After Eastleigh, Cameron's innate optimism is no longer enough

IT WAS a sign of how badly things had gone for the Conservatives at the Eastleigh by-election that on Friday morning they wheeled out Michael Gove to respond, rather than the party chairman, Grant Shapps. But even Gove, the undoubted heavyweight in the Prime Minister's inner circle, found himself struggling to put an optimistic spin what had happened. 

To understand just how big a blow Eastliegh has been for the Tories, go back a few weeks to when the by-election was called. The party needs to capture some 20 Lib Dem seats to have any hope of majority at the next election, and the Hampshire town was one of its top targets. After Chris Huhne resigned in disgrace, having admitted perverting the course of justice, there was a real expectation among Conservatives that they could win it.

Party strategists had anticipated having to fight on two fronts, with the Lib Dems to the left and UKIP to the right, and thought they had their strategy ready. Young, centrist voters were targeted with policies like gay marriage and increasing overseas aid, while the promise of an EU referendum and Theresa May's crackdown on immigration were designed to reassure older types, tempted by the blandishments of UKIP.

In the event, the strategy failed on both counts. The Lib Dems, despite the beating they have taken in national opinion polls ever since they went into coalition, managed to distance themselves from the unpopularity of being in government. Meanwhile UKIP thrived as the party for protest votes, of which there are a growing number.

No wonder the Tories are shell-shocked. A large part of their game plan for the next election has just gone up in smoke, and it is far from obvious what should replace it.

Writing in the Sunday Telegraph at the weekend, David Cameron was adamant that he had set his direction and would stick to it. That might sound like bravado, but he really does not have much room for manoeuvre.

If he tacks to the right to attract UKIP supporters, as many of his backbenchers would like, he risks losing the centre ground he has spent so much time trying to cultivate. But if he tries to butter up the centre, he will only risk further fueling the UKIP insurgency.

Financially, too, the constraints are getting tighter. With no money to spare and the markets jittery, the potential for George Osborne to produce a feel-good Budget later this month would seem to be somewhere between limited and non-existent.

So what can the Tories do now, and should they indeed do anything? At No. 10, surprisingly, they still have hopes of the economy. If things pick up before 2015, they reason, aided by the arrival of a new Governor at the Bank of England, the Tories could yet get back on track.

Perhaps even more surprisingly, Downing Street's other big hope is Ed Miliband. The view at No. 10 is that, despite his steady double-digit poll lead, the Leader of the Opposition remains eminently beatable - and particularly if he is going to keep Ed Balls at his side.

But while Miliband and Balls have not been doing well recently, even Downing Street must know the Conservatives cannot rely on their opponents' shortcomings to rescue them in 2015. That will be down to Messrs Cameron and Osborne, and with so few shots left in their locker they need to make the most of them.

The most frequently heard complaint among Tory ministers and backbenchers about both the PM and his Chancellor is not that they are taking the government in the wrong direction, but that after nearly three years in office they still have not got a grip on its day-to-day management. George Osborne, in particular, comes in for stick for spending as much time on party political strategy as he does on the economy, despite growth having flat-lined ever since he came into office, while the party organisation is weaker than ever.

The lesson the Tories need to learn from Eastleigh is not so much that they should change what they are doing, but that they need to do it an awful lot better.

One of the weaknesses of the so-called Cameroons has always been a tendency to assume that somehow things will work out for them in the end. In good times such a laid-back approach can be quite attractive; in bad times it does not inspire confidence. ·