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8 June 2022

The Tories remain the prisoners of market ideology

Boris Johnson’s party wills statist ends but it refuses to commit to statist means.

By Paul Mason

“Under you,” wrote the Tory backbencher Jesse Norman of Boris Johnson, “the government has no sense of mission. It has a large majority but no long-term plan… Rather, you are simply seeking to campaign, to keep changing the subject and to create political and cultural dividing lines mainly for your advantage.”

With inflation surging above 9 per cent and people driving Audis turning up at food banks, these words will be the epitaph of Johnson’s time in office. The Prime Minister escaped defeat in Monday’s vote of confidence only because, though all Tory MPs are terrified by their polling slump, the rival factions in the party do not have a clear alternative project.

They are a mixture of extreme Brexiteers, who believe Johnson should rip up the Northern Ireland protocol, shrink the state and pursue radical deregulation; patrician One Nation Tories, who understand the social injustice of austerity; the remnants of the party’s pro-EU wing and a group of foreign policy hawks who see Johnson as a liability in the stand-off with Russia.

For each of these groups there is a potential leader. But to install that leader as prime minister, they would have to recruit a large number of MPs who are currently supporting Johnson, and on the government payroll. And that is why he survives.

But, though he emerged from the vote declaring he will now “draw a line” and “focus” on the important stuff, this looks impossible. If the Tories lose both the Wakefield and Tiverton by-elections on 23 June, this will be a symbolic defeat for Johnson across two demographics. Though the lives and political cultures of these voters are different, lying to parliament, breaking the law and running a government that has no clear objectives are all things that play badly with them.

The fundamental problem for Johnson is: nothing the Tories promise ever happens. Brexit was supposed to be about freedom to trade in an increasingly globalised world – with a deregulated domestic market attracting inward investment and Britain as a kind of European Singapore. But Covid, and the emergence of systemic competition with Russia and China, significantly deglobalised the world.

So the actual payload of Brexit is trade disruption, acute labour shortages and three-hour waits at Faro airport. Sterling, meanwhile, has been compared to an “emerging-market currency”. Not just because the Bank of England is paralysed over inflation but because the government’s solution to every serious political pressure is to borrow money and spend it on short-term alleviation of the pain.

Meanwhile, Norman is right: the Tories have no unifying objective, nor any clear vision of the future. Brexit has gone badly wrong. Return to Europe is politically impossible. The Union is fragmenting – and the relentless grind of care home closures, staff shortages and flight cancellations is sapping people’s patience.

Johnson has ruled through aspirational soundbites: he would “level up” the depressed towns of northern England. Britain would become a “science and technology superpower”. It would host a “trillion-dollar tech company”. It would build a new nuclear power station every year.

But none of it ever happens. Though the Johnson philosophy is mildly dirigiste, creating myriad industrial plans and strategies, the Conservative Party in office – and a civil service whose attitudes closely align with it – cannot effectively direct the market sector. 

Though there are still some, such as the writer and former MEP Dan Hannan, who want to let market forces rip, clearing out zombie companies and sacking civil servants, the Johnson approach has been somewhat statist. It’s not that the Tories don’t try to direct the economy; it’s that they have neither the mechanisms nor the mindset to execute dirigisme.

If you look, for example, at the Defence and Security Industrial Strategy, a 106-page document published in March 2021, it’s basically a series of aspirations and suggestions to an industry that’s essentially captured the Ministry of Defence. Like Sergeant Wilson in Dad’s Army, Tory attempts at dirigisme metaphorically begin with the words “Would you be so kind as to…” There is no actual plan.

And so the economy stagnates. To insulate the run-down 19th-century, brick-built terraced homes that populate our former industrial heartlands would require a massive injection of state funding. But there is not enough.

To complete even one new nuclear power station – something the British government has not achieved for 27 years – would need capital and labour that is not currently available and profits that could only be generated by state diktat. So the power stations remain a dream.

To become a science superpower, the government would have to direct the school system to improve massively the take-up of the hard sciences and further mathematics and launch a German-style industrial strategy.

The root of the problem is cognitive dissonance. Even as the state has become central to capitalism – in the aftermath of the 2008 crisis and the Covid pandemic, and with the need for rapid decarbonisation – the Tory belief system denigrates state direction, control and ownership.

They believe, at the same time, in a directive state and a small state; in low taxation and high borrowing. They are opposed to government debt but they have issued more of it even than John McDonnell promised in 2019.

As Rishi Sunak borrows tens of billions to fund new public spending and subsidies and to help households cope with energy inflation, he’s throwing it into an economy plagued with low growth and high inequality. So the money flows upwards, into the profits of privatised energy providers, into the soaring rents of the speculative property developers and into exorbitant bus and train fares for the privatised transport sector. 

A sustained opinion poll slump will not, on its own, remove Johnson. Indeed, as Norman suggested, the government’s entire purpose has become sustaining him in power. What will finally remove him is when two of the anti-Johnson factions do some kind of deal, in the name of electoral survival. 

The natural allies are the One Nation paternalists and the hard Brexiteers. Their separate objectives are not incompatible so long as they are prepared to go on borrowing and spending, to make up for weak growth and high inequality resulting from a trade war with Europe. 

The most likely leaders of such an alliance would be Liz Truss or Penny Mordaunt. But now that Johnson is so badly weakened, many others will fancy their chances.

The only certainty is that Johnson will go on trying to bluff, lie and improvise his way out of trouble. It is hard to see any route back to popularity for him.

[See also: Confidence vote results show Boris Johnson is far from safe]

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