Poor relations

The former Tory leader Iain Duncan Smith talks about his “Damascene” conversion and how the “sharp b

In his 2009 speech to the Conservative party conference, David Cameron acknowledged the contributions made by several of his shadow cabinet colleagues. George Osborne, Kenneth Clarke, David Willetts, Chris Grayling and Dominic Grieve were all warmly commended for their efforts in a range of policy areas. But the Tory leader reserved special mention for a man who does not sit on the Conservative front bench - his predecessor but one as leader of the party, Iain Duncan Smith.

Cameron recited a familiar litany of social dysfunction that "12 years of big government" had done nothing to remedy: poverty, crime, addiction, failing schools, sink estates and family breakdown. In the fight against these evils, his favoured shorthand for which is "Broken Britain", Cameron declared that "there's one person this party can rely on. He's the man who has dedicated himself to the cause of social justice and shown great courage in standing up for those least able to stand up for themselves: Iain Duncan Smith." If the Conservatives were to win the election, Cameron went on, their former leader would be "responsible in government for bringing together all our work to help mend the broken society".

This was Cameron's way of acknowledging the influence that Duncan Smith has had on the shape of Tory social policy (not to mention the tone of its rhetoric on social issues) since 2005. The editor of the ConservativeHome website, Tim Montgomerie, who helped Duncan Smith to set up the think tank the Centre for Social Justice (CSJ) in 2004, says that his ­influence cannot be underestimated. "Duncan Smith and the CSJ have made the Conservatives think about poverty again in a serious way. After the creation of New Labour, both main parties were focused on the middle-class vote. It's good that there's now a political competition for the poverty vote."

Duncan Smith's hand, and that of the CSJ, was discernible in both Cameron's diagnosis of the ills afflicting Britain's poor and in the panacea he conjured up to heal them - "making the country more family-friendly" through such measures as a transferable tax allowance for married couples and the abolition of the so-called couple penalty in the benefits system. (CSJ doctrine has it that family breakdown is at the root of most social problems and that ­marriage, which it thinks the Labour government has "disincentivised", is a crucial bulwark against it. Indeed, it can sometimes appear as if there is no social problem to which, in the CSJ's view, marriage is not the answer.)

Conscience of the party

When, in January, Cameron appeared to retreat from his commitment to implement the marriage tax allowance, the Times reported that Duncan Smith had given the Tory leader "permission" to water down the proposals. I suggest to Duncan Smith, when I meet him at his handsomely appointed office in the House of Commons, that his writ inside the Conservative Party runs wide. He laughs at the suggestion, but doesn't exactly disabuse me. "It was David Cameron who first made a statement about marriage, and we [the CSJ] then promised we'd look at it after he got elected as leader."

He is keen to make it clear that he has long had the leadership's ear, and appears to imply that much of the rhetoric, if not the substance, of so-called progressive Conservatism comes from him. "My point to the Conservative Party has been that social justice is critical and that it should be an integral part of what we do. After the 2005 election, I wrote a paper in which I said that we have to re-engage that debate [about social justice]. And David Cameron read it and said, 'I agree with you, we can't just ignore this.' So that's where the whole argument about social justice came from."

Duncan Smith's anointment by Cameron as the social conscience of a "modernised" Conservative Party appeared to complete a re­markable transformation that had begun in 2002, the year before he stepped down as leader, when he visited the traumatised and catastrophically deprived Glasgow housing scheme of Easterhouse. He says he had already begun to think about the predicament of those living on Britain's worst estates while he was shadow secretary of state for social security in the late 1990s. But it was with the visit to Easterhouse, in the company of the community worker (and lifelong socialist) Bob Holman, that Duncan Smith's metamorphosis from Thatcherite hammer of the right into One-Nation Tory began in earnest.

“Going up to Glasgow was the moment," he says. "Standing in the middle of an estate like Easterhouse, you know it was built after the war for a purpose, only to see this wrecked and dreadful set-up ­today, with families locked into generational breakdown, poverty, drug addiction and so on.

“And that really does confront you with the thought that we did this - we built the brave new world, and look where it's gone. It was a sort of Damascene point. It's not that I wasn't thinking about these things before, but after Easterhouse I saw that we had to do something about it."

