John McTernan: Grim shade stalks the upbeat Tories

David Cameron should not ignore a surge in job losses – it’s an issue that could cost him his own

NEUTRALISE all the negatives. That’s the Tory plan for this week’s conference. So, David Cameron has ruled out a referendum on EU membership, and also the possibility of repealing the Human Rights Act – in this parliament. And he has tried to send a message to women voters.

This latter move, though necessary, has been extraordinarily cack-handed. For over a year women have been more sceptical of the coalition plans than men. There’s probably a simple explanation – many women juggle home and work responsibilities and their lives are smoothed by the many services provided by the welfare state. Trim these, and a working woman’s life becomes just a little harder. Though the numbers have been clear in the polls, the response from No 10 has been contradictory. Steve Hilton, Cameron’s “blue-sky” thinker, mused at a Whitehall brain-storming session about lifting burdens from small business. He mused about ending maternity leave and associated rights. The message to women was clear – your interests are subordinated to those of business.

On the other hand, a leaked paper from Downing Street on possible policies for women shows a desire to tell a different story. One that recognises the need to address women. In the end, Cameron concluded that he had to do this head on. In interviews at the weekend, he apologised for his apparent sexism at Prime Minister’s Questions, saying he wasn’t “one of the lads”. This is odd, because that’s never been an accusation made against him. No-one thinks he’s a saloon bar misogynist, the PM’s problem is born-to-rule, “de haut en bas” condescension.

Odder still was the briefing that he employs loads of women in No 10, and will soon employ more. Now I have worked with some of them, and women such as Kris Murrin, Cameron’s head of implementation, are bright and hard and brilliant. But his defence rings hollow, sounding too much like – “I’m not racist, some of my best friends are black.”

This matters, because it is symbolic of a wider problem. The coalition is starting to have a problem with tone. The lecturing and the hectoring that accompanies the defence of the deficit reduction strategy has a harshness that cumulatively alienates people. At its best, it’s like being told to eat up our greens because they are good for us. At its worst, it has echoes of Norman Lamont, “if it isn’t hurting, it isn’t working”. Yet the government is locked into this line – and style – of argument, because it has placed so much onus on staying the course, sticking to the strategy.

This message is going to grate more and more as at least two more years of falling living standards hit Britain. Hope and confidence have fallen out of the lexicon of the coalition. They understand this, which is why there have been so many references to a growth strategy during the conference. Now, in one way this is welcome. Manufacturing in the UK is making a recovery thanks to the effective devaluation of the pound. But it needs more help – a much more activist government is needed to assist the private sector to grow.

The problem is that the coalition seems clueless. Business Secretary Vince Cable has promised a strategy since last autumn, but there has been nothing of the quality – intellectually or practically – of Peter Mandelson’s “New Industry, New Jobs”. Instead, what we are offered is odds and ends like removing employment protection. From what I know from people with small businesses, it is not the fact that workers get full employment rights after 12 months that puts people off increasing jobs at the moment, it’s the lack of credit available from banks, and the deleveraging of individuals, households and the private sector.

This is the cloud that is looming on the horizon for the coalition. In reality, a growth strategy is last year’s game – it’s one of the three legs of an effective deficit reduction strategy, along with increasing taxes and cutting spending. The issue by the end of this year will be jobs – or more precisely unemployment. This time last year, coalition ministers were convinced that the private sector would grow fast enough to generate more jobs than were cut by the public sector. That was always more of a wish than an accurate prediction, but no-one anticipated the surge in job losses in the first half of the year that took unemployment to 2.5 million. It’s predicted that it will reach 2.75 million by the end of the year. This is what the Prime Minister needs to start focusing on.

There are real dangers for Cameron in high unemployment. The first is that when the numbers get near to three million, then all his work on detoxifying the Tory brand will be in danger of being washed away. Mass unemployment is the worst memory of the Thatcher and Major years. As Ian Fleming pointed out, twice is coincidence, three times is enemy action. If the Tories presided over three million unemployed for the third time in 30 years, it would look as though this was, in fact, their historic destiny. Worse, jobs are the one issue on which the public always trust Labour more – it’s in the name. If Ed Miliband can get on to unemployment and jobs, then he can shrug off a lot of the economic critique the coalition currently uses. Nothing will be more important than cutting youth unemployment and long-term joblessness.

This conference for Cameron cannot be a moment of rest or celebration. It has to see him seizing the agenda on unemployment. He will have a problem with tone – since Michael Heseltine and the task forces that sorted out riot-torn cities in the Eighties there has been no Tory who can sound passionate on jobs. More, he will have a problem on content.

Having scrapped the successful Future Jobs Fund, the coalition has no practical policies on job creation – let alone any inspirational ones. The polls tell us that the terms of political trade are finely balanced at the moment.

It’s very possible that the economy is going to push things firmly in Labour’s favour. And then Cameron’s personal Plan B – just not being Ed Miliband – won’t be enough. If he wants to keep his job, the Prime Minister should do some thinking about jobs.