The next stage of Tory modernisation must address the party's class problem

Sceptical voters on low and middle incomes need much more reassurance that the party is on their side.

The modernisation of the Conservative Party is an unfinished project. As such, despite an impressive swing towards the Conservatives in the last general election, we were not able to form a majority government in 2010.

Gloomy economic circumstances and the nature of coalition have meant the modernisation project has been undermined. It’s time to give it a reboot. This book by Bright Blue offers the blueprint for the second stage of Tory modernisation so the Conservative Party and, more importantly, British society and the economy flourish in the years ahead.

Since its formation in 2010, Bright Blue has built a grassroots pressure group of Conservative activists, councillors and MPs to ensure strong foundations for continuous modernisation. This book includes essays by influential individuals from this modernising alliance – politicians, activists, journalists and policy-makers. Each contributor offers a new vision and radical policies for the Conservative Party to adopt.

This time, we must emphasise the breadth of the modernisation package. It is vital for a safer and fairer future that we retain our modest spending commitment to international aid, support renewable energies, and legalise same-sex marriage. But sceptical voters on low and middle incomes need much more reassurance that we are on their side as they strive for a better future for their families. Historically, Conservatism has been at its best when it is open-minded and big-hearted, providing ladders of opportunity for people from modest backgrounds. So the focus now needs to be on helping these families with the cost of living and accessing high-quality public services.

Where the Conservative Party has gained the most traction recently is with changes to the education and welfare systems, providing positive and effective reforms in these areas which are traditionally associated more with left-wing parties. Let us now be bolder on further reform of public services. This is not about abandoning our principles, but applying and adapting Conservative principles to areas which are really important and relevant to people.

This is an extract from the introduction of the new book from Bright Blue, Tory modernisation 2.0: the future of the Conservative Party, launched today.

Workmen manoeuvre a large model of the Conservative Party symbol on stage at last year's party conference in Birmingham. Photograph: Getty Images.

Ryan Shorthouse is the director of Bright Blue

Guy Stagg leads the Bright Blue Review

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How the Conservatives lost the argument over austerity

After repeatedly missing their deficit targets, the Tories can no longer present spending cuts as essential.

"The age of irresponsibility is giving way to the age of austerity," declared David Cameron at the Conservatives' 2009 spring conference. Fear of spending cuts helped deny his party a majority a year later but by 2015 the Tories claimed vindication. By framing austerity as unavoidable, they had trapped Labour in a political no man's land. Though voters did not relish cuts, polling consistently showed that they regarded them as necessary.

But only two years later, it is the Conservatives who appear trapped. An austerity-weary electorate has deprived them of their majority and the argument for fiscal restraint is growing weaker by the day. If cuts are the supposed rule, then the £1bn gifted to the Democratic Unionist Party is the most glaring exception. Michael Fallon, the Defence Secretary, sought to justify this largesse as "investment" into "the infrastructure of Northern Ireland" from "which everybody will benefit" - a classic Keynesian argument. But this did not, he hastened to add, mean the end of austerity: "Austerity is never over until we clear the deficit."

Britain's deficit (which peaked at £153bn in 2009-10) was the original and pre-eminent justification for cuts. Unless borrowing was largely eliminated by 2015, George Osborne warned, Britain's public finances would become unsustainable. But as time has passed, this argument has become progressively weaker. The UK has cumulatively borrowed £200bn more than promised by Osborne, yet apocalypse has been averted. With its low borrowing costs, an independent currency and a lender of last resort (the Bank of England), the UK is able to tolerate consistent deficits (borrowing stood at £46.6bn in 2016-17).

In defiance of all this, Osborne vowed to achieve a budget surplus by 2019-20 (a goal achieved by the UK in just 12 years since 1948). The Tories made the target in the knowledge that promised tax cuts and spending increases would make it almost impossible to attain - but it was a political weapon with which to wound Labour.

Brexit, however, forced the Conservatives to disarm. Mindful of the economic instability to come, Philip Hammond postponed the surplus target to 2025 (15 years after Osborne's original goal). Britain's past and future borrowing levels mean the deficit has lost its political potency.

In these circumstances, it is unsurprising that voters are increasingly inclined to look for full-scale alternatives. Labour has remade itself as an unambiguously anti-austerity party and Britain's public realm is frayed from seven years of cuts: overburdened schools and hospitals, dilapidated infrastructure, potholed roads, uncollected bins.

Through a shift in rhetoric, Theresa May acknowledged voters' weariness with austerity but her policies did not match. Though the pace of cuts was slowed, signature measures such as the public sector pay cap and the freeze in working-age benefits endured. May's cold insistence to an underpaid nurse that there was no "magic money tree" exemplified the Tories' predicament.

In his recent Mansion House speech, Philip Hammond conceded that voters were impatient "after seven years of hard slog” but vowed to "make anew the case" for austerity. But other Tories believe they need to stop fighting a losing battle. The Conservatives' historic strength has been their adaptability. Depending on circumstance, they have been europhile and eurosceptic, statist and laissez-faire, isolationist and interventionist. If the Tories are to retain power, yet another metamorphosis may be needed: from austerity to stimulus.

George Eaton is political editor of the New Statesman.

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