The "we" in that last remark refers not only to the society that bears responsibility for the disastrous fate that has befallen many of its poorest members; but also to the Conservative Party, which, during the Thatcher years and their long aftermath, had seemed almost to flaunt its indifference to the conditions endured by the worst-off. In a much-discussed speech delivered before she became prime minister, Thatcher had dismissed as incoherent the very idea of "social justice", along with a "progressive consensus" that regarded the notion as fundamental. (It is also worth ­remembering, incidentally, that in the early 1980s Thatcher had rejected proposals to protect marriage through the tax system, put to her by the then head of the Downing Street ­Policy Unit, Ferdinand Mount. Mount, who published an elegy to the lost "civilisation" of the English working class at about the time Duncan Smith was establishing the CSJ, has since worked with the think tank's social ­housing group in what he describes to me as a "fruitful relationship".)

Duncan Smith sees himself as challenging the Conservative Party to reconnect with the One-Nation traditions that were obliterated by Thatcherism. "The aim," he says, " is to get the party on to a subject from which they have arguably been absent for too long." For Montgomerie, this amounts to an alternative model of Tory "modernisation" to the one pursued by Cameron, which has focused on "brand decontamination" and a diluting of the party's reactionary stance on a range of social issues. In a report written for the CSJ in 2004, Montgomerie argued that "Britain's conservatives might find a more fruitful form of 'modernisation' than that embraced by those advocating libertarian policies on family, drugs and crime . . . Wouldn't the Tory party have made more progress if it had focused on the stark gap between haves and have-nots?"

The CSJ was launched with a paper written by Duncan Smith entitled Britain's Conservative Majority, in which he came to much the same conclusion. "The marriage of socially conservative views with a commitment to social justice," he wrote, "is . . . the most intellectually interesting characteristic of Britain's conservative majority." He urged Conservative politicians to engage voters' deeply held moral and religious convictions, rather than setting them to one side in the name of pluralism or, indeed, modernisation.

Faith-based voluntary organisations are also central to the CSJ's vision of social renewal. Duncan Smith, who is a Catholic, believes that the voluntary sector in general, and religious groups in particular, are invariably more successful in helping the deprived than the state. "In the past 15 years," he tells me, "there has been in government, and among the establishment, a growing sense that somehow religion, and particularly Christianity, is some sort of threat to equality and rational argument. My answer to that is that the organisations I see on the ground doing arguably the best work are ­often religious organisations. You don't have to agree with the nature of their religion, but you have to recognise that there is something that drives them. There is a significant chunk of people who feel they have to put something back and help. If you say to them, 'You must get out of this area,' then you shut down a huge amount of good work that goes on."

The day before we meet, the Pope has suggested that the provisions in the Equality Bill requiring Catholic adoption agencies to consider gay couples run counter to "natural law". Duncan Smith is relaxed about Benedict XVI's intervention. "I don't have a problem when religious leaders enter the fray. And there is an argument here as to whether this bill has deliberately sought to put greater pressure on religious bodies to do one particular thing. Does tolerance stretch to religion, or are you to exclude it?"

What of Montgomerie's point that Duncan Smith's combination of religiously flavoured social conservatism and a belief in "social justice" is at odds with the Cameroonian version of "progressive Conservatism"? "I haven't really got any thoughts on that," he says. "Though, from the Conservative Party's standpoint, they would have to make adjustments about what they're about, and tolerance has always got to be part of that."

And there is the objection made by some on the centre left that the attempt to reach back to pre-Thatcherite Conservative traditions requires an account of what happened to social justice under Thatcher in the 1980s. The kind of account, in fact, that Cameron has thus far failed to provide. (In that same conference speech, he railed against the failures of "big government", overlooking how 19th-century Tories such as Shaftesbury and Disraeli used the power of the state in order to deliver the kind of "progressive ends" he claims to desire.)

After a lengthy defence of the necessity of "economic revolution" at the end of the 1970s, Duncan Smith acknowledges that there were "sharp bits of Thatcherism that were really hurtful. Because of the way we distributed ­social housing, we managed to lock in whole groups of people in places where there was no work. We should have seen that you can't have an economic revolution without a social revolution. We didn't do anything about that and, if anything, that made things worse. When Thatcher said later that we had to go to the inner cities, that's what should have happened. But then, of course, we stumbled into the end of government and it never got going."

Line of redistribution

It is not clear, however, what follows from such a recognition. One interested observer of the work of the CSJ, Richard Reeves of the rival think tank Demos, is not convinced that Duncan Smith is capable of pursuing his insights to their logical conclusion.

