David Cameron’s speech at the Lord Mayor’s banquet yesterday evening rehearsed some basic political arguments that will be honed between now and 2015. Cameron made a decent assault on Labour over the cost of living:
‘There are some people who seem to think that the way you reduce the cost of living in this country is for the state to spend more and more taxpayers’ money….At a time when family budgets are tight, it is really worth remembering that this spending comes out of the pockets of the same taxpayers whose living standards we want to see improve.’
The logical corollary of that statement is pretty obvious: smaller government and tax cuts are the solution to the cost of living crisis. Whether the government can actually cut taxes in time for the election remains to be seen; it is borrowing £3,200 a second because it has not cut state spending sufficiently. That fact provides one explanation for why Cameron happily concedes that the recovery is fragile, which in turn allows him to argue that One Nation Labour poses the same old danger. He said:
‘The single biggest threat to the cost of living in this country is if our budget deficit and debts get out of control again. If interest rates and mortgage rates start to soar, the increase in cost of living will far outweigh the impact of any increase in government spending or indeed reduction in taxation.’
The Liberal Democrats are conspicuously absent from Cameron’s account; but one can see where he might go in 2015: the Lib Dems would not let us go far enough on the economy; vote Conservative for a prosperous future. Of course, the risk of attacking the Lib Dems is that it might drive the party’s base away from Nick Clegg and into the arms of a Miliband sympathiser or to Miliband himself. In that event, with the electoral maths as they are, Cameron will surely lose Downing Street. But it might be a risk that he has to take if he is to convince undecided voters to back him and to negate criticism from the wavering right that he prefers coalition.