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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