Nick Wood: Will Miliband's panda party ever give birth?

Nick Wood is founder of Media Intelligence Partners and former Conservative Party Communications Director.

Has Ed Miliband turned into a giant panda? That was the unhelpful but not unreasonable question posed by former Home Secretary Jacqui Smith the other day as she likened Tian Tian's lengthy but unproductive pregnancy to the Labour leader's failure to produce a single policy of note despite a three year gestation.

Next week, at his conference in Brighton, Ed may confound us all by having triplets. But the smart money is on him keeping us all guessing for a long time to come. After the worthy but underwhelming Lib Dem gathering in Glasgow, the political landscape still looks like a scene from Narnia's frozen north.

Nick Clegg and his dwindling band of supporters have been stuck on around 10 per cent of the vote for as long as anyone can remember. UKIP, under the rumbustious Nigel Farage, have fallen back from the glory days of the May local elections but are still in double figures, while Labour holds a narrowing but still decisive lead over the Tories.

Nick, despite some decent press reviews, failed to effect a thaw last week. Can Ed do any better?

Not if he models himself on Edinburgh Zoo's most celebrated if enigmatic inmate. So far the Labour leader has treated his conference speeches as a largely metaphysical exercise. A couple of years ago we had a now forgotten denunciation of "predatory capitalism" and last year, in a bid to steal Tory clothes, New Labour was replaced with One Nation Labour - ironically an echo of Tony Blair's one-time boast that his party was the political wing of the British people.

Nick Wood: The physical, intellectual and moral courage of Margaret Thatcher

Nick Wood is former Head of Communications for the Conservative Party and now runs Media Intelligence Partners.

Leaders of serious countries like Britain need many qualities to leave their mark on history. Intelligence, energy, imagination, a strong set of core beliefs and  the ability to build and manage a talented team are just some. But courage is the most precious of all. And Margaret Thatcher had courage in spades.

Physical courage obviously. Two of her closest political allies, Airey Neave and Ian Gow, were assassinated by Republican terrorists, one at the beginning of her time in office and the other at the end. Mrs Thatcher herself narrowly escaped death at their hands in the bombing of the Grand Hotel in Brighton in October 1984.

Hard to credit it now but the Conservative Party conference proceeded uninterrupted. Five people were dead and 31 injured; the hotel was in ruins; Cabinet Minister Norman Tebbit was painstakingly extricated from the rubble in full view of the world's cameras, Tebbit's wife Margaret was crippled for life. But Mrs Thatcher insisted that the show must go on, ensuring that it started at 9.30 am prompt that Friday morning.

Nor did she waste too many words on her would-be assassins. In three defiant but crisp paragraphs, Mrs Thatcher condemned the "outrage" of this attempt to "cripple Her Majesty's democractically-elected Government" and insisted that the terrorists would always fail. And then it was time for "business as usual".

But for all her physical courage and amazing resilience, it was her intellectual courage that marked her out from the ordinary run of politicians. Opinion polls and focus groups might have said one thing, but Mrs Thatcher stuck to her course throughout her time in Downing Street.

"The suspicion (remains) that he is in it for only one cause and for only one person: Just Boris"

Nick Wood reviews Sonia Purnell's biography of Boris Johnson, "Just Boris". Nick is former Head of Communications for the Conservative Party and now runs Media Intelligence Partners. He is a regular blogger at RightMinds.

I suppose you could say that the world divides into two camps when it comes to Boris Johnson: those who think he is a bumbling, self-indulgent, unprincipled idiot incapable of doing a serious political job - and those who think that beneath the disheveled exterior lies a sharp, original and amusing mind, a ferocious capacity for hard work, and an even more ferocious ambition to get to the top of the greasy pole.

Few people are indifferent to him. And in a world where the average Fleet Street newsdesk could not name half the Cabinet, few people, from the highest to the lowest, live in a world that has never heard of Boris.

He even had a walk on part in Eastenders - playing himself of course, an act he has perfected over nearly half a century. And like a footballing Galactico, he is known throughout the land by his first name alone. London cabbies hail him as "Bozza", he is mobbed pretty much wherever he goes and he commands vast sums of money for his speaking, writing and TV appearances, while at the same time appearing to go through life without ever buying anyone a drink.

