George Osborne and Michael Gove at the Conservative conference in Manchester in 2013. Photograph: Getty Images.
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The Tories are taking the morality war to the enemy

Cameron, Duncan Smith, Gove and Osborne are sincere in their desire for social emancipation. They must now find the words to express it. 

Now that the Great Recession is over, the Cameroons are returning to their radical roots. George Osborne recently spoke in favour of full employment. Just about every senior Tory is keen to address social mobility. A strategy is emerging. The Tories are determined to take the morality war to the enemy.

The modern economy has eroded Labour’s moral capital. The Marxists claimed that the rich drew their wealth from the surplus value created by manual labour. The Labour movement certainly drew much of its political capital from manual labour. If you examine Labour propaganda at least until the fifties, a lot of it is based on the injustice of workers toiling to support the idle rich. Those days are over. Bertie Wooster was abolished by the Second World War and post-war taxation.

British politics would look different if Alan Johnson were leading the Labour Party. He could still get a song out of the old tunes. But you cannot proclaim the glory of manual labour and the moral superiority of the proletariat from the coalfields of Hampstead or the steelworks of Kentish Town.

So why has the Tories’ moral deficiency appeared so insuperable? To some extent, it was Margaret Thatcher’s fault. That might seem paradoxical. In health, education and welfare, she did nothing to dismantle the architecture of a social democratic state. Those programmes were allowed to share in the proceeds of growth. She was accused of "cuts", yet there never were any cuts. Even so, the charge was not wholly unfair. Her political body language signalled a desire for cuts. She gave the continuous impression that Thatcher’s Britain was for the striving, the sharp-elbowed and the successful; no one else need apply.

Mrs Thatcher was often cloth-eared when it came to language, otherwise she would never have said that there was no such thing as society. Her injudicious comment drew attention to one of Thatcherism’s intellectual weaknesses: it had no theory of the state. Although Tories have never believed that the state should merely be anarchy plus the constable, the Lady came perilously close to validating that caricature, and to giving the impression that for her, the state was defence, the police and an unprivatisable residuum. Equally, she did nothing to reform either state education or welfare, which drifted along in a pre-Thatcherite sleepy hollow.

False impressions and linguistic slips did not matter as long as Labour was led by Michael Foot or Neil Kinnock. But when the party came up with a leader who was salonfähig in the living-rooms of middle England, the cuts legacy was toxic. Labour claimed that the Tories could not be trusted with the services on which ordinary families depend. Only Labour would defend them - without putting up taxes. It was a formidable platform.

During the Blair years, the Tory party often consulted focus groups and always depressed itself. Asked to draw a Labour politician, the groupers would come up with a slim chap in a dark blue suit talking into a mobile: very modern-looking. A Tory would be depicted as fat, in green wellies and tweeds, very unmodern-looking. So the Cameroons decided to tackle all this. As they had no intention of cutting the NHS, as David Cameron had spent night after night in Great Ormond Street hospital at his child’s bedside, they would proclaim their support for the NHS and for all public services. It helped that Mr Cameron and his team believed in social generosity and were determined to remove the obstacles to social mobility.

It also helped that the right spokesmen were in place. There is no more passionate believer in using education to bring opportunity to the poorest households than Michael Gove. At moments, in his intense desire to tear down the barriers to social mobility, Mr Gove can sound like a leftie.

In the Fifties, reviewing Tony Crosland’s The Future of Socialism, Roy Jenkins wrote that to him, socialism meant the relief of distress and poverty plus the removal of class barriers. The Cameroons would reply that they too are interested in those goals, which they can accomplish far more easily, because they do not have to deal with other socialist baggage, or the belief that the answers to social questions always involve a larger state.

The "big society" was an unfortunate phrase; it sounds sinister and Orwellian. If only the Great Society had still been available. But Cameronian conservatism is about social empowerment. This is most apparent in health and education. In the long run, it will also be true in welfare. That might seem a strange claim. How do you empower people by reducing their entitlements? There is a simple answer. Over the past few decades, the welfare state has increasingly lost its way. We have created an ill-fare state, in the form of a welfare aristocracy: families who believe that they have a hereditary entitlement to unemployment benefit. The greatest argument against promiscuous welfare is not the waste of money. It is the waste of people.

