“The government’s tone of voice is one that suggests all public spending is wasteful, and all those working in central or local government are on the make or take. Perhaps, given his goal of a smaller state, this is Mr Cameron’s intention. If so, it is neither sensible nor politically astute. It also happens to be unfair.”

How long before this unfairness jars with the public?

I have a childhood memory (perhaps, I mean nightmare) of a member of the public describing themselves as a civil servant on Noel’s House Party and Noel doing nothing to discourage the booing which came from the audience as a result. I didn’t even know what a civil servant was at the time but this booing didn’t seem fair to me. Of course, this may all be false memory. There is no doubt, however, that this government wants to bring public servant bashing back into vogue.

The Daily Telegraph isn’t normally essential reading for Labourites. But yesterday it should have been, especially for Harriet Harman. Fraser Nelson set the backdrop to the politics of the deficit and the “emergency” Budget, to which she, as acting leader, will respond. This week’s report from the new Office of Budget Responsibility (OBR) dramatically changes this political context. Nelson has been quick to realise this and, while our instincts differ markedly from his, we need to be equally fleet-footed.

The limited discussion on the deficit in the leadership election has denied our candidates the opportunity to demonstrate this quality. Though, of course, they could engineer such an opportunity for themselves. I’d be impressed if any of them do flesh out a more substantial economic platform, not least as The Economist is right to note that, “nothing will make or break the next leader of the opposition like his response to the government’s austerity programme”.

The coalition, preparing the ground for the scorched earth to come, has grasped any and every opportunity to exclaim their horror that “it is even worse than we thought”. Labour, apparently, have not just cooked the national books, but eaten and spat them out again. It’s what we always do. We can’t help ourselves. It is the coalition’s duty to pick up the pieces; in the national interest, of course.

The coalition has pushed this story since its creation. It matters whether it is believed. It wasn’t until after black Wednesday that the spectre of the winter of discontent stopped being a drag on Labour’s support. If the deficit is perceived as Labour’s deficit, then the pain of reducing it will be a similar drag. However, a major spanner has been thrown in the coalition’s attempts to embed this perception. As Nelson observes, “something is going badly right” for the British economy.

The OBR reported earlier in the week, as Nelson noted, that unemployment “will be almost 200,000 lower than had been feared. Economic growth will not be quite as strong but the tax revenues – which are far more important – will come in much more strongly than Mr Darling gloomily forecast.” So, the reality is that public finances are in better shape than the Treasury forecasts bequeathed to the coalition gave them to expect.

How troubled George Osborne must be that this reality, so out of kilter with his desired spin, has been presented by the OBR. After all, he established this body, as Nelson puts it, with the intention to “demolish the economic Potemkin Village that Gordon Brown built during his time in Downing Street and reveal the full extent of his fiscal vandalism”. Yet, rather than exposing Labour irresponsibility, the OBR has shown “Mr Osborne’s election goal – to abolish “the bulk” of the structural deficit by 2014 – would have been easily achieved had Mr Darling remained in place. No more taxes need to be raised, or budgets cut, to honour this Tory manifesto pledge.”

This is a tremendous vindication for Darling and inconvenience for Osborne. If Osborne now persists with plans to cut further and faster than intended by Darling, he will be doing so for reasons of political belief, not economic pragmatism. Nelson understands this and urges him to press on “because he wishes to restore the power balance between state and society. A true liberal believes that people spend their own money more wisely and effectively than government can do on their behalf.”

While Rachel Reeves has expertly explained why comparisons – encouraged by the scaremongering spin of the coalition – between the UK and Greece are spurious, our deficit does require careful management. However, there is a world of difference between the careful prudence of Darling’s plan and the ideological, small-state zeal that would carry Osborne beyond it. Nelson encourages Osborne in this direction because “with Labour embroiled in a five-way leadership contest, he will never face weaker opposition”. Precisely why we must be vigilant against him.

What the formation of the coalition told Philip Stephens about David Cameron was that “he is a Conservative in the centrist tradition of Harold Macmillan rather than a radical such as Margaret Thatcher”. However, we need to be ready for his Chancellor leading the coalition on a distinctly Thatcherite course in his first Budget. Having scrapped the Child Trust Fund and the Future Jobs Fund this might be no surprise, particularly after the coalition agreement made, as James Purnell noted, “no mention of abolishing child poverty. Of reducing inequality. Of protecting education funding. Of guaranteeing jobs for the long-term unemployed.”

