Almost eighteen months ago the Labour Party plunged to electoral defeat. At 29.8 per cent its share of the British vote was its second lowest since the war and smaller still than the Conservatives had achieved in our 1997 and 2001 debacles. Normally such a drubbing represents a seismic shift profoundly shaking up the direction of British politics. Strangely this has not happened.
Indeed the New Labour narrative still predominates amongst the media and vast tracts of the UK population. Speak to most people under the age of forty and their world view goes something like this: the 1980s was a decade of industrial strife, privation outside southern England and poorly thought-through service cuts. The 1990s was a period of economic incompetence (Black Wednesday), sleaze, corruption and moral decay. From 1997 the Labour Party rode to the rescue, invested in public services and ran the economy “for the many, not the few”. By 2010 it was time for a change as the greedy bankers and international corporations (the beneficiaries of the 1980s Thatcher reforms) caused a colossal recession in which those working in and reliant on the public services are innocent victims. This commonly-held analysis emphasises the magnitude of the task ahead for Conservatives in persuading the electorate of the right route out of the national economic crisis. In part this has been self-inflicted.
Responding to the previous decade in which political discourse had become a relentless public relations exercise, for much of the last parliament we offered change (only of personnel) alongside continuity in policy (“sticking to Labour’s spending plans” and “sharing the proceeds of growth”). The entire elite political class colluded in a failure during the last election campaign to level with the British public on the tough economic choices that lay ahead. For Labour’s part they are now able to sit happily on the sidelines and blame the coalition government for everything they postponed addressing. However, even now domestic politics continues largely to be defined by New Labour’s rhetoric, with any commitment to cutting public spending being sold on the grounds of necessity rather than natural Conservative instincts for a smaller, more efficient state.
Too seldom do we hear the moral case that it is wrong for today’s generation of Britons to over-consume and rely upon future generations to foot the bill for this profligacy. The government has yet to challenge conclusively the contention that devoting huge swathes of taxpayer cash to tackling ‘social inequality’ through a lumbering welfare system is more caring than one which believes in empowering the individual. Nor has it sufficiently defended itself against its opponents’ class war politics. Instead we acquiesce in higher taxes on the wealthy without making clear the practical reasons why, in an age of global mobility, the brightest and best of our people will simply leave these shores if their plans to create wealth and promote enterprise are stifled.
The harsh reality is that we are still collectively spending far beyond our means. This year public borrowing is likely once again to exceed £125bn (in stark terms this equates to £1 in every £5 that government spends continuing to be borrowed). Over the past fifteen years the drivers of headline economic growth have been private borrowing (both a property- and credit-driven boom) and huge increases in public spending (financed even before the global economic crisis by unsustainable debt). Complacently this led to the ramping up of public spending up to and well beyond the illusory expansion in the tax base driven by rising property values. If this were not serious enough, the conventional wisdom of the age has promoted a culture of entitlement and demand for ‘fairness’ that exists, unchallenged, to this day. Near zero interest rates in the West have enabled Alice in Wonderland economics to persist. For now.
Here in the UK we must now swiftly end this state of denial over the true state of our national economy. The most destructive delusion that threatens to undermine future prosperity is the keen sense of collective and individual entitlement which was fostered under the last government. This has resulted in every departmental expenditure cut announced during the past year being portrayed by vocal interest groups as unconscionable, unworkable or immoral.
Meanwhile, the politics of envy has returned with a vengeance to domestic political discourse. The urgent task of any government serious about rapid economic recovery is to effect a sea change in these attitudes. In truth the UK and its citizens have an automatic entitlement neither to relentlessly higher living standards nor an ever generous welfare state. The latter was created as a reward after the huge communal efforts of winning a World War, but must now adapt to the rigours of a highly competitive global economy. Lifestyle improvements must be earned if future generations of Britons are to enjoy the opportunities and possibilities that we have for too long taken for granted. Nor does this apply solely to the economy.
Following this summer’s riots, David Cameron returned to one of his earliest (and most authentic and passionate) themes, “The Broken Society”. However, much of his ambitious programme of welfare and community reform is unachievable without the repeal of the Human Rights Act, one of the most toxic pillars of the Blair/Brown legacy. Finally, if one believes much of the media coverage, the spirit of this age is uncompromisingly ugly for those of us who instinctively support capitalism, free markets and global trade. There remains an open hostility (all too frequently expressed by coalition representatives) to banks, bankers, big business, the wealthy, private education, private health and the profit motive. Changing this mindset requires clear-sighted political leadership. As a matter of urgency government needs unapologetically to make the case for individual empowerment, promoting responsibility, efficiency and living within our means.