Panic among Tories to abandon austerity after Labour’s shock surge will ruin the gains already made
Tough choice: re-appointed Chancellor Philip Hammond is under pressure to relax the Government’s austerity policies REUTERS
William Hague likes to say that the Conservative Party has two default positions: complacency and panic. Since the election it has contrived to be guilty of both. Refusing to announce a timetable for her resignation, Theresa May is instead seeking a desperate (and doomed) parliamentary alliance with the reactionary Democratic Unionist Party. In so doing, she is reinforcing the ancestral suspicion that Tories care only about clinging on to power.
Meanwhile, her party is in a state of ideological mayhem, apparently willing to say anything and sacrifice any principle to meet the challenge of Jeremy Corbyn’s Left-wing populism. A week ago the PM was promising “strong and stable” leadership. Now, her Government — if that is the word — cringes in the foetal position, begging for mercy.
It is one thing to heed an unexpectedly poor electoral performance, to listen and learn; quite another to signal that everything is up for grabs, as if there were a political “safe word” to end the ordeal.
Predictably, the implications of the new hung Parliament for Britain’s departure from the EU have attracted most attention. More pressing, however, is the question of fiscal policy, raised by the sudden insistence that Conservatives should ditch “austerity”. It is confidently asserted by a significant number of Tories that May’s failure to achieve a Commons majority on Thursday can be ascribed to the deficit reduction strategy she inherited from David Cameron’s government.
According to one unnamed Tory MP quoted in today’s Financial Times: “We should have a summer Budget and announce a load more money for schools and hospitals and a five per cent pay rise across the board.” In other words: what was economically illiterate a week ago becomes political expedient today. How gullible do such Conservatives imagine the voters to be?
It is certainly true that the Tories made no effort at all to defend their economic record during the campaign, leaving the field clear for Corbyn with his fantasy shopping-list of spending promises. This was like opting to keep the goalkeeper on the bench during a penalty shoot-out. After seven years of tough fiscal decisions by the Coalition and the Conservative Government, Labour was always going to attack this flank. Amazingly, it encountered almost no resistance.
This failure nourished the myth that the Tory strategy of fiscal conservatism reflected an ideologically driven yearning to shrink the state. In fact, Cameron and George Osborne always faced strong opposition from the Right for their commitment to ring-fencing the NHS and international development budgets. The logic of their position had nothing to do with a determination to roll back the frontiers of the state, and everything to do with economic stability.
The Cameron-Osborne strategy may not have worked as quickly as they hoped, but it has borne fruit, bringing the deficit down from 10 per cent of GDP to below three per cent. Yes, this has subjected the public sector to considerable pressure. But it has also forced necessary efficiencies and imaginative public service reform. As a long-serving Home Secretary, May herself knows that prudent spending does not preclude a fall in crime.
More to the point, consider the alternative: had the deficit been allowed to soar, interest rates would have followed upwards with crippling consequences for mortgages and the nation’s economic credibility. Indeed, one of the Cameron government’s unsung achievements was to force Ed Miliband’s Labour to recognise the need to control the deficit.
Yes, the approach of Brexit has compelled Chancellor Philip Hammond to seek greater flexibility: he may need the head-room in the turbulent times ahead. But it would be madness, after so many years of hard-won fiscal progress, for the Tories to turn on a dime and surrender their commitment to responsible public spending simply because Labour won 30 seats.
The problem is otherwise. We have entered an age of populist oscillation, in which elections and referendums are treated less as moments of collective decision-making than opportunities to punish (often ill-defined) élites.
Last year’s Brexit vote was, to a considerable degree, an ugly uprising against immigration. The general election, in its turn, was a punishment beating for a government that called a snap election and then failed to defend itself or explain its purpose.
In today’s Sun, Robert Halfon, the Tory MP for Harlow — inexplicably sacked by the PM on Monday — correctly observes that “our election campaign portrayed us as a party devoid of values... We let ourselves be perceived primarily as the party of ‘austerity’, failing entirely to campaign on our record of a strong economy or strong employment.”
While most Tories would stop short of endorsing Halfon’s call for their movement to be renamed the “Workers Party”, they should heed his call for “a proper narrative which speaks to a real emotional connection with the British people”.
This may sound platitudinous, but it is no such thing. Politicians generally, and Conservatives especially, tend to think that a barrage of statistics and proposals will carry the day. Yet, as Naomi Klein argues in her new book, No is Not Enough, it is essential to “lead with values, not policies”.
This is what was completely lost in the social care debacle: the core intention was to protect the elderly from losing their homes during their lifetimes, and to increase the amount they could leave to their loved ones. What should have been presented as a “story” about peace of mind in old age became a debased shouting-match about the so-called “dementia tax”.
In the same spirit, what is now vilified as “austerity” should be defended as part of the duty adults owe the young. There is no nobility in bequeathing ever-greater debt to the next generation, or squandering economic responsibility to escape a political jam.
The future belongs to the party that is able to bridge the gap between populist fervour and governing practicality. For now, the Conservative tribe shows little sign of being up to the task.
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