Nick Wood: Britain's teenage rioters know the nasty party is long dead

Nick Wood is former Head of Communications for the Conservative Party and now runs Media Intelligence Partners.

Nearly a decade ago Theresa May chided the Conservative Party for being the "nasty party", thereby encapsulating a long-running power struggle between modernisers and traditionalists - or more simply Left and Right inside the party.

Mrs May won. The Tories, once seen as cruel but efficient but more latterly (pace John Major) feeble and inefficient, eventually bought her argument that the clue to electoral recovery lay in niceness.

David Cameron, who limped to power on the strength of his hoodie and husky hugging, embodied the switch from nastiness to nice - or more specifically to cool, modern (think of the Converse trainers and the barefoot Rasputin Steve Hilton), and above all liberal.

Egged on by the liberal media, Cameron "detoxified" the Tory Party, thereby implying that past Titans such as Churchill and Thatcher were unsuited to polite company. For all that he only sneaked home with 3% more of the vote than Hague or Howard and was forced to govern with even nicer people like Nick Clegg.

How the wheel has turned. Last night, no doubt much to SamCam's fury, Dave was forced to abandon his Tuscan idyll and fly back to a city in flames (not to mention the small matter of an economy in meltdown). Mrs May also cut short her holiday to issue a routine denunciation of street violence.

Nick Wood: There was never going to be a quick fix to Labour's economic mismanagement - and all Tories must now be braced to ride the coming storm

Nick Wood is a former press secretary to Conservative leaders William Hague and Iain Duncan Smith who is now Chief Executive of Media Intelligence Partners. Click here to read his Budget preview.

Predictably enough it turned out to be a micro Budget. The Chancellor has little room for manoeuvre as he ploughs ahead with the Herculean task of eliminating the deficit over the next four years.

So he had to restrict himself to worthy micro-measures to boost growth, employment and jobs. He also took widely forecast steps to ease the pain of the soaring price of petrol. And chucked in a small cut in income tax. A dose of sensible business economics and populism, against the background of disappointing growth projections.

As Labour leader Ed Miliband was quick to highlight, the Government is downgrading its growth forecasts, as recovery proves more intractable than expected.

Osborne knows there is no quick fix to Labour's economic mismanagement. And for all kinds of reasons, the Coalition Government will not make the case for a genuinely small state, low tax, low spend approach to the economy. Talk of sharing the proceeds of growth may be long gone. But the memory lingers on.

Meanwhile, the politics look grim for the Government. 2011/12 will be a year of mounting economic pain and - for the Lib Dems especially - a pounding in the May local elections.

Cameron and Osborne are braced to ride the storm. Let's hope their party are ready to follow them.

Nick Wood: Radical steps and a cultural shift are needed to break the country's addiction to public spending

Nick Wood is a former press secretary to Conservative leaders William Hague and Iain Duncan Smith who is now Managing Director of Media Intelligence Partners.

On Saturday, tens of thousands of trade unionists will parade through London in protest at the cuts. And today, George Osborne will take another small step along the path to fiscal sanity by unveiling his second Budget.

There is a considerable mismatch here. The protesters believe that the Coalition is embarked on the most savage round of spending cuts since the days of Attila the Hun. More measured souls, such as former Chancellor Norman Lamont, point out that in cash terms spending is actually set to rise over the next four years. After allowing for inflation, it only comes down by 3.7 per cent.

This gulf in perception points to a deeper truth. After the binge of the Labour years, Britain is addicted to public spending, currently gobbling up 47 per cent of national output.

Osborne is toying with the idea of merging tax and national insurance to create greater transparency in the tax system. But such is the reach, cost, power and general inefficiency of the public sector, far more radical steps and a cultural shift will be needed to break the nation's spending habit.

Growth and jobs won't come while business remains burdened by the state.

ConHome's expert panel give their take on the Comprehensive Spending Review

This morning ConHome assembled a panel of economic and political experts to summarise their hopes, fears, advice and expectations in advance of George Osborne's statement on the Comprehensive Spending Review. Here they give us their reaction to the statement:

Sajid Javid is MP for Bromsgrove and a member of the Work and Pensions Select Committee who is a former senior Managing Director of Deutsche Bank:

Osborne delivered.