The Cameroons will have to deal with the charge of hypocrisy: that they are rich men who are pretending to be interested in the less well-off merely in order to defend their own interests. That should not be hard for them, for two reasons. First, most voters do not share Ed Miliband’s inherited enthusiasm for class warfare. Second, it is not true. Messrs Cameron, Duncan Smith, Gove and Osborne are sincere in their desire for social emancipation. They must now find the words to express it. 

Bruce Anderson is a political commentator

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BHS is Theresa May’s big chance to reform capitalism – she’d better take it

Almost everyone is disgusted by the tale of BHS. 

Back in 2013, Theresa May gave a speech that might yet prove significant. In it, she declared: “Believing in free markets doesn’t mean we believe that anything goes.”

Capitalism wasn’t perfect, she continued: 

“Where it’s manifestly failing, where it’s losing public support, where it’s not helping to provide opportunity for all, we have to reform it.”

Three years on and just days into her premiership, May has the chance to be a reformist, thanks to one hell of an example of failing capitalism – BHS. 

The report from the Work and Pensions select committee was damning. Philip Green, the business tycoon, bought BHS and took more out than he put in. In a difficult environment, and without new investment, it began to bleed money. Green’s prize became a liability, and by 2014 he was desperate to get rid of it. He found a willing buyer, Paul Sutton, but the buyer had previously been convicted of fraud. So he sold it to Sutton’s former driver instead, for a quid. Yes, you read that right. He sold it to a crook’s driver for a quid.

This might all sound like a ludicrous but entertaining deal, if it wasn’t for the thousands of hapless BHS workers involved. One year later, the business collapsed, along with their job prospects. Not only that, but Green’s lack of attention to the pension fund meant their dreams of a comfortable retirement were now in jeopardy. 

The report called BHS “the unacceptable face of capitalism”. It concluded: 

"The truth is that a large proportion of those who have got rich or richer off the back of BHS are to blame. Sir Philip Green, Dominic Chappell and their respective directors, advisers and hangers-on are all culpable. 

“The tragedy is that those who have lost out are the ordinary employees and pensioners.”

May appears to agree. Her spokeswoman told journalists the PM would “look carefully” at policies to tackle “corporate irresponsibility”. 

She should take the opportunity.

Attempts to reshape capitalism are almost always blunted in practice. Corporations can make threats of their own. Think of Google’s sweetheart tax deals, banks’ excessive pay. Each time politicians tried to clamp down, there were threats of moving overseas. If the economy weakens in response to Brexit, the power to call the shots should tip more towards these companies. 

But this time, there will be few defenders of the BHS approach.

Firstly, the report's revelations about corporate governance damage many well-known brands, which are tarnished by association. Financial services firms will be just as keen as the public to avoid another BHS. Simon Walker, director general of the Institute of Directors, said that the circumstances of the collapse of BHS were “a blight on the reputation of British business”.

Secondly, the pensions issue will not go away. Neglected by Green until it was too late, the £571m hole in the BHS pension finances is extreme. But Tom McPhail from pensions firm Hargreaves Lansdown has warned there are thousands of other defined benefit schemes struggling with deficits. In the light of BHS, May has an opportunity to take an otherwise dusty issue – protections for workplace pensions - and place it top of the agenda. 

Thirdly, the BHS scandal is wreathed in the kind of opaque company structures loathed by voters on the left and right alike. The report found the Green family used private, offshore companies to direct the flow of money away from BHS, which made it in turn hard to investigate. The report stated: “These arrangements were designed to reduce tax bills. They have also had the effect of reducing levels of corporate transparency.”

BHS may have failed as a company, but its demise has succeeded in uniting the left and right. Trade unionists want more protection for workers; City boys are worried about their reputation; patriots mourn the death of a proud British company. May has a mandate to clean up capitalism - she should seize it.