Cameron’s challenges at the Tory conference

Labour has thrown down a gauntlet. The Prime Minister has no choice but to pick it up

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It is shaping up to be a spicy conference season. Where Ed Miliband had the baleful, McBride-conjured spectre of Labour’s fractious past to contend with, David Cameron’s party will gather this weekend against the apparently stereotype-confirming background of a super-rich patron caught up in the Libor-rigging scandal.

Regulators’ timing in slapping a £54m fine on Icap could not be much worse for the Prime Minister, in fact. Never mind that Michael Spencer – the multimillion-pound donor and former party treasurer who set up the broker – denies any knowledge of the alleged activities of three of his (now-ex) staff. The lurid emails promising champagne and Ferraris in return for fraudulent hokey-cokey with a benchmark interest rate will stick in the public mind.

Such associations would be troublesome at any time. This particular week, with the Labour conference just ending and its Conservative counterpart about to start, they are even more so. Leaving aside the rights and wrongs of Mr Miliband’s proposal to freeze energy bills, where “Red Ed” has unquestionably succeeded is in dragging attention away from the signs of economic improvement and on to the steady slide in living standards. In doing so, he plays his strongest political card: Labour is on the side of the struggling many – the narrative goes – while those posh-boy, Eton-educated Tories are just out for themselves and their multimillionaire friends.

Given that the first part is so palpably true – inflation has outpaced wages near-consistently since 2007 – the second is doubly potent. Mr Cameron’s priority in next week’s speech must be to prove it wrong.

The greatest risk he faces is complacency. With signs of life in the economy at last, there will be much self-congratulation in Manchester. It would be unwise to call the recovery too soon, though; and equally so to rely on GDP growth trumping all else at the next election. The same goes for Mr Miliband himself. The lazy assumption that he is unelectable, as maintained by many Tories, is a dangerous one – particularly with the UK Independence Party dragon still unslain on Mr Cameron’s right. Nor is the Labour leader’s energy-bill promise guaranteed to fall foul of his party’s reputation for economic incompetence, as some are inclined to think. Meanwhile, refutation of it looks a lot like the defence of high bills and vested interests of which Mr Miliband speaks.

Instead of self-satisfaction, then, the Prime Minister had better meet the challenge head on. He must prove both that he and his colleagues – Old Etonian or not – understand the travails of the woman and man in the street, and that they will do something meaningful to ease the strain.

There are signs that the penny is dropping. Nick Clegg’s policy titbit at the Liberal Democrat conference – free school meals for all under-eights – looked a lot like a tactic to steal a march on the Opposition. With the Government’s primary advantage being its ability to act as well as talk, Mr Cameron would do well to do the same. It is in the cost of living for the majority, even more than the machinations over Ukip, that victory at the next election lies.

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