Housing benefit: Cameron is showing how he'd rule without the Lib Dems

In calling for under-25s to lose housing benefit, the Tory leader is shoring up his rightwing credentials to appease his party faithful
Housing benefit cuts would affect tens of thousands
Are proposals to restrict housing benefit anything more than a distraction? Photograph: Matt Cardy/Getty Images

Our ruling Conservatives would like to persuade us that they are thinking only of Britain's struggling economy and how to grow more jobs. Sadly for them it's becoming impossible to ignore the fact that, from David Cameron downwards, they're fighting like fat cats in a sack about the future direction of their party, and its leadership.

The first consequence is going to be a time of what we might call shadow politics – high-profile, frantically advertised political positions that will never actually come to much, but helpfully differentiate between the varieties of contending Toryism.

An obvious example of shadow politics is the radical reduction of the welfare state now being touted by the prime minister, as well as by Iain Duncan Smith. The new headline-grabber is to ban everyone under 25 from claiming housing benefit.

A moment's thought shows it to be preposterous at best, and cruel if not preposterous. Younger parents to be turfed from their homes? And what about all the 163,000 single under-25s who don't have an income high enough for a commercial rent and so rely on housing benefit now?

As Shelter has pointed out, many don't have a parental home to go to, perhaps because their parents have divorced or perhaps because their parents have followed the government's own advice and already downsized. Last year, says Shelter, 10,000 young people became priorities as "homeless", having been thrown out by their parents. Many more won't have shown up in the statistics, having resorted to "sofa sharing, hostels or at worst the streets".

Being a generous soul, my assumption is that the prime minister doesn't seriously propose to force tens of thousands of people to live in tents or under bridges; and that this proposal is only preposterous, and mainly designed to shore up his rightwing credentials.

He needs to do this, presumably, because of the growing row over Lords reform, with Tory rebels and Liberal Democrat ministers at loggerheads. Cameron, thus far, has stuck with Nick Clegg rather than the Tory critics, but it's causing him real trouble on the backbenches. A bit of right-revolutionary rhetoric on welfare helps. Lords reform is a good idea. It isn't going to happen. Labour, while promising to stay principled on the issue, will have enough concerns about the details of any plans to prohibit an easy ride. As one Labour insider puts it drily: "Lords reform has seen off many better men than Nick Clegg." Its immediate role is game-playing inside the Tory family, while Lib Dems look on and wring their hands.

The European referendum is another example. Whether you think it's good or bad in principle, there is no comprehensible question to be put; and there will be no referendum any time soon. Waving it as a possibility merely allows rightist Tories to advertise themselves. For now, a safe piece of advice is to ignore all stories on the subject.

The next battle in this arena of virtual, or fantasy, politics, is over our struggling and sub-standard education system. The case for reform and investment is real but the huge self-promotion of Michael Gove, and his provocative rhetoric (including over the Leveson inquiry) reveals a minister on manoeuvres. As with the housing benefit rumpus, this produces alarm and despondency in the real world, as students complete exams now being rubbished by Whitehall – great timing, boys.

But Gove is clearly a potential Tory leader. The adopted son of working class parents, and a man so well educated he can swagger through polysyllabic quotations at question time, he has become the right's new darling. A good back-story, journalistic training and contacts and more self-confidence than an Icelandic geyser, he's on a roll. As George Osborne's reputation has taken a battering, the obvious comparison is with that other potential leader, Boris Johnson. Gove though, has the advantage of already being in the Commons.

So Cameron, having proved himself relaxed enough to cope with the rigours of leading a compromising coalition, has to signal to the party the kind of leader he'd like to be if he wins a second term and a clear Tory majority. On welfare, education and Europe, he has to give the impression that he'd move sharply to the right, while not destroying his current relationship with Clegg and co. But is he the unwilling prisoner of the coalition, or the only man really enjoying it? He looks like the latter. No wonder the Tory party is confused.

The rest of us could look on, merely amused, except that these games of political positioning have real effects. The euro crisis may well mean that our economy is plunged into years of no growth, or low growth, piling up misery here. So tough choices about public spending will confront any government.

At the moment we have a coalition that often talks more rightwing than it acts. However, the allure of an anti-welfare, anti-European agenda is being burnished by government ministers who may yet find themselves able to actually enact it, pushing us towards a far more politically confrontational Britain than we have now.

Instead, they ought to be re-examining those hard choices without the distorting spectacles of Tory ideology. They'd find, for instance in the public outrage following Jimmy Carr's tax-avoiding antics, ample scope for raising more revenue, rather than punishing the most vulnerable.

One of Ed Miliband's advisers points out that the government loses something like 20 times as much in tax avoidance as through benefit cheats. We hear a lot about the latter. Here is a golden opportunity for an open-minded government, which really thinks "we're all in it together", to focus on the innumerable rich individuals, and major companies, who don't pay their fair share. It would be a popular crusade.

It would also, however, irritate the relatively few rightwing ideologues who so hate taxation they defend tax avoidance as morally fine. Some of them are, inevitably, big Tory donors. Yet I think the reason there was an uneasy response to the Carr revelations was because the need to play to the right-wing gallery makes tax avoidance a non-issue, just as it makes welfare cuts an irresistible one.

Halfway through the life of a struggling administration, with storm clouds ahead, it's no longer possible to ignore the ideological struggle in the party – except that it's barely a struggle now, just a rush to the right. We can't say we're not being warned.

Twitter: @jackieashley