"Do Cameron and Osborne know what they're doing?"

That is the question voters will ask.

Jeremy Hunt is in trouble. The Culture Secretary’s statement in the House of Commons today has done nothing to dispel the impression that he allowed News Corp privileged insight into a process he was overseeing in a quasi-judicial capacity. A cache of emails released yesterday clearly indicates that, at least as viewed from the Murdoch side, Hunt was a collaborative partner in the process of ensuring smooth passage of the controversial bid to take 100% control of BSkyB. Hunt’s defence appears to be that such an impression is false and  derives from excitable embellishment by the emails’ author – News Corp’s European public affairs director Frederic Michel – encouraged by over-zealous briefing by Adam Smith, the minister’s own special adviser. Smith has resigned.

It is a flimsy line and a shabby one. The secretary of state is responsible for his advisor’s actions and it is simply not credible that so much information, briefings and encouragement were fed to Michel behind Hunt’s back. If the Spad behaved in a way that seemed to lubricate relations with News Corp it is because his boss instructed him to do so. That raises the question of what instructions Hunt had from his own boss – the Prime Minister.

Cameron will not want to lose Hunt. He is a loyal minister who has, until now, proved diligent and effective. Besides, any forced resignation carries a whiff of disorder and corruption. But, crucially, if Hunt goes, suspicious eyes turn automatically higher up the chain of command. We know that Cameron was close to James Murdoch and Rebekah Brooks. He found time in his busy schedule for Christmas lunches and Cotswolds rambles with the latter. If, as the emails strongly imply, the Culture Secretary saw facilitation of the BSkyB bid as part of his job description, it is reasonable to suppose he took that interpretation from Downing Street’s culture of wider Murdoch facilitation. Of course, Hunt’s case is egregious because he was supposed to be acting in a quasi-judicial role. The PM, meanwhile, is allowed to have friends in business and media and was not the one making the takeover decision. That, at least, would be Downing Street’s defence. Unless there is some evidence that Cameron instructed Hunt to satisfy News Corps’s appetites (and one has to presume he would never be so crass), the damage to Number 10 from this episode is limited.

There is damage nonetheless. Most people, I suspect, will not drill too deep into the exact nature of the government’s role in regulating the media, who was responsible for what, when and whether or not specific communications were therefore improper. Labour should be wary of getting too excited about an issue that is essentially retrospective – the BSkyB bid is dead, the Leveson inquiry has been established and will report in due course. Cameron is unlikely to be seen riding a News of the World-branded police horse down Whitehall any time soon.

The most problematic part of the whole business for Downing Street is the way it reinforces the impression that the government serves rich and powerful clients before attending to the interests of ordinary citizens.  This is rapidly becoming a theme in criticism of Cameron, from the “kitchen suppers” for donors to the Budget tax breaks for high earners.

Today’s grim economic news – the confirmation of a double-dip recession - will feed a wider sense of drift that is shaking people’s confidence in the government. When challenged on the growth crisis in parliament, Cameron fell back on the familiar refrain that the difficulty in getting the economy back on track is simply an expression of the scale of the mess bequeathed by Labour. The political returns from that line are diminishing fast. The economy was expanding when Cameron entered Downing Street; now it is shrinking. How is that not at least to some extent a consequence of his policies? And what is the plan to restart growth? He says borrowing more is not the answer, but as many of his Conservative critics point out, borrowing more is precisely what he and George Osborne are being forced to do.

Those economic problems dwarf the local crisis enveloping the Department for Culture, Media and Sport. They are connected in one crucial respect. Double-dip recession will provoke in many people’s minds the question of whether Cameron and Osborne know what they are doing. The reminder of cosy collaboration with billionaire media moguls provokes the question of whose side they are really on. The combination of those doubts in the public mind could be electorally ruinous.

David Cameron and George Osborne. Photograph: Getty Images.

Rafael Behr is political columnist at the Guardian and former political editor of the New Statesman

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The Tories' aim is to put Labour out of business for good

Rather than merely winning again, the Conservatives are seeking to inflict permanent damage on the opposition. 

The Conservatives are numerically weak but politically strong – that is the peculiarity of their position. Their majority is the smallest of any single-party government since October 1974. Yet, to MPs at the Tory conference in Manchester, it felt like “2001 in reverse”: the year of Tony Blair’s second election victory. Then, as now, the opposition responded to defeat by selecting a leader, Iain Duncan Smith, who was immediately derided as unelectable. Just as Labour knew then that it would win in 2005, so the Conservatives believe that they have been gifted victory in 2020. David Cameron has predicted that the party’s vote share could rise from 37 per cent to a Thatcherite 43 per cent.

