There is a new consensus about the economy and – believe it or not – Labour called it first

Buried in the coalition’s austerity programme is the kernel of acceptance that, ultimately, government is the solution to economic malaise.

The Conservative Party’s dedication to the memory of Baroness Thatcher is hardly in doubt. Grief at her death earlier this year brought more unity to the party than any of the policies David Cameron has devised for that purpose. In case the point was missed (it wasn’t), a group of Tory backbenchers propose renaming the August bank holiday in honour of the Iron Lady (it won’t be).

But when it comes to influencing government policy, Mrs T is rivalled by the man who brought her down. Michael Heseltine may not enjoy the veneration of his party but he has the ear of its leaders. Earlier this year, he published a plan for stimulating growth by giving regions more control over spending. Chunks of the report have been adopted as government policy. Ask Treasury ministers and advisers about their economic strategy and the chances are that Heseltinian intervention will get a reference before Thatcherism.

Westminster has been so busy noticing the victory of the right in an argument about cuts it has barely clocked the left’s victory in an argument about the duty of the state to foster growth. There is cross-party agreement on the need to spend scarce resources on infrastructure. There is near consensus that the state should be doing more to nurture promising, innovative sectors of the economy. The discredited 1970s practice of “picking winners” has been adjusted and rebranded. It is now a “modern industrial strategy”. Every party will have one in its 2015 manifesto.

Not everyone has received the new wisdom. There are Conservatives who despise all state meddling and think that the only good government intervention is lighting a bonfire of employment rights and workplace protection. Osborne recognises the need to keep that wing of his party fed with meaty policy chunks but his own views are more nuanced.

Cabinet colleagues say the Chancellor privately accepts that Britain already has a liberal labour market and a relatively low-regulation economy. Future growth, in other words, will be spurred by government getting stuck in, not getting out of the way.

Osborne took a gamble on hard and fast cuts in the hope of fighting an election with a tamed deficit and booming economy. That move failed. But cynical risk-taking is not the same as ideological rigidity. Osborne’s allies say his urge to win is greater than his eagerness to parrot Thatcherite shibboleths.

The really zealous expressions of Conservatism are elsewhere, in Michael Gove’s campaign to prise schools away from localauthority control, for example, or in a welfare policy that sees help from the state as a cause of poverty rather than its alleviation. In a fiercely ideological field, economic management is one of the more pragmatic bits of the coalition agenda.

Labour detests the idea that Osborne is flexible. The Chancellor’s refusal to change course has been an opposition mantra. Any dabbling in pro-growth intervention is dismissed with scorn. Money for infrastructure, say shadow ministers, is dwarfed by earlier cuts to capital spending budgets. Funds aimed at supporting new businesses sit idle. If the coalition wanted local growth plans, why scrap regional development agencies? Vince Cable might fancy a new industrial policy but, says Labour, the real agenda is set by old Tory reflexes: tax cuts for the rich; devil take the hindmost.

There are obvious reasons for Ed Miliband and Ed Balls to depict Cameron and Osborne as captives of an outmoded and callous creed. At a glance, the cap fits. But by belittling the Tory conversion to active government, Labour misses the opportunity to claim a moral victory. Under the last government, Peter Mandelson led the interventionist revival with his call for a more “strategic state” to navigate chaotic forces of globalisation. In candid moments, Heseltinian Tories concede that Mandelson was right.

Neither Labour nor the Conservatives dare admit that their economic views are converging. The fortification of opposing trenches, separated by boggy no-man’s-land (aka the Lib Dems), has become a strategic necessity and a source of intellectual comfort. Yet the proximity is clear to anyone outside the two tribes. Labour has accepted that budgets must be cut, as the Tories said all along. The Tories are borrowing to keep the economy afloat, as Labour predicted they would.

Both want to spend on infrastructure and skills. Both are working their way towards a more vigorous industrial policy. Both are planning manifesto chapters on beefing-up consumer regulation to address the rage of people who feel permanently ripped off by banks, utilities, rail companies and pretty much every other essential service, many of which are in the private sector. The political pendulum is swinging towards more, not less, intervention in the economy. That should favour Labour – but before the opposition can take any credit for the new consensus, it has to prove that the consensus is there. That means recognising there is more to Tory economic policy than cuts.

Buried in the coalition’s austerity programme is the kernel of acceptance that, ultimately, government is the solution to economic malaise, not the cause. Miliband and Balls may not want to give the Chancellor credit for getting anything right but they also need to look as if they are winning some big arguments. Full-frontal attack is Labour’s default stance towards Osborne. Sometimes faint praise can be more damning.

David Cameron and Ed Miliband look on during the service to celebrate the 60th anniversary of the Coronation of Queen Elizabeth II at Westminster Abbey in London. Photograph: Getty Images.

Rafael Behr is political columnist at the Guardian and former political editor of the New Statesman

This article first appeared in the 01 July 2013 issue of the New Statesman, Brazil erupts

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The far right rises as the Nordic welfare model is tested to breaking point by immigration

Writing from Stockholm, the New Statesman’s editor observes how mass immigration has tested the old Scandinavian model of welfare capitalism.