No change in the quantum of cuts.  No re-profiling.  No more structural budget deficit, if all goes to plan, in four years’ time. No mean feat. The financial markets took it in their stride.  It was spot on, as expected.  Interest rates will stay lower for longer and our AAA credit rating is secure – for now. The coalition had an historic opportunity to put the country first and make some long term decisions.  And it took its chance.

The key to full economic recovery is to deliver pro-growth measures. Ultimately, only a buoyant private sector will pull us out of this inherited mess. Which is why I was pleased to hear that spending on transport infrastructure will be prioritised and that the science budget will be protected in cash terms.  Whilst the bank levy was made permanent, there was, reassuringly, no announcement of any further “anti-bank” measures.

Equally significant was that Osborne put an end to the idea of an ever-growing state.  Government will be re-modelled so that it’s an efficient provider of services, not just an inefficient producer. Yes, we could have done more: shelving the unfair Barnett Formula, for example.  But we did enough. Hats off to Osborne and team.

Ruth Lea is an Economic Adviser to the Arbuthnot Banking Group:

 In broad macroeconomic terms, there is little to comment on.  There was a modest (£2bn) increase in total spending in cash terms, so the overall retrenchment spelt out in the Emergency Budget remains unchanged. The Chancellor, as widely expected, stuck to his guns.

Within the total, savings have been made to Annually Managed Expenditure (principally welfare payments) which have been relocated to departments. But even so, some of the departments facing swingeing cuts. The forecast for debt interest payments is unchanged – rising from £43bn (2010/11) to £63bn (2014/15). £20bn that could have been spent elsewhere or even used for tax cuts. The Spending Review’s toughness is essential. Rising indebtedness had to be tackled. The Coalition Government must now deliver.  

Andrew Lilico is Chief Economist at Policy Exchange:

George Osborne rightly stuck to his guns over the total consolidation, reducing discretionary spending cuts by only an irrelevant £2bn (all driven by less fall in capital spending).  The NHS and DFID ringfences were expected, but that Education was cut only 3.4% over the period was disappointing because we believed there were intrinsically desirable cuts greater than this. 

Cuts in most departments lay in the 20-25% range: Transport – 21%; CLG – 27%; BIS – 25%; Home Office – 23%; DEFRA – 29%; DCMS – 24%.  Our previous analysis suggests that cuts on this scale should be broadly feasible through a combination of intrinsically desirable and plausible measures, without needing to resort to much that is unpalatable (except the cuts to the Defence budget, which take it back below its 1993/4 level).

The ability to avoid too much unpalatable cutting was the consequence of finding £7bn extra cuts/effective tax rises from the Welfare budget and from Child Benefit, along with rises in public sector employee pension contributions, though it was disappointing (but not surprising) that misdirected programmes such as winter fuel payments survive intact.

There are a number of interesting points from specific departments:

The key DECC story is that about 5000 large, non-energy intensive companies which come under the new CRC Energy Efficiency Scheme need to buy carbon permits from 2012.  The cost of these permits will not now be recycled back to companies, as originally proposed, but retained by the Treasury.  This will raise £1bn pa by 2014-15.

The 6% savings each year from the Home Office budget (23% by 2014-15) should be delivered relatively straightforwardly.  There is big scope for cutting back bureaucracy in Home Office agencies, merging some organizations and scrapping others.  A 20% cut to police funding is in reality more like 14%, once one takes account of local funding through council tax. This is slightly more than the 12% that HMIC decided was perfectly possible for forces to deliver, without slashing officer numbers.

The 23% cuts to the Ministry of Justice constitute a bigger hit than the Home Office with this settlement because the savings are harder to find here. The cuts lead to a total budget of £7bn by 2014-2015, but it could have been worse.  There are major savings that can be made, in legal aid, in central staffing and in the bureaucratic NOMS empire, but a quarter of the department’s budget is spent on prisons, and this scale of savings can only be realised if prison numbers are less than expected in 2015, so jails can actually be closed, or not built in the first place.

Overall, however, perhaps the most noteworthy point was Osborne’s final jibe that the Coalition is proposing smaller cuts to DELs than Labour. It appears that the struggle to move politicians away from the formulation that “Increased public spending = All that is Good and Virtuous” still has some way to go

Matthew Sinclair is Director of the TaxPayers' Alliance:

It is great news that the Government has announced a good range of tangible cuts which will save a lot of money and mean lower taxes and less money wasted on debt interest over time.  Wasteful programmes including Train to Gain are going and there are healthy cuts in departments like the Treasury, BIS and DEFRA.

Unfortunately a number of measures that would save significant amounts of money without hitting the priorities of ordinary families haven't been taken: a freeze in the International Development budget; pay cuts for the best paid public sector staff; scrapping bodies like the Carbon Trust and the Equality and Human Rights Commission.

And in some areas they've introduced new spending. Carbon Capture and Storage and the Green Investment Bank get £1 billion each, for example.  That is a lot of money that will have to be found from other programmes or the pockets of ordinary families.

Sensible and necessary cuts have been announced today, but the Government need to do more to deliver good value for hard pressed taxpayers.

Nick Wood is Managing Director of Media Intelligence Partners and former press secretary to William Hague and Iain Duncan Smith:

A great sigh of relief will have gone up in Whitehall this afternoon now that George Osborne has announced the new spending totals. No longer will departments have to wake up to ghastly headlines about Minister A falling out with the Treasury or Osborne attempting to crucify some benighted colleague. At least the dark cloud of the cuts review is passing over the horizon.

There were few surprises. The nasty and the (few) nice bits of the CSR had been leaked or announced well before today. The pain is being spread around. The middle classes have been clobbered over child benefit, university tuition fees and pensions. The not so middle face a benefits squeeze, although their schools and hospitals have been afforded some protection.

Core Conservatives will be alarmed by the cutbacks at the MOD and comedians will enjoy the prospect of aircraft carriers that don't carry aircraft and are mothballed almost as soon as they have glided down the slipway.

But today's galaxy of numbers won't make much difference. The proof of this plate of gruel will lie in the eating. And that is months if not years away. Six months from now it is a fair bet that the Today programme will have become a parade ground for cuts sob stories and the Government can expect to find itself under mounting political pressure.

Next year is the period of maximum political danger for the Coalition. All eyes will now turn to the economy. If it double dips, then Cameron, Osborne and Co are in deep trouble. If by next autumn, the recovery is well
under way, people will look back on today's balancing act as a political masterstroke, in much the same way as the widely derided Geoffrey Howe Budget of 1981 is now seen as laying the foundations of the Thatcher economic miracle. It didn't look like it at the time. 

 

Howard Flight is a former Shadow Chief Secretary to the Treasury who is now chairman of Flight & Partners Recovery Fund:

In terms of the savings which need to be made to restore the public finances, the Government is discharging its promise for which it is to be congratulated.

What is disappointing is that we have a typical 'Whitehall Package' of cuts, missing a once in a generation opportunity for the sort of radical reforms needed to propel the productive private sector economy into better growth and achievement and to reverse the nanny state intrusions of the last 20 years - analogous to the radical reforms of the early 1830s then to address excessive government borrowing and social policies damaging the economy in that era. We need higher savings and investment and - dare I say - an element of mercantilist policy to boost our exports.

I am not in the camp which believes means testing universal benefits is the key reform needed. This would only make sense if and when personal tax rates are reduced substantially. What I believe the UK needs is a fiscal and welfare environment which clearly rewards and incentivises upward mobility, skill acquisition, hard work and personal responsibility rather than the reverse. These are the underlying drivers of China's and India's current success.

Viewed from Asia, sadly the UK looks both to have Its political and economic priorities wrong and to be living in the past where it is rather Asia which will soon need to be helping us rather than the empty gesture of us increasing aid to Asia.

We will face falling standards of living unless we unleash the 'animal' drive to grow the productive economy - Government does still not appear to realise this.

ConHome's expert panel previews the Comprehensive Spending Review

ConHome assembled a panel of economic and political experts to summarise their hopes, fears, advice and expectations In advance of George Osborne's statement on the Comprehensive Spending Review this afternoon. They will also all give us their reaction later this afternoon.

Howard Flight is a former Shadow Chief Secretary to the Treasury who is now chairman of Flight & Partners Recovery Fund:

The economy would recover better if cuts in the low productivity, Public Sector were greater, and taxes were reduced; the 70/30 apportionment may be deemed politically the best that can be achieved, but if the Private Sector is to grow faster tax reductions are needed.

Quango abolition should be more aggressive but the two areas with the greatest scope for saving are public sector remuneration: (it is a scandal that it has grown to, on average, 25% more than private sector remuneration, even before allowing for much better public sector pensions); and welfare expenditure, bloated by Gordon Brown to buy votes.  There is scope to save £100bn p.a. in the combined territories – and now is the opportunity to be bold on both fronts.

Be cautious of means testing benefits – as established by Magna Carta, taxation still rests on consent, where the quid pro quo for higher earners paying much more taxation is universal entitlement to at least most benefits.  Means testing can also be costly to administer.  Also in limiting benefits avoid obvious unfairness on families as between 1 or 2 earners – for benefits relating to children entitlement should be based on combined family income.  Drop the crackpot Graduate Tax which would punish achievement and reward failure; and would also increase the brain drain.

Be prepared to have a row with the EU where ridiculous EU rules have resulted in unreasonable benefit entitlements.  Also small business needs massive regulatory exemption.

Finally be careful not to wreck retirement saving: a major long term cause of Britain’s economic problems is that savings and investment have been too low and the economy over dependent on consumption.

Sajid Javid is MP for Bromsgrove and a member of the Work and Pensions Select Committee who is a former senior Managing Director of Deutsche Bank:

The biggest risk to our economy is doing nothing to address the fiscal black hole left by Labour. Whether we like it or not, the bond markets demand action.

Had we failed to act decisively in June’s Emergency Budget, our AAA credit rating would have vanished and interest rates would have soared.  Our rapid action has already reaped rewards.

Although total cash spending by the government will actually rise by a cumulative 5% by the end of this Parliament, there will be a real fall of around 4%. This may not sound like much but after allowing for higher interest payments, entitlements and real spending freezes on health, schools and international development, we should expect cuts of almost 35% in other departments.  So these cuts – Labour’s cuts – will hurt.

The Chancellor needs to be as compassionate with his words today as possible.  Although the electorate understand, they need to be reassured that our actions are in their best interests.

We are right to get this tough fiscal retrenchment out of the way now.  We have time on our side and, as long as we follow through with pro-growth economic measures, these combined policies will result in robust job creation and a vibrant economy.

Ruth Lea is an Economic Adviser to the Arbuthnot Banking Group:

In the Emergency Budget the Chancellor provided the overall spending totals for 2011/12 to 2014/15, compatible with balancing the cyclically-adjusted current budget by 2014/15. He should stick to these totals. If he relaxes them, he will undermine his credibility with the markets. But further tightening is not required and would only serve to put a quite unecessary brake on the economy.

The plans showed that total spending in real terms will fall by 4% over the 4 years from 2011/12 to 2014/15. Such cuts shoudn't send the economy into "double dip".

Within the totals some budgets fare reasonably well. But others will be very badly hit. Given the ring-fencing of the NHS (£122bn this year) and international aid, the likelihood of still rising welfare payments (though there may be more savings here) and the exploding debt interest payments, many departments will be on very thin gruel.

Most are faced with at least 25% cuts in real terms. It seems however that MOD will be partly spared, facing only 7-8% cuts, and education may similarly be given preferential treatment with only 10% cuts. But for the others, including BIS, Communities and Local Government, DECC, the Home Office, Department of Justice and Transport, the medicine will be very nasty indeed.

Andrew Lilico is Chief Economist at Policy Exchange:

The most important thing in the Spending Review is absolute resolution in respect of the spending cuts.  There must be no suggestion that such cuts might be delayed or "reprofiled".  And Osborne should say “We are not currently expecting the economy to turn down again, but if it were to do so that would make it even more important to press ahead with the spending cuts planned.  To surrender to the Siren voices, to “unlash ourselves from the mast”, as Alan Johnson has urged, would be disastrous.”

I expect it to impose enormous cuts of above 35% in non-ringfenced departments apart from Defence (8%) and Education (~10%).  This will include some blunt and unpalatable cutting that will be extremely unpopular.  If they had been wise, they would have given up on the NHS ringfence by now, thereby avoiding the most unpalatable cuts elsewhere.  But I’m not expecting them to change that now.

