Cameron's embrace of Thatcher's mantle has been a disaster for the Tories

In opposition, Cameron recognised the profound limits of Thatcher's approach. But in office he has retreated into dogmatism.

It is easy now to forget how eager David Cameron was to distance himself from Margaret Thatcher's legacy when he became Conservative leader. As well as repudiating the most egregious aspects of her reign, such as Section 28 and her description of Nelson Mandela's ANC as "terrorists" (prompting Thatcher's former spokesman Bernard Ingham to remark: "I wonder whether David Cameron is a Conservative"), he explicitly recognised the baleful consequences of her economic policies, including the dramatic rise in inequality and child poverty (which tripled from one in nine children to one in three, the highest level in Europe).

While Thatcher dismissed those concerned about the gap between the rich and the poor as crude egalitarians ("he would rather that the poor were poorer, provided that the rich were less rich," she said of Simon Hughes at her final PMQs), Cameron declared in 2006: "I want this message to go out loud and clear: the Conservative Party recognises, will measure and will act on relative poverty. Poverty is relative – and those who pretend otherwise are wrong." Later, in his 2009 Hugo Young Memorial lecture, he recognised the great insight of The Spirit Level, that, in his words, "among the richest countries, it's the more unequal ones that do worse according to almost every quality of life indicator." 

Even while acknowledging that a Conservative government would cut public spending in order to reduce the deficit, he promised to do so in a fair and responsible way. "This is something we need to do with the public sector, not to the public sector," he said in 2009. "This is very important: this is not some 1980s-style approach about cutting public spending." While Thatcher branded her opponents "the enemy within", Cameron declared that "we are all in this together". He promised that the 50p rate, an important symbol of solidarity in hard times (and, as I noted last week, a source of revenue), would remain. "I have been very clear that we have to do this in a way that is fair so that the broadest backs bear the biggest burden. That is why we haven’t changed for instance the 50p tax rate," he said as late as November 2011. 

But under pressure from his recalcitrant backbenchers and a hard-right conservative press, he has retreated into dogmatism. The 50p rate has been scrapped, the NHS ("the closest thing the English people have to a religion", in the words of Nigel Lawson) recklessly reformed and Europhobia indulged. Even after a double-dip recession and a £245bn increase in forecast borrowing, he only offers the Thatcherite mantra that "there is no alternative". In so doing, he has alienated many of the voters originally attracted by his promise of a more compassionate conservatism. The irony is that Thatcher, a far more pragmatic figure than many of her followers remember (she signed the integrationist Single European Act, barely touched the NHS and allowed public spending to rise), may have charted a more reasonable course. 

The challenges confronting today's Conservative Party have little in common with those faced by Thatcher when rampant inflation and trade union militancy meant there was a ready audience for her free-market brand of conservatism. In age of declining living standards, gross inequality and unaffordable housing (a legacy of the "right to buy" and the failure to build new stock), the voters crave a more, not a less, interventionist state. If the Conservatives are to revive their support in the north and Scotland (parts of the country where Thatcher remains widely loathed) and win again, they will need to draw on the richer, one-nation tradition that Cameron once sought to stand in. But to the great advantage of Labour and Ed Miliband, ever fewer Tories are willing to say so. 

Margaret Thatcher waves as she stands with David Cameron on the doorstep of 10 Downing Street on 8 June 2010. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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I was wrong about Help to Buy - but I'm still glad it's gone

As a mortgage journalist in 2013, I was deeply sceptical of the guarantee scheme. 

If you just read the headlines about Help to Buy, you could be under the impression that Theresa May has just axed an important scheme for first-time buyers. If you're on the left, you might conclude that she is on a mission to make life worse for ordinary working people. If you just enjoy blue-on-blue action, it's a swipe at the Chancellor she sacked, George Osborne.

Except it's none of those things. Help to Buy mortgage guarantee scheme is a policy that actually worked pretty well - despite the concerns of financial journalists including me - and has served its purpose.

When Osborne first announced Help to Buy in 2013, it was controversial. Mortgage journalists, such as I was at the time, were still mopping up news from the financial crisis. We were still writing up reports about the toxic loan books that had brought the banks crashing down. The idea of the Government promising to bail out mortgage borrowers seemed the height of recklessness.

But the Government always intended Help to Buy mortgage guarantee to act as a stimulus, not a long-term solution. From the beginning, it had an end date - 31 December 2016. The idea was to encourage big banks to start lending again.

So far, the record of Help to Buy has been pretty good. A first-time buyer in 2013 with a 5 per cent deposit had 56 mortgage products to choose from - not much when you consider some of those products would have been ridiculously expensive or would come with many strings attached. By 2016, according to Moneyfacts, first-time buyers had 271 products to choose from, nearly a five-fold increase

Over the same period, financial regulators have introduced much tougher mortgage affordability rules. First-time buyers can be expected to be interrogated about their income, their little luxuries and how they would cope if interest rates rose (contrary to our expectations in 2013, the Bank of England base rate has actually fallen). 

A criticism that still rings true, however, is that the mortgage guarantee scheme only helps boost demand for properties, while doing nothing about the lack of housing supply. Unlike its sister scheme, the Help to Buy equity loan scheme, there is no incentive for property companies to build more homes. According to FullFact, there were just 112,000 homes being built in England and Wales in 2010. By 2015, that had increased, but only to a mere 149,000.

This lack of supply helps to prop up house prices - one of the factors making it so difficult to get on the housing ladder in the first place. In July, the average house price in England was £233,000. This means a first-time buyer with a 5 per cent deposit of £11,650 would still need to be earning nearly £50,000 to meet most mortgage affordability criteria. In other words, the Help to Buy mortgage guarantee is targeted squarely at the middle class.

The Government plans to maintain the Help to Buy equity loan scheme, which is restricted to new builds, and the Help to Buy ISA, which rewards savers at a time of low interest rates. As for Help to Buy mortgage guarantee, the scheme may be dead, but so long as high street banks are offering 95 per cent mortgages, its effects are still with us.