Tory group Renewal: capitalism needs "emergency shock treatment"

The Conservative organisation is wise to warn that the party should not position itself as the defender of a market system that is not working for the low-paid.

One of the reasons that the Conservatives' attacks on Ed Miliband as a "socialist" and a "Marxist" have failed to succeed is that they have positioned themselves as the absolutist defenders of a market system that isn't working for the majority. For millions of workers, the link between higher growth and higher wages that existed for decades has been severed. GDP may finally be rising but median wages are still forecast to be below pre-recession levels in 2018 and no higher than they were in 2003. 

In these conditions, it is unsurprising that many are attracted by Miliband's radical solutions. As I've noted before, if the Labour leader is a socialist, so are most of the public. Around two-thirds of voters support a 50p tax rate, a mansion tax, stronger workers’ rights, a statutory living wage and the renationalisation of the railways and the privatised utilities (putting them to the left of Miliband). 

If the Tories are to stand any chance of triumphing in 2015, they will need to offer answers to the failings of the market, rather than merely excuses. One group that understands this is Renewal, which seeks to broaden the party's appeal among working class, northern and ethnic minority voters. Founded last year and led by former Conservative candidate David Skelton (a frequent NS contributor) it is today launching a new piece of work entitled "Renewing Capitalism", which will look at "new ways to create a genuinely competitive economic environment in which the consumer and the low-paid are protected, competition is cherished and anti-competitive, monopolistic behaviour is cracked down on". It is also calling again for the introduction of policies such as a rise in the minimum wage, the building of one million homes and the creation of a new Secretary of State for consumer protection. At the same time, Policy Exchange, Skelton's alma mater, has launched "Popular Capitalism", which will look at ways of creating private sector jobs outside London and dealing with the challenges around low pay and housing shortages. 

Skelton said of Renewal's new project: "The Conservative Party needs to come to terms with the fact that many people, particularly the low paid, don't think that capitalism is working for them. We need to do more to show that capitalism can work for everybody in every part of the country. Being pro market isn't the same as being pro big business. Where there are instances of abuse – in either the public or the private sector – Conservatives should come down hard to protect the consumer."

Robert Halfon, its main parliamentary supporter, who recently argued in favour of a windfall tax on the energy companies on The Staggers, said: "It was a big mistake for the Conservative Party to oppose the minimum wage. We must right that wrong by at least increasing it in line with inflation.  We should not make the same mistake. We must move on to ensure that everyone, in the north and the south, on low wages as well as high, can benefit from the proceeds of growth. If we say that the Conservative Party is on the side of hard working people then we have to really mean it."

Renewal's programme offers a coherent response to what remains the Conservatives' greatest weakness: that they are viewed by most voters as "the party of the rich". But it is less clear to what extent the party leadership is prepared to embrace it. While it seems likely that there will now be a significant rise in the minimum wage next month, after Tory cabinet ministers threw their weight behind the idea, the Conservatives have yet to came close to outlining a plan to build houses on the scale required, preferring to focus on subsidising demand through Help to Buy. In the 12 months to September 2013, annual housing starts totalled just 117,110, while annual housing completions fell by 8% to 107,950, the lowest level of construction since the 1920s. 

More broadly, Renewal faces countervailing pressure from organisations such as the Free Enterprise Group whose vision of an even more deregulated economy (for instance through UK withdrawal from the Social Chapter) is at odds with its call for a more humane capitalism. Just 14 months 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 at the Conservative conference in Manchester last year. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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PMQs review: Jeremy Corbyn prompts Tory outrage as he blames Grenfell Tower fire on austerity

To Conservative cries of "shame on you!", the Labour leader warned that "we all pay a price in public safety" for spending cuts.

A fortnight after the Grenfell Tower fire erupted, the tragedy continues to cast a shadow over British politics. Rather than probing Theresa May on the DUP deal, Jeremy Corbyn asked a series of forensic questions on the incident, in which at least 79 people are confirmed to have died.

In the first PMQs of the new parliament, May revealed that the number of buildings that had failed fire safety tests had risen to 120 (a 100 per cent failure rate) and that the cladding used on Grenfell Tower was "non-compliant" with building regulations (Corbyn had asked whether it was "legal").

After several factual questions, the Labour leader rose to his political argument. To cries of "shame on you!" from Tory MPs, he warned that local authority cuts of 40 per cent meant "we all pay a price in public safety". Corbyn added: “What the tragedy of Grenfell Tower has exposed is the disastrous effects of austerity. The disregard for working-class communities, the terrible consequences of deregulation and cutting corners." Corbyn noted that 11,000 firefighters had been cut and that the public sector pay cap (which Labour has tabled a Queen's Speech amendment against) was hindering recruitment. "This disaster must be a wake-up call," he concluded.

But May, who fared better than many expected, had a ready retort. "The cladding of tower blocks did not start under this government, it did not start under the previous coalition governments, the cladding of tower blocks began under the Blair government," she said. “In 2005 it was a Labour government that introduced the regulatory reform fire safety order which changed the requirements to inspect a building on fire safety from the local fire authority to a 'responsible person'." In this regard, however, Corbyn's lack of frontbench experience is a virtue – no action by the last Labour government can be pinned on him. 

Whether or not the Conservatives accept the link between Grenfell and austerity, their reluctance to defend continued cuts shows an awareness of how politically vulnerable they have become (No10 has announced that the public sector pay cap is under review).

Though Tory MP Philip Davies accused May of having an "aversion" to policies "that might be popular with the public" (he demanded the abolition of the 0.7 per cent foreign aid target), there was little dissent from the backbenches – reflecting the new consensus that the Prime Minister is safe (in the absence of an attractive alternative).

And May, whose jokes sometimes fall painfully flat, was able to accuse Corbyn of saying "one thing to the many and another thing to the few" in reference to his alleged Trident comments to Glastonbury festival founder Michael Eavis. But the Labour leader, no longer looking fearfully over his shoulder, displayed his increased authority today. Though the Conservatives may jeer him, the lingering fear in Tory minds is that they and the country are on divergent paths. 

George Eaton is political editor of the New Statesman.

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