In the summer of 1999 I was commissioned by a Scandinavian magazine to write about the completion of the longest road-and-rail link in Europe, connecting Denmark and Sweden across the Øresund strait at the gateway to the Baltic Sea. I was a guest at the ceremony, along with assorted Swedish and Danish royalty, at which the final girder of the concrete and steel-cable-stayed bridge was fitted into place.

It was a cold day but the mood was joyful. The Øresund Fixed Link symbolised the new Europe of open borders and free movement of people. There was much excitement about the creation of an economic zone centred on Copenhagen but incorporating Malmö and the university town of Lund in Sweden. The Øresund Bridge has since become an icon of Scandinavian culture, in part because of the success of the noirish television crime series The Bridge, starring the blank-eyed Sofia Helin as the Swedish police detective Saga Norén, which fetishises the structure in its brilliantly stylised opening credits.

Emergency measures

Last autumn, after Angela Merkel declared that Germany’s borders were open to Syrian refugees, it was across the Øresund that tens of thousands of desperate people began arriving in Sweden, straining the country’s habitual openness to incomers. They were arriving not just from Syria but from Afghanistan, Iraq, Pakistan, Eritrea and elsewhere in Africa – sometimes as many as 10,000 a week. In 2015, 163,000 people registered for asylum in Sweden, including 36,000 unaccompanied children. Many others are presumed to have entered the country illegally. (The comparative figure registering for asylum in Germany was 1.2 million and in Denmark 25,000. David Cameron has pledged to resettle 20,000 Syrian refugees in Britain by 2020.)

There was a sense last November that Stefan Löfven’s minority Social Democratic government was losing control of the situation. As a result, Sweden was forced to introduce emergency border controls, as well as security checks for those arriving across the bridge from Denmark. The rules of the Schengen passport-free area allow for such measures to be enacted in a crisis. Denmark responded by tightening border controls with Germany as fences and barriers were erected across Europe in an attempt to stem the flow of refugees heading north along the so-called western Balkan route.

Sweden’s Blair

To the outsider, Sweden no longer seems to be a country at ease with itself. Mass immigration has tested the old Scandinavian model of welfare capitalism to near breaking point and resentment is festering. “Immigration is now the number one issue facing our country,” Johan Forssell told me when we met at the Riksdag in Stockholm. He is a former chief of staff for Fredrik Reinfeldt, prime minister from 2006-14. As a former leader of the Moderate Party, Reinfeldt is a conservative, but, in his commitment to free markets and open borders, the politician he most resembles is Tony Blair. I was a guest at a lunch for Reinfeldt in London last autumn, and, as he defended his immigration policies, I was struck above all by his liberalism.

In August 2014, in a celebrated speech, he called on his fellow Swedes to “open their hearts” and “show tolerance” to immigrants and asylum-seekers. The speech was received with derision. It surely contributed to the defeat of the Moderate-led centre-right coalition in the general election in which the far-right Sweden Democrats, led by Jimmie Åkesson, recorded their best ever performance, winning 49 out of 349 parliamentary seats. “It was a brave speech, but Freddie didn’t prepare the people for it,” one senior Swedish politician said to me.

Editorial positions

One afternoon I visited Peter Wolodarski, the 38-year-old editor-in-chief of Sweden’s leading quality daily newspaper, Dagens Nyheter (“Today’s News”), at his office in Stockholm. The son of a Polish-Jewish architect who came to Sweden in the 1960s, Wolodarski is highly influential: editor, columnist and television commentator, and an unapologetic liberal internationalist. He likened his politics to David Miliband’s. In the past, Dagens Nyheter, which is privately owned by the Bonnier family, supported the then-hegemonic Social Democrats but, reflecting the fluidity and shifting alliances of Swedish politics, it now pursues what it describes as an “independently liberal” editorial position.

Wolodarski, who used to edit the comment pages, is slim and energetic and speaks perfect English. We discussed the EU referendum in Britain, which alarmed and mystified him, and Islamist terror as well as the rise of the anti-immigrant Sweden Democrats. Security at the Dagens Nyheter offices has been tightened considerably since the Charlie Hebdo massacre – Wolodarski’s paper as well as others in the group republished Charlie cartoons – and it has been reported that as many as 300 Swedish nationals are fighting for Isis in Syria. One Swede, Osama Krayem, is suspected of being part of the group that carried out the Brussels attacks in March. The Sweden Democrats have seized on this as further evidence of the failures of Nordic multiculturalism.

A refugee’s story

One morning I visited a refugee registration centre in Märsta in the northern suburbs. The people there were fleeing war or persecution. Each was waiting to discover where next they would be moved while their asylum application was processed.

One young, secular Muslim woman from Gambia told me she was escaping an arranged marriage (to her mother’s polygamous brother, who was in his sixties) and the horror of female genital mutilation. Articulate and frustrated, she wept as we talked. The next day, I received an email from her. She was now in a small town in the far north. “It is remote here and cold,” she wrote. And then she wished me a “safe return journey” to London.

Jason Cowley is editor of the New Statesman. He has been the editor of Granta, a senior editor at the Observer and a staff writer at the Times.

This article first appeared in the 06 April 2016 issue of the New Statesman, The longest hatred