They ought to announce the encompassing of the child benefit reductions planned within a longer-term review of the tax treatment of parents relative to those without dependent children.  They also ought to announce the abandonment of the inflation target and its replacement by a price-level target, with house prices included in a new CPI.

Time to see.

Matthew Sinclair is Director of the TaxPayers' Alliance:

What we should have after the Spending Review is announced are the targets for cuts in each of the different departments and more information about how they plan to reach those targets.  There will almost certainly still be a lot of uncertainty about some of the details.  You can see from the list of quangos to be abolished or retained that Francis Maude released last week that many items are still under review.

We have to hope that the Government will really take the axe to the public bodies and quangos that no one but their staff and some special interests will miss.  That won't do the job alone, but every penny saved by scrapping a body like the Carbon Trust is one that won't come from tax or spending measures that hit the pockets of ordinary families.

It is also vital that the Government avoid making a hash of the measures as they did with changes to Child Benefit.  They could have cut by more and faced less of a political backlash if they hadn't tried to be so clever in the way they limited the benefit.

The Government know they will be judged on how they handle the response to the fiscal crisis.  We will have a better idea of how they are doing this afternoon.

Nick Wood is Managing Director of Media Intelligence Partners and former press secretary to William Hague and Iain Duncan Smith:

"C'est magnifique, mais ce n'est pas la guerre," remarked the French Marshall Pierre Bosquet, our ally at the time, of the Charge of the Light Brigade. Of course, in broad terms, Chancellor George Osborne is doing the right thing by today announcing measures to wipe out a deficit of £150 billion over the next four years. Amid all the controversy that will erupt over the cuts package, no doubt greatly fanned by the BBC, no one should lose sight of Labour's responsibility for the greatest mismanagement of the nation's finances in living memory.

But grave dangers lie in wait for the Coalition. And I fear that the French Marshall's verdict on the heroism of the Light Brigade more than 150 years ago might yet find an echo in history's verdict on the spending review.

My concerns are twofold. Politically, no one is likely to be pleased by the Chancellor's £80 billion cuts package. Core Conservatives won't like the idea of an aircraft carrier that carries no aircraft. Nor do they like the idea that child benefit is to be axed for higher rate taxpayers - especially if the Chancellor pursues his barmy idea of leaving the £80,000-a-year couple better off than the stay-at-home mother couple on £44,000. Expect him to tweak the numbers eventually to inject an element of much vaunted "fairness" into the equation.

Economically, pitfalls also lie ahead. Smart analysts in the City are pointing out that because the private sector - household and business - is paying down debt at a rate of knots, this is not the time for the Government to apply a savage deflationary squeeze as well. At the least, Mr Osborne should take his foot off the brake for fear of spinning GB Racing into the crash barriers.

The double dip recession is the nightmare scenario, not least because it will wreck the Chancellor's carefully calibrated arithmetic and make a mockery of his deficit reduction plan. The Chancellor's courage is to be applauded. But he should also box clever today.

Nick Wood: David Cameron should tell the British people the truth

Nick Wood is a former press secretary to Conservative leaders William Hague and Iain Duncan Smith. He now runs Media Intelligence Partners. In the growing debate about the extent to which David Cameron should be honest with the British people about his post-election plans, Nick takes us back thirty years...

Who said this?

“We believe in making substantial cuts in the tax on your pay packet. Labour doesn't.”

And this:

“The State takes too much of the nation's income; its share must be steadily reduced. When it spends and borrows too much, taxes, interest rates, prices and unemployment rise so that in the long run there is less wealth with which to improve our standard of living and our social services.”

And this:

“Any future government which sets out honestly to reduce… taxation will have to make substantial economies, and there should be no doubt about our intention to do so.

“We do not pretend that every saving can be made without change or complaint; but if the Government does not economise the sacrifices required of ordinary people will be all the greater.”

And finally:

“The reduction of waste, bureaucracy and over-government will also yield substantial savings.”

OK, not too many prizes for guessing the answers. All of them are from Margaret Thatcher thirty years ago. The first quote comes from her conference speech of 1978 and the rest from the Conservative Party manifesto of 1979.

Many myths have grown up about the Thatcher years. One of the most pervasive is that she fought and won the 1979 election on a Tory-lite prospectus. And, for that reason, David Cameron should do the same.

