You could be forgiven for thinking, in recent days, that a bunch of Tory grandees had collectively bought up most of the retirement homes in the Algarve, such is their sudden and astonishing interest in all things Portuguese. Unsurprisingly, perhaps, it is not out of a Labour-style solidarity for a neighbour in times of crisis – indeed, many Tory backbenchers are loudly voicing their insistence that Britain should not be involved in a bailout, even though we are legally obliged to do so. No, it is a clever political manoeuvre and, if you’ll forgive the metaphor, we should be wary of its quiet approach and nasty sting.

Back in December we wrote here that David Cameron was trying to manipulate the euro crisis in general for political advantage: to paint Britain as in the same dire straits as the PIIGS economies, in an attempt to strike fear into the hearts of voters and encourage passive acceptance of his cuts programme. Whether or not it worked in helping worry the economic commentators is debatable but in any event, at the very least, it’s clear that Labour is not winning the economic argument.

Now, stage two of Cameron’s cunning scheme has now been put in place: step up the linkage, focus it. Zoom in on Portugal’s current misery in the media: the political gridlock in agreeing a cuts programme. During the budget, Osborne mentions Portugal, Spain and Greece twice. The rightwing press have been happy to assist with articles from Tory MPs saying how, if we deviate a millimetre from the current programme, that doom and destruction will surely follow – just like Portugal. The resignation of the prime minister, Jose Socrates, has now made the crisis even bigger international news, so the story is slowly continuing to build.

But the whole crisis is now particularly useful for Cameron in a third way. Very soon, it’s quite possible that the whole crisis will explode into a full-scale bailout. Socrates heads up an old-fashioned left, like most of continental Europe, thought of as being to the left of Labour. The left are implementing reforms with their backs against the wall, and finding it very difficult, hence the ‘back-me-or-sack-me’ prime ministerial resignation to try and break the deadlock: doing a Major, as it were.

But all this is excellent positioning for Cameron, once the media suddenly fill with all things Portuguese. How convenient for Cameron to be able to paint Socrates as the European, lefty bogeyman trying to wreck everything. Aligning himself with an international trend – right austerity versus left anti-cuts – makes it much harder for the British left to win over the more neutral economic and political commentators. The hard working, sensible, rational right versus the irresponsible, spendthrift wreckers on the left. It’s a good job you have us, says Cameron, because if Labour we’re in power, they’d be like them over there, and what a mess we’d be in then.

It is, of course, a false comparison. For a start, David Miliband is quite right on the dire state of the European left: most of them are already out of power. But in Portugal (and neighbouring Spain), practically the sole remaining leftwing governments in Europe, are struggling to implement a similar cuts programme. And who is trying to block it? Well, apart from the major unions, ironically, it has quite often been the right, and often for reasons of pure politics. It is also false because, of course, Britain is not part of the euro, so does not have the resulting strains on its economic levers. Neither – despite a relatively modest overspend under Brown – does it have anywhere near the long history of fiscal incontinence of some of our southern European counterparts. And finally – most importantly – because we have never been anti-cuts, like they were before being forced into them. We are anti- the speed and depth of cuts.

So how should we, Labour, react, when this story starts to bite, and each headline on Portugal is used to characterise Labour as part of a European cabal of out-of-touch tax-and-spenders? Obviously, by pointing up the falseness of the arguments above at every opportunity. But, above all, by remembering that it is a bear trap. We cannot and must not play into their hands by looking like the Portuguese left or the Spanish left. We are not politically like them, our history is different and our economic policy is certainly different.

But in order that we can maintain this distinction, it is vital not to play into the hands of the Tories as they wilfully tar us all with the same brush. The mixed messages about our attitude to cuts, such as the unwise engagement of some of the PLP with UK Uncut, and our unwillingness to challenge others’ quite distinct message of ‘no cuts’, such as was on show at last Saturday’s demo, are currently conspiring to do the exact opposite.

Photo: Jose Goulao