“He needs to accept the fact that the big increase in inequality, and the other things that the Tories would describe as 'broken Britain', occurred in the 1980s under Thatcher," Reeves says. "He needs to develop a much more coherent analysis of the role of free-market Thatcherism to go alongside some of the things the CSJ quite rightly points to, such as family breakdown and drug dependency."

Yet Duncan Smith rejects the criticism, made recently in the New Statesman by the Labour MP Jon Cruddas (who is otherwise impressed by what the CSJ is doing), that in emphasising cultural and social impoverishment, he understates actual material poverty, the remedies for which must be redistributive. "We take it as a given that a modern society does have, at its heart, a concept of redistribution," he says. "The tax system is redistributive. We're not challenging that. Our question is to what ­degree redistribution through government ­actually works."

But if "social justice" is not primarily a redistributive notion, what is it? Here, Duncan Smith's response is startlingly muddled: "I mean to improve the quality of people's lives, which gives people the opportunity to improve their lives. In other words, so people's quality of life is improved."

The incoherence of this answer suggests that Duncan Smith's journey has some way to go. And his uncertainty mirrors that of his leader, who still needs to explain how the “progressive" ends of fairness and equality can be achieved by cutting benefits and slashing public spending.

Jonathan Derbyshire is culture editor of the New Statesman

Jonathan Derbyshire is Managing Editor of Prospect. He was formerly Culture Editor of the New Statesman.

This article first appeared in the 01 March 2010 issue of the New Statesman, The Dave Ultimatum

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How can Britain become a nation of homeowners?

David Cameron must unlock the spirit of his postwar predecessors to get the housing market back on track. 

In the 1955 election, Anthony Eden described turning Britain into a “property-owning democracy” as his – and by extension, the Conservative Party’s – overarching mission.

60 years later, what’s changed? Then, as now, an Old Etonian sits in Downing Street. Then, as now, Labour are badly riven between left and right, with their last stay in government widely believed – by their activists at least – to have been a disappointment. Then as now, few commentators seriously believe the Tories will be out of power any time soon.

But as for a property-owning democracy? That’s going less well.

When Eden won in 1955, around a third of people owned their own homes. By the time the Conservative government gave way to Harold Wilson in 1964, 42 per cent of households were owner-occupiers.

That kicked off a long period – from the mid-50s right until the fall of the Berlin Wall – in which home ownership increased, before staying roughly flat at 70 per cent of the population from 1991 to 2001.

But over the course of the next decade, for the first time in over a hundred years, the proportion of owner-occupiers went to into reverse. Just 64 percent of households were owner-occupier in 2011. No-one seriously believes that number will have gone anywhere other than down by the time of the next census in 2021. Most troublingly, in London – which, for the most part, gives us a fairly accurate idea of what the demographics of Britain as a whole will be in 30 years’ time – more than half of households are now renters.

What’s gone wrong?

In short, property prices have shot out of reach of increasing numbers of people. The British housing market increasingly gets a failing grade at “Social Contract 101”: could someone, without a backstop of parental or family capital, entering the workforce today, working full-time, seriously hope to retire in 50 years in their own home with their mortgage paid off?

It’s useful to compare and contrast the policy levers of those two Old Etonians, Eden and Cameron. Cameron, so far, has favoured demand-side solutions: Help to Buy and the new Help to Buy ISA.

To take the second, newer of those two policy innovations first: the Help to Buy ISA. Does it work?

Well, if you are a pre-existing saver – you can’t use the Help to Buy ISA for another tax year. And you have to stop putting money into any existing ISAs. So anyone putting a little aside at the moment – not going to feel the benefit of a Help to Buy ISA.

And anyone solely reliant on a Help to Buy ISA – the most you can benefit from, if you are single, it is an extra three grand from the government. This is not going to shift any houses any time soon.

What it is is a bung for the only working-age demographic to have done well out of the Coalition: dual-earner couples with no children earning above average income.

What about Help to Buy itself? At the margins, Help to Buy is helping some people achieve completions – while driving up the big disincentive to home ownership in the shape of prices – and creating sub-prime style risks for the taxpayer in future.

Eden, in contrast, preferred supply-side policies: his government, like every peacetime government from Baldwin until Thatcher’s it was a housebuilding government.

Why are house prices so high? Because there aren’t enough of them. The sector is over-regulated, underprovided, there isn’t enough housing either for social lets or for buyers. And until today’s Conservatives rediscover the spirit of Eden, that is unlikely to change.

I was at a Conservative party fringe (I was on the far left, both in terms of seating and politics).This is what I said, minus the ums, the ahs, and the moment my screensaver kicked in.

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.