Nick Wood: If Tories allow Brown to win the next election they should retire to a monastery

Nick Wood is a former press secretary to Conservative leaders William Hague and Iain Duncan Smith. He now runs Media Intelligence Partners.

Conservatives should stop worrying about losing the election. Instead, they should start worrying about what they are going to do when they have won it.

After Alistair Darling’s pre-Budget report, it is almost impossible to
imagine Labour winning a fourth term in power. Just take the horrific scale of the numbers: borrowing over the next four years is projected to amount to £394 billion – more than twice Alistair Darling was predicting only eight months ago.

As The Times pointed out, only a little tongue in cheek, for that money you could extend the Jubilee Line 1200 miles to Sicily or send every child in the land under the age of 15 to Eton for 18 months.

No wonder – after a convenient pause to allow for the election – taxes are set to rise by £4 billion and public spending is to face its biggest squeeze since Labour came to power.

Yet does anyone seriously think this is going to work? Set against this skyscraper of debt, how can a “fiscal stimulus” of £20 billion make a scrap of difference. It is like trying to prop up the Empire State Building with a match-stick.

And should anyone believe Darling’s figures? He was horrendously wrong before when he predicted that the economy would grow this year and next. Why shouldn’t he be wrong again with his panglossian forecast that growth will resume in 2010 and that – laughably – the public finances will be back under control seven years from now?

The truth is anything could happen. But the smart money (if there is any left) has to be on a far longer and deeper recession than the Chancellor can bring himself to admit: job losses on the scale of the early 1980s, an avalanche of business failures and home repossessions and a debt mountain even more menacing than the Atlas conceded in his statement. The tax rises then won’t be a footling £4 billion. At this rate, we will be celebrating Tax Freedom Day on Christmas Day.

If Labour can pull off an election victory against this background, then the Tories should pack in politics and take to a monastery. Gordon Brown is like a steeplechaser faced with a series of fences equivalent to the 1967 sterling devaluation, the Winter of Discontent, the manufacturing slump of 1980/81 and Black Wednesday. Pegasus couldn’t make it.

Nick Wood: An early election is Gordon’s only hope

Nick Wood is a former press secretary to Conservative leaders William Hague and Iain Duncan Smith. He now runs Media Intelligence Partners.

A Labour MP was quoted this week as likening the financial meltdown to the 1982 Falklands War, which brought Margaret Thatcher’s beleaguered Government back from the brink and helped secure her landslide election win of 1983.

So how secure is that parallel? We all know that when floods and plague sweep the land, gloomy Gordon cheers up a mite. About his only good spell was last summer when he was able to pretend he was in charge of events. And the further and faster the markets fall today, the jollier he looks.

His message – and Labour’s – is that Gordon is good in a crisis - unlike the effete sixth-formers warming the Conservative frontbench. Brown’s “novice” crack at the Labour conference – rightly confronted by David Cameron in Birmingham – underlined Labour’s latest mantra – “things can only get worse”.

It is true enough that people are scared by the market gyrations, the collapse of banks that once towered over Wall Street and the City and the dire warnings of a Main Street shake-out to come – with spending cuts and tax rises. The instinct to keep hold of nurse for fear of something worse is no doubt behind the spring in the Prime Minister’s step as he lectures the world on bank bailouts and jets from one crisis summit to the next.

Yet this is not the Falklands. That war lasted only a few weeks and ended in a clear and heroic victory for the British forces who sailed 8,000 miles across the Atlantic to rout the invaders. But it was much more than a spectacular feat of arms. The Falklands came to symbolise Margaret Thatcher’s assault on the defeatism that had crippled the country for 20 years. For the first time since the 1950s, government was no longer about the orderly management of decline. And – almost magically – once General Galtieri was put to flight, the economy started to respond to her nasty but necessary medicine.

Nick Wood: Hats off to David Cameron

Former Times journalist Nick Wood was a media adviser to Conservative leaders William Hague and Iain Duncan Smith. He now runs Media Intelligence Partners.

Hats off to David Cameron and his team. By denying Gordon Brown his preferred option of an early election, the Conservatives have scored a stunning political coup and opened up the genuine prospect of victory when polling day eventually comes.

