Clegg is a bystander as Tories tackle the deficit

Political Editor GRAHAM DINES believes that if in the next few weeks, David Cameron can nail the financial deficit firmly on Labour, the Tories can win the next election outright

FOR David Cameron and the Tories, the weeks up to the August parliamentary recess are critical.

The coalition Government’s huge deficit inherited from the spendthrift Gordon Brown is going to cause massive pain to almost everyone in Britain.

In ordinary circumstances, spending cuts and tax rises could lead to the coalition becoming deeply unpopular.

But by no stretch of the imagination can Labour’s debt mountain be called ordinary. The coalition must overcome a brick wall of debt - and for the Conservatives, there’s a massive opportunity.

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If Cameron and George Osborne are able to convince voters that there is no alternative because Labour threw IOU’s into the air without there being any means to pay for them, then there is unlikely to be any lasting electoral damage to the Tories.

The Liberal Democrats, as the junior partner in the coalition, will be swamped, leading to the Conservatives winning the 2015 General Election outright and, to govern for the following five years without the Lib Dems

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As Nick Clegg leads the “renewal of democracy” element of the coalition agreement - electoral reform and elections to the House of Lords - Cameron and Chancellor Osborne will be the public faces of any successful deficit reduction.

Cameron yesterday prepared the public for the emergency budget to be presented by Osborne in two weeks’ time.

He said if drastic cuts were not implemented, the Treasury would be spending an annual �70 billion on debt interest within five years - more than on schools in England, transport, and fighting climate change put together.

“Overall scale of the problem is even worse than we thought. How we deal with these things will affect our economy, our society - indeed our whole way of life.

“The decisions we make will affect every single person in our country. And the effects of those decisions will stay with us for years, perhaps decades, to come.

“It is precisely because these decisions are so momentous, because they will have such enormous implications, and because we cannot afford either to duck them or to get them wrong that I want to make sure we go about the urgent task of cutting our deficit in a way that is open, responsible and fair,’’ he said.

“I want this Government to carry out Britain’s unavoidable deficit reduction plan in a way that strengthens and unites the country. I have said before that as we deal with the debt crisis we must take the whole country with us - and I mean it.

“George Osborne has said that our plans to cut the deficit must be based on the belief that we are all in this together - and he means it.’’

Cameron stressed that the UK’s position was better than that of Greece, which has been left in financial and social turmoil in the wake of the credit crunch. For that piece of comfort, Labour will expect us to raise a glass and drink a toast to its fallen leader,

I suspect not. Cameron warned of the global financial markets no longer focusing simply on the financial position of the banks. “They want to know that the governments that have supported the banks over the last 18 months are taking the actions to bring their own finances under control.

“Around the world people and their governments are waking up to the dangers of not dealing with their debts. And Britain must be part of that international mainstream.’’

That’s diametrically opposed to Brown’s discredited optimism of spending our way our of recession.

Labour’s Liam Byrne, the joker who left a message in a drawer for his successor at the Treasury saying the country had run out of money, claimed yesterday Labour had stopped “recession becoming depression. Because we made the right calls the coalition has inherited an economy that is growing, borrowing which is falling, and unemployment lower than in America or Europe.”

The Budget will blow a hole in that claim.

The Prime Minister and Chancellor are to take as their model the success of mid-1990s Canada in turning round an alarming budget deficit in three years with radical spending cuts.

Canada implemented an unprecedented public consultation exercise on what people expect from public services and where they think the cuts should fall; a fundamental re-evaluation of the relationship between government and the public sector; and a new “star chamber” of Cabinet ministers vetting every departmental budget.

One way Canada slashed its defence spending without hitting operational needs was to abolish separate army, navy, and air force commands and merge them into a Canadian Defence Force.

Labour was already looking at amalgamating the navy and RAF but whether Cameron is prepared to take that further and then sell it to his MPs and activists is as yet unclear.

At the end of this fixed term parliament, Cameron will stand or fall by his success or otherwise in sorting out the deficit. That will also depend on public perception of the way Labour left this country in eye-watering debt.

If Cameron and Osborne pull it off, Nick Clegg will be left as little more than a bystander at the election.

If Cameron and Osborne fail, voters will turn to Labour again and the Lib Dems won’t be able to escape their part in the coalition’s politics.

Either way, this will confirm the fears of Lib Dem activists that there should have been no deal with the Tories.

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