Economy, Europe loom over British Tory conference

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Prime Minister David Cameron's Conservatives gather for their annual conference on Sunday buoyed by the polls but under pressure over the stuttering economy and an upsurge of eurosceptic feeling.

Sixteen months after forming a coalition with the smaller Liberal Democrats, the centre-right Tories have managed to keep their support steady, unlike their junior partners who have seen their poll ratings halve.

Cameron's party has held onto its support despite the government's controversial plan to eliminate the budget deficit by the 2015 elections through major cuts to public spending.

The Conservatives strongly back the plan, but as the economy falters, finance minister George Osborne is coming under pressure to do more to boost growth.

"There are obviously big worries about the economy and people know that we are into grim times," said Tim Montgomerie, editor of ConservativeHome, a leading Tory website.

"What people are looking for from the party leadership is a strong sense that they know where they're going. There's an expectation that something needs to be accelerated in economic policy."

Eurosceptic Conservative lawmakers believe the economic difficulties at home and the debt crisis engulfing the eurozone are a chance to return some powers from the European Union to Britain.

A newly formed group of 120 MPs want Cameron to set out a clear plan for pulling back from Brussels, in a move that threatens to reopen a deeply divisive issue for the party.

The prime minister has resisted such calls so far, saying Britain must work with the EU and support the eurozone where it can, because although Britain has not adopted the single currency its economic fortunes are linked to Europe's.

Foreign Secretary William Hague has made clear he would like a transfer of powers, but admitted that any such move would be impossible while the Tories are in power with the pro-Europe Lib Dems.

This is a cause of frustration for those Tories who believe that cutting European red tape is a key element of boosting growth.

"Some of the things which are necessary and appropriate from an economic point of view are also things that the Liberal Democrats are very keen that we shouldn't do," one senior Tory told AFP on condition of anonymity.

Other economic issues are causing friction in the coalition, notably the top 50 percent tax rate on incomes over £150,000 ($235,000, 170,000 euros), which is currently subject to a review by the Treasury.

When the Lib Dems held their party conference earlier this month, several senior figures launched attacks on their Conservative partners for being too right-wing, in particular over their response to the August riots in England.

The Lib Dems also took pains to highlight the parties' differences, with an eye already on the next election in 2015, when they will campaign separately.

Many of the Tories gathering in Manchester, northwest England, this weekend will want to see some return fire and to set out their own distinct agenda.

But the key issue remains the economy, and Osborne's speech to conference on Monday will be as important as Cameron's leadership address on Wednesday.

"Everything is in the economy," Montgomerie told AFP.

"If you ask the Tory membership whether they're happy with the Tory position on Europe or immigration or whatever, they're not. But they will also say that if the coalition fixes the economy, they will forgive the lack of action."

Tim Bale, professor of politics at the University of Sussex, cautioned that while pressing ahead with deficit reduction, Cameron must provide a positive image "to get people through what are going to be very difficult times."

But he said the prime minister was generally in a strong position, despite this summer's riots and a scandal over phone hacking, which came to Cameron's door when his former media chief Andy Coulson was arrested in the case.

Cameron is helped by the poor ratings for Labour leader Ed Miliband, who is still struggling to be taken seriously one year after being elected to the job.

Labour has generally been leading the polls, but a ComRes survey this week put the Tories ahead for the first time in a year, by 37 to 36 percent.

Bale predicted that as long as the Conservatives maintained this support any disgruntled party members would keep quiet.

"Most people in the Conservative party want to see the government succeed, and are not likely to want to rock the boat," he said.

© 2011 AFP

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