David Cameron has put away the hair shirt and brought out the cosy dressing gown. At the weekend, the Conservative leader moderated his stern rhetoric on the need for immediate cuts in public spending after the general election. Mr Cameron now says there will be no "swingeing" cuts in the first year of a Tory administration and that "we are not about to jeopardise Britain's economic future by suddenly pulling the rug from under the recovery".
Some wonder whether this might be a Machiavellian plot by Mr Cameron to provoke a bond market revolt before the election, which would be fatal for the Government. But that is surely too clever by half. It is more likely that Mr Cameron has taken a long hard look at the feeble state of the British economy and decided that the kind of fiscal medicine his party has been prescribing is premature.
There are certainly strong economic grounds for treading carefully. Last week's revelation from the Office for National Statistics that the economy grew by a meagre 0.1 per cent in the fourth quarter of 2009 surprised many economic analysts. And there are significant hurdles that this recovery must pass too. The return of VAT to 17.5 per cent last month and the imminent end to the car scrappage scheme are likely to subdue consumer confidence. Perhaps personality had something to do with the shift too. Mr Cameron might have decided to listen to some of the more experienced heads around him, such as the Shadow Business Secretary, Kenneth Clarke, who warned last month against "damaging and unsupportable cuts".
Yet whatever prompted Mr Cameron's change of tone, it is welcome. The UK deficit (with £178bn forecast to be borrowed this financial year) is plainly unsustainable. But if ministers slash government spending too early, there is a real risk of wiping out the recovery.
The Tories are right to point out that without a credible plan to bring down the deficit there is a risk that foreign investors in UK gilts will demand higher interest rates, which would push up the cost of borrowing painfully across our economy. But the greater risk at the moment is surely of an anaemic economic recovery slipping back into recession. A "double dip", brought on by premature tightening, would simply end up making the deficit even bigger. And a government which slashed spending without regard to the state of the economy would be cutting off its nose to spite its face.
The Government was crowing yesterday at the Conservatives' reversal. The Business Secretary, Lord Mandelson, twisted the knife, accusing the Tories of being in "confusion and disarray". But Mr Mandelson should be careful. Now that the Tories have stepped back from their dogmatic stance on cuts, the spotlight could easily switch to the Government's own shortcomings. Ministers are yet to outline how they would achieve their own target of cutting the deficit in half by the end of the next Parliament. They have a serious economic credibility problem of their own.
All three major political parties have now moved closer together with regard to the timing of Britain's fiscal consolidation. There is nothing wrong with a consensus providing it is a consensus around the right policy, as it is here. But that does not mean there is no scope for a genuine political contest on economic policy. Now the question on tackling the deficit must shift from "when" to "how"?