Fraser Nelson

The choice Cameron faces now that we’re over the cliff

The choice Cameron faces now that we're over the cliff
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British politics is currently suspended in one of those strange Road Runner moments, when we’ve run over the cliff but haven’t looked down. From April 2011, spending on public services will start to fall by a cumulative 7 percent over three years, according to Budget 2009. And given its fairytale economic assumptions (trampoline recovery, etc) the real cuts could be far greater. If the Tories protect health (as they say they will), then the cuts will be a cumulative 10 percent over transport, defence, education, police etc. This will dominate the next parliament. Huge schools cuts, huge military cuts – and all the time at the risk of the credit rating agencies pulling the plug. We don’t have to wait for the Tory manifesto, we know the parameters. The only variable is whether this 10 percent cut over three years will be more like 15 percent. This is not insider information, but a basic economic fact, apparent to anyone with p226 of the Budget and a calculator. Sure, you have to factor in extra debt interest (as the IFS did), but the implications are clear, and huge. Yet, as far as I can tell, it has not entered the political narrative, anywhere.

In a piece for the Daily Telegraph tomorrow, I look into Cameron’s future a little bit. He is going to be hated, because no one can cut to the extent he has to and be liked. His first term will be a war with the unions, who by then may have taken over the Labour Party entirely. It seems impolite to say so, but he is going to be a hatchet man. Not out of choice, but because he has to – at a minimum – carry out the cuts of Budget 2009. And if he wants to assuage the credit rating agencies, who will be the true masters of Britain, he’ll have to cut still further. It doesn’t matter if his heart isn't in it; it doesn’t matter if he and Steve Hilton would rather be sharing the proceeds of growth. Events have overtaken them. Their options narrow by the month. The hatchet is waiting, behind the door of No10, and – like it or not - Mr Cameron will be judged by how effectively he wields it.

I’ll leave CoffeeHousers with a parting thought. Cameron knows that these cuts are ahead of him, knows he has a Thatcher-style mission with about a quarter of the preparatory time that Thatcher had. (Sure, he’s been leader since Dec 2005, but the scale of fiscal surgery only became clear over the last few months). So what’s his strategy? Does he shut up about it, and not let talk about Tory cuts enter the election narrative? You can see the temptation: no-one wants to talk about how they’re going to get into office and impose the sharpest education and home office cuts in postwar history. And you can bet that Brown will keep quiet about the cuts which Budget 2009 committed him to, if he wins.

But if Cameron does keep quiet now, and springs the cuts agenda on the public after the election, it could look like a discretionary move that the Tories embarked on for fun. In my view, he needs to make three things clear:

1) That these are Brown’s cuts, needed to clear up the mess that Brown made. The Tories aren’t doing this for a jaunt.

2) The alternative to making the cuts will be even worse – i.e. national bankruptcy, losing the AAA rating, debt for our children, IMF bailout, the works. The threat is abstract, but needs to be made real.

3)
That only the Tories can clear up this mess because they will level with the public about the state of the finances. It’s the Tories job in history: to clean up the mess Labour made.

Cameron could start talking now about the cuts, so the public aren't surprised when the hatchet comes down in the first Tory budget. Or he could keep quiet, then take a "Oh my God, you’ll never guess what we found in Brown’s Budget - oh, we have to cut - let’s unleash Hammond" mock-surprise approach. So what should his strategy be?  Cameron does, of course, read Coffee House, and this will be one of the trickiest questions he faces. So, suggestions please.

UPDATE: I should have been a little more specific in the question. It's not so much how Cameron cuts, but how he manages to convey to the public that these are Brown's cuts, made necessary by Brown's failings. Defining your opponent's past record is a crucial task for a new government, and Brown powerfully caricatured the Major years as the Long Black Wednesday. So Cameron needs to say: "Brown has taken us to the brink of collapse, these cuts are to save us." How does he best get this message across, and should he start now, during the campaign or after the election?

Written byFraser Nelson

Fraser Nelson is the editor of The Spectator. He is also a columnist with The Daily Telegraph, a member of the advisory board of the Centre for Social Justice and the Centre for Policy Studies.

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