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UK's Cameron under pressure to launch a comeback next week

Friday, 5 Oct 2012 | 10:38 AM ET

* Cameron's Conservatives trail Labour in polls

* Britain is due to hold election in 2015

* Economic woes/resurgent opposition are main challenges

* Upcoming economic data may boost Cameron

By Matt Falloon

LONDON, Oct 5 (Reuters) - Presiding over a fractious coalition amid a recession and derided by critics as an "out of touch" snob, British Prime Minister David Cameron is under pressure to take on a resurgent opposition at his party's annual conference next week.

In a coalition with the smaller Liberal Democrats, Cameron's Conservatives languish behind a revived Labour opposition party in opinion polls and he faces a tough task to win an outright majority in 2015, something he failed to do in 2010.

A dazzling performance next week could set the stage for a comeback. "We know we have got to turn it around," one Conservative Party official said. "We're running out of road."

Cameron is gambling that by 2015 he will be able to heal a sickly economy and to slash government spending - a key driver of demand - to erase a record budget deficit.

But a bleak global economic situation coupled with debt-related turmoil in the nearby euro zone and what his critics regard as serious policy missteps mean his plan is off-course.

Britain has fallen back into recession and the government looks like it will miss its own flagship austerity targets - to get rid of most of the deficit by 2015 - by such a margin that spending cuts could drag on through much of the next parliament.

"Cameron bet the farm on deficit reduction and an almost inevitable improvement in the economy in sufficient time for the 2015 election - clearly neither of those things have happened," said Tim Bale, a politics professor at London's Queen Mary University and an expert on the Conservatives.

"It's going to be a very difficult ask to come out in 2015 with an overall majority - it's about momentum and right now the momentum is slipping away."

If he is to have a chance, Cameron, who used a cabinet reshuffle last month to try to pacify his party's restive right flank, must try to woo middle class families who are likely to decide the election.

But the expensively-educated son of a stockbroker has struggled to shake off accusations that he is out of touch with ordinary voters, many of whom face shrinking household budgets.

One rebellious Conservative lawmaker dubbed Cameron and Osborne, the finance minister, "posh boys", while another powerful Conservative caused a storm last month by labelling police officers "plebs" - a derogatory reference seized upon by critics who said it proved the Conservatives were snobs.

PROMISING ECONOMIC DATA ON WAY?

An unpopular budget which cut taxes for high earners, a scandal over cosy ties with Rupert Murdoch's media empire, party infighting over Europe, and talk of a leadership coup have made this year a difficult one for Cameron.

In contrast, Labour leader Ed Miliband - dismissed earlier this year as an awkward liability - is showing signs of transforming himself into a credible alternative.

Cameron's speech to the party faithful at the Conservative Party Conference in Birmingham will give him a chance to claw back lost ground. He is likely to try to strike a confident tone and to cover issues ranging from the economy to foreign affairs.

But there is no guarantee that the gathering, where anti-European Union activists will share the stage with liberal modernisers, will revive Cameron's battered election hopes.

The Conservative party's ambitious and popular London Mayor Boris Johnson, whose high profile during the Olympics sparked rumours he was after the premier's job, could upstage Cameron again.

Johnson, a witty public speaker, addresses the conference a day before the prime minister and if he were to sharply criticise the government or drop a hint about his own ambitions, the build-up to Cameron's big moment would be overshadowed.

George Osborne, the unpopular finance minister once lauded as a top tactician but now criticised for his failure to kicks tart the economy, may also want to score some points ahead of what are expected to be dismal official growth and borrowing forecasts in December.

He too is reported to have leadership ambitions.

"Cameron has to prove he's got that very elusive thing, which is grip - there is a sense in which things appear not only to be not working, but drifting," Queen Mary's Bale said.

Despite his current problems, things could still go Cameron's way.

Although December's economic forecasts are likely to make for depressing reading, there are signs the worst could be over. Third quarter figures, due out later this month, are expected to show that the economy grew for the first time since the end of last year.

While few expect a sudden surge of sustained growth, the data could improve confidence and help drag Britain out of recession.

This week, Johnson showered Cameron with effusive praise.

"David Cameron is going to win the next election, win it well. The government is doing the right thing by the economy. It's necessary to stabilise and cut the deficit and they've done exactly what the country needed them to do," he told reporters.

"You can't always be popular." (Editing by Andrew Osborn)

((matt.falloon@thomsonreuters.com))

Keywords: BRITAIN CONSERVATIVES/