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.

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Voters are turning against Brexit but the Lib Dems aren't benefiting

Labour's pro-Brexit stance is not preventing it from winning the support of Remainers. Will that change?

More than a year after the UK voted for Brexit, there has been little sign of buyer's remorse. The public, including around a third of Remainers, are largely of the view that the government should "get on with it".

But as real wages are squeezed (owing to the Brexit-linked inflationary spike) there are tentative signs that the mood is changing. In the event of a second referendum, an Opinium/Observer poll found, 47 per cent would vote Remain, compared to 44 per cent for Leave. Support for a repeat vote is also increasing. Forty one per cent of the public now favour a second referendum (with 48 per cent opposed), compared to 33 per cent last December. 

The Liberal Democrats have made halting Brexit their raison d'être. But as public opinion turns, there is no sign they are benefiting. Since the election, Vince Cable's party has yet to exceed single figures in the polls, scoring a lowly 6 per cent in the Opinium survey (down from 7.4 per cent at the election). 

What accounts for this disparity? After their near-extinction in 2015, the Lib Dems remain either toxic or irrelevant to many voters. Labour, by contrast, despite its pro-Brexit stance, has hoovered up Remainers (55 per cent back Jeremy Corbyn's party). 

In some cases, this reflects voters' other priorities. Remainers are prepared to support Labour on account of the party's stances on austerity, housing and education. Corbyn, meanwhile, is a eurosceptic whose internationalism and pro-migration reputation endear him to EU supporters. Other Remainers rewarded Labour MPs who voted against Article 50, rebelling against the leadership's stance. 

But the trend also partly reflects ignorance. By saying little on the subject of Brexit, Corbyn and Labour allowed Remainers to assume the best. Though there is little evidence that voters will abandon Corbyn over his EU stance, the potential exists.

For this reason, the proposal of a new party will continue to recur. By challenging Labour over Brexit, without the toxicity of Lib Dems, it would sharpen the choice before voters. Though it would not win an election, a new party could force Corbyn to soften his stance on Brexit or to offer a second referendum (mirroring Ukip's effect on the Conservatives).

The greatest problem for the project is that it lacks support where it counts: among MPs. For reasons of tribalism and strategy, there is no emergent "Gang of Four" ready to helm a new party. In the absence of a new convulsion, the UK may turn against Brexit without the anti-Brexiteers benefiting. 

George Eaton is political editor of the New Statesman.