Economy still the key talking point for leaders

So we’ve now had an hour of Chancellor’s debate and about half hour of the leaders’ debate discussion on the economy and tax and spend policy.

This election will be decided on the economy. And for that reason, I would be starting to feel a little edgy at Conservative Central Office.

Mr Cameron did not bomb, by any means, but that must have been the sort of performance that persuaded Tony Blair not to risk a debate, in similar circumstances in 1997. Solid, yes, but not transformative for undecided voters.

One piece of evidence for this, an Angus Reid poll saying that despite both bigger parties trailing Mr Clegg, Gordon Brown attracted many more previously undecided voters than David Cameron.

I had a hunch that the ‘Hundred Business Leaders have signed my letter’ argument would not run as well with the electorate as it seemed to do with the political commentariat. Despite his clumsy joke, and over-reliance on the bludgeon of statistics, Gordon Brown was at his most effective, scaring the audience with the prospect of a double-dip, caused by premature Conservative cuts. ‘It’s not question time David, it’s answer time’.

Cameron again referred to ‘waste’ and the backing of business leaders. This argument is a not an adequate response to the question ‘why cut now?’.

There are good answers to this question. The business leaders’ letter-writing skills are not one of them. The Business leaders are against the NI rise which starts in 2011.

Mr Cameron does not need to cut this year in order to prevent NI going up. The £6bn net ‘waste cuts’ that will start in a matter of weeks will in 2010/11 all go towards cutting back the deficit. NI is irrelevant.

I would also point out that Cameron said that Brown’s ‘£1bn schools cut’ number was ‘plucked out of thin air’. Well the Schools budget is not protected under Mr Osborne’s plans.

Shadow Treasury aides told us that the average cut in unprotected areas (also housing, transport, communities, and universities) would be 2.8 per cent in the current year. It works out at an ‘in-year’ cut of £1.7bn, unless Mr Cameron is saying that Michael Gove has secured partial ‘protection’ for his department.

Add in the fact that ‘St’ Nick Clegg backs Brown on this timing argument, and I think there is an epic banana skin for Mr Cameron. And this is not just an academic debating point, this could become a key sticking point in hung parliament negotiations.

Cameron also failed to land a single blow on Brown over his culpability for the credit crisis. A man who in his first Budget in 1997 said: ‘I will not allow house prices to get out of control and threaten the sustainability of the recovery,’ before allowing house prices to treble in a decade.

Mr Cameron, bravely apologised for Conservative deregulatory zeal, as far back as January 2008 (interview with me in Davos), but if he can’t land some blows on the man minding the till for the decade long-boom (And Yes, St Nick would ‘agree’), then how will he extend that poll lead into majority territory?