not make common cause with either a Corbynite Labour party or a Brexiter Tory party. Would Corbyn stepping down be a price of coalition? “It’s not a personal thing,” he insists. “I’ve no personal antipathy to Jeremy, he’s a perfectly decent guy from my experience. It’s more the leadership of the Labour party and what it represents and its policies which are a problem, not the individual.” He says there’s “a large group of MPs in the Labour party who I would feel perfectly comfortable working with, but not the Labour front bench”. Anyway, he says, all that is a matter for his successor.Looking ahead, he says he won’t give up his seat in the Commons, though if this parliament serves out its full term he will be nearly 80 and won’t stand again. He reminds me that he didn’t even become an MP until 1997 when he was 54, admitting that he occasionally “daydreams” about what might have been if all this, including the party leadership, had come 20 years earlier. But that delayed start had other advantages: he did a “boring nine-to-five job” (he was chief economist at Shell) that enabled him to get home in time to read to his three children.

For now, he will work on that book and a couple of voluntary roles he has with social enterprises. So he won’t follow Clegg’s lead and become a highly paid tech executive? He smiles at the very idea, before insisting he does not feel “morally fastidious” about Clegg working for Facebook. How much contact does he have with the man he served as deputy? “None. Or virtually none.”

Cable has already had a taste of life away from the frontline. He used his two enforced years outside parliament between 2015 and 2017 to enter a few ballroom tournaments in Blackpool, so surely now is the moment to return to the dancefloor. Would he say yes if Strictly called? “It would be nice to be asked,” he says.

Would he be any good? “I could sail through the ballroom. Even jive I can do, but trying to do rumba and cha-cha, where you need great hip action: that’s more difficult when you get older.” And he never really liked doing it competitively. “Dancing on a crowded floor, and you’ve got one and a half minutes and somebody bangs into you and you lose your routine” – and it takes me a moment to realise he is talking about dancing, rather than the life of a politician on the centre ground, squeezed between the two big parties, waiting for his moment and hoping to get the timing just right.