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30 September 2024updated 02 Oct 2024 12:46pm

The Tories are still in denial

Voters want economic interventionism, not reheated Thatcherism.

By George Eaton

Labour’s conference did not resemble that of a party which recently won an election. The Conservatives’ conference does not resemble that of a party which recently lost one.

Keir Starmer’s plummeting approval ratings – a poll shows a 45-point drop since July – have given the Tories hope as they assemble in Birmingham. A shrunken party draws comfort from an ever more volatile electorate. If Labour can recover from a landslide defeat in a single term, they ask, why can’t we?

Negative answers to that question surround you at Tory conference. The party knows it suffered an emphatic defeat – the worst in its 190-year history – but it is not yet ready to absorb the full implications. 

Its four leadership candidates offer banal versions of Thatcherism: tax cuts, deregulation, a smaller state. Kemi Badenoch, who leads in membership polling, has gone further than most. She floated the possibility of charging for the NHS in the future (“over my dead body,” declared a gleeful Wes Streeting). Then, as if dared to top this, she opened a debate on maternity pay, noting that before its existence “people were having more babies”. 

Badenoch’s subsequent insistence that “of course I believe in maternity pay!” brought to mind Ronald Reagan’s adage: “If you’re explaining, you’re losing”. Her chief rival, Robert Jenrick, certainly hopes as much. “Our maternity pay is among the lowest in the OECD,” he accurately observed. 

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But though the slickest candidate, Jenrick is not free of myopia. At a fringe event hosted yesterday by the Centre for Policy Studies, the former immigration minister declared that “the centre ground doesn’t really exist, the centre ground is just the middle point on the political spectrum. What we should care about is the common ground of British politics. The common ground is where millions of our fellow citizens are.” 

As it happens, Jenrick is right. Back in August, I wrote on why “the common ground” – a term popularised by the late Thatcherite pioneer Keith Joseph – is a more valuable one than “the centre ground” (recycled by Theresa May in her Times column).

Most voters do not lie in the midpoint between left and right – in the manner of the Liberal Democrats or the defunct Change UK. They lean left on the economy – favouring public ownership of utilities and higher taxation of the wealthy – and right on crime and immigration (66 per cent believe immigration numbers have been too high over the last decade). They are also liberal on race, abortion and gay rights, and strongly in favour of action on climate change. 

The problem for Jenrick – regarded by some in Labour as the strongest candidate – is that he only accepts parts of the common ground. While vowing to lower immigration (named by former Tory voters as the last government’s biggest failure), he also inveighs against “higher spending and taxes”. Even the supposedly pragmatic James Cleverly and Tom Tugendhat evangelise for tax cuts.

This is hardly surprising – this is a Tory leadership election, after all. But it symptomises a party as yet unwilling to confront reality. One would never guess that the last government cut National Insurance by 4p (taking the average personal tax rate to its lowest since 1975). Or that voters elected a party committed to higher taxes to fund public services. Or that the most ardent attempt to cut taxes – Liz Truss’s mini-Budget – ended in political and economic Götterdämmerung

When pressed on how they would fund tax cuts, Tory candidates take refuge in generalities: fewer civil servants, “efficiency savings” and so on. Faced with an actual cut – such as means-testing winter fuel payments – they default to fiscal nimbyism. 

Expect Labour to exploit such contradictions, warning of a potential repeat of the Truss debacle (aided by the former PM’s omnipresence). In her conference speech, Rachel Reeves signalled that she is also prepared to revive Gordon Brown’s favoured dividing line: cuts vs investment. “If the Conservative Party wants a fight about who can be trusted to make the right choices for our public services and those who use them,” she declared, “then bring it on”.

Voters may eventually revolt against “Labour spending”. Public opinion, the pollster James Kanagasooriam tells me, is “thermostatic”: it tends to move in the opposite direction to government policy. After years of Labour investment, voters may once more embrace Tory frugality. But for now their revealed preference is clear: higher public spending over tax cuts. 

That this fact is incapable of penetrating the Tory leadership debate reveals a party talking to itself. If tax cuts are invariably the answer, the Conservatives are asking the wrong question. In an echo of Labour’s Bennites, Jenrick declared that the party “should be at the service of the membership” – the inverse of Starmer’s “country first, party second”.

The Labour leader is seen by some Tories as offering a template for their next leader. Back in 2020, Starmer won the membership by offering what some characterised as “Corbynism in a suit”. He then ruthlessly pivoted, discarding or revising most of his “10 pledges”. The electorate trumped the selectorate. 

Is any Conservative candidate capable of the same manoeuvre? The early signs point to a party content with a second term in opposition – even as Labour stumbles.

[See also: Labour cannot afford to lose Rosie Duffield]

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