In responding to Osborne’s Budget, the key distinction is between actions that can be justified as decisions of economic necessity and those that are driven by political belief. We strip ourselves of credibility if we do not acknowledge the necessity of some pain. We can absorb more of this pain in the form of taxes than Osborne will propose, but we can’t hide from the need for some spending cuts. To remain credible we need openly to concede this, but we also need clearly to identify the areas in which Osborne is acting as the ideological vanguardist that Fraser Nelson wants him to be, losing sight of the sober economic reality presented by the OBR.

That this reality is much brighter than the coalition’s spin is a credit to the decisions we made in office. We need to be equally strategic and forensic in our economic decision making in opposition.

“It was Ukraine’s misfortune that the Orange Revolution took place just as the European Union was succumbing to “enlargement fatigue” – following the shock of moving from 12 members in 1995 to 27 members today. As a result, the EU has given Ukraine an almost criminal lack of encouragement, as the country attempts to secure simultaneously its independence, its democracy and its prosperity. Everybody knows that actually joining the Union is a long and arduous process – since it involves transforming the laws and economies of the applicant countries. But it would have cost the EU very little to give Ukraine the encouragement of holding out the prospect of eventual membership.”

While Turkey probably also remains “a long and arduous process” away from EU membership, Turkey has been knocking on the EU’s door for decades. This article in Newsweek suggests that they got tired of getting no answer and focused instead on becoming a dominant player in the Middle East.

The transformation of central and eastern Europe that the EU encouraged by opening itself up to membership from post-Communist states is one of its great successes. So, it is all the more sad to witness the consequences of the present “enlargement fatigue”. We all know – most especially people in states like Turkey and Ukraine – that EU membership for many of the states that border the EU remains, for better or for worse, a long way away. Nonetheless, the EU should still be capable of acting as a stronger magnet to these states than it has been in recent years. The carrot doesn’t have to be as big as full membership in short order. But it has to be substantial enough to retain the interest of these states. Otherwise, they will drift away towards other centres of power (the incoming Ukrainian president is notoriously close to Moscow and the Turkish president describes Mahmoud Ahmadinejad as his “good friend”). The ‘soft power’ of all EU states is all the weaker as a result.

Must Europe wither? It surely shall if we do not wake up and smell the coffee and move on from the navel gazing and introversion that have marked recent years. Tony Blair suggested three years ago that the big distinction in politics was between open societies and those which were closed. “If you take any of the big motivating debates in politics today”, argued Blair, “each essentially has, at its core, this question: ‘Do we open up? Albeit with rules and controls, or do we hunker down, do we close ourselves off and wait till the danger has passed? Is globalisation a threat or an opportunity?’” The EU has chosen to hunker down, to close itself off, not just to Turkey but to a world that is hurtling towards a G2 in which there is no place at the top table for Europeans.

British pro-Europeans, like Nick Clegg, must have watched these developments with horror and wished that the EU could turn itself around and open itself up. The conclusion of the Lisbon process offers a great opportunity for this and Blair’s candidacy for the EU presidency offers the leadership and gravitas necessary to achieve this. Even his advocates, such as Charles Grant and Will Hutton, do not fail to find fault with Blair. Yet “the message” Grant hears “in places such as Beijing, Delhi and Washington is that if the EU wants to be taken seriously, it should choose a big name as president”. Is there another big name candidate? No. Thus, the choice is to be closed (and deride Blair as a ‘superstar’ unworthy of support as Clegg did today) or open (and go for Blair precisely because he is a superstar in the capitals that now matter most).

It is not just a betrayal of Clegg’s pro-European credentials for him to fail to back Blair, it is an abdication of his profession. Politics exists, after all, as J. K. Galbraith knew, “in choosing between the disastrous and the unpalatable”. Clegg may find Blair unpalatable; so do Grant and Hutton, to some extent. But Turkey getting into bed with Iran is the first of many disasters that shall befall the EU if it continues on its current trajectory. It is because Grant and Hutton have retained the ability, unlike Clegg, to distinguish between the unpalatable and the disastrous that they are able to bring themselves to support Blair.

