How Cameron could ease Tory anger over gay marriage

The Prime Minister could promise to meet his pledge to introduce a married couples' tax allowance in return for support over the issue.

As the government prepares to announce plans to bring forward legislation on gay marriage, the growing divisions within the Conservative Party over the issue are being exposed. Yesterday, David Davies MP described the policy as "barking mad", adding, apropos of nothing, that "most parents would prefer their children not to be gay". Meanwhile, Peter Bone told Sky News: "It was in no party manifesto, there is no mandate for the Prime Minister to do this; he is absolutely wrong to be doing it now, and he's splitting the Conservative Party when we don't need it to be split."

To counterbalance such figures, a group of senior Conservatives, including Michael Gove, Boris Johnson, Transport Secretary Patrick McLoughlin, and former justice minister Nick Herbert, have founded a new group, Freedom to Marry, to campaign for equal marriage. In a letter to the Sunday Telegraph, they wrote: "We recognise that civil partnerships were an important step forward in giving legal recognition to same sex couples. But civil partnerships are not marriages, which express a particular and universally understood commitment."

Today, they are joined by John Major, who declared in a statement released through the group, "The Prime Minister's instinct to support equal marriage is a courageous and genuine attempt to offer security and comfort to people who - at present - may be together, yet feel apart."

That such senior figures feel the need to campaign for what is, after all, already government policy, is an indication of how weak David Cameron's position is. If the PM is forced to rely on the votes of Labour and Liberal Democrat MPs to pass the bill (at least 130 Tory MPs are prepared to vote against it), he will be exposed as the leader of a divided and, in places, bigoted party. Rather than casting the Conservative Party in a positive light, the issue could only serve as a reminder of how unreconstructed parts of it remain. Cameron will lose Conservative votes over the issue, while failing to gain those of liberals.

If the PM wants to limit the extent of the Conservative rebellion, one option would be to fulfil his long-standing pledge to recognise marriage in the tax system (as ConservativeHome editor Tim Montgomerie has argued). The Coalition Agreement (see p. 30) promised to introduce transferable tax allowances for married couples, while guaranteeing Lib Dem MPs the right to abstain, and the measure is reportedly under consideration for next year's Budget. By pledging to bring forward this policy for straight and gay couples alike, Cameron could drain some of the poison from the Tory revolt.

To be clear, he would be wrong to do so (there is no good argument for privileging married couples over others) and such a move may not even succeed in winning the rebels round. In today's Telegraph, demands the introduction of a tax allowance for married couples, while rebuking Cameron for his support for gay marriage. He writes:

The CSJ’s poll, published today, reveals that not just 47 per cent of Conservative supporters feel betrayed by the PM on this omission [Cameron's failure to introduce a tax allowance for married couples] but 35 per cent of all voters. I doubt that the Government will enjoy anything like compensatory approval ratings for announcing in the same week that gay marriage has apparently become a more urgent issue for Government action, despite no similar manifesto commitment to legislate and after a massive consultation exercise that has been overwhelmingly negative.

All the same, it would be surprising if Cameron wasn't considering a grand bargain along these lines.

David Cameron addresses guests at a Gay Pride reception in the garden at 10 Downing Street. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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The Autumn Statement proved it – we need a real alternative to austerity, now

Theresa May’s Tories have missed their chance to rescue the British economy.

After six wasted years of failed Conservative austerity measures, Philip Hammond had the opportunity last month in the Autumn Statement to change course and put in place the economic policies that would deliver greater prosperity, and make sure it was fairly shared.

Instead, he chose to continue with cuts to public services and in-work benefits while failing to deliver the scale of investment needed to secure future prosperity. The sense of betrayal is palpable.

The headline figures are grim. An analysis by the Institute for Fiscal Studies shows that real wages will not recover their 2008 levels even after 2020. The Tories are overseeing a lost decade in earnings that is, in the words Paul Johnson, the director of the IFS, “dreadful” and unprecedented in modern British history.

Meanwhile, the Treasury’s own analysis shows the cuts falling hardest on the poorest 30 per cent of the population. The Office for Budget Responsibility has reported that it expects a £122bn worsening in the public finances over the next five years. Of this, less than half – £59bn – is due to the Tories’ shambolic handling of Brexit. Most of the rest is thanks to their mishandling of the domestic economy.

 

Time to invest

The Tories may think that those people who are “just about managing” are an electoral demographic, but for Labour they are our friends, neighbours and the people we represent. People in all walks of life needed something better from this government, but the Autumn Statement was a betrayal of the hopes that they tried to raise beforehand.

Because the Tories cut when they should have invested, we now have a fundamentally weak economy that is unprepared for the challenges of Brexit. Low investment has meant that instead of installing new machinery, or building the new infrastructure that would support productive high-wage jobs, we have an economy that is more and more dependent on low-productivity, low-paid work. Every hour worked in the US, Germany or France produces on average a third more than an hour of work here.

Labour has different priorities. We will deliver the necessary investment in infrastructure and research funding, and back it up with an industrial strategy that can sustain well-paid, secure jobs in the industries of the future such as renewables. We will fight for Britain’s continued tariff-free access to the single market. We will reverse the tax giveaways to the mega-rich and the giant companies, instead using the money to make sure the NHS and our education system are properly funded. In 2020 we will introduce a real living wage, expected to be £10 an hour, to make sure every job pays a wage you can actually live on. And we will rebuild and transform our economy so no one and no community is left behind.

 

May’s missing alternative

This week, the Bank of England governor, Mark Carney, gave an important speech in which he hit the proverbial nail on the head. He was completely right to point out that societies need to redistribute the gains from trade and technology, and to educate and empower their citizens. We are going through a lost decade of earnings growth, as Carney highlights, and the crisis of productivity will not be solved without major government investment, backed up by an industrial strategy that can deliver growth.

Labour in government is committed to tackling the challenges of rising inequality, low wage growth, and driving up Britain’s productivity growth. But it is becoming clearer each day since Theresa May became Prime Minister that she, like her predecessor, has no credible solutions to the challenges our economy faces.

 

Crisis in Italy

The Italian people have decisively rejected the changes to their constitution proposed by Prime Minister Matteo Renzi, with nearly 60 per cent voting No. The Italian economy has not grown for close to two decades. A succession of governments has attempted to introduce free-market policies, including slashing pensions and undermining rights at work, but these have had little impact.

Renzi wanted extra powers to push through more free-market reforms, but he has now resigned after encountering opposition from across the Italian political spectrum. The absence of growth has left Italian banks with €360bn of loans that are not being repaid. Usually, these debts would be written off, but Italian banks lack the reserves to be able to absorb the losses. They need outside assistance to survive.

 

Bail in or bail out

The oldest bank in the world, Monte dei Paschi di Siena, needs €5bn before the end of the year if it is to avoid collapse. Renzi had arranged a financing deal but this is now under threat. Under new EU rules, governments are not allowed to bail out banks, like in the 2008 crisis. This is intended to protect taxpayers. Instead, bank investors are supposed to take a loss through a “bail-in”.

Unusually, however, Italian bank investors are not only big financial institutions such as insurance companies, but ordinary households. One-third of all Italian bank bonds are held by households, so a bail-in would hit them hard. And should Italy’s banks fail, the danger is that investors will pull money out of banks across Europe, causing further failures. British banks have been reducing their investments in Italy, but concerned UK regulators have asked recently for details of their exposure.

John McDonnell is the shadow chancellor


John McDonnell is Labour MP for Hayes and Harlington and has been shadow chancellor since September 2015. 

This article first appeared in the 08 December 2016 issue of the New Statesman, Brexit to Trump