Why Cameron shouldn't lurch to the right

These are worrying times for Tories. Their poll lead has shrunk: from 17 points in December 2009, to 12 in January, and down to merely two in a March YouGov poll of 60 marginal seats. Even if other surveys point to a less tight picture, there has clearly been a dramatic breach in support.

A battle now rages over how to explain the fall, fought between the party’s progressive and regressive wings. Stuck between them, the Tory high command is bemused. They don’t know why this haemorrhage has happened, and so they don’t know what to do. Surely, against one of the weakest governments in modern history, they should be topping 50 per cent, not dropping below 40.

The party last looked wrong-footed in the final two months of 2008, during the height of the banking crisis. But in time, as the scale of the bailout and the extent of Britain’s crisis hit home, Labour’s credibility again collapsed. Deft handling of the expenses scandal solidified David Cameron’s renewed lead. A Tory leadership confident of winning a social election had feared the change of terrain to economics, but by mid-2009 their lead was back, and all looked on course for victory. Then, perhaps in a moment of over-confidence, a fateful decision was made: Tory strategists decided that instead of reverting to their former plan of action, they would instead choose to fight the coming election on the same economic grounds they once feared—using the rising tide of national debt as blue water to separate them from Labour.

It seems this new focus on debt was, in part, driven by the recently buried yet irresistible temptation of vestigial Thatcherite instincts: an economic “back to basics” campaign. And just as suddenly, against the background of improving economic conditions and Gordon Brown’s injunction to take a “long hard look” at the Tories, voters paused and took stock. Even worse, the debt strategy began to undermine the positive elements of Cameron’s renewal. Out went optimism about the future, and concern for the struggles of ordinary people. In came Conservatives with scary talk of emergency budgets, and violent images of slashing spending. The result: a gradual re-toxification of a brand Cameron had painstakingly cleansed, and a retreat from his often visionary and transformative agenda.

Of course, Cameron hadn’t entirely ditched his better plans. In the same months the party slipped back into its old habits, it also launched more radical measures—for instance giving all public sector workers the right to take over the services where they work. But a negative message about a negative situation is never good politics, and such things went unnoticed against the backbeat of austerity conservatism. Without a positive account of how the debt could be cut more smartly, the Tories seemed like they were driving the ship of state onto the rocks to avoid an oncoming storm. Brown seemed like the safe option.

Yet, even with a smaller lead, Cameron will still likely become prime minister. The issue is whether this stumble changes the character of his leadership. Oddly this recent fall caused by a return to Thatcherite orthodoxy has provoked loud demands for more of the same—as if intensifying the approach that lost support somehow holds the key to arresting the damage.

A typical response came from Tim Montgomerie, creator of the ConservativeHome website. In March he called for “more red-meat Toryism” and “less red Tory nonsense,” arguing for the need to “broaden rather than transform” the party. But this ignores the recent collapse of market orthodoxy, marks an inability to rethink the economic agenda and ultimately suggests the same core vote strategy that lost three elections, and would lose a fourth. In short, disastrous.

The most recent research from Mori shows the public already see the Tories as having the best policies on crime and asylum. So what is to be gained from talking about these issues more? Most important are credible economic policies; 39 per cent of voters say the economy is “very important” in deciding how they vote, twice as high as any other issue. The evidence is there in the very survey cited by Montgomerie: 44 per cent want restrictions on bankers, but only 22 per cent want cuts in spending. A March YouGov poll showed the pyrrhic success of Tory austerity: voters think they will raise taxes and cut public spending. With such a double whammy no wonder the electorate has second thoughts.

Broadening the party’s appeal cannot take place without transformation, and the creation of a new economic model for Britain, a point the shadow chancellor George Osborne has repeatedly made in recent months. Without this, Cameron risks repeating the historical failure of one nation Toryism: not creating a political economy for the poor. Disraeli could have prevented state socialism if he had offered the working waged a stake in the economy. In the 1890s the Primrose League, formed to take forward Disraeli’s ideas, had more members than the unions. But then the Tories dropped the ball, and workers had no alternative but socialism.

Today it is this same inability to rethink economics that may drive working people back into the arms of the left. So what to do? Osborne has been more radical than the chancellor Alistair Darling in advocating breaking up the banks, but far less certain about new structures to take their place. This is where Cameron’s new Tory co-ops come in: rebuilding local financial services, but also providing mutual models for everything from energy utilities to British Airways. Elsewhere, our economy is dotted with oligopolies—the huge chains that own our pubs, the giant retailers and the banks themselves. Breaking up and localising the latter could create an investment fund for towns: when the banks are sold back to the private sector, give some of the capital to entrepreneurs in poorer areas. Elsewhere we should let communities that improve the management of their public services keep any savings, while giving extra tax-raising powers to local authorities. And what about radical Tory pro-family policies, like a living wage, allowing families to prosper without being propped up by tax credits?

Such ideas would begin a Tory reboot. The fundamentalist ideologies of market and state are dead. Civil society is the future radical centre of British politics—the “big” society Cameron rightly extols. And the poor can’t be capitalists without capital. So the Tories must offer them a stake in the economy; a popular capitalism for all. And the Conservative manifesto is the place to start.