Go on, let's have a proper argument

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ARE WE, after these many months of Euro-obsession, factionalism and leadership-jockeying, on the verge of a return to Real Politics - you remember, that stuff about jobs, prosperity and spending? It is, no doubt, too much to expect. But the imminence of elections does bring a blast of cold air, as real voters are offered real choices about real things.

This happy thought was prompted by the annual get-together of German and British politicians, industrialists, journalists and policy-makers at the Konigswinter conference, held this year in Cambridge. The two political elites are experiencing a similar, and wholly justified, unease at the prospect of facing resentful voters. Similar-sounding complaints about weak leadership, political sclerosis and corruption have been bubbling through the British and German media. While Tory MPs have been inward-turned and bickering, their German counterparts seem equally obsessed by the prospects of this or that coalition. And voters turn away in disgust to worry in private about their jobs and their incomes.

In Britain, this has contributed to a mood of despair about the country's parliamentary leadership, and helped to destabilise John Major. The local and European elections, and the Westminster by-elections, will affect his future, but the most powerful British constituency in 1994 remains the Conservative MPs. In Germany, things are rather different: there, politicians face 14 sets of elections, including every important political post in the country.

But in both cases the fundamental political threat is high unemployment and its consequences, including swollen government deficits, higher taxes, straining welfare systems, fraying social cohesion and rising crime. And the big change is that this threat may not be cyclical, but semi-permanent. The new industrialised world is a market in which Asian workers can produce high-quality goods while being paid a twenty-fifth of what a German worker gets. It is a market that offers even higher rewards to the most skilled and talented Europeans working for the most successful companies; and the prospect of penury for the European losers.

The political consequences seem obvious. Employment policy and tax policy are going to be at the top of the agenda and will stay there. Governments that allow themselves to be distracted from the search for jobs and prosperity will see their authority and relevance draining away until they are finally destroyed by vengeful voters. Old arguments about redistribution and market failures will return. And the employed will be involved in the argument, too. Once the goblin enemy of the prosperous middle classes was socialist taxation. These days it is crime - expropriation carried out less formally, more efficiently and without a manifesto.

At the Konigswinter gathering, it often seemed as if the industrialists and academics were ahead of the politicians and civil servants in recognising these new truths. The gap between the concerns of the political elite and that of its voters was embarrassingly audible.

But this should now start to change. The German 'year of elections' will force politicians there to listen a little harder to their people. In Britain the preoccupations of mid-term politics will soon start to give way to the serious struggle for power. Already, the local election campaign is rubbing the noses of national politicians in the sordid realities of council tax levels and local spending decisions. We will, no doubt, spend quite a lot of the rest of this year gazing at Mr Major's career trajectory. But the economic argument will be unavoidable.

Or so I hope. For a return to the basics of political economy would revive our dispirited national conversation. It would inject an intellectual vigour and volatility into the political competition.

The volatility will be there because it is entirely unclear who will benefit. Both the big parties are profoundly divided. Yesterday Gordon Brown produced his latest pamphlet on economic inequality. It was notable for the cheerful self- confidence of its demolition-job on the Tory record and for some strong hints about future Labour policies. (Including an end to charitable status for private schools and an acceptance that richer parents must fund more of their children's university education in order to offer poorer families a better deal - both, in my view, welcome.) But although he was infuriatingly vague about the future for taxation, Mr Brown clearly mapped out a political agenda for employment and education that is incompatible with Labour thinking on a nationally-applicable minimum wage, and with a schooling policy ghost-written by the National Union of Teachers.

If there is a ding-dong battle to be fought inside the Shadow Cabinet, the Conservatives also have some serious rethinking to do. The vast gap between Asian and European wage-levels is answer enough to those Thatcherites who pretend that a 'flexible labour market' and lower taxes are a sufficient response to long-term unemployment. And who was it who said, in a Sunday Times interview at the weekend, that the underclass cannot be ignored, that trickle-down economics no longer worked, and that 'I find myself in complete agreement with somebody like Tony Blair and his stress on social cohesion and community values'? None other than Chris Patten, the man who ran the 1992 Conservative campaign. For thinking Tories, there is an argument to be had here quite as acute as that facing Labour.

Perhaps it's just spring, perhaps I am over-excited. But after the depression and sleaze of the winter, the prospect of a real argument about employment, tax and the role of the state - one which rewarded clarity and eloquence - is exhilarating. Too much to expect? As Parliament returns, it is something we have a right to require.