James Forsyth
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A Conservative strategist concedes that there is a risk of optimism ‘appearing out of touch’ when so many of the economic numbers remain grim. And No. 10, according to one secretary of state, has made it clear that the first Cabinet minister to mention green shoots of recovery will be ‘taken outside and shot’.
Things no longer look quite so bleak as they did before Christmas, when there were fears that the euro was about to collapse: that problem seems to have gone from acute to chronic. But worse economic news may still come this year. There is, for instance, mounting concern inside Downing Street that Greece’s failure to agree a deal with its creditors will lead to a disorderly default, which in turn could trigger a deep, Europe-wide recession. Any talk of sunlit uplands will therefore be accompanied by an emphasis on how the coalition is keeping the country safe during an international debt storm. Ministers will also emphasise measures to ease the cost of living.
Senior Tories nevertheless remain hopeful that economic confidence will begin to return this year. They have tracked people’s view of the economy against inflation and found a direct correlation: the higher inflation is, the more people think that the economy is on the wrong track. With the effects of the VAT rise and the oil shock working their way out of the system, inflation is expected to fall rapidly this year. It’s already a whole percentage point lower than it was in September, and in December, according to figures released this week, it fell faster than it has done for three years. By summer, if all goes as Downing Street would like, it could be back below 3 per cent. This might be particularly helpful with women voters, whose turn against the Tories No. 10 now believes had more to do with high prices than with spending cuts.
Cameron’s dilemma over optimism is the thread that connects three other issues of the moment: not just the Queen’s Diamond Jubilee and the Olympics, but also the prospect of a referendum on Scottish independence, now likely in 2014. In his letter to Nick Clegg pushing for a new royal yacht, Michael Gove argued that the ‘celebrations must — despite, indeed perhaps because of, these austere times — go beyond those of previous Jubilees’. Yet the government remains acutely sensitive to the idea of doing anything that could be deemed extravagant or out of touch.
When it comes to the Olympics, there is no question of austerity: the staging agreement with the International Olympic Committee wouldn’t allow it. That doesn’t stop Cabinet ministers worrying how the whole thing will look. One has spoken to me of voters fuming in traffic while chief executives speed past in Zil lanes to Olympic stadiums. But others offer sound reasons to expect a triumph. The BBC, the Olympic broadcaster, will be pumping out positive coverage. Most newspapers are inclined to follow suit. The Department of Culture, Media & Sport reckons Britain will finish third in the medals table. Those close to Cameron hope that the Olympics can serve as a vivid illustration for his arguments about how the United Kingdom can compete in the 21st century.
Then there is the matter of keeping the UK in one piece to compete in future Olympiads, by winning a referendum on Scottish independence. Those involved in the government’s planning of its pro-union campaign are confident that they have the economic case worked out. They also believe that they can raise doubts about whether an independent Scotland would be able to join the European Union; the Spanish are not keen to set a precedent for regions seceding from an existing EU member and then immediately acceding to the EU. What government strategists admit they lack is an emotional argument — a defence of the Union that goes beyond warning the Scots that they’ll be worse off outside it. I understand that developing such an emotionally resonant defence is a responsibility that the Prime Minister has taken on himself.
If Cameron is to make this appeal successfully, he’ll have to exude a sense of optimism about Britishness and the future of the union. He will have to be the ray of sunshine to Alex Salmond’s Scotsman with a grievance.
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