Tories ditch spending promise as poll shows lead collapsing.

David Cameron has been getting away with murder for months now simply by not being Labour. He has enjoyed a healthy lead over Brown for quite a while now, despite the fact that he remains spectacularly vague on policies.

But it appears that the recent economic downturn is damaging Cameron in the exact same way that it damaged McCain over in the states. The first sign that things were not going Cameron's way was when Glenrothes bucked the trend and voted Labour, despite even the Labour party expecting to lose the seat to the SNP.

But recent polls have reduced Cameron's lead to a mere three points and he has now dropped his promise to match Labour's spending plans. Usually the Tories would do this to offer tax cuts but Cameron finds himself in the strange position of opposing Brown's plans to offer of tax cuts to stimulate the economy. No doubt he's doing this to try to portray Brown as attempting to buy the next election, as otherwise his opposition makes no sense at all.

Cameron has stated, "We cannot afford a massive tax giveaway" although, almost immediately, the business world undermined him:

But his position was undermined as the Institute of Directors came out in favour of a £20bn stimulus, including a 3p cut in income tax, and the CBI also gave its support.

But Cameron appears to think that he's on a winner here:

Party leaders spent the day attacking each other's vision for steering Britain out of recession. Ahead of next Monday's pre-budget report, Cameron announced he was abandoning the Tory commitment to match Labour spending pledges from 2010-11, claiming the government's planned rises were unsustainable and will lead to a tax bombshell later.

Public spending is due to rise by 2.3% in 2010-11, 1.7% in 2011-12, and 2% in 2012-13. Cameron refused to say how much he would slow the rate of growth, but indicated NHS budget rises will be protected.

He accepted his prudent fiscal stance - denounced as "economic madness" by the Liberal Democrats - might be unpopular in the short term, but insisted he was confident the public will no longer listen to a repeat of Labour lies about the Tories intent on "mining local hospitals".

He said: "My profound sense politically is that the British people are not fools, by any imagination. They are very sharp and very perceptive. They know exactly what's going on now. They can see that the nation has maxed-out on the credit card ... I would rather say something I believe to be right and true and honest, and fight the election on that, than try to pretend that you can have your cake and eat it."

Brown claimed that the Tories were out of step: "[More spending] means new help for families, and businesses now. And the one group that seems to be standing against it for purely dogmatic reasons is the Conservative party."

I happen to agree with Cameron that the British public are sharp and perceptive, which is why I think they will see through his ploy. The Tory party which seems to usually always wish to offer tax cuts seems oddly out of place by opposing tax cuts at the very moment when the economy needs just such a boost.

Like McCain in the US, this economic downturn might very well turn out to be Cameron's undoing. He's way out of step with everyone else. And the polls are starting to show the public's reaction.

Nick Clegg, the Liberal Democrat leader, said the Conservatives' announcement was "economic madness". He added: "David Cameron has learnt nothing. It's exactly what the Conservatives did in the 1980s. To simply slash public spending when we are heading into a recession – there's no case for it whatsoever."

Perhaps Cameron doesn't remember the public reaction to Thatcher's instinct to slash public spending as a way to reduce costs, but the rest of us do. He's done a lot to change people's view of the Conservatives as the "nasty" party, but - with this one statement - he's in real danger of reviving it.

A Tory government would allow state spending to grow by less than the 2.3 per cent real terms increase planned by Labour through savings in government programmes and cutting waste.

That all sounds drearily familiar. In fact, it sounds like the eighties, and none of us want to go through that again.

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Tags: Cameron, Brown, economic downturn, tax cuts