‘It’s tough. These are difficult times, we’re being tested,’ prime minister to tell delegates at party conference
David Cameron will seek to prevent Ed Miliband’s “one nation” Labour driving him from the common ground of British politics on Wednesday, asserting that his brand of compassionate Conservatism is not just for the strong, but also the best way to help the poor, the weak and the vulnerable.
Despite a conference full of tough messages on burglary, welfare and sometimes social issues, the prime minister will insist: “My mission from the day I became leader was … to show the Conservative party is for everyone, north or south, black or white, straight or gay.”
In his annual speech to the Conservative party conference, he will tell his party: “It’s not enough to know our ideas are right. We’ve got to explain why they are compassionate too.”
His aides decline to refer to the political “centre ground” arguing that on issues such as welfare, crime and Europe, the common ground is to the right, and in territory long occupied by the Conservatives. He will also refuse to bury the much derided “big society” concept in his keynote speech closing the conference season saying his task is “above all to show Conservative methods are not just the way we grow a strong economy, but the way we build a big society”.
But on the day after the IMF issued another downgrade of its UK growth forecasts, Cameron will also issue a stark, almost existential, warning to the country, saying unparalleled global forces mean the country is at an hour of reckoning.
He will say: “Unless we act, unless we take difficult decisions, unless we show determination and imagination, Britain may not be the force which it has been in the past. The truth is this we are in a global race today and that means an hour of reckoning for a country like ours – sink or swim, do or die.”
At the same time, flashes of his trademark optimism will appear, drawing on the revival of the British spirit shown in the Olympic summer.
Cameron’s aides believe that Miliband’s largely insular address to his own party totally failed to address not just the deficit but the scale of competitive challenge facing Britain due to rise of new global powers. He will argue that these forces require tough decisions on spending, welfare, and schools if the strivers working hard are not to feel cheated.
The prime minister’s aides acknowledge that although Miliband, in personal terms, delivered a strong speech, they estimate he has made two major strategic errors in failing to make tough decisions on the deficit or show a greater willingness to curb the welfare budget.
Cameron will say: “Labour’s plans to borrow more is actually a massive gamble with our economy and with our future. We’re here because they spent too much money and borrowed too much. How can the answer be more spending and more borrowing. I honestly think Labour has not learned a thing.”
George Osborne upped the stakes by claiming a fundamental threat to the free enterprise system now existed, adding to claims made by Cameron that Labour is waging class war.
He told a meeting of businessmen in Birmingham: “Really for the first time in my adult lifetime, up for grabs is the argument about a free enterprise economy.
“That was really resolved I thought at the end of my teenage years when the Berlin Wall fell and all parties and all groups in Britain basically accepted the consensus of the free market economy.
“I would say you just see signs of that being contested, contested because of what’s happened in the banking crash, and people are starting to say it’s OK for the state to take 50% of the national income, it’s OK for the state to tax people 50% of their income, it’s actually wrong to challenge vested interests in our education and welfare system.”
In an implicit acknowledgement that the electorate remains confused about his core values, Cameron will reveal more than he has ever done before about his personal background.
Cameron will not present himself as a hard luck story, but the son of a man that suffered disability, stigma, loneliness and a broken family. Cameron’s father Ian died two years ago aged 77 and had been born with both legs deformed, and endured repeated operations in an attempt to straighten them. “Because disability in the thirties was such a stigma, he was an only child and probably a lonely child,” Cameron will say.
Challenging those who see the Conservatives as the party of snobs and the rich, he will say: “There is nothing complicated about me. I believe in working hard, caring for my family and serving my country”.
Cameron found himself under growing pressure over his plans to cut the welfare budget, with Liberal Democrat grassroots bodies demanding that Nick Clegg does not sign up to such measures. They are furious that their plan to raise taxes through a “mansion tax” has been thrown out by the chancellor. There is suspicion in Lib Dem circles that Clegg has in broad terms agreed to this level of welfare cuts, something his officials hotly deny.
Mark Garnier, a member of the Treasury select committee, said at a fringe event: “The reason we have a low interest rate is because the economy is absolutely screwed.” But Cameron rejected a change: “It’s not Plan B that we need, what we are doing is making sure that every part of Plan A is firing on all cylinders.”
Political mood towards banks turns increasingly hostile as George Osborne blames Labour for regulatory failures
MPs were drawing parallels between the apparent collapse in ethical values at Barclays and the controversy that has engulfed News International, with some suggesting there may need to be a Leveson-style public inquiry into the bank’s attempts to manipulate the Libor benchmark used to set loan and savings rates.
Mark Garnier, a Conservative Treasury select committee member and one of the MPs due to cross-examine Barclays’ chief executive Bob Diamond about his personal knowledge of the scandal, said: “I think we may be heading towards something like Leveson.”
He added: “I think Bob Diamond has some incredibly important questions to answer, not least because he was the head of Barclays Capital while this was going on, but also he is a derivatives expert – so he should know what is going on.”
Chris Leslie, the shadow Treasury minister, also suggested a public inquiry might be necessary. “If this goes on, and it emerges this had spread to other banks and internationally, there is a very strong case for a specific inquiry into how there was systemic manipulation and rigging of key market statistics.”
The parallels with Leveson were apparent during a Commons statement as MPs repeatedly asked the chancellor, George Osborne, what the regulators knew, whether warnings from within Barclays were picked up by the Financial Services Authority and if the government’s advocacy of light-touch regulation stemmed from its excessive closeness to the City.
The political mood towards the banks is increasingly hostile. Liberal Democrat MP John Thurso claimed the banks were in “a sewer of systemically amoral dishonesty”, while the former Labour business minister Pat McFadden claimed the banks needed a cathartic clause IV moment – a collective admission of moral failure.
The Treasury select committee chairman, Andrew Tyrie, spoke of a collapse of trust between MPs and the banks. Osborne repeatedly pointed out that the new Barclays scandal was a Labour regulatory failure.
The chancellor told the Commons that “the email exchanges between derivative traders and the Libor submitters read like an epitaph to an age of irresponsibility”. He pointed out that the zenith of this age was 2005, 2006 and 2007, part of the period when Ed Balls, an advocate of light-touch regulation, was City minister.
Osborne claimed the Labour government had been “literally clueless about what was going on”, adding: “The Labour party’s trouble is that it is led by the cheerleaders for the age of irresponsibility, but they have yet to say sorry for it.”
He added: “Shockingly, the scope of the FSA’s criminal powers, granted by the previous government, does not extend to being able to impose criminal sanctions for manipulation of Libor.”
Osborne’s assault on the absence of criminal sanctions was helped by an own goal by Lord Tunnicliffe, the Labour Treasury spokesman. Referring to criminal sanctions, he told peers: “It is fair to say that you cannot find them in the current legislation, and yes, OK, it is our fault – I hope my leaders do not hear me say that.
“One of the reasons is that it is extraordinarily difficult to bring criminal sanctions into an area such as this where the criminal burden of proof is so high.”