Cameron is complacent about the Tory right flank

Internal opposition is not restricted to "one or two backwoodsmen".

The key moment in Michael Gove's interview with Andrew Marr this morning came when he was challenged on the growing opposition from the right of the Tory party to the Cameron project. He replied:

When you carry out any kind of modernisation there are always one or two backwoodsmen who will grumble in the undergrowth.

In fact, the evidence suggests that a far greater number of MPs and activists remain highly sceptical of David Cameron's modernising agenda. There are two critical divisions: the first over policy and the second over party structure. The main tensions in the first category are over climate change and Europe.

On climate change, which ConservativeHome's Tim Montgomerie has predicted will prove as divisive for the party as Europe was in the 1990s, we have seen that reducing Britain's carbon footprint is the lowest priority for Tory candidates. As Montgomerie points out: "You have got 80 per cent or 90 per cent of the party just not signed up to this. No one minded at the beginning, but people are starting to realise it could be quite expensive, so opinion is hardening."

On Europe, although Cameron would most likely be the most Eurosceptic prime minister in history, many activists and backbenchers remain angered by his refusal to promise a referendum on any aspect of Britain's EU membership. Unless he manages to repatriate significant powers from Brussels (which is unlikely), we can expect this issue to flare up again.

Tory modernisers are fond of reminding us that significant sections of the Labour Party never accepted Tony Blair's policy agenda. Yet there is a big difference. Following the repeal of Clause Four, there was no serious constituency of support for wholesale nationalisation. But in the case of today's Tories, the right-wing dominance of the press means that Euroscepticism and and climate-change denialism have not been similarly discredited.

Meanwhile, the Joanne Cash affair demonstrates how hostile many local activists are towards what they see as Cameron's centralisation of the party. That the debacle took place in Westminster North (not usually Turnip Taliban territory) makes one wonder how much anger there is elsewhere in the country.

It is increasingly likely that Cameron will be forced either to swerve to the right or to lead a divided and resentful party. These are equally unpalatable options for a modernising leader.

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George Eaton is political editor of the New Statesman.

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What type of Brexit did we vote for? 150,000 Conservative members will decide

As Michael Gove launches his leadership bid, what Leave looks like will be decided by Conservative activists.

Why did 17 million people vote to the leave the European Union, and what did they want? That’s the question that will shape the direction of British politics and economics for the next half-century, perhaps longer.

Vote Leave triumphed in part because they fought a campaign that combined ruthless precision about what the European Union would do – the illusory £350m a week that could be clawed back with a Brexit vote, the imagined 75 million Turks who would rock up to Britain in the days after a Remain vote – with calculated ambiguity about what exit would look like.

Now that ambiguity will be clarified – by just 150,000 people.

 That’s part of why the initial Brexit losses on the stock market have been clawed back – there is still some expectation that we may end up with a more diluted version of a Leave vote than the version offered by Vote Leave. Within the Treasury, the expectation is that the initial “Brexit shock” has been pushed back until the last quarter of the year, when the election of a new Conservative leader will give markets an idea of what to expect.  

Michael Gove, who kicked off his surprise bid today, is running as the “full-fat” version offered by Vote Leave: exit from not just the European Union but from the single market, a cash bounty for Britain’s public services, more investment in science and education. Make Britain great again!

Although my reading of the Conservative parliamentary party is that Gove’s chances of getting to the top two are receding, with Andrea Leadsom the likely beneficiary. She, too, will offer something close to the unadulterated version of exit that Gove is running on. That is the version that is making officials in Whitehall and the Bank of England most nervous, as they expect it means exit on World Trade Organisation terms, followed by lengthy and severe recession.

Elsewhere, both Stephen Crabb and Theresa May, who supported a Remain vote, have kicked off their campaigns with a promise that “Brexit means Brexit” in the words of May, while Crabb has conceded that, in his view, the Leave vote means that Britain will have to take more control of its borders as part of any exit deal. May has made retaining Britain’s single market access a priority, Crabb has not.

On the Labour side, John McDonnell has set out his red lines in a Brexit negotiation, and again remaining in the single market is a red line, alongside access to the European Investment Bank, and the maintenance of “social Europe”. But he, too, has stated that Brexit means the “end of free movement”.

My reading – and indeed the reading within McDonnell’s circle – is that it is the loyalists who are likely to emerge victorious in Labour’s power struggle, although it could yet be under a different leader. (Serious figures in that camp are thinking about whether Clive Lewis might be the solution to the party’s woes.) Even if they don’t, the rebels’ alternate is likely either to be drawn from the party’s Brownite tendency or to have that faction acting as its guarantors, making an end to free movement a near-certainty on the Labour side.

Why does that matter? Well, the emerging consensus on Whitehall is that, provided you were willing to sacrifice the bulk of Britain’s financial services to Frankfurt and Paris, there is a deal to be struck in which Britain remains subject to only three of the four freedoms – free movement of goods, services, capital and people – but retains access to the single market. 

That means that what Brexit actually looks like remains a matter of conjecture, a subject of considerable consternation for British officials. For staff at the Bank of England,  who have to make a judgement call in their August inflation report as to what the impact of an out vote will be. The Office of Budget Responsibility expects that it will be heavily led by the Bank. Britain's short-term economic future will be driven not by elected politicians but by polls of the Conservative membership. A tense few months await. 

Stephen Bush is special correspondent at the New Statesman. He usually writes about politics.