Insurgent UKIP stalks Cameron's re-election drive

By Andrew Osborn BIRMINGHAM England (Reuters) - David Cameron strived to make his Conservative party's annual conference an upbeat launch pad into next May's election but away from the stage activists spent their time fretting about the rise of an anti-EU party on its right flank. Cameron, whose party trails opposition Labour in most opinion polls, is scrambling as voters and even some of his lawmakers desert him for the UK Independence Party seven months before what is shaping up to be one of the closest elections in modern British history. His speech at this week's conference in Birmingham, central England, was meant to calm nerves offering tax cuts and hope of a brighter future after years recovering from financial crisis. It helped, but many party members fear an internal schism over Europe fuelled by UKIP could be its undoing. "We've been the dominant party in British politics for 200 years," David Davis, a Conservative lawmaker and former minister who challenged Cameron for the leadership in 2005, told activists. "If we don't win the next election we and the country are in deep trouble. UKIP is something we have to deal with." Tapping into an anti-politics zeitgeist, UKIP won European elections in Britain in May, poached two of Cameron's lawmakers in the past month, and polling suggests it may win up to six of 650 seats in the British parliament next year. That sounds like a paltry number but its ability to split the centre-right vote in any number of constituencies which, under a winner-takes-all system could hand them to the Labour party, strikes fear into Conservative hearts. "I think we have the right policies but we don't seem to be getting our message across," Liz Fairhearst, a Conservative councillor on the southern English coast, told party workers. "Frankly our PR (public relations) is appalling." Cameron once derided UKIP, which wants Britain to quit the European Union and impose stiff caps on immigration, as "fruitcakes, loonies and closet racists". But under a media-savvy leader it has become a potent force. Next week it may secure its first seat in the Westminster parliament in a by-election in south-east England forced by the defection of a Conservative lawmaker. According to the bookmakers, UKIP will win. Cameron, whose party hasn't won an overall majority since 1992 and governs in coalition with the centre-left Liberal Democrats, is under pressure to deliver a clear victory next year or face being ousted as leader. UKIP's ascendancy, driven in large part by the energy and speaking skills of its leader Nigel Farage, has forced Cameron to harden his stance on the European Union, a cause for concern among EU allies. It has also exposed rifts within Cameron's party, with some warning it could split in two and become unelectable for a generation. Jacob Rees-Mogg, a prominent Eurosceptic Conservative lawmaker, likened the widening rift to what happened with the party in the 19nth century when it tore itself apart over the issue of scrapping corn import tariffs. It took the party 28 years to regain power. "We know from history that parties that split don't meekly come back. They may come back eventually but the time lags can be enormous," he told a meeting of Eurosceptic activists on the conference's fringe this week. BETRAYAL? In lively scenes that illustrated the debate convulsing the Conservative party, former members who have switched to UKIP turned up at the event to vent their anger at their old party. Colin Mair, a UKIP councillor in the east of England, said he was fed up with Conservatives trying to frighten people into not voting for his party and rejected calls from parts of Cameron's party to form an electoral pact next year. "The disloyalty is that the Conservative leadership have completely ignored the grassroots," he said to loud cheers of support. UKIP has capitalised on disenchantment among Conservatives at what they see as a drift towards the centre or even the left as Cameron tried to copy Labour's triple election winner Tony Blair and reposition his party to make it more electable. Laws he championed that legalised gay marriage and committed Britain to give away 0.7 percent of its annual national wealth in foreign aid have caused widespread anger in the party. There is fury that he failed to deliver on a promise to bring annual net migration down to the tens of thousands by 2015 from the hundreds of thousands. Parliamentarians also talk of his inability or unwillingness to connect and consult with the rank-and-file. "The problem we're having is because the party, maybe because of the Liberals, is being tied down to policies that worry Tory (Conservative) MPs," Davis said. "If we are more Conservative we'll have fewer defections." Cameron's Eurosceptic credentials have come under scrutiny. He has promised to renegotiate Britain's EU relationship before offering an in/out referendum in 2017. But some of his supporters are frustrated by his reticence to spell out what he wants to change and his reluctance to plainly state that Britain will leave the 28-nation bloc if it doesn't get what it wants. "He does need to say what he wants to get out of the negotiation," Charles Moore, a commentator and a former editor of the right-leaning Daily Telegraph newspaper, told activists. "At present we're being told we're going to have a negotiation and that's really all. There's no particular reason why we should find that impressive." POLITICAL EARTHQUAKE Cameron tried to address those concerns in his keynote speech on Wednesday, promising he would try to alter the EU's freedom of movement rules to curb immigration and dilute the reach of the European Convention on Human Rights. "I will go to Brussels, I will not take no for an answer and when it comes to free movement I will get what Britain needs," Cameron said. [ID:nL6N0RW1EU] Internally, a debate is raging about whether to cherrypick UKIP policies. Davis, who is on the right of the party, spoke of the need to "reclaim" traditional Conservative policies from UKIP, but others warned against what they said could become a "race to the bottom" to present increasingly right-wing ideas. Tack too far right and the Conservatives risk the public seeing them as what interior minister and potential Cameron successor Theresa May once called the "nasty party". When he beat Davis to the party leadership nine years ago, Cameron was clear that he could only win power as a modernist camped on the centre-ground. In his conference speech, he said the best anti-UKIP weapon was to tell voters a vote for UKIP would let Labour into power by the back door. That may well be his most convincing argument. "There is only one real choice. The Conservatives or Labour," Cameron told the party faithful. "If you vote UKIP that’s really a vote for Labour. On 7th May (election day) you could go to bed with Nigel Farage, and wake up with (Labour leader) Ed Miliband," he said. Farage did his best to sabotage the conference by timing the announcement of Conservative defections, large and small, and is promising an "earthquake" in British politics. "The other parties are losing councillors, MPs and backers to UKIP, not only voters, and they are all playing their part in changing the course of politics in the UK for good," he said. (Editing by Mike Peacock)