Magazine article The Spectator

The End of the Recession, but Just the Beginning of the PM's Problems

Magazine article The Spectator

The End of the Recession, but Just the Beginning of the PM's Problems

Article excerpt

Since the end of the recession was confirmed a few days ago, confidence has returned to at least one part of Britain.

Ministers are beginning to strut again as they wander round Whitehall and their conversations include the occasional reference to a second term. Political recovery will, they think, follow economic recovery. As evidence for this, they point to polling which shows that the coalition's reputation for economic management has already returned to pre-Budget levels.

David Cameron, though, is more cautious. Over the past difficult few months, he did his best to keep his own and others' spirits up. Colleagues were regularly told, 'Well, it was never going to be easy.' But now he is airing some of his suppressed irritation. He has ticked off Tory Cabinet ministers for too much loose talk about their colleagues and the Downing Street operation.

Cameron is in for a rough ride between now and Christmas - due in part to Europe.

This week's Commons vote over the EU Budget was another reminder that the issue splits the party and will test his authority as Prime Minister. But this vote was a mere squall compared to the storm that's coming when Cameron actually sets out his European plans: to commit himself before Christmas to a policy of renegotiation followed by a referendum in the next parliament.

But will this be enough to satisfy his increasingly Eurosceptic party? Many of the Eurosceptics want Cameron to entertain the possibility of leaving the EU if the rest of the member countries won't engage with Britain's demands. But Cameron, who remains convinced that EU membership brings Britain genuine benefits, is determined not to be dragged down that path.

The impasse has led several of those close to him to wonder if they should take matters into their own hands. They are considering making it clear that they would advocate withdrawal if the other 26 member states reject Britain's requests out of hand.

Other problems lie in wait for the PM.

Next week it'll be the negotiations for the Chancellor's autumn statement that dominate the agenda. Ministers now think it will be a smaller package than was expected over the summer. There's a determination to avoid including any policies that will have to be overturned at a later date.

A third problem: before 5 December, the coalition will still have to resolve what to do about its second fiscal rule, that the national debt must fall as a percentage of GDP by the next election. The Office for Budget Responsibility is expected to say that the coalition is on course to miss this goal by tens of billions. One MP who follows this matter closely predicts that the coalition will be £16 billion off. …

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