Heseltine's wisdom exposes Osborne's limits

The former Conservative deputy prime minister condemns the government's lack of a growth strategy.

When George Osborne commissioned Michael Heseltine to produce a review of economic policy, he must have known that the results would not be entirely favourable to the government. The former deputy prime minister, a one nation Tory, has long favoured the kind of state interventionism that is anathema to the modern Conservative Party. Even so, it would be surprising if Osborne wasn't having at least some regrets this morning. Heseltine's 228-page report (which must be the first to feature a cartoon of its author on the cover), entitled No Stone Unturned in Pursuit of Growth, is a searing indictment of the coalition's approach.

The above cartoon appears on the front of Michael Heseltine's report.

"The message I keep hearing is that the government is that the UK does not have a strategy for growth and wealth creation," Heseltine writes, and he appears to agree. In an attempt to fill this void, he urges the government to establish a Prime Minister-led National Growth Council (rather like the National Economic Council abolished by the coalition), to transfer £58bn in funding to Local Enterprise Partnerships, to review "regulations relating to immigration policy", to "clarify urgently" its solution to the problem of aviation capacity, to outline a "definitive and unambiguous energy policy" (not much sign of that), to block foreign takeovers if they damage national interests, to hand a legal role to chambers of commerce to encourage local support for businesses, and to continue to "promote the British interest in Europe" (Heseltine is a reminder of the days when Tory MPs were more pro-EU than their Labour counterparts). But with the Treasury already briefing against him last weekend, it remains to be seen how many (if any) of these proposals become government policy.

The recurring mantra of the report is that an interventionist state is an essential precondition for growth. Having once believed in "the simplest of notions of the role of government. Get off our backs, cut the red tape, deregulate, lower taxes", Heseltine has come round to the view that "there are some things that only government can do to drive growth". At a time when the Tory party is increasingly dominated by crude Thatcherites, it is profoundly refreshing to hear such words from a Conservative.

Elsewhere, in a welcome blast against the supply side fanatics, he writes: "I reject the notion that regulation in itself hinders growth. Good, well-designed regulation can stop the abuse of market power and improve the way markets work to the benefit of business employees and consumers." And he warns that tax cuts, the right's other favoured solution, will "have only a limited effect", "the principal void in today's investment climate is confidence".

Heseltine's report is a reminder both of his enduring wisdom and of the paucity of the government's economic vision. Osborne did the country, if not himself, a fine service in commissioning it.

Michael Heseltine said that he kept hearing that "the UK does not have a strategy for growth". Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Getty
Show Hide image

Is defeat in Stoke the beginning of the end for Paul Nuttall?

The Ukip leader was his party's unity candidate. But after his defeat in Stoke, the old divisions are beginning to show again

In a speech to Ukip’s spring conference in Bolton on February 17, the party’s once and probably future leader Nigel Farage laid down the gauntlet for his successor, Paul Nuttall. Stoke’s by-election was “fundamental” to the future of the party – and Nuttall had to win.
 
One week on, Nuttall has failed that test miserably and thrown the fundamental questions hanging over Ukip’s future into harsh relief. 

For all his bullish talk of supplanting Labour in its industrial heartlands, the Ukip leader only managed to increase the party’s vote share by 2.2 percentage points on 2015. This paltry increase came despite Stoke’s 70 per cent Brexit majority, and a media narrative that was, until the revelations around Nuttall and Hillsborough, talking the party’s chances up.
 
So what now for Nuttall? There is, for the time being, little chance of him resigning – and, in truth, few inside Ukip expected him to win. Nuttall was relying on two well-rehearsed lines as get-out-of-jail free cards very early on in the campaign. 

The first was that the seat was a lowly 72 on Ukip’s target list. The second was that he had been leader of party whose image had been tarnished by infighting both figurative and literal for all of 12 weeks – the real work of his project had yet to begin. 

The chances of that project ever succeeding were modest at the very best. After yesterday’s defeat, it looks even more unlikely. Nuttall had originally stated his intention to run in the likely by-election in Leigh, Greater Manchester, when Andy Burnham wins the Greater Manchester metro mayoralty as is expected in May (Wigan, the borough of which Leigh is part, voted 64 per cent for Brexit).

If he goes ahead and stands – which he may well do – he will have to overturn a Labour majority of over 14,000. That, even before the unedifying row over the veracity of his Hillsborough recollections, was always going to be a big challenge. If he goes for it and loses, his leadership – predicated as it is on his supposed ability to win votes in the north - will be dead in the water. 

Nuttall is not entirely to blame, but he is a big part of Ukip’s problem. I visited Stoke the day before The Guardian published its initial report on Nuttall’s Hillsborough claims, and even then Nuttall’s campaign manager admitted that he was unlikely to convince the “hard core” of Conservative voters to back him. 

There are manifold reasons for this, but chief among them is that Nuttall, despite his newfound love of tweed, is no Nigel Farage. Not only does he lack his name recognition and box office appeal, but the sad truth is that the Tory voters Ukip need to attract are much less likely to vote for a party led by a Scouser whose platform consists of reassuring working-class voters their NHS and benefits are safe.
 
It is Farage and his allies – most notably the party’s main donor Arron Banks – who hold the most power over Nuttall’s future. Banks, who Nuttall publicly disowned as a non-member after he said he was “sick to death” of people “milking” the Hillsborough disaster, said on the eve of the Stoke poll that Ukip had to “remain radical” if it wanted to keep receiving his money. Farage himself has said the party’s campaign ought to have been “clearer” on immigration. 

Senior party figures are already briefing against Nuttall and his team in the Telegraph, whose proprietors are chummy with the beer-swilling Farage-Banks axis. They deride him for his efforts to turn Ukip into “NiceKip” or “Nukip” in order to appeal to more women voters, and for the heavy-handedness of his pitch to Labour voters (“There were times when I wondered whether I’ve got a purple rosette or a red one on”, one told the paper). 

It is Nuttall’s policy advisers - the anti-Farage awkward squad of Suzanne Evans, MEP Patrick O’Flynn (who famously branded Farage "snarling, thin-skinned and aggressive") and former leadership candidate Lisa Duffy – come in for the harshest criticism. Herein lies the leader's almost impossible task. Despite having pitched to members as a unity candidate, the two sides’ visions for Ukip are irreconcilable – one urges him to emulate Trump (who Nuttall says he would not have voted for), and the other urges a more moderate tack. 

Endorsing his leader on Question Time last night, Ukip’s sole MP Douglas Carswell blamed the legacy of the party’s Tea Party-inspired 2015 general election campaign, which saw Farage complain about foreigners with HIV using the NHS in ITV’s leaders debate, for the party’s poor performance in Stoke. Others, such as MEP Bill Etheridge, say precisely the opposite – that Nuttall must be more like Farage. 

Neither side has yet called for Nuttall’s head. He insists he is “not going anywhere”. With his febrile party no stranger to abortive coup and counter-coup, he is unlikely to be the one who has the final say.