Cameron should be delighted. Gordon Brown looks to be heading for oblivion at next year's general election. And the Damian McBride fiasco has exposed Brown's coterie of loyal henchmen as boorish bullies and disgusted a public that would not normally be the least bit interested in the activities of the inhabitants of the backrooms of Downing Street.
What's more, the Prime Minister's troubles will escalate this week when MPs are likely to rebuff his plans to clamp down on their lavish parliamentary expenses – a subject that infuriates a general public struggling to make their way through a reces
sion.
But right at the heart of Labour's troubles is last week's Budget, which saw Alistair Darling deliver a horrifying set of statistics that illustrated just how far the economy has sunk. The severity of the economic storm that faces the UK has put a bleak complexion on Britain's future. So how does the Budget set the scene for the next year's General Election battle?
Under normal circumstances things being bad for Labour could only mean good things for the Tories. This time, however, things are so bad that Cameron could be forgiven for momentarily asking himself if the Premiership is a prize worth winning or just a poisoned chalice.
Only momentarily, mind. Like any politician the lure of power will, of course, prove too great and Cameron will present himself as the man who can take Britain out of recession while condemning Labour's mismanagement of the economy.
Yet privately, he and his aides will be wondering how on earth they are going to sort out a mess that will see public borrowing rise to £175bn by the end of this financial year – the worst figures since the Second World War. With Britain forecast to remain in debt until 2023, facing rising unemployment, negative growth and a plummeting property market, the outlook is far worse than the last time the Conservatives faced a comparable situation.
It was 30 years ago that Margaret Thatcher inherited a failing economy - albeit not on the disastrous scale of the 2009 version. "The situation is worse than 1979," said John Curtice, professor of politics at Strathclyde University. "But for the Falklands War, Mrs Thatcher's Tories would have been in terrible trouble from 1979 to 1982. Trying to be an effective new government in this kind of situation is going to be very difficult.
"Is this an election that the Conservatives would actually want to win or an economy that they would want to inherit?"
Hopefully, Cameron will not have to rely on a far-off war in order to establish his presence in Downing Street. But in another sense the Conservative leader will look to that period of history in an attempt to secure the support of the people.
As soon as Darling delivered his Budget, the Conservatives were immediately harking back to the days of Old Labour when Jim Callaghan, Michael Foot and Neil Kinnock struggled to lead a left wing party that the public would not trust with the economy. Darling's plans to tax the rich were denounced as "class war". It was the end of New Labour and an attempt to shore up the traditional working-class vote in anticipation of defeat at the polls – and an acknowledgment that the middle-class voters that swept Tony Blair to power had deserted them.
But simply looking backwards will not satisfy a new generation of voters, who do not remember Sunny Jim, Foot's donkey jacket or the Welsh windbag. Cameron's challenge is to convince an increasingly tired and cynical electorate that he and George Osborne have the ability to chart the United Kingdom through economic turmoil. Despite recent polls suggesting that Cameron has doubled his lead over Labour in the past month and is in line for a 150-seat majority, there are still questions about how he would do that.
The questions are especially pressing given that Cameron would inherit
a black hole which the Institute for Fiscal Studies, suggests will cost families £1,400 in higher taxes. The Conservatives will undoubtedly take tough measures to tackle financial waste in the public sector. Imaginative tax cuts will also have to be considered to accelerate growth, despite the need to claw-back public debt. Cameron has already signalled that he is prepared to go down that route by promising to reverse Labour's plan to tax the highest earners at 50%.
For Labour, these are desperate times. Brown's only hope now is that his Chancellor's incredibly optimistic prediction that Britain will start to come out of recession at the turn of next year somehow turns out to be true. His hope is that he can delay the election until the last possible moment and claim credit for steering the country through the worst of its difficulties.
At the moment, Scotland's ruling party may just be a side-show at Westminster, but the General Election could throw up some intriguing possibilities for the SNP. Alex Salmond has said he wants to win 20 seats. That target remains and if it is reached the SNP could become important power brokers at Westminster as well as Holyrood in the event of a hung parliament. SNP strategists point to a poll last week, which said 41% of people thought it would be good thing if the SNP held the balance of power in a hung House of Commons, compared with 19% who thought it would be a bad thing.
Angus Robertson, the SNP leader at Westminster, said: "If it is a realistic prospect, people will see that it is worthwhile to vote for us. But is it a realistic prospect? I would say that we have to be prepared for every eventuality. But you can't predicate any offering to the electorate on a potential outcome like that - but we have to be prepared for it."
