Let nobody dare say the prime minister is out of touch with the voters. The Office for National Statistics on Thursday revealed that 44% of us are more inclined to spend our money than save it: we would rather have a good standard of life now than provide for a comfortable retirement. Britain’s finances have been operating on the same principle since the 2001 general election.
Perhaps mindful that a 44% share of the vote would represent a landslide majority, Alistair Darling failed to change course in his pre-budget report (PBR). In these austere times, he announced, spending would go up by an extra £31 billion next year. Even sympathetic economic commentators thought the chancellor’s programme for paying back debt lacked credibility: there is a £30 billion black hole uncovered by taxes or spending cuts. The bond markets hiccupped and rumbled.
“The PBR was like the worst kind of Lib-Dem politics,” a leading Liberal-Democrat chortles. Well, it takes one to know one, I suppose. “It has no sense of shape, narrative or purpose. It adopted a scatter-gun approach of hurling bon-bons at the electorate.”
The remnants of Tony Blair’s following are quietly despairing. All that work he and Peter Mandelson put in to convince the aspiring middle classes that Labour was their friend, not their enemy, appears to have been abandoned. As George Osborne, the shadow chancellor, pointed out in his reply to Darling: “If you want to get on in life, if you want to own your own home, if you save for a pension or leave something to your children, then the Labour party is not for you any more.”
The Blairite website Progress groaned: “New Labour was a titanic effort to banish the image that Labour was the party you voted for if you were on benefits, or worked for the council, and if you owned your own home and liked Delia Smith you voted Tory.”
Gordon Brown, boxed in by his own spendthrift record and happy to play politics in his old comfort zone, reverts to old Labour ways in an attempt to get out the party’s core vote. He hammers the bankers — the fools at the Royal Bank of Scotland deserve everything they get for picking a fight with the government about their bonuses a week before the PBR; he brands the opposition a bunch of greedy Etonian toffs. Meanwhile his own ministerial ruling class is ripping off the public for the cost of their bell towers and porn videos.
The old arguments surface. Brown is “still in denial about the scale of the cuts required”, say cabinet sources. Ed Balls is at sixes and seven with Mandelson; Yvette (Mrs Balls) Cooper battles Darling; the prime minister armwrestles his chancellor. As for a policy programme for government, forget it.
This should be the moment when David Cameron’s Tories go for the kill. What is holding them back?
The opposition appears to be winning the argument about the economy, according to the polls. The voters know cuts will have to be made and suspect the government is not getting to grips with the problem. Cameron and Osborne are more trusted than their opposite numbers. Yet Brown and Darling have one last trump card. As the Office for National Statistics observed, voters prefer pain tomorrow over pain today.
Osborne has allowed third-party voices, international organisations and City analysts to make his case, for fear of being seen to talk down the economy. “Perhaps, with Ireland, Dubai, Greece on the ropes, “he should now be less squeamish about making his argument that the country’s credit rating is imperilled by fiscal weakness,” says an ally.
Lord Lawson, on Newsnight last week, showed how it might be done. For me, this was the real political contest of the week. Proving that, at 77, he is more intellectually intimidating than most men half his age, the former Tory chancellor and brains behind Thatcher’s reforms ripped into Professor David Blanchflower, the most eloquent advocate for delaying fiscal consolidation. Yet the Institute for Fiscal Studies says there is a £27 billion hole in Osborne’s plans if he wants to go “further and faster” in cutting.
The economy aside, in recent weeks there has been a lack of clarity about the Tory position. They have lost their way. What’s more, they realise it too. What should have been a pedestrian discussion within Tory high command recently about what to put in their new year poster campaign, I am told, turned into a full sclae argument about the substance of the Conservative offering. This can’t go on for long, otherwise there will be four general election campaigns in the making: Cameron’s, the media chief Andy Coulson’s, Osborne’s and Steve Hilton’s — he’s the consultant who shapes the modern Tory brand.
One camp argues that the polling on Labour is so magnificently dreadful that the Conservatives can’t gain much more by attacking the government. Even Labour’s friends think it needs a spell in opposition. Focus groups conducted by the parties register pity for Brown not anger. He is seen as a decent man engulfed by impossible challenges, out of his depth in the wrong job, utterly miserable. You wonder why the PM has been grinning during his last two bouts at question time and the pre-budget report. You can bet that his image consultants have been begging him to imitate a litttle ray of sunshine.
Polling evidence shows there are also doubts, however, about the Conservative party’s fitness for office. Will Tory lips smack as they trim fat off the state? The Conservatives must show they care for schools, hospitals and the plight of the unemployed or else they are just the same old nasty Tories voted out in 1997.
Disillusioned with the political class following the expenses scandal, voters see little to re-inspire them. If the Conservatives want to represent change, they need a positive message to confound the impression that “they are all the same”.
In the Crewe and Nantwich by-election last year, Labour’s anti-toff propaganda campaign ran into the ground. Cameron was then at the zenith of his appeal to voters: a good family man who transcended class, who cared for the NHS. Since then Labour and Liberal Democrat private polling has detected a shift in opinion: the voters think he is a strong, ambitious leader, but they have begun to question his values under assault from Labour’s constant cries of “Tory cuts”. No 10 took heart at local election results last week that saw it make small gains from all parties.
Yes, the Tories have been more honest than Labour about the need for cuts; but cuts on their own are a hard, hard sell to an electorate that has only recently been weaned off “spend now, pay later”. For years I have been banging on that an across-the-board agenda of reform of the public services provides a platform for either the government or the opposition. The argument becomes more acute as spokesmen for local government and the trade unions begin to scream that trimming the budget will soon hit essential services. When retrenchment begins, it will be more severe than that imposed by the IMF in 1976. Only new efficiencies and private providers can make up the difference. This is an opportunity as well as a crisis.
With the departure of James Purnell from government, new Labour appears to have given up on this agenda. Michael Gove ploughs a lonely furrow of education reform for the opposition — too lonely a furrow. The Tory wonks James O’Shaughnessy and Oliver Letwin are sitting on policy groups that are supposed to report in the new year. Cameron must hope they roll out something appealing to a sceptical public.
The Tory leader has shown resilience before when the polls have narrowed. He held his nerve when Brown appeared to be briefly in the ascendant after the rescue of the banks. He can’t and shouldn’t pretend there aren’t bad times just around the corner. But he has to offer hope amidst the gloom. Cameron can do better than old Tories versus old Labour.
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