Dave must take the Red Tory turn

The “big society” was the Tories’ chance to remake a broken society and economy. The opportunity was

In many ways, the present period in British politics resembles the 1970s: the complete collapse of the old governing orthodoxies, with the future still yet to be born. That we are governed by compromise, oscillation and U-turn is not merely a fact of coalition politics. At a deeper level, it is an expression of what Gramsci would have called "hegemonic crisis", in which reality is no longer captured by conventional ideas and orthodox policies.

We are entering uncharted seas, and our leading politicians are either tacking against the wind or floundering - or refusing to take to the water at all.
Chancellor Osborne's deficit-reduction programme has created such a powerful sense of negative purpose that it risks defining coalition politics entirely. But tactics can defeat strategy: people did not vote Tory for negative reasons; they wanted a new government to tackle bureaucratic dysfunction and to heal the "broken society", a concept that still meets with the approval of 60-70 per cent of the population, though derided by cosmopolitan liberals.

Much of the promise of a new Toryism has been leached away by the economic legacy of Labour's experiment with neoliberal economics and the reality of coalition politics. However, there is also deep ideological confusion about what Conservatism ought to be. David Cameron remains an enigmatic figure who, although personally popular, is unable to offer a credible account of what he and his government stand for. At different times, he has been a progressive Conservative, a compassionate one, a "muscular liberal", a liberal Conservative, or a purely pragmatic politician who can easily dispense with ideology.

Without a strong sense of what it is for or what it is trying to achieve, the government is acutely vulnerable to events. The debacle over GP commissioning in England is a case in point. Nobody was quite sure what the reform was, why it was occurring, and to what end. Such was the opposition, that more decisive reform of the National Health Service is now off-limits.

Cameron's remaking of Toryism is only half finished and is in danger of being sidelined. ­Crisis is always an opportunity, and the deficit, inherited from Labour, offered the chance to reform the state so as to bolster the new social vision. Yet far too little of this has occurred. Indeed, cuts are being enforced before the Localism Bill has passed, with the effect that budgets and provision are being lost before powers to challenge expenditure decisions and take over council budgets are put in place.

If Cameron is to be master in his own house, he needs to create the rationale for occupying it. He should cut as necessity demands, but at least try to broker the outcome that the government supposedly believes in. The failure to ­further craft and augment a vision for a radical Toryism has left the Conservatives running in reverse, thinking all the while that they are moving forward. By staking everything on deficit reduction without gesturing beyond it, they risk failing once again to appeal beyond their base and to breach the 40 per cent barrier that a party needs for a governing majority. Cameron has the right intuitions, but has not yet chosen the ideas or policies to build on them.

As for Nick Clegg and the Liberal Democrats, they had little choice but to strike a coalition bargain with the Conservatives. To do so was not ignoble, yet the Lib Dems seem degraded by power, all the joy and innovation of their 2010 manifesto transformed into bleakly utilitarian calculation or platitudes about equality. They are currently polling at about half of their electoral support, and their situation is stable but critical. Clegg, perceived as weak or opportunistic, is seen as having traded principle for office.

All of this was avoidable and is the result of several strategic errors. First, against explicit Tory advice, the Lib Dem leadership decided to own everything the government did. The result was that they lost their distinctive identity and, in May, were punished with two crushing defeats - in the referendum on the Alternative Vote and the local elections in England.

Second, Clegg needlessly committed the ultimate sin in British politics, that of appearing to govern without principle. His unambiguous endorsement of the deficit agenda, together with the leadership's U-turn on student fees (on which, again, he was advised to abstain), has given him the appearance of a zealot who strongly believes in nothing at all.

Clegg's party has failed to generate policy ideas; instead, its claim to radicalism rests on its merely limiting or challenging Con­servative policies. If they are not to become the squeezed middle of the next general election, the Lib Dems must offer more positive proposals. However, in government, they appear both ill- and under-advised. As a left-wing party governed by a right-wing leadership, they have come close to destroying their social-democratic base and appear to be courting a constituency of 19th-century-style classical liberals that simply does not exist.