For Cameron and George Osborne, who entered parliament in 2001, this moment is revenge for New Labour’s electoral hegemony. They believe that by applying Blair’s lessons better than his internal successors, they can emulate his achievements. The former Labour prime minister once spoke of his party as “the political wing of the British people”. In Manchester, Cameron and Osborne displayed similarly imperial ambitions. They regard Jeremy Corbyn’s election as a chance to realign the political landscape permanently.

Seen from one perspective, the Tories underperformed on 7 May. They consistently led by roughly 20 points on the defining issues of the economy and leadership but defeated Labour by just 6.5 overall. It was their enduring reputation as the party of the plutocracy that produced this disparity. Those who voted for Labour in spite of their doubts about Ed Miliband and the party’s economic competence may not be similarly forgiving of Corbyn. To maximise their gains, however, the Tories need to minimise their weaknesses, rather than merely exploit Labour’s.

This process began at conference. At a dinner organised by the modernising group the Good Right, Duncan Smith, Michael Gove and the Scottish Tory leader, Ruth Davidson, affirmed their belief that, contrary to Thatcherite orthodoxy, inequality is a problem. Only the Business Secretary, Sajid Javid, an admirer of the libertarian heroine Ayn Rand, insisted that equality of opportunity was the defining metric.

George Osborne’s assured speech was most notable for his sustained appeal to Labour voters. Several opposition MPs told me how unsettled they were by the Chancellor’s declaration that Labour’s new leadership calls “anyone who believes in strong national defence, a market economy and the country living within its means” a Tory. He added, “It’s our job to make sure they’re absolutely right. Because we’re now the party of work, the only true party of labour.” The shadow minister Jonathan Reynolds told me: “We’ve got to be extremely clear that this is not business as usual. This is a real attempt by the Tories to put us out of business – possibly for ever.”

The Conservatives’ aim is to contaminate Labour to the point where, even if Jeremy Corbyn were deposed, the toxin would endure. For those opposition MPs who emphasise being a government-in-waiting, rather than a protest movement, the contrast between the high politics of the Tory conference and Corbyn’s rally appearance in Manchester was painfully sharp. They fear guilt by association with the demonstrators who spat at and abused journalists and Tory delegates. The declaration by a rally speaker, Terry Pullinger, the deputy general secretary of the Communication Workers Union, that Corbyn’s election “almost makes you want to celebrate the fact that Labour lost” was regarded as confirmation that some on the left merely desire to run the party, not the country.

But few Tory MPs I spoke to greeted Corbyn’s victory with simple jubilation. “It’s a great shame, what’s happened to Labour,” one said. “We need a credible opposition.” In the absence of this, some fear the Conservatives’ self-destructive tendencies will reassert themselves. The forthcoming EU referendum and leadership contest are rich in cannibalistic potential. Tories spoke forebodingly of the inevitable schism between European Inners and Outers. As the Scottish experience demonstrated, referendums are almost never definitive. In the event of a close result, the party’s anti-EU wing will swiftly identify grounds for a second vote.

Several cabinet ministers, however, spoke of their confidence in Cameron’s ability to navigate the rapids of the referendum and his pre-announced departure. “More than ever, he’s the right man for these times,” one told me. By this December, Cameron will have led his party for ten years, a reign exceeded in recent history only by Stanley Baldwin, Winston Churchill and Margaret Thatcher. That the Conservatives have so far avoided cataclysm is an underappreciated achievement.

Yet there are landmines ahead. An increasing number of MPs fear that the planned cuts to tax credits could be a foul-up comparable to Gordon Brown’s abolition of the 10p tax rate. Despite the appeals of Boris Johnson and the Sun, Cameron and Osborne have signalled that there will be no backtracking. At such moments of reflection, the Tories console themselves with the belief that, although voters may use Corbyn as a receptacle for protest (as they did Michael Foot, Neil Kinnock and Ed Miliband), they will not elect him. They also acknowledge that the current Labour leader may not be their opponent in 2020. The former paratrooper Dan Jarvis is most often cited as the successor they fear. As with Cameron and Blair, his relative lack of ideological definition may prove to be a strength, one MP suggested.

William Hague is fond of joking that the Tories have only two modes: panic and complacency. If the danger before the general election was of the former, the danger now is of the latter. 

George Eaton is political editor of the New Statesman.