The Conservatives' G.R.A.N.D. strategy for re-election

Tim Montgomerie

2011 will be a difficult year for the country and the government. We can expect a quadruple whammy of higher taxes, higher mortgage rates, faster inflation and the first of four years of significant cuts in public spending. Resuming his essential column this morning, after a Christmas break, Allister Heath tells City AM readers that there is no need for too much pessimism, however. Despite problems in the €urozone area that could yet cause major problems, Heath says robust growth in emerging markets and an improving US economy bode well. The doomsters were wrong about a double dip recession in 2010, he notes, and predicts "unspectacular growth of 2%" for this year.

The next two years are nonetheless going to be difficult for the Conservatives as cuts bite and vested interests are upset by reforms. But, despite short-term trials, the party's long-term prospects are good. It's very hard to glean much from Downing Street on electoral strategy but over the last 48 hours I've been talking to MPs and commentators who take a close interest in party strategy. A re-election strategy with five crucial components is becoming clear. I call it the G.R.A.N.D. strategy.

GROWTH: Cameron will be re-elected if George Osborne succeeds. If the Chancellor's first budget was about eliminating the deficit his second budget must be about further measures to jumpstart the economy. Education and welfare reforms will improve Britain's long-term competitiveness but the Coalition's policies towards the City and on climate change endanger competitiveness. Tough pro-growth decisions taken now will help build a feelgood factor for 2014/15 and that will be the best possible underpinning of a re-election campaign and the promise of tax relief for the 'pound-stretching' class of striving voters. In today's FT (£) Osborne gets top marks from a majority of economists for his deficit plan. The much-underestimated Mr Osborne had a very good 2010.

RETIREMENT: Tory strategists have identified older voters - those thinking about retirement and already retired - as crucial to re-election prospects. This is the part of the electorate most likely to vote and the Coalition has bent over backwards to protect the benefits and health services on which they depend. The IDS/Webb plan for a universal pension of £140 is also key to this strategy. This may be bad for the young (the 'IPOD' generation David Willetts championed in The Pinch) but the grey vote is the Tories' number one priority.

ALLIANCE: This third component of the G.R.A.N.D. strategy is the least defined but leading Tories are determined to convert this parliament's coalition-of-necessity into some kind of realignment of British politics. It might mean that certain Lib Dems become part of a new Tory Party (eg Clegg, Laws and Alexander - long a Cameroon ambition). It might mean a non-aggression pact in seats like Eastleigh where Chris Huhne would face almost certain defeat if a Tory candidate stood. It is unlikely to mean a full merger.

NORTH: At the last election the Conservatives did least well in the North. Special regional investment subsidies and Philip Hammond's £34bn rail project are the beginnings of an attempt to win over northern voters. Beyond northern England there is despair inside Number 10 at Tory prospects in Scotland. It is one of the reasons why David Cameron is so grateful for the Coalition. Without Lib Dem MPs he would be a Prime Minister with just one MP from north of the border.

DAVE: Part five of the G.R.A.N.D. strategy is the personality of David Cameron. He is as natural a PM as Ed Miliband does not look prime ministerial. He has much better ratings than either Clegg or the Labour leader. According to party polling his commitments to social justice, the environment and to diversity of candidates mean the party reaches sections of voters, particularly women, that his predecessors cannot reach.

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Ipsos-MORI has talked about an iron triangle of political success. That triangle included party leader image, economic competence (where the Conservatives enjoy an increasing advantage) and party unity. Party unity is good despite the debate about a secret alliance with the Lib Dems but it is something that Downing Street must still do much more to nurture.