The Tories that Cameron and Osborne need to listen to

Conservative group Renewal's pledge card calls for an increase in the minimum wage, the building of one million homes, free party membership for trade unionists and action against "rip-off companies".

Free party membership for trade unionists, the building of one million homes over the next parliament, an increase in the minimum wage, a "cost-of-living test" for every policy, a cut in fuel duty and a cabinet minister to "take action for the consumer against rip-off companies". The latest set of demands from Len McCluskey? No. Rather, the six proposals that will appear on a New Labour-style pledge card next week from Renewal, the Conservative group aimed at broadening the party's appeal among working class, northern and ethnic minority voters (the launch of which I covered earlier this year).

The group, led by NS contributor David Skelton, has gone further than any other in recognising that the Tories need to dramatically refashion their agenda if they are to ever win a majority again (a feat that has eluded them for 21 years). The party currently has no councillors in Liverpool, Manchester, Newcastle and Sheffield, and just one seat in Scotland. In 2010, it won the support of just 16% of ethnic minority voters.

If it is to improve on this performance next time round, it needs to depart from its traditional script of Europe, immigration and welfare. Voters might share the Tories' views on these issues but they do not share their obsession with them. To win new supporters, the party needs to adopt a relentless focus on living standards. As Skelton notes, "Traditional Labour voters are disenchanted, lack a natural political home, but do not believe the Conservatives are interested in them. We have got to change that perception. We have got to show that we stand up for ordinary working people, and that we are not the party just of the rich or big business. The six issues on the pledge card are designed to show we are on the side of hard-pressed working people."

So, what are the chances of succcess and how worried should Labour be? Renewal enjoys significant support from senior ministers, including Patrick McLoughlin, who wrote the foreword to the collection, and Eric Pickles, who addressed its launch, as well as MPs such as Robert Halfon and Guy Opperman. Its work is also being studied by George Osborne, who appointed Skelton’s former Policy Exchange colleague Neil O’Brien as his special adviser and whose former chief of staff, Matt Hancock, contributed a chapter on "conservatism for the low-paid" to Renewal's recent pamphlet Access All Areas. Several sources have told me that the party is likely to announce a significant increase in the minimum wage at its conference in Manchester next week in a bid to win over low-income groups.

But less than two years away from the election, time is short for the Tories to detoxify their brand. The decision to cut the top rate of tax, to privatise large parts of the NHS and to demonise trade unionists have all added to the damage. But if Renewal's agenda becomes the party's, the long work of winning a hearing among voters who have shunned it for decades will begin. 

David Cameron speaks during an official reception at Downing Street on September 16, 2013. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty
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Scotland's vast deficit remains an obstacle to independence

Though the country's financial position has improved, independence would still risk severe austerity. 

For the SNP, the annual Scottish public spending figures bring good and bad news. The good news, such as it is, is that Scotland's deficit fell by £1.3bn in 2016/17. The bad news is that it remains £13.3bn or 8.3 per cent of GDP – three times the UK figure of 2.4 per cent (£46.2bn) and vastly higher than the white paper's worst case scenario of £5.5bn. 

These figures, it's important to note, include Scotland's geographic share of North Sea oil and gas revenue. The "oil bonus" that the SNP once boasted of has withered since the collapse in commodity prices. Though revenue rose from £56m the previous year to £208m, this remains a fraction of the £8bn recorded in 2011/12. Total public sector revenue was £312 per person below the UK average, while expenditure was £1,437 higher. Though the SNP is playing down the figures as "a snapshot", the white paper unambiguously stated: "GERS [Government Expenditure and Revenue Scotland] is the authoritative publication on Scotland’s public finances". 

As before, Nicola Sturgeon has warned of the threat posed by Brexit to the Scottish economy. But the country's black hole means the risks of independence remain immense. As a new state, Scotland would be forced to pay a premium on its debt, resulting in an even greater fiscal gap. Were it to use the pound without permission, with no independent central bank and no lender of last resort, borrowing costs would rise still further. To offset a Greek-style crisis, Scotland would be forced to impose dramatic austerity. 

Sturgeon is undoubtedly right to warn of the risks of Brexit (particularly of the "hard" variety). But for a large number of Scots, this is merely cause to avoid the added turmoil of independence. Though eventual EU membership would benefit Scotland, its UK trade is worth four times as much as that with Europe. 

Of course, for a true nationalist, economics is irrelevant. Independence is a good in itself and sovereignty always trumps prosperity (a point on which Scottish nationalists align with English Brexiteers). But if Scotland is to ever depart the UK, the SNP will need to win over pragmatists, too. In that quest, Scotland's deficit remains a vast obstacle. 

George Eaton is political editor of the New Statesman.