Steve Richards: Rise of the Tory Romantics

Usually there is only a 'feel-good factor' when the economy is doing well enough to make the electorate feel good about itself

Can a government make us feel better about ourselves? Even the question will make some voters feel miserable. "Of course not" is likely to be the instinctive response, not least at a time of economic gloom and when an anti-politics mood is deeply entrenched.

Yet the future prospects for the Conservative wing of the Coalition hinge on generating at least a whiff of optimism. As I wrote on Tuesday, senior ministers from both parties made a tactical error in exaggerating the scale of our economic crisis in order to justify their programme of spending cuts. They made us fearful. Heading for the shops to spend some money was not an obvious response. Here is proof at least that a government has the power to make us feel pessimistic.

In their mood-generating ambitions ministers leap from one extreme to another. George Osborne greeted this week's puny growth figures almost with triumph, as if we had moved from bust to boom with the wave of his austere wand. This misjudged tone highlights how difficult it can be for ministers to sound upbeat when darkness has settled. One of Osborne's predecessors, Norman Lamont, never got over his claim that he could detect the "green shoots" of economic recovery. Lamont was entirely right in his detection, but we were not in the mood for such an upbeat assessment. Usually there is only a "feel-good factor" when the economy is performing well, or at least well enough to make a significant proportion of the electorate feel good about themselves.

Still, demand will not rise until consumers sense that they can spend with a degree of confidence. Such confidence arises from optimism about the economic future. The economic case for generating some happiness is obvious. The political dimension is at least as important for a Conservative Party that has not won an overall majority at an election since 1992.

In relation to economic policy, David Cameron, Osborne and various senior advisers are as dry as their various Conservative predecessors, including those that lost three elections in a row after 1997. As far as they are all concerned, the key is tax cuts at some point, lighter regulation and, of course, the deficit reduction package. Such an economic prescription is fully supported by those close to Cameron whom I have described before as the Tory Romantics. They include the likes of Steve Hilton and Rohan Silva in Number 10 and, to some extent, Oliver Letwin and Francis Maude in the Cabinet Office. But although they dance to economic tunes composed by John Redwood, they are in politics for reasons beyond reducing the deficit. They like more lively tunes, too, and rock around the clock to realise their wider vision, one that redistributes power from the centre to local institutions and individuals.

In some respects the Romantics have had a tough time of it over the last year. In supporting a dry-as-dust economic policy they are nowhere near romantic enough, and their more interesting vision about communities and empowerment is proving hard to implement for a thousand reasons. Nonetheless the Romantics have an ace card. They realise, as does Cameron, there is an acute danger that for all the talk about "modernisation" their party is becoming associated only with a hardline economic policy, one that it more or less advocated in the elections in which they were slaughtered. They might believe the policies are "the right thing to do", but they know that alone they will not widen the appeal of the Conservatives at the next election.

Optimism is a characteristic of the Romantics. Before arguing gloomily that Britain was as vulnerable as Greece Cameron was urging us all to let the sun shine. They support and are implementing the Wellbeing Index, an easily mocked attempt to incorporate quality of life indicators when policies are decided. Assuming the Index is applied in policy making – admittedly a big assumption – this is not silly, but a potentially radical innovation that would, at times, challenge Treasury orthodoxy as to what criteria should determine policy decisions.

Another possible initiative from the Romantics is a practical policy to protect local shops against the ambition of big companies. One of them notes that the local and extensive market in his hometown has closed because the stalls could not compete with the famous stores expanding nearby. They are considering a change in competition law to make the impact on local diversity a factor.

Above all they press on with their attempts at local empowerment. Along with the, so far, patchy public service reform, they dare to hope that the election of mayors in some big cities outside London might be an irreversibly defining policy. In these areas they move near the terrain occupied by the so-called Red Tory, Phillip Blond, and the largely misunderstood Blue Labour project. Crucially they could provide another dimension to Cameron's project beyond the economic hard grind. Governments can generate optimism, but Cameron will need to look well beyond the Treasury for some light. Oddly, in the darkness, the Tory Romantics might come to matter more.;