Steve Richards: The recession has forced Cameron to revive the failed policies of old

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The Independent Online

The politics of the recession claims another policy, this time a big one. In announcing that the Conservatives will no longer stick with the Government's planned spending levels, David Cameron makes a move he was once determined to avoid.

When Cameron first became leader he was adamant he would never enter an election proposing immediate public spending reductions to pay for tax cuts. He knew that much of his party and some newspapers would call on him to make the move. He would not do so. The Tories had lost two elections on that basis. He would stick to the Government's plans at first and stay clear of the trap in which "Tory cuts" were a central theme of another campaign.

Yesterday, though, Cameron announced that he supported tax cuts, to be paid for from lower spending levels – the same pitch as his election-losing predecessors. But in the extraordinary game of chess that is being played out against the backdrop of the recession, he had no choice.

On Monday the Chancellor, Alistair Darling, will announce a much trailed tax cut in his pre-Budget report. The Conservative leadership could have opposed the cut, a stance that would have driven its party into a state of apoplectic fury and one that would have been unlikely to boost their more precarious opinion poll lead. As a second option they could have supported the Government in funding the cut out of borrowing, but that would not have been of much political use to them. If the cut was popular, the Government would have got the credit.

So Cameron and George Osborne opted for the only other available policy, their old favourite, a tax cut to be paid for out of "efficiency savings". The move gets them through next Monday's pre-Budget report and in the short-term at least gives them good lines.

Having followed the New Labour handbook from the mid-1990s in the early years of his leadership, Cameron is now taking the politics of the 1992 election as his guide, the last which was fought in an atmosphere of economic gloom.

The Conservatives won that election easily largely because of voters' fears about Labour's tax plans. Now Cameron revives the most famous slogan from that era. "Labour's tax bombshell" is back.

Will such slogans work again? They might do. An apparently long-lasting tax cut has more attractions than a temporary one and gives Cameron space to argue that the Government is borrowing recklessly. But there are big risks for the Tories. Most non-partisan economists recognise the case for higher borrowing to pay for a fiscal stimulus. The Conservatives are virtually on their own in claiming spending cuts are an immediate answer. The Liberal Democrats are being more candid and progressive in arguing that taxes on high earners should rise to pay for some of their proposals.

Spending cuts are also easier to announce than they are to implement, not least when the Conservatives have some ambitious spending programmes of their own. If Cameron comes up with any pain-free cuts, Brown will implement them first, as he did in the run-up to the last election.

And where does this leave Cameron's claim to have modernised his party when on pivotal issues such as "tax and spend" he plans to enter the next election with policies similar to the last? The recession is having as much impact on British politics as it is on the economy.

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