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22 October 2014

To win, the Tories need to make the economy the defining issue – and a crisis could help them

Trailing to Ukip on immigration and to Labour on the NHS, the Conservatives' best hope may be an economic slowdown that persuades voters the storm has not passed. 

By George Eaton

At a recent Prime Minister’s Questions, David Cameron snapped at Ed Miliband: “Why doesn’t the right honourable gentleman get back to talking about the economy?” It is a question that some Conservatives are now asking of him. When Cameron promised £7bn of tax cuts in his party conference speech, the Tories were reassured that their leadership had armed itself with the weapons needed to repel Labour’s cost-of-living offensive. But those voters who missed the announcement the first time round (that is to say, most of them) are unlikely to have heard it since. Rather than the proposed tax reductions, it is immigration that has taken centre stage in the Conservative shop window. One Tory MP describes the strategy to me as “baffling”.

The confirmation by Downing Street that Cameron will use a forthcoming speech to call for restrictions on the free movement of EU citizens marks a new chapter in his leadership. In an address in 2006, he declared: “We should not try to unlock the potential of our own citizens by locking out the citizens of other countries. When willing, able and energetic people come to this country to work, they don’t crowd out other people from the labour market.” In defiance of this insight, he went on to impose a cap on non-European immigration in 2010. He is now poised to go further than any of his Conservative predecessors by arguing for a comparable limit on EU migrants.

The Prime Minister’s revamped approach has been adopted with two battles in mind. The macro war is the general election. Conservative strategists believe that only by demonstrating unambiguous intent to reduce EU immigration will they prevent Ukip from polling at a level that makes defeat inevitable. The micro war is the Rochester and Strood by-election on 20 November. Cameron’s harsher rhetoric marks the opening of his party’s blitzkrieg against the Ukip defector Mark Reckless.

If many Tories welcome this realignment, others regard it as futile. “If we make immigration the problem, people will always view Ukip as the solution,” warns one. Another says: “We tried it with those ghastly posters in 2005. It didn’t work then and it won’t work now.” Conservative moderates fear that Cameron has embarked on a battle he cannot win. Ukip’s brutally simple offer of EU withdrawal to regain control of the UK’s borders will trump whatever solution Cameron proposes.

The same figures warn that an immigration-centred campaign will doom the Tories to defeat in Rochester. They contrast the 2013 Eastleigh by-election, in which the Ukip-lite Conservative candidate Maria Hutchings finished third, with this year’s Newark by-election, where the party triumphed by attracting tactical votes from Labour and Liberal Democrat supporters.

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Even if Cameron’s new immigration pitch succeeds in getting the Tories over the line in 2015, his party’s muted band of pro-Europeans fear that he is now locked on a course that leads only to “Brexit”. With no prospect of the EU’s 27 other member states granting the UK an exemption from free movement, the Prime Minister will be left either to campaign for withdrawal or to argue unconvincingly for the status quo.

The other issue that has defined the post-conference period is the “national religion”: the NHS. After promising to spend £2.5bn a year more than the Conservatives on the health service, Labour has sharpened the dividing line by pledging that patients will wait no longer than one week for cancer tests and results by 2020. Though not indifferent to the rising salience of immigration (Miliband has told the shadow home secretary, Yvette Cooper, that she “needs to do more” on the issue), the party is pitching its tent on the favourable terrain of living standards and the NHS. “We’re going to come back to it again and again for policy and political reasons,” one strategist says of the latter.

The Tories’ response has been to launch a renewed assault on the performance of the Labour-run Welsh NHS. But the party is confident that it can see off what it regards as a smear campaign. “Every time that Cameron mentions the NHS, it helps us,” says an aide of this issue, on which the opposition enjoys its largest lead.

Outplayed by Ukip on immigration and outgunned by Labour on health, the Conservatives desperately need to move the battle to their home ground of the economy. The most recent YouGov poll puts the party 16 points ahead here, the widest gap since the general election. That this has not translated into an overall poll lead is partly due to the continued fall in real wages and the Tories’ enduring image as the party of the rich, but also due to the diminishing importance that voters attach to the economy. As the UK has moved from rescue to recovery, the public has turned its gaze elsewhere: to immigration, to health, to personal finances rather than the nation’s.

For this reason, the Tories’ best hope may be that the economic slowdown in the eurozone and China alerts voters the storm has not yet passed. If the question becomes which party is best placed to shelter the UK from the vicissitudes of the markets, the Tories are most likely to prosper. An aide to George Osborne described to me how they plan to fight Labour and Ukip as one by framing themselves as the serious people for serious times. The hope is that a vote for Miliband will appear too risky, while a vote for Farage will appear too frivolous.

At times, in their desire to trumpet the return of growth, the Tories have been in danger of giving the appearance that the job has been done and that the public has permission to change captain. Though they would never say so, if their priority is to win the election, they should cross their fingers and hope for turmoil. 

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