Howard-Letwin 2005 is less credible than Hague-Portillo 2001. Astonishing!

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The Independent Online

The strange plight of the Conservative Party is perfectly illustrated by our opinion poll today. It finds that 71 per cent of people believe illegal immigration to be out of control under Labour, that 41 per cent say that it could affect the way they vote - and that the Labour lead has widened to eight points.

The strange plight of the Conservative Party is perfectly illustrated by our opinion poll today. It finds that 71 per cent of people believe illegal immigration to be out of control under Labour, that 41 per cent say that it could affect the way they vote - and that the Labour lead has widened to eight points.

How is it that the Tories have popular causes - immigration, crime, tax, public-sector waste, choice on schools, hospital waiting lists, and Europe - but cannot turn them into popular policies? Much of the answer is that, despite Michael Howard's aura of competence, the party's policy-making is still a shambles. When he became leader, relieved Conservatives and apprehensive Labourites expected the party to pull itself together. Which it did, a bit. But Howard's judgement is not as reliable as his deliberate manner suggests. He made a string of mistakes last year, tying himself in such knots over Iraq that he fell out with the White House. Looking back, I missed the significance of Howard's speech to executives of Rupert Murdoch's global empire at Cancun in Mexico in March. I am told that his stock at News International plummeted. His performance was "wishy-washy" rather than disastrous, but it came after a storming speech from Norman Schwarzkopf, the former US army general.

None of this would have mattered much, however, if the Conservatives were heading in broadly the right direction. And the reason they are failing to gain any traction on issues that ought to be electorally favourable to them is because their policies fall apart the moment they are tested. It is not Howard's occasionally erratic tactical sense that is the problem, or his manner, but his ragged attention to policy detail.

Immigration is a prime example. There is a school of thought that this is a subject on which most voters have fairly settled views and that by raising the issue, as Howard did last week, all he is doing is reinforcing the Tory base. After all, it is pointed out, William Hague ran on a similar programme for the last election and a fat lot of good it did him. But I do not think that is the end of the matter. What was wrong with Hague's policies in 2001 was precisely what is wrong with Howard's policies now. The Conservatives have had four years to get this right and yet seem to have made no progress.

What is more, the alarm bells should have been ringing in Tory Central Office all along. When Oliver Letwin, as shadow Home Secretary, first proposed that all asylum-seekers should be processed on an island "far, far away" in October 2003, a message should have been beamed back to planet Earth: "Houston, we have a problem." One of Blair's advisers told me that he assumed that the Tories would have sorted the policy out by that weekend. Fifteen months later, the Tory policy on asylum is still to deal with all applicants on fantasy island - a place that has not yet been identified. Not only that, but the party's spending plans now assume that it can save nearly £1bn a year on the processing of asylum claims, which is more than half the entire budget for dealing with immigration and asylum. Yet it would plainly be more expensive to arrest, transport and detain asylum-seekers than to have them wait for their claims here.

So the Tory policy on asylum is based on a fantasy island financed by fantasy economics. Indeed, the whole Conservative programme is based on fantasy economics. Again, this is extraordinary. One of the reasons why the Tory campaign was so weak in 2001 was that the tax and spending plans set out by Michael Portillo, Hague's shadow chancellor, looked as if they had been jotted down on a Kensington restaurant napkin. Then, the Tories promised to cut both taxes and spending by £8bn a year. But the savings came from "the usual combination of cutting red tape, fighting fraud and thinking wishfully", as one dispassionate commentary put it.

What is astonishing is that Howard-Letwin 2005 is even less credible than Hague-Portillo 2001. Letwin's "big picture" was superficially attractive - to match Labour spending plans on the NHS and schools and freeze everything else, allowing room for modest tax cuts. That might have worked had Andrew Lansley and Tim Collins, the Health and Education spokesmen, come up with reasons why public services would be better in their charge. Yet Lansley is still saddled with having to subsidise the better-off to go private. And Collins still says all schools can decide their own admissions without saying what happens to the pupils that no schools want.

At least Letwin's spending total made sense. Until this month, when a revolt by shadow spending ministers forced him to promise higher spending than Labour on defence, police and pensions - in addition to matching Labour on the two big headings, the NHS and schools. The result is that at this election the Tories are promising higher spending than last time, and yet they have come up with a bigger figure for cutting spending, £12bn a year, than last time. Despite drafting a respected company doctor, David James, to come up with cuts, the results are just as unconvincing as last time - both Labour and the Liberal Democrats found childish errors in the James report within minutes. And Letwin's bigger problem is that, having attacked Gordon Brown for his fiscal black hole, he has to use £8bn of the £12bn saved to repay government debt, leaving just £4bn a year for tax cuts. So he is going to cut spending by more than last time and cut taxes by less. Brilliant.

Surely a party that was serious about winning power would do whatever it took to produce policies that withstood a moment's scrutiny? The Conservatives ought by now to be in a position where credible bodies such as the Institute for Fiscal Studies or even leader-writers on sympathetic newspapers look at their manifesto and say: "That will work." Instead, they have not yet even set off from the shores of fantasy island.

Labour should be scared of the Tories, therefore, but not yet. This week Blair becomes the longest-serving Labour prime minister, overtaking Harold Wilson's combined period in office of seven years and nine months. So far the official opposition shows no sign of being in any shape to stop him if he were to change his mind about standing down during the next four years.

If the Conservatives ever get their policies together under a competent, presentable leader, they have great potential. So many of their basic values go with the electorate's grain. But that day seems distant. Archie Norman, the former chief executive of Asda who became an MP and a member of the Shadow Cabinet, has given up in disgust and is standing down from the Commons. I am told he is going not because he thinks the Conservatives will lose this election but because he thinks they have no chance of winning the next one. The question is whether the party has the will to survive another eight years in opposition until 2013.