The Conservatives have won the argument but not the election

The Conservatives have won the argument but not the election

It seems like an age ago that George Osborne was under assault from all fronts for his economic policy, the IMF singled him out for criticism, the ratings agencies downgraded the UK’s credit rating, and he was seen as a hapless Chancellor.  His fortunes have had a revival and there are whispers of him becoming the next leader of the Conservative party.  Just like the Chancellor, the Conservative party has started to win the big arguments, with Labour now promising to be tough on welfare and to allow parents to open free schools, as well as the popular sale of Royal mail.  So by this logic the Conservatives should be set to coast to a majority in 2015, however it seems unlikely that it will be so easy.

Ed Miliband has highlighted a key issue, which has the potential to decide the next election in his conference speech, the cost of living.  Although you can easily argue that Labours policy to tackle the rising cost of energy is counterproductive.  Sadly for the Conservatives that is not their only idea, and as Labour slowly start to fill their policy void the cost of living will become a greater issue for Cameron and Osborne.  Labour’s other idea has received endorsements for rightward leaning think tanks and it is a logical idea that worked well for Alistair Darling and Conservative back benchers have also called for it.  It’s a cut to VAT , unless it is a substantial cut it will still be a token gesture but Darling’s own small cut in VAT did lead to economic growth.  But the Chancellor in his position of increased confidence says any savings made from cuts will be used to pay off government debts and there will be no VAT cut. 

The Chancellor may just be waiting until it is closer to the election before he starts to dish out goodies such as tax cuts or he might be plotting a different way to tackle the cost of living.  One such way cut be a cut to Green taxes which are damaging industry by increasing the cost of production which is being passed on to consumers, and it is severely damaging energy intensive industries such as the chemical and steel industries.  Moreover, for all the damage green taxes do to the economy and the cost of living they have a minimal effect on climate change.  Although Vince Cable has ruled out a cut to green taxes under the coalition this does not mean that a Conservative manifesto will not include such a policy and it would be a move of political genius that Osborne is known for.  It would some red meat for the right of the party and it would tackle the issue of the cost of living as well as showing that the Conservatives are on the side of UK industry.  Whatever Cameron and Osborne decide to do they will need a policy to tackle the cost of living problem in the UK or risk helping Ed Miliband into Number 10 after all very few people feel better off now than they did in 2010.