“In promising to transfer Ofcom’s work to Whitehall so it is more directly accountable to ministers and parliament, Mr Cameron has shown he has no clear idea of what it does. The central charge seems to be that Ofcom’s views on public service broadcasting have strayed too far into realms better reserved for ministers … Broadcasting policy accounts for only about 5 per cent of Ofcom’s workload. Moving it to Whitehall would scarcely mean “that Ofcom, as we know it, will cease to exist”. Some 90 per cent of Ofcom’s remit comprises unglamorous work such as telecommunications regulation, upholding broadcasting standards, allocating spectrum, and, crucially, policing competition. All this can properly be done only at arms length from civil servants and ministers … The Ofcom proposal is another salutary reminder of how much of the Conservative prospectus is still about grabbing a headline rather than setting a framework for effective government”.

“The challenge for David Cameron is huge. If, as seems likely, he becomes Prime Minister next year, it will be his task to ensure that future generations do not look back on the years 1979-2009 as a blip — an aberrant resurgence — in the otherwise steady decay of a once great nation”.

Johnson seems more eager to embrace Thatcher than Cameron. Perhaps, the differing attitudes of these two rivals for the leadership of the Tory Party, reflect a deeper fault line in the Tories – or, maybe, Cameron is simply more sensitive to the national mood than Johnson. Cameron may remain loath to reveal himself as a Thatcherite while public opinion continues to be as starkly divided over Thatcher as Tim Adams recently observed in The Guardian:

“It’s exactly 30 years since she came to power, nearly 20 since she was unseated and still none of us can rationalise, quite, what we feel about her – either our loathing or our adoration. Even as her era and her “-ism” abruptly ends – in the bail-out and humbling of her market economy, the smashing up of the banks – no one can get to us as a nation quite like she can”.

There is no Thatcher myth. There never was. There is a massively polarising figure and fierce debate about her policies. In contrast, a book has recently been published with the title Tear Down This Myth: How the Reagan Legacy Has Distorted Our Politics and Haunts Our Future. Amazon tells us of Will Bunch’s book:

“Nearly two decades after leaving office and four years after his death, the legend of Ronald Reagan looms larger than ever over America’s political life. Nowhere has that been more evident than in the 2008 presidential campaign, with Republicans – especially presumptive nominee John McCain – appearing to run more aggressively for the Reagan mantle than for the White House itself, and with even Democrats debating how to add some Reagan lustre to their progressive platform”.

I know that Gordon Brown had Thatcher round for tea but no Labour person seriously wants to add some Thatcher “lustre to their progressive platform”. That would be absurd. Philip Collins has done a good job of explaining why this is so.

So, why does the UK attitude towards Thatcher seem so different from the US attitude to Reagan? Was Reagan less divisive? Only fighting Communists without, rather than “enemies within”? “Enemies” which never existed on the same scale in the US as they did in the UK, suggesting the less ambiguous US attitude towards Reagan may find its historical origin in the weaker socialist traditions in the US. This is the right nation, after all.    

Philip Stephens concludes his piece, thus:

“The president might fairly ask Mr Brown what he has to offer. Thus far Britain has seen the special relationship as setting it apart from the rest of Europe. The reverse should be true. Why should the US take the lead in forging a new global compact, Mr Obama could justly say, when a fractured Europe is bending to the siren voices of economic nationalism? If Britain wants to be heard in the White House, surely it must show it has real clout in Europe. Now there is something for Mr Brown to think about during the long flight home”.

Beneath Stephens, Gideon Rachman writes:

“The four freedoms already established by the EU – free movement of goods, people, services and capital – are huge and tangible achievements. It would be terrible to see them rolled back.

“Yet the threat is there. The British prime minister has talked of “British jobs for British workers”, the French president has urged car companies to invest at home rather than elsewhere in the EU, the government of Spain has launched a “Buy Spanish” campaign. State aid rules that prevent the promotion of national industrial champions are being cheerfully trashed. Despite the deliberately reassuring communiqué that closed this weekend’s summit, a genuine assault on the European single market is brewing.

“If Europe starts rolling back the four freedoms, the implications will stretch well beyond economics. Protectionism and nationalism are close cousins. The principles of consultation, co-operation and open borders within the EU have helped to repress the old, nationalist demons”.

Brown may be going to the US to warn against protectionism but his relationship will be all the more special with Obama if he can lead the EU to a future free of protectionism. The four freedoms of the EU salvaged Europe from the wreckage of fascism and communism. They deserve better than to be slain by a mere credit crunch. This should be the high principle of Brown’s engagement with the EU, while the low cunning is the gains that this will bring him with Obama.