The Tories' hardline 2015 manifesto is taking shape

Conservative ministers have been trailing right-wing policies for post-coalition life.

We've heard plenty about the Lib Dems' "differentiation strategy" in the last year, but surprisingly few have noted the Conservatives' equivalent. On Europe, welfare, human rights law and employment regulation, Tory ministers now routinely say what a Conservative government would do differently to the coalition. At last night's meeting of the 1922 Committee, David Cameron promised his MPs that the party would go into the next election "with a clear Eurosceptic position": expect the 2015 Conservative manifesto to include a commitment to hold an EU referendum (likely offering voters a choice between looser membership and withdrawal). Below, I've compiled a list of other Tory-pleasing policies set to make an appearance.

Even deeper and harsher welfare cuts

George Osborne wanted to announce £10bn of welfare cuts in the Autumn Statement but the Lib Dems limited him to £3.8bn. Expect a promise of deeper cuts to appear in the manifesto.

It's also likely that Tory welfare proposals blocked by Nick Clegg's party, such as the abolition of housing benefit for the under-25s and the restriction of child benefit for families with more than two children, will feature. Other policies trailed by David Cameron in his welfare speech in the summer included:

- Preventing teenagers from claiming benefits as soon as they leave school.

- Paying benefits in kind (like free school meals), rather than in cash.

- Reducing benefit levels for the long-term unemployed.

- A lower housing benefit cap. Cameron said that the current limit of £20,000 was still too high. 

Some or all of those could appear in the manifesto.

For-profit free schools

Early on in the coalition's life, Nick Clegg made it clear that he would veto any move to introduce for-profit free schools, viewed by some Tories as the key to transforming the education system. But when he appeared before the Leveson inquiry, Michael Gove indicated that they could be established under a Conservative majority government.

The Education Secretary remarked that unlike some of his coalition colleagues, "who are very sceptical of the benefits of profit", he had an "open mind", adding: "I believe that it may be the case that we can augment the quality of state education by extending the range of people involved in its provision."

Withdrawal from the European Court of Human Rights

The Conservatives have become increasingly hostile towards the European Court of Human Rights (ECHR), which has prevented the deportation of Abu Qatada and forced the government to consider extending voting rights to some prisoners, but Lib Dem obstructionism has prevented reform. The commission set up to examine the proposed British Bill of Rights, split as it was between Cameron and Clegg nominees, failed to reach agreement when it published its report this week.

But in an article for the Daily Telegraph, Justice Secretary Chris Grayling wrote: "I will also be looking clearly towards the next election, and starting work on ensuring that we have a real plan for change then as well." Rather than merely replacing the Human Rights Act with a British Bill of Rights, which would still allow UK citizens to petition the ECHR, it's increasingly likely that the Tories will promise to withdraw from the jurisdiction of the court and leave the European Convention on Human Rights altogether (a position recently supported by former justice minister Nick Herbert). Such a move would require David Cameron to replace Attorney General Dominic Grieve, an avowed defender of the ECHR, but a post-election reshuffle could take care of that.

Hire-and-fire employment laws

Vince Cable ensured that a Tory proposal to allow employers to fire workers at will (contained in the now-infamous report by Conservative donor Adrian Beecroft) didn't become law, but Downing Street made it clear that it approved of the plan and it is likely to feature in the party's election offering.

David Cameron and George Osborne are already dropping hints about what the Conservatives' 2015 election manifesto will look like. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Leader: The unresolved Eurozone crisis

The continent that once aspired to be a rival superpower to the US is now a byword for decline, and ethnic nationalism and right-wing populism are thriving.

The eurozone crisis was never resolved. It was merely conveniently forgotten. The vote for Brexit, the terrible war in Syria and Donald Trump’s election as US president all distracted from the single currency’s woes. Yet its contradictions endure, a permanent threat to continental European stability and the future cohesion of the European Union.

The resignation of the Italian prime minister Matteo Renzi, following defeat in a constitutional referendum on 4 December, was the moment at which some believed that Europe would be overwhelmed. Among the champions of the No campaign were the anti-euro Five Star Movement (which has led in some recent opinion polls) and the separatist Lega Nord. Opponents of the EU, such as Nigel Farage, hailed the result as a rejection of the single currency.

An Italian exit, if not unthinkable, is far from inevitable, however. The No campaign comprised not only Eurosceptics but pro-Europeans such as the former prime minister Mario Monti and members of Mr Renzi’s liberal-centrist Democratic Party. Few voters treated the referendum as a judgement on the monetary union.

To achieve withdrawal from the euro, the populist Five Star Movement would need first to form a government (no easy task under Italy’s complex multiparty system), then amend the constitution to allow a public vote on Italy’s membership of the currency. Opinion polls continue to show a majority opposed to the return of the lira.

But Europe faces far more immediate dangers. Italy’s fragile banking system has been imperilled by the referendum result and the accompanying fall in investor confidence. In the absence of state aid, the Banca Monte dei Paschi di Siena, the world’s oldest bank, could soon face ruin. Italy’s national debt stands at 132 per cent of GDP, severely limiting its firepower, and its financial sector has amassed $360bn of bad loans. The risk is of a new financial crisis that spreads across the eurozone.

EU leaders’ record to date does not encourage optimism. Seven years after the Greek crisis began, the German government is continuing to advocate the failed path of austerity. On 4 December, Germany’s finance minister, Wolfgang Schäuble, declared that Greece must choose between unpopular “structural reforms” (a euphemism for austerity) or withdrawal from the euro. He insisted that debt relief “would not help” the immiserated country.

Yet the argument that austerity is unsustainable is now heard far beyond the Syriza government. The International Monetary Fund is among those that have demanded “unconditional” debt relief. Under the current bailout terms, Greece’s interest payments on its debt (roughly €330bn) will continually rise, consuming 60 per cent of its budget by 2060. The IMF has rightly proposed an extended repayment period and a fixed interest rate of 1.5 per cent. Faced with German intransigence, it is refusing to provide further funding.

Ever since the European Central Bank president, Mario Draghi, declared in 2012 that he was prepared to do “whatever it takes” to preserve the single currency, EU member states have relied on monetary policy to contain the crisis. This complacent approach could unravel. From the euro’s inception, economists have warned of the dangers of a monetary union that is unmatched by fiscal and political union. The UK, partly for these reasons, wisely rejected membership, but other states have been condemned to stagnation. As Felix Martin writes on page 15, “Italy today is worse off than it was not just in 2007, but in 1997. National output per head has stagnated for 20 years – an astonishing . . . statistic.”

Germany’s refusal to support demand (having benefited from a fixed exchange rate) undermined the principles of European solidarity and shared prosperity. German unemployment has fallen to 4.1 per cent, the lowest level since 1981, but joblessness is at 23.4 per cent in Greece, 19 per cent in Spain and 11.6 per cent in Italy. The youngest have suffered most. Youth unemployment is 46.5 per cent in Greece, 42.6 per cent in Spain and 36.4 per cent in Italy. No social model should tolerate such waste.

“If the euro fails, then Europe fails,” the German chancellor, Angela Merkel, has often asserted. Yet it does not follow that Europe will succeed if the euro survives. The continent that once aspired to be a rival superpower to the US is now a byword for decline, and ethnic nationalism and right-wing populism are thriving. In these circumstances, the surprise has been not voters’ intemperance, but their patience.

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