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23 November 2016

Theresa May’s government will do well to do more than just manage

Faced with Brexit and a small majority, any change will be gradual. 

By George Eaton

As the British empire declined, Harold Macmillan spoke of a “wind of change” blowing through the African continent. In her recent speeches, Theresa May has echoed this motif. “Change is in the air,” she declared in her addresses to the Lord Mayor’s Banquet and the Confederation of British Industry (CBI).

“Whether we like it or not, this growth of national consciousness is a political fact,” Macmillan observed of anti-colonialism. May has met today’s revolts with similar equanimity: “When people demand change,
it is the job of politicians to respond.”

For her, the Leave vote was a mandate not merely to depart the EU but to reshape domestic policy. May’s Conservative party conference speech, which channelled another 1960s refrain (“A Change is Gonna Come”), announced this mission in dramatic fashion. Corporate Britain, the Bank of England and the EU were all put on notice. In May’s Brexitannia, workers would be represented on boards, savers reimbursed and free movement controlled.

Two months later, change has come but of a different kind. May has been forced to retreat, at least rhetorically. In her conference speech, she vowed: “We will publish our plans to have not just consumers represented on company boards, but workers as well.” Yet on 21 November, she told the CBI: “I can categorically tell you that this is not about mandating works councils, or the direct appointment of workers or trade union representatives on boards.” May’s initial language was ambiguous enough to prompt fierce – and successful – resistance by business and cabinet ministers (including the Chancellor, Philip Hammond).

The Prime Minister has also been forced to underline her respect for the Bank of England’s “independence”. Her ominous promise of “change” antagonised a tetchy Threadneedle Street. Again, Downing Street insists that no offence was intended. But like David Cameron before her, May has learned that every word spoken by a prime minister is invested with meaning. If change is in the air, May needs to avoid giving an appearance of solidity to pure wind.

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Her pledge to avoid a Brexit “cliff edge”, in her CBI speech, is another case in point. The phrase encouraged hopes of a transitional deal to remain in the single market, which would prevent a precipitous exit and a reversion to World Trade Organisation terms. (Though the EU would likely extract a price in the form of continued budget contributions and free movement.) After the speech, No 10 sources had to “clarify” that the comment was not an intentional hint at a transitional deal.

Among Conservative MPs there is broad satisfaction with the Prime Minister and the Chancellor. Their unshowy, sober style is praised by backbenchers and activists alike. At a recent meeting of the Conservative 1922 Committee, there was spontaneous cheering when Hammond remarked that secretaries of state should focus on their own departments and budgets – a rebuke to his imperial predecessor, George Osborne.

Conservative morale is sustained by the party’s poll ratings (which consistently exceed 40 per cent) and by Labour’s many woes: its subterranean support, its internecine strife, its opaque slogans. Tories speak of being begged by some of their opponents to trigger an early general election, in the hope that this will rid the party of ­Jeremy Corbyn (while others express the fear that it will not).

Downing Street is less dismissive of the Labour leader than some assume. In the age of Donald Trump, insiders say, the unexpected should be expected. It is not enough to dismiss populists of left or right as prima facie unfit to rule: the arguments must be fought and won.

For Theresa May the defining divide is within, not outside, the Conservative Party. As a “reluctant Remainer”, the Prime Minister is vulnerable to fusillades from both sides. Her pledge to control free movement (which would necessitate leaving the single market) set her against pro-Europeans. Around 20 to 30 Tory MPs are prepared to vote against a “hard Brexit”. Although they will not seek to block the triggering of Article 50, they intend to table amendments to next spring’s Great Repeal Bill.

But the Leavers have mounted a counteroperation. A self-described “Praetorian Guard” of Brexiteers – Steve Baker, Bill Cash, Iain Duncan Smith, Edward Leigh, Peter Lilley and John Redwood – meet frequently to co-ordinate interventions. The one-time “bastards” wryly observe that they are now supporting, rather than opposing, the government. But the muscle memory of past revolts endures, ready to be reactivated at any hint of compromise. “The British people have already closed the door to that,” one said of the prospect of a transitional arrangement.

Since becoming Prime Minister, Mrs May has made it her defining mission to support those families that are “just about managing”. Her task, as she contends with Brexit, is to avoid her government appearing similarly burdened.

Change, if it comes, will be gradual. In contrast to the breakneck pace often fav­oured by David Cameron, May has adopted a more patient and deliberative style. Consultation (on new grammar schools and, now, corporate governance), rather than legislation, is her first resort.

The Prime Minister is pursuing change but not in circumstances of her choosing. She has inherited Brexit – the greatest post-1945 challenge – as well as one of the largest budget deficits in the developed world and a parliamentary majority of just 12.

The past three Conservative prime ministers have all been overwhelