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Nicholas Leonard: Cameron plotting national transformation

You don't need Doctor Who and the Tardis to go time travelling at Westminster this new year bank holiday. Much to the annoyance of the prime minister, David Cameron, the toxic legacy of Thatcherism is once again overshadowing his efforts to portray the Conservatives as a caring, sharing party.

Documents just released show that back in 1981, the then chancellor, Geoffrey Howe, was secretly urging Margaret Thatcher, in the wake of widespread rioting, to let Liverpool slide downwards in a state of 'managed decline'.

Thatcher is in very poor physical and mental health these days but Mr Howe, who is now 85, has tried, rather unsuccessfully, to explain away comments he made 30 years ago when he never thought they would be revealed in public.

The Conservative politician who has emerged best from it all is Michael Heseltine, who refused to accept that Liverpool was doomed and, with only minimal backing from the sceptics at the Treasury, succeeded in triggering a transformation in the city's attitudes and performance.

Mr Cameron is hoping to do something similar for Britain as a whole. He has the great advantage, at a time of intense economic uncertainty, of being a natural optimist, a quality he says he inherited from his late father.

He is pinning his hopes for this year on a psychological boost from two major celebrations: the queen's diamond jubilee in June, followed in July and August by the Olympics in London. The jubilee has some family relevance for Mr Cameron because he is a distant cousin of the queen.

Looking much further ahead, Mr Cameron can point to research by controversial Goldman Sachs, which has just forecast that by the year 2050 the UK, thanks to high levels of skilled immigration and capital investment, will have overtaken France and Germany to be the richest economy in Europe and, on a per head basis, the third best performer in the world. By then, Mr Cameron will be 84.

Meanwhile, he is fortunate that unlike many other global leaders, including Barack Obama, Nicolas Sarkozy and even Vladimir Putin, he can be pretty well certain that he will still be in the same job this time next year.

There is a mood of almost disbelieving euphoria among his Downing Street spindoctors at the remarkable fact that despite the stringent cutbacks to deal with the budget deficit, the opinion poll ratings of the Conservatives continue to match or exceed those of the lacklustre Labour party under Ed Miliband.

Mr Cameron has taken advantage of this to dish out controversial new year's honours to some of the biggest donors to his party, including a hedge fund operator who made a great deal of money speculating, correctly, that shares in the struggling banks would collapse in 2008.

The decision to give a government seal of approval to this kind of short-term financial activity has infuriated Mr Cameron's cabinet colleagues from the Liberal Democrat party but they know they are trapped inside the coalition and while they may rattle the bars of their cage from time to time they have no way of escaping without dooming themselves to political oblivion.

But such a fate may well await the Lib Dem energy minister Chris Huhne, who is still struggling to avoid prosecution for allegedly getting his wife, from whom he is now separated, to take the rap for him in a speeding offence.

Mr Cameron will get a useful pointer in May to how voters really rate the Conservat- ives when his party colleague, the ebullient media celeb Boris Johnson, will be challenged by the left-wing maverick Ken Livingstone in the election for mayor of London.

New year forecasts from EU leaders like Angela Merkel and Nicolas Sarkozy yesterday were dominated by the unpredictable outcome of the eurozone crisis. But Mr Cameron knows that the future of his coalition government is also at risk from broader global uncertainties, including the increasingly aggressive stance of Iran over its nuclear weapons, the next phase of the so-called Arab Spring and the effort to find a way of handling the Nato exit from Afghanistan so as to leave behind a reasonably stable democracy.

The former British ambassador to Afghanistan, Sherard Cowper-Coles, has recently published a book called 'Cables from Kabul', in which he gives a devastatingly frank analysis of all the mistakes made by the US and Britain as they struggled to understand the tribal and cultural tensions of a nation that is united more by having one name rather than by a common sense of nationhood.

One of the few people to emerge with credit from his book is the former foreign secretary, David Miliband, and one of the themes of 2012 at Westminster will be the efforts by his supporters in the Labour party to find a way of electing him as their leader instead of his underwhelming younger brother, Ed.

Ed confessed in a media interview yesterday that he finds it a strain wearing the right clothes to project an image: "I used to wear big glasses and nasty jumpers. I wish I could just wear those jumpers again and not have to worry about collars. Life would be so much simpler."

Irish Independent