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Socialism Today 125 - February 2009

The Tory party: back to the future

THROUGHOUT 2008, Tory leader David Cameron attempted to draw a clear distinction between the policies of the Conservative Party and New Labour as the Tories rose and fell in the polls. However, as the scale of the economic crisis began to be revealed, his room for manoeuvre became increasingly curtailed. He was forced to suspend hostilities during the Labour party conference and back Gordon Brown’s rescue package. Despite his attempts to blame Brown for the scale of the crisis and his talk of ‘broken Britain’, he came under fierce attack from the right of the party as the gap between the parties narrowed to three points in the polls.

Brown’s jibe that the Tory frontbench were novices and what was needed was experience to steer the ship through the stormy period ahead had hit home. The mutterings against shadow chancellor and Cameron’s closest ally, George Osborne, began to grow particularly following ‘yachtgate’. (This revolved around an allegation that Osborne had discussed a possible donation to the Tory Party with Russian oligarch, Oleg Deripaska, on his luxury yacht off Corfu. New Labour’s Lord Mandelson was also among the holiday guests.)

Cameron then attempted to make a clear break from Brown’s handling of the economic crisis. In a speech to the London School of Economics he reaffirmed the Tories’ abandonment of the policy of matching New Labour spending plans. He pledged that the Tories would rein in public-sector borrowing and attempt to make savings in public expenditure with the further privatisation of some remaining public services, while offloading others onto the voluntary sector.

Cameron reasoned that confidence in the economy could not be restored unless people were reassured that they would not be hit with future tax rises, imposed to pay for the government’s reckless borrowing now to stave off the worst of the recession. This is a reference to their exposure of Brown’s plan to compensate for the temporary cut in VAT by raising it to a level above the standard rate later. Brown subsequently denied this.

Cameron then set out his alternative plan to deal with the economic crisis. He claimed that New Labour was dead and Brown was in fact returning to the failed, 1970s policies of old Labour, of recklessly increasing government debt to "pump money into unreformed public services". He argued that the only way to restore confidence was to control borrowing and public spending, apart from what he calls the automatic stabilisers that operate during a recession – that spending on out-of-work benefits increases and revenues from tax receipts fall. He characterised Labour’s policy as ‘spend now and increase taxes later’, and claimed that it would undermine business and individuals’ confidence in the future, thus prolonging the recession: "If the future looks bleak and uncertain, people are likely to be more cautious… If people know they will be hit with massive tax rises in a couple of years, they’re less inclined to spend more now".

Cameron went on to spell out what this means. Firstly, that public spending will be reined in below that set out in New Labour spending plans for 2010 and beyond. This would mean that the Tories would set spending next year at £645 billion rather than the £650 billion proposed by chancellor Alistair Darling. They would achieve this by "reducing the demands on the state by fixing our broken society. Second, increasing the productivity of the state by reforming our public services. And third, cutting government waste".

So, back to the traditional Tory diet: cutting public expenditure and privatising public services; passing welfare provision over to voluntary organisations; breaking the state monopoly on education; and tackling social breakdown by advocating marriage.

Cameron followed this up with the announcement of a £4.1 billion package of tax cuts, scrapping all tax on savings for basic-rate taxpayers and raising the threshold at which millions of pensioners begin paying tax. This would benefit about 18 million basic-rate taxpayers and about four million pensioners.

He was attempting to shore up the core Tory support in anticipation of Brown calling an election. The response within the party gives an indication of the tensions that will go some way to determining the character of the next Tory government. Whereas Cameron calls for a 1% cut in any projected increase in public spending, the former director of the CBI, Lord Digby Jones, fresh from his stint as a New Labour minister, demanded further massive cuts in the civil service: "Frankly the job could be done with half as many, it could be more productive, more efficient, it could deliver a lot more value for the taxpayer". The ultra-Thatcherite Tory MP John Redwood proposed on his blog that the public sector should take some of the pain that the private sector is currently experiencing, that private sector pensions are being hit by the economic crisis while public-sector pensions continue to be protected.

Following the death of Alan Walters, Margaret Thatcher’s economic guru, Simon Heffer in the Daily Telegraph, harked back to the golden days of the Tories: "Putting a few bob into old ladies’ purses is commendable; but it isn’t a policy. There is a need for radicalism: what is more, it is the time. By that I mean that a coherent economic policy – rather like that outlined by the Tories in the year or so before the 1979 victory – will be treated with respect by an electorate that has had all the proof it needs of Labour’s incompetence and dishonesty". (6 January)

George Bridges, a former advisor of Cameron, went further, with a clarion call to the right of the party that the next election will be a rerun of 1979: "The Left sees capitalism gasping for breath, and hopes a well-aimed blow could do mortal damage. Invigorated by the market’s collapse, socialists are on the march. No more talk about a third way. No more twaddle like the Blairite ‘what matters is what works’. Pulsating with core belief and conviction, the Left are preaching ‘the state can save us’."

A section of the Conservative Party has never come to terms with Labour’s transformation into a bourgeois party, into New Labour. For them, it is forever 1979. However, Cameron is advocating policies that, in reality, differ very little from Brown’s. For instance, £35 billion of cuts in public spending from 2010-11 had already been announced in Darling’s pre-budget report. Proposals to have the social fund administered by credit unions and for the further privatisation of schools had already been floated by New Labour. There is little difference between the proposal for state insurance for £50 billion of lending to business that Osborne put forward to stimulate the flow of credit to companies and the package announced by Brown.

On the other hand, when Cameron makes a populist bid to oppose New Labour, he risks incurring the wrath of sections of his own party and undermining its support from big business. A case in point is the government’s decision to build a third runway at Heathrow. Cameron has gone so far as to say that the project will be cancelled if the Tories win the next election, effectively attempting to warn off firms who might invest in the project.

In his latest cabinet reshuffle, Cameron has tried to overcome the accusation of inexperience by bringing back ‘big beast’ Ken Clarke as business secretary to counter the Mandelson effect. Though undoubtedly popular, this move is fraught with danger. Clarke is not popular with the Euro-sceptic wing of the party and is an inveterate rebel, having voted against the Conservative whip no less than 33 times under Cameron. A week earlier he affirmed that William Hague had been made deputy leader, effecting a slight sideways move for George ‘Lord Snooty’ Osborne from his place as Cameron’s right-hand man. This is calculated to appease the rightwing.

The Tories are now climbing high in the polls again, 45% to New Labour’s 32%. It may be that Brown has already missed his window of opportunity to go to the country and emerge with a creditable result. As unemployment grows and the economy continues to struggle, so disenchantment with Brown and New Labour will grow and the Tories, as the main opposition party, will benefit. There is little difference between the policies of the two bourgeois parties, particularly constrained as they are by the economic situation. The most telling phrase that Cameron used in his speech is that a Conservative government would be a fresh start. Ultimately, it may be simply the desire to punish New Labour that brings the Tories back to power. In the absence of any challenge from the left, as the trade union leaders strive to keep the lid firmly on any attempts towards a new workers’ party, this scenario seems more and more likely.

Ken Douglas


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