John Rentoul: Cameron may be right, but he's on his own

The Conservative leader is failing to find common cause with Gordon Brown's policy critics on the Continent
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The Independent Online

Suddenly, the Conservatives are keen on dialogue and policy co-ordination with our European partners. What could be the reason for this potentially momentous shift in the geology of British politics?

I was urged by one of David Cameron's advisers last week to listen to Nicolas Sarkozy, the President of France – in French. How right he was, I was told, to say that Gordon Brown's VAT cut had "absolutely not worked". Just as Peer Steinbrück, the German finance minister, was right to deride Brown's "crass Keynesianism" before Christmas. George Osborne, the shadow Chancellor, wants us to take our cue from the Germans, the French and the Dutch. Or, at least, from individual politicians in each of those countries who have been rude about Brown's fiscal stimulus.

If Peter Mandelson were not Brown's new best friend, he could be hailing the conversion of the Tory party to the idea of a Europe-wide consensus. But no, this is not a clever pre-emptive manoeuvre to avoid the elephant trap of the issue of Europe at the next election.

A cabinet minister told me the other day that, if the Irish reverse their No vote in the second referendum on the Lisbon Treaty later this year, "Cameron's got a problem in the election campaign". The Conservative leader will be asked what he meant by saying that he would "not let the matter rest" if the treaty were ratified. The question will be all the more fraught now that Kenneth Clarke, who wants the treaty to be ratified, has returned to the Tory front bench.

Actually, it is just as much of a trap for the Government, because the attempt to get the Irish to vote, vote and vote again until they come up with the answer that Brussels first thought of is a hideous embarrassment to the pro-European cause, especially as we British were not allowed even one referendum on the same issue.

However, the Tories are not really repositioning themselves on Europe. Their sudden admiration for Sarkozy does not mean that the tectonic plates have moved. Her Majesty's Official Opposition is engaged in opportunism. They do enjoy it when people are rude about the Prime Minister, although they obviously had to join in the chorus of disapproval that greeted Jeremy Clarkson's personal remarks last week.

Nicolas Sarkozy, though, was a different matter. His rudeness was on a different plane, and it was about policy. But in their haste to embrace their enemy's enemy, they may draw attention to their own weaknesses.

I do not mean here the paradox of a Tory shadow Chancellor who wants to cut taxes praising Sarkozy when he pours scorn on Brown for doing precisely that. "Britain is cutting taxes; that will bring them nothing," Sarkozy said when cornered in a television debate. The problem for the Conservatives is that Sarkozy is wrong and Brown is right about tax cuts. The French President was defending his policy of spending public money on infrastructure projects: "When we put France into debt by taking money to invest, in return we have assets." But most of the best economists are on Brown's side, saying that if you are spending public money or cutting taxes (the effect on the public finances is the same) in an attempt to stimulate the economy, tax cuts are quicker and more effective. The increased spending power is immediately available. Yet the Tories propose neither. They may be right to do so, which is a separate argument, but if you want a stimulus, tax cuts are better than spending on public works.

As for Sarkozy's assertion that the VAT cut has "not worked", that is impossible to prove because we don't know how bad things would have been without it.

So, no joy for the Tories in Paris. What about Berlin? Well, no sooner had Peer Steinbrück made his disobliging comments about the pointlessness of the Brits knocking 80p off a £39.90 DVD player than Angela Merkel announced her €50bn stimulus in Germany. No luck there. What about Amsterdam? George Osborne was excited by the comments made last week by Wouter Bos, the Dutch finance minister: "Lowering the value-added tax I think was not a very wise thing to do. I don't believe it will contribute to a recovery of the economy."

That may seem useful to the Tory case, but what did Bos go on to say? Another reason he disliked the British VAT cut is that it "put pressure on other countries to do the same". He said: "It's that type of policy response where I would have liked to see a bit more co-ordination."

The Conservatives have ended up, in effect, arguing for a single European economic policy, a co-ordinated fiscal stimulus – albeit of spending on public works rather than tax cuts. The Tories think that they have won an argument when they have scored only debating points. Every quotation from a foreigner that they cite turns out not to be a firm handhold but a straw.

Most European governments are spending money they don't have to try to avert the depression that Brown misspoke in the House of Commons on Wednesday as something that was already upon us. Worse, from Cameron's point of view, Barack Obama thinks a fiscal stimulus is the right thing to do. But Cameron's position is that Britain, uniquely, cannot afford it.

It is a tricky position to defend. The fact that it may even be right is irrelevant. I am, after all, a Bill Clinton supporter, a Balanced-Budget Democrat. It may be true that tax cuts or extra spending are unnecessary. House prices went up last month, after all, and nobody seems to know why. Or it may be that they are unaffordable, in the sense that they store up worse problems for the future. Although Kenneth Clarke did not think so – at least, not until Cameron had him in and told him that, if he wanted that job in the shadow Cabinet, he had better go out there and, er, "clarify" his support for a VAT cut. "Not affordable," Clarke mumbled into the Official Record.

That is the danger of what might be called Jeremy Clarkson politics. Just because Sarkozy was rude about Brown does not make him right.

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