The Week in Politics: Tories are repeating mistakes of the last campaign

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Sir David Frost made a revealing comment as he scanned the newspaper front pages at the start of his Sunday morning BBC programme last weekend. He said the previous week had been dominated by the controversy over Labour's claim that the Tories would cut public spending by £35bn.

Sir David Frost made a revealing comment as he scanned the newspaper front pages at the start of his Sunday morning BBC programme last weekend. He said the previous week had been dominated by the controversy over Labour's claim that the Tories would cut public spending by £35bn.

The veteran broadcaster was right, but his casual aside was deeply wounding for Labour strategists. What they wanted him to say was that the previous week had been dominated by Gordon Brown's Budget or Labour's attack on the Tories' plans to cut public spending by £35bn. Labour had deliberately held its fire on the Tory programme until the day after the Budget, in the hope of presenting a neat contrast between Mr Brown's limited but popular goodies and "Tory cuts".

The move backfired. Labour's determination to redraw the 2001 campaign "dividing line" between the two parties - Labour investment versus Tory cuts - got the better of it. Tony Blair became rattled by the accurate suggestion that the Tories would not really "cut" public spending but merely increase it more slowly than Labour. Instead of turning the spotlight on the Tories' plans, as Labour confidently expected, the media turned its guns on to Labour for over-egging the pudding. The Tories could hardly believe their luck; they accused Mr Blair of telling "lies" about them.

Yesterday, the tables turned. The foolish remarks by Howard Flight, a Tory deputy chairman, at a dinner for Thatcherites on Wednesday, that the Tories would seek deeper spending cuts than they admit, are surely a turning point in the election campaign.

The relief at Labour headquarters yesterday was palpable. The party postponed until today the launch of a poster attacking the Tories' health plans and proudly revived its "£35bn cuts" poster, which was widely discredited when it was unveiled nine days ago. The same journalists who then asked hostile questions about the cuts claim were a pretty tame bunch yesterday. At a press conference, no one questioned Labour's claim that Mr Flight had proved its point: the £35bn was only the "tip of the iceberg". It was clear that a single event had turned the campaign on its head.

On one level, nothing has changed. Mr Flight has resigned, so the Tories can claim that he was a lone ranger who was shooting his mouth off. They can insist that their spending plans are intact - and that they can match Labour on schools and health and even spend a little more on pensions, the police and defence. They can accuse Labour of telling more "lies".

The Tories' problem is that it won't wash. Mr Flight, an accident waiting to happen in the eyes of some colleagues, has given legitimacy to Labour's attacks. He cannot be dismissed as a nobody. He was the party's special envoy to the City and, in his previous role as shadow Chief Treasury Secretary, set up the review by the company doctor David James which found £35bn of savings in government spending.

Perception matters and, on that level, everything has changed. Eighteen months of painstaking work by Michael Howard and Oliver Letwin, the shadow Chancellor, has been undone by one dinner for free-marketeers.

Mr Howard and Mr Letwin appeared to have neutralised Labour's attacks on their spending plans. The Tories' private polls show that voters no longer view them as a threat to health and education. I suspect the polls will make gloomy reading over the next few days. The affair has also undermined Mr Howard's attempt to exploit voters' lack of trust in Mr Blair by "playing it straight" and offering a limited number of carefully costed proposals.

The only crumbs of Tory comfort are that Mr Flight's gaffe happened now rather than nearer the 5 May election, when more voters would have noticed it, and that Mr Howard sacked him immediately. But the much-needed discipline Mr Howard has injected into a fractious party has broken down at a critical moment, and his ruthless response will not prevent long-term damage. Labour can have it both ways, claiming Mr Flight was dismissed for telling the truth about the Tories' "secret agenda".

With less than six weeks until polling day, the Tories have to start over again. They will have to work hard to convince people that that their sums add up and that they would protect key services. Crucially, it will make it much harder when they play their remaining trump card in the next couple of weeks - their £4bn package of tax cuts. The announcement has been held back for maximum impact at the election and to allow the Tories to reassure voters they would not cut public services. That strategy is now in tatters.

There is still some ammunition in the Tories' locker. People believe them when they say that taxes would rise in a third Labour term. But they need to sharpen up their act. They missed a trick by not exploiting the The Sunday Times's revelation last weekend that the Budget's small print showed that Labour would raise taxes by £35bn over the next four years.

The Tories have helped Labour to rerun its 2001 campaign by repeating the mistakes they made then, when Mr Letwin had to go into hiding after suggesting they would cut taxes by £20bn. Only a few days ago, a senior Tory told me that Labour's election campaign was flawed because the party was fighting the last war. Now, it seems, the Tories are too, in which case there can only be one winner.