John Rentoul: Cameron knows he should be doing better

Caught between the hares and tortoises within his party, the Conservative leader is pursuing an erratic course
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The Independent Online

E veryone seems to agree that David Cameron is not doing as well as he should be. Cameron said it himself in an interview with The Times last week. "Find me the leader of an opposition anywhere who does not wish they were doing better," he said. "There is a lot farther to go and there is not one ounce of complacency in either me or my team."

His opponents on the left say he should be doing better. Polly Toynbee, in another furious attack on Gordon Brown in The Guardian, listed the Prime Minister's betrayals and said: "Despite all this, the Tories are still only a few points ahead, nowhere near where they should be."

Cameron's enemies to his right say he should be doing better. Tim Montgomerie, who runs the ConservativeHome website, wrote last week of a split at the top of the party between tortoises and hares. Cameron is the tortoise; George Osborne, the shadow Chancellor, is the hare. "Osborne is now said to be 'on manoeuvres' again – listening carefully to those who think the Tories need to move up a gear," said Montgomerie.

He is on to something. There is more to this than the superficial spats between the leadership, Cameron and Osborne united, and those arguing for tax cuts or a referendum on the Lisbon Treaty, even if it is ratified. Osborne is going to hold the line on sticking to Labour spending plans, which means any promises of tax cuts have to be paid for by tax rises elsewhere. This is quite different from the Conservative promises in the past two elections, which were funded by imaginary efficiency savings.

Never mind that Osborne paid for his cut in inheritance tax with an imaginary tax on foreigners. It worked. When Brown copied him, the Treasury boffins found out that the tax on foreigners was imaginary and Alistair Darling had to raise capital gains tax, which is not imaginary, a change that unravelled last week. By coincidence, because Brown was not in control of the timing of Peter Hain's resignation, the mini reshuffle distracted from Darling's retreat in the Commons. Having claimed that the capital gains tax change was a simplification, the Chancellor complicated it again to give small businesses a special 10 per cent rate.

The success of Osborne's inheritance tax ploy persuaded some of the Tory Bourbons, who learn nothing and forget nothing, to resume their demand for deep cuts in public spending. They will get nowhere. But there are differences of emphasis in the Cameron inner circle which, while they may seem subtle now, will only grow in importance in the coming year.

On one side are what Montgomerie – a self-proclaimed hare – called the tortoises, although he also used a more accurate insult, the "uber-modernisers". That was a term Osborne used when the party moved into its more aggressive phase in the autumn. The uber-modernisers include Steve Hilton, Cameron's adviser, and Michael Gove, Tory education spokesman and the "sunshine" half of Cameron's brain. The hares include Osborne and Andy Coulson, Cameron's press secretary and the "broken society" half of Cameron's brain.

There are two issues on which the tensions within the Cameron team and between the two halves of Cameron's brain are evident. One is crime, on which Cameron sounds more and more like a punitive Tory and less like a feel-good optimist. The other is the economy, where he is in danger of sounding like a pedlar of gloom rather than an inspirer of confidence. The hares like to present themselves as impatient to take the attack to the Government, implying that the tortoises want simply to wait for Brown to collapse. But one Shadow Cabinet tortoise told me: "Most of those arguing for boldness are those who derive emotional satisfaction from dramatic gestures."

At issue last week, in the middle of the stock market dip, was the question of how aggressive Cameron and Osborne should be in trying to pin the blame for the economy slowing down on Brown. It is all very well for Cameron to repeat Osborne's line, borrowed from John F Kennedy via Bill Clinton, that Brown hadn't "fixed the roof when the sun was shining". But to use Northern Rock to try to erode Brown's reputation for economic competence is more risky.

Cameron tried to make the case last week that Brown's "dithering" over the failed bank had put vast billions of taxpayers' money at risk. With all due deference to my colleague, Alan Watkins, who supports the charge of dithering on page 46, I disagree. The implication is that there was a quick sale – supposedly to Lloyds TSB – which was possible at the start, and which slipped out of Brown's fingers because he wouldn't decide. This was not the case, as the Treasury Select Committee found when it looked into it.

Brown could have acted quickly to nationalise Northern Rock, as urged by the Liberal Democrats, but Cameron didn't want that and it wouldn't have been the right thing to do either. Brown did the sensible thing, which was to reorganise the company to make a private sale possible and hold the option of nationalisation in reserve.

I fear Cameron (and Watkins) may win the point. It would be no more unfair than Labour's benefiting from the end of Britain's membership of the European exchange rate mechanism, a policy supported tenaciously by the then shadow Chancellor, Gordon Brown. But Northern Rock will not matter nearly as much as the national humiliation of 1992, since nothing much will happen. And the benefit to the Conservatives will be small, because it is so transparent that Cameron proposes no alternative course of action.

Indeed, in yesterday's opinion polls, the Conservatives had a two-point lead and an eight-point lead, an average of five. Nothing much has changed, in other words. Yet that is enough to deprive Labour of its majority without winning a majority for the Tories. It may not seem much to Cameron, Polly Toynbee or Tim Montgomerie, but it represents a transformation of the settled political landscape for the past decade and a half.

I suspect the tensions over strategy will continue, and that Cameron will continue to pursue a slightly erratic course, oscillating between sunshine and gloom, but tending towards the gloomy. It may be he would do better to tend the other way, and perhaps that is what Tony Blair would have told him when they met for 20 minutes at Davos last week, if they hadn't been talking only about the Middle East.

But keep an eye on this split. It will matter more and more as Cameron and Osborne get closer to government. The two gave an intriguing joint interview on a trip to China before Christmas. Asked if he had told Osborne how long he intended to go on as PM, Cameron said: "I don't think it's something we have ever really talked about." Osborne described this as "an answer worthy of a Chinese official".

Read John Rentoul's blog: independent.co.uk/openhouse

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