James Forsyth

Cameron can’t risk becoming the status quo candidate

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The next few weeks should be a good time to be Prime Minister. Unusually for this decade, anti-politics will not be the mood of the moment. Instead, the nation will indulge in an Olympic holiday from austerity. Every time the Prime Minister congratulates a British medal winner, his words will be eagerly reported. He will also be on hand whenever a foreign businessman announces a new investment in Britain.

Cameron knows that looking like he is trying to gain partisan advantage from the Games would be disastrous. So he’s quick to stress that the public won’t confuse Olympic success with economic growth, something which remains alarmingly elusive. The economy shrank a further 0.7 per cent last quarter, meaning that we have had nine months of negative growth. But, in private, the Cameron circle knows that the Games should reinforce his standing as a plausible Prime Minister.

But in this age of discontent, even the Olympics aren’t without risks. In No. 10, they are increasingly worried about the Zil lanes that are meant to speed VIPs to the Games. They know that the sight of various bigwigs zooming past a gridlocked populace could all too easily become a metaphor for modern-day society where the only people who appear to be getting ahead are the elite.

Cameron is so concerned about this that he has, to the irritation of some colleagues, said that he’ll be using public transport to get to the Games and that he expects ministers to do the same where security permits. But, in the long term, the biggest risk for Cameron isn’t the Zil lanes but inadvertently becoming the defender of the failing economic status quo.

This risk is acute because Cameron faces an opponent determined to break with the current order. Before his conference speech last year, Ed Miliband told aides, ‘We’re about to find out what happens when you break with a 30-year-old consensus.’

The initial reaction to the speech, which tried to distinguish between productive and predatory capitalism, was hostile. Most Tories were cock-a-hoop. His quasi-academic musing about various types of capitalism was precisely why Miliband would never connect with the public as Blair once had.

A few people in No. 10, though, including the Prime Minister himself, took a very different view of the speech. They feared that Miliband was on to something; that the public would agree with his analysis if not his policy prescriptions.

Steve Hilton and Cameron knew that what Miliband was saying was not that different from what they had said in their early days in opposition about corporate social responsibility, and that attacks on corporate irresponsibility are even more potent now because people’s disposable incomes have been falling since 2009. Polls backed up their instincts; the public did think there was such a thing as predatory capitalism.

In the new year Cameron delivered a speech on moral markets which was in many ways a response to Miliband. But the problem with being Prime Minister is that you get dragged into defending the status quo, or at least appearing to do so. Change is notoriously difficult to force through the Whitehall machine, so you end up taking responsibility for the way things are even if that is not how you would like them to be.

When Cameron chats with aides about his legacy, he still emphasises social reform. But times are such that fundamental economic reform must now be his defining purpose. He has, though, proved unwilling to embark on a programme that would boost Britain’s competitiveness. In Downing Street, aides roll their eyes at the mere suggestion of looking at the pricing policies of the energy companies.

This problem has been compounded by Hilton’s absence. Hilton’s role was to advocate the dramatic solution. Sometimes his ideas were unworkable and he could be too quick to act — those who worked with him recall one meeting in which he ripped up a memo to show that he disagreed with it, only to try to piece it back together again so he could explain what he objected to. But Hilton’s boldness created a much-needed counterweight to the status quo, the establishment instincts of the civil service and many of Cameron’s closest advisers.

Hilton is now teaching in California and whether or not he returns to Downing Street next year remains to be seen. When he left, he confided in friends his fear that Cameron was not as radical as he thought he was.

Without him, there is a danger that the Tories will fail to grasp that they cannot be seen to be defending the current economic model. Making the case for more cuts to balance the books is one thing. But telling voters who feel worse off than they did five years ago that there isn’t a need for fundamental change is another.

What Cameron needs to do is to come out with a distinctly Conservative response to this crisis. The intellectual vanguard of the 2010 Tory intake have argued convincingly that to make the economy work for the majority again, more competition and much less regulation is needed. The solution to the fact that oligopolies tend towards cartel-style behaviour is to encourage new companies into certain key markets.

Another problem of incumbency, though, is that it dulls your political instincts. This is a particular issue for Tories, far too many of whom think that politics is something you do in opposition, not government.

Cameron’s relatively unpolitical operation is a product of this problem. The referendums for city mayors were lost everywhere apart from Bristol because the Tory machine failed to find candidates who could invigorate local electorates. The same problem is befalling this November’s elections for police and crime commissioners. What makes this so odd is that in neither case did Cameron himself hit the phones in an attempt to drum up candidates. Most people would find it hard to resist a prime ministerial request to stand.

The political space created by the Olympics should offer Cameron some respite from the grim economic news. The fate of his government, though, will not be decided by Britain’s place in the medals table, but by what Cameron decides the government’s political purpose is.