The Lib Dems are now the least innovative of the three main parties, which is remarkable, given the calibre of some of their pre-election thinking. If they are not to drift any further, they must depart from an exhausted rights-based agenda and reach further back into their tradition to transformative figures such as Jo Grimond, arguably the first prominent postwar politician to call for a non-statist participatory economics and politics.

The Labour Party might yet be in the best ­position to profit from what is to come. Though deeply traumatised by electoral defeat last May, the party has not succumbed to ­internal feuding - the Brownite and Blairite groups keep the peace by vetoing each other's suggestions. The result, however, is that party policy is stuck in the past; stability comes at the price of stagnation. Ed Miliband recognises this, but remains imprisoned by it. He has ­repudiated New Labour but not the statism that preceded it.

A policy review is under way, but we have yet to see what might emerge. The need to criticise the government has exposed the paucity of current left-wing thinking, despite the crisis of neoliberal economics. By not spelling out a coherent economic alternative, Labour looks woefully out of touch.

Under Miliband, Labour has broken through on only two occasions. First, on the "squeezed middle", which, like Cameron's "broken society", captures public anxiety about the future. Second, when it reached for the moral high ground over News International and phone-hacking. By tackling one of the most corrosive forces in modern Britain, Miliband again showed an acute awareness that the future contours of British politics will be shaped by the return of morality.

Beyond this, Labour appears still to be wedded to the most damaging aspects of its legacy: social libertarianism and statism. Development on the deficit is limited by the misguided brilliance of the shadow chancellor, Ed Balls.

A gifted political pugilist, Balls believes that the key to private-sector growth lies in state expenditure, and nothing else. He is unable to grasp that debt constrains growth and that public debt is inextricably linked to private debt.

As a consequence, he cannot craft a meaningful economic response to the financial crisis. Caught between the legacy of Brown and Blair, Miliband is looking for alternatives.

Blue Labour, the work of Maurice Glasman, is a cogent response to my Red Toryism. So far, however, it remains a creature of Glasman's admirable rhetorical abilities and appears limited to working-class appeal, rather than embracing middle-class interest. And, crucially, it lacks any substantive policy detail.

The risk is that Miliband will not challenge the existing paradigms, but instead will choose from them. To the public, he seems too young, too callow; people still do not feel he could or should represent the nation. Cameron, by contrast, has a vision, but not necessarily the will or the focus to realise it.

When economic and social paradigms shift, the politics that prevails is the one that most quickly adapts to new circumstances in the light of its core beliefs. Lab­our determined the shape of post-1945 politics; Margaret Thatcher dominated after 1979. But nobody has yet come forward to shape the politics of the post-financial-crisis era.

What is this new reality and what should the new politics be? This question is best addressed by looking at the old reality and the old politics.
Despite appearances, postwar British politics has been predominantly liberal. We have followed a common project through different parties: the left has pursued social liberalism and the right its reductive economic variant. And what is the common factor in this shared endeavour? It is the elimination of relationships, reciprocity and morality from politics and economics.

The result has been a huge concentration of wealth and power in the hands of those who win the zero-sum economic game and of the apparatchiks of the welfare state who manage the consequences. Our contemporary politics of proxy representation has tended to destroy genuine political participation and has handed the country over to an unaccountable elite, who manage our society without regard to local needs and interests.

The prompt objection to this analysis would be that the left has not been liberal at all. Collectivism and statism are surely highly illiberal, but extreme collectivism is the consequence of extreme individualism, and each is dialectically involved in the creation of the other. Liberalism is, at bottom, a demand to enthrone unconstrained human will. And once you claim that the individual is paramount, you need that to be more than mere subjective assertion - so you must universalise your subjectivity. From Rousseau through Kant to German idealism, it was argued that subjectivity was the originator of all truth and value.

Simply put, one can trace a line from Rousseau and Bentham through Marx to social democracy in which civic and religious traditions have been replaced by a secular, centralised statism that conceived of its role as that of making individuals ever more autonomous, isolated and independent. If one doubts this analysis, then one struggles to explain the ideology of New Labour, in which ­statism and libertarianism (both social and economic) existed side by side. Its chief ideologue, Anthony Giddens, argued that the state exists precisely to free citizens from ties of ­locality, family and tradition.

