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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Find the EU renegotiation demands dull? Me too – but they are important

It's an old trick: smother anything in enough jargon and you can avoid being held accountable for it.

I don’t know about you, but I found the details of Britain’s European Union renegotiation demands quite hard to read. Literally. My eye kept gliding past them, in an endless quest for something more interesting in the paragraph ahead. It was as if the word “subsidiarity” had been smeared in grease. I haven’t felt tedium quite like this since I read The Lord of the Rings and found I slid straight past anything written in italics, reasoning that it was probably another interminable Elvish poem. (“The wind was in his flowing hair/The foam about him shone;/Afar they saw him strong and fair/Go riding like a swan.”)

Anyone who writes about politics encounters this; I call it Subclause Syndrome. Smother anything in enough jargon, whirr enough footnotes into the air, and you have a very effective shield for protecting yourself from accountability – better even than gutting the Freedom of Information laws, although the government seems quite keen on that, too. No wonder so much of our political conversation ends up being about personality: if we can’t hope to master all the technicalities, the next best thing is to trust the person to whom we have delegated that job.

Anyway, after 15 cups of coffee, three ice-bucket challenges and a bottle of poppers I borrowed from a Tory MP, I finally made it through. I didn’t feel much more enlightened, though, because there were notable omissions – no mention, thankfully, of rolling back employment protections – and elsewhere there was a touching faith in the power of adding “language” to official documents.

One thing did stand out, however. For months, we have been told that it is a terrible problem that migrants from Europe are sending child benefit to their families back home. In future, the amount that can be claimed will start at zero and it will reach full whack only after four years of working in Britain. Even better, to reduce the alleged “pull factor” of our generous in-work benefits regime, the child benefit rate will be paid on a ratio calculated according to average wages in the home country.

What a waste of time. At the moment, only £30m in child benefit is sent out of the country each year: quite a large sum if you’re doing a whip round for a retirement gift for a colleague, but basically a rounding error in the Department for Work and Pensions budget.

Only 20,000 workers, and 34,000 children, are involved. And yet, apparently, this makes it worth introducing 28 different rates of child benefit to be administered by the DWP. We are given to understand that Iain Duncan Smith thinks this is barmy – and this is a man optimistic enough about his department’s computer systems to predict in 2013 that 4.46 million people would be claiming Universal Credit by now*.

David Cameron’s renegotiation package was comprised exclusively of what Doctor Who fans call handwavium – a magic substance with no obvious physical attributes, which nonetheless helpfully advances the plot. In this case, the renegotiation covers up the fact that the Prime Minister always wanted to argue to stay in Europe, but needed a handy fig leaf to do so.

Brace yourself for a sentence you might not read again in the New Statesman, but this makes me feel sorry for Chris Grayling. He and other Outers in the cabinet have to wait at least two weeks for Cameron to get the demands signed off; all the while, Cameron can subtly make the case for staying in Europe, while they are bound to keep quiet because of collective responsibility.

When that stricture lifts, the high-ranking Eurosceptics will at last be free to make the case they have been sitting on for years. I have three strong beliefs about what will happen next. First, that everyone confidently predicting a paralysing civil war in the Tory ranks is doing so more in hope than expectation. Some on the left feel that if Labour is going to be divided over Trident, it is only fair that the Tories be split down the middle, too. They forget that power, and patronage, are strong solvents: there has already been much muttering about low-level blackmail from the high command, with MPs warned about the dire influence of disloyalty on their career prospects.

Second, the Europe campaign will feature large doses of both sides solemnly advising the other that they need to make “a positive case”. This will be roundly ignored. The Remain team will run a fear campaign based on job losses, access to the single market and “losing our seat at the table”; Leave will run a fear campaign based on the steady advance of whatever collective noun for migrants sounds just the right side of racist. (Current favourite: “hordes”.)

Third, the number of Britons making a decision based on a complete understanding of the renegotiation, and the future terms of our membership, will be vanishingly small. It is simply impossible to read about subsidiarity for more than an hour without lapsing into a coma.

Yet, funnily enough, this isn’t necessarily a bad thing. Just as the absurd complexity of policy frees us to talk instead about character, so the onset of Subclause Syndrome in the EU debate will allow us to ask ourselves a more profound, defining question: what kind of country do we want Britain to be? Polling suggests that very few of us see ourselves as “European” rather than Scottish, or British, but are we a country that feels open and looks outwards, or one that thinks this is the best it’s going to get, and we need to protect what we have? That’s more vital than any subclause. l

* For those of you keeping score at home, Universal Credit is now allegedly going to be implemented by 2021. Incidentally, George Osborne has recently discovered that it’s a great source of handwavium; tax credit cuts have been postponed because UC will render such huge savings that they aren’t needed.

Helen Lewis is deputy editor of the New Statesman. She has presented BBC Radio 4’s Week in Westminster and is a regular panellist on BBC1’s Sunday Politics.

This article first appeared in the 11 February 2016 issue of the New Statesman, The legacy of Europe's worst battle