The scale of the damage done to Brown is almost incalculable. The aura of impregnability that has surrounded the Prime Minister since taking over the reins in the summer has been shattered. His reputation for seriousness and straight-talking has suffered a dreadful blow. The weekend before the Tory conference he dominated the political landscape. By last weekend he looked shallow, fragile and fallible. No longer the master strategist, he has committed a series of blunders of quite breathtaking naivete.

Meanwhile, Cameron has won his spurs. Against the background of opinion polls pointing to a Labour landslide, in a week he transformed the political weather, forcing Brown to back down at the eleventh hour. Forget all this Labour guff about the PM wanting to set out his vision. The PM wanted to crush the Conservative Party. He failed and he failed in the most spectacular and humiliating way.

Andy Coulson and the Tory publicity machine should take a bow. Last week at Blackpool was like watching Shane Warne bowling on a beach as ball after ball bamboozled the Labour string-pullers. The media lapped it up, producing the best set of Tory headlines for 20 years.

Nick Wood: Is Cameron a lucky general?

Napoleon favoured lucky generals. On that basis, David Cameron should be made a Field Marshal. Last week, as the press made hay with the policy report on the environment, conjuring up lurid headlines about higher taxes on flights, driving and shopping, Cameron looked on the back foot.

Then Gordon Brown's big tent flapped open to embrace Margaret Thatcher - reinforcing the impression that PM-For-Life Brown is truly the father of the nation.

Cameron's people said the Leader was "relaxed", which in my experience equates to something mid-way between furious and incandescent.

But then came Northern Rock. Thousands queued outside branches in a panicky bid to get their money out. And millions more wondered if the casino economy - founded on more than £1 trillion of debt - was about to come crashing down.

The story was broken on BBC News by Robert Peston, the business editor and a former political editor of the Financial Times. Unusually for the Beeb, Peston knows what a story is and has the guts to pursue it all the way to transmission.

Nick Wood: Operation Don't Panic

Former Times journalist Nick Wood was a media adviser to Conservative leaders William Hague and Iain Duncan Smith. He now runs Media Intelligence Partners.  Nick begins his new weekly look at the media's coverage of the week's political events.

Tony Blair dubbed Gordon Brown the Great Clunking Fist, but this week the old bruiser has been boxing clever.

Faced with a mini-revival in Tory fortunes sparked by David Cameron’s rediscovery of some favourite old tunes, or blasts from the past as they are sometimes known, Brown has avoided direct engagement with the enemy.

Instead of the left hook, we have had the left jab as Brown has sought to keep Cameron off balance. The recruitment of John Bercow, Patrick Mercer and Johan Eliasch to the Brown corner took the gloss off Cameron’s attempts to define himself and his party – specifically through new education policies and a slimmed down version of national service.

Although The Daily Mail and The Sun in particular backed the national service idea, most of  the media were happier to play hunt the defector. The BBC, especially, treated the transfer of the little-known Eliasch as if Sir Alex Ferguson had signed half the Chelsea squad.

Nick Wood: Cameron cannot win without The Mail, Telegraph and Express

Former Times journalist Nick Wood was a media adviser to Conservative leaders William Hague and Iain Duncan Smith. He now runs Media Intelligence Partners.  Nick begins his new weekly look at the media's coverage of the week's political events.

For the first time since Gordon Brown became Prime Minister, David Cameron has won the weekly battle of the headlines.

His robust interventions over youth crime, immigration and Europe have sparked approving noises from mass market newspapers, in particular The Sun (6 million readers); The Daily Mail (5 million); The Daily Telegraph (1.5 million) and The Daily Express (1.5 million).

Less prominence has been given to his interventions on the BBC, but in the last week Cameron has secured his first positive and prominent headlines in months from papers read by some 13 million people. Add in the Sundays over the past two weekends and he has hit the target with well over 20 million people

Even Richard Littlejohn and Amanda Platell, two of the Mail’s best read and most trenchant columnists, had something nice to say about him – definitely a first. The acerbic Andrew Pierce in the Telegraph was also impressed, though he rightly warned about the looming PR disaster of green taxes.

The polls, while hardly encouraging, have tilted back a little in the Tories’ direction, giving Brown pause for thought as he toys with an autumn election. But with Brown back at his desk and on the offensive, the media war this week will be more fiercely fought. We should expect the same over the next few weeks as Brown decides whether he can be sure of victory in late October.