Julian Astle, the director of the think tank Centre Forum, wrote recently in a perceptive article that there is a secret club at the centre of British politics, comprising about 30 people and including the recent leaders of the major parties and their followers: the "Cameroons", the Blairites and the Orange Book Liberals. "Its members," Astle wrote, "divided by tribe, are bound by a truth they dare not admit . . . [T]he creed that really unites these modern­isers is liberalism."

I agree with him. And at any other point during the past 30 years, the confidence of these liberal modernisers would have been entirely merited. Those at the bottom of society could be safely ignored. Social liberalism, in freeing people from their obligations to each other and from nearly all conceivable constraints on behaviour, preached the progressive consequences of choice in anything from sex to fast food. Meanwhile, the variant of economic liberalism we were presented with seemed to provide endless credit on the basis of endlessly appreciating assets.

All was well in the liberal universe, until the collapse not just of the economic compact, but of the social accord as well. After the crash and after the riots, and amid the continuing, terrifying disaster of the debt crisis, the ruling liberal orthodoxy seems anything but secure. Nor should it be - the social fragmentation that has broken parts of our society and eroded much of our social compact continues apace, as does the collapse of economic growth across the western world.

In 2009, I published an essay in Prospect, "Rise of the Red Tories". The main trends I ­argued against in that essay were the liberal consensus, the persistence of class and the permanence of monopoly and oligopoly. If the government is to be properly judged, it should be on these grounds.
First, it must be said that the Conservatives have done much to shift the agenda in the right direction. The work done at the Department for Work and Pensions by Iain Duncan Smith and David Freud is transformative. For the first time, the benefits trap has been identified, and they have tried to smooth out the steepness of the marginal tax rate, as well as the administrative delays that make it so hard to move out of welfare into work.

Second, the Localism Bill, now working its way through parliament, is full of innovative ideas and policies that will, for the first time, enable those at the bottom to establish - with the powers of budgetary takeover, community right to buy and neighbourhood control over planning - a political economy that could change localities beyond all recognition. Perhaps the most underacknowledged change is the power of competence that will allow local authorities to innovate and do anything that is not explicitly proscribed.

The policing reforms, especially after the riots and the ceding of British streets to criminals, now look especially merited. In education, similarly, the idea of free schools is right and proper, though the administrative barrier for applications is rising so quickly that, in effect, it risks becoming something that only the middle class, with lawyers and managers on its side, can do.

The mass nationalisation of schools under the banner of Michael Gove's academy programme is proceeding apace. And although this subjects schools to central rather than local control, it is because the centre wishes to liberate them from standardisation that it will, paradoxically, allow variation and ethos to come back into play. Nor should we forget either the pupil premium or the unrecognised successes in the extension of apprenticeships, for both young people and adults.

Finally, public-sector mutualisation under the aegis of the Cabinet Office is proceeding far, far faster than it ever did under Labour. This is all good.
Yet these developments cannot counter the terrible, disempowering inertia of vested interest and endemic social, cultural and economic poverty. The long-term trend in the country is increasingly bad for those in the ­bottom half of our society: they are cut off from assets and opportunity. The mantra of social mobility is a perverse indication of how bad life is for those in the bottom deciles. As the ladder of opportunity lengthens, we risk turning class into caste and re-creating the "two nations" that Disraeli decried more than a century and a half ago.

The "big society" - a complex of political and economic ideas that attempts to empower citizens rather than the state or the market - was, conceptually at least, the best chance those at the bottom have had in nearly seven decades. We all know the story of how the idea, appallingly communicated and reduced to a caricature of volunteering and philanthropy, was privately laughed at by the Liberal Democrats and despised by many in the Conservative Party.

Yet it remains the single most important policy breakthrough of the past 30 years. It captures the fact that the vertical state has destroyed the horizontal structures of a vivid and progressive civic life; it recognises that the poverty of those at the bottom of society is both financial and social; and it tries to link those twin deprivations with new associative models that blend private and public capital in social enterprises.

The tragedy is that the government has adopted a laissez-faire approach to the delivery of the big ­society. It has claimed that if the state stepped back, and social enterprise was incentivised (not least by the "Big Society Bank"), then the civic sector would grow itself - and there is no doubt that, in some parts, that will be true. But there is no civic infrastructure on which to base this ­innovation. It required a retail offering - every town or village or locality should have had its own big society platform where people could go for advice and input, and where the new powers in the Localism Bill could be explained and augmented with civic expertise, training in social entrepreneurship and the delivery of public service.

With these ideas cut off by the spending cuts and sidelined by the Treasury as a prime ministerial distraction, the battle for the big society has probably already, needlessly, been lost. But its proponents may well have won the war, for Labour now acknowledges that it should adopt its own civic variant.

The idea still remains central to the Prime Minister's vision, not to mention to his future legacy and any future parliamentary majority he might secure.

The big society should be the means whereby the self-employed can come together with small businesses to develop their own supply chains and collaborate with each other to compete with the bigger players. It should mean a stake in public procurement for the bottom-up enterprises that we need to encourage and foster.

But most of all, it should broker relationships between successful and emerging business, so that the former can build the capacities of the latter. Without that, we don't stand a chance in the global economy.

At present, Conservatism looks uncertain and incoherent. The Treasury remains in the ascendancy and has struck bilateral bargains with departments which, in exchange for cuts delivered, are allowed to pursue their own policy agendas. The Office of the Prime Minister seems to have been bypassed; Cameron is less a captain than a referee, and one who intervenes only when there is a serious problem. If the centre cannot hold, things will fall apart.

As of now, there is no Conservative offer for the poor; all the poor are being given is the prospect of less welfare and lower wages. In ­exchange, they will have even less economic security than they enjoy at present.

Waged labour is receiving an ever smaller share of GDP, and the old trickle-down argument simply doesn't hold. The failure of wages to maintain a decent standard of living is the very thing underpinning the debt crisis: in a form of privatised Keynesianism, the demand burden passed from the state to individuals, who took on huge amounts of credit in order to fund an economy that had lost touch with all fundamentals.

The trouble is that the condition of those at the bottom of society is rapidly becoming the norm for those in the middle, too - both ­welfare and well-paid work are falling away, and conventional middle-class life, especially with high university tuition fees, no longer looks sustainable. Indeed, in July this year, Charles Moore wrote in the Daily Telegraph that he was starting to think that the left was right - that a winner-takes-all philosophy has produced deep immorality at the top of our society, and that an economy that was increasingly run in the interests of those corporations or individuals who own everything could no longer command widespread support. It seems that the outlook may be serfdom for the many and lordship for the few. This is far from Friedrich Hayek's vision of a plural and truly free market economy in which there are multiple centres of ownership, innovation and power, with competition between them all.

Unless Conservatism makes a determined effort to create a plural and participatory economy, all it does is create a constituency for the left: a permanent class always and only reliant on wages. If popular ownership beyond the bubble of ­residential housing is to be achieved, a new economic settlement beyond wage slavery and economic insecurity needs to be imagined. The winners in our society have taken too much and given back too little. The liberal project has destroyed the virtuous elite and introduced venal ones.

Unless we rein in the rapacious elite at the top, we cannot tackle criminal dysfunction at the bottom. We need a new form of social conservation and a properly distributive economics. We need, in short, Red Toryism.

If David Cameron is to fulfil his considerable promise, he has to assume the mantle of leadership and offer clear intellectual direction. He governs through friends, but he needs to lead through followers. To attract supporters for a political project, a strong central and conceptual leadership is required, one that ensures that everything that is done is carried out in the name of an overarching vision.

Cameron's intuitions are his greatest asset and, from the "broken society" to Libya, they have been proved both right and moral. However, he needs a vision of the future.

If the Tories continue to make excuses for the top, squeeze the middle and cut off the bottom, Cameron's fate will be that of Jim Callaghan - a leader who refused to recognise the crisis for what it was. Liberalism is over. Cameron must take the Red Tory turn.

Phillip Blond is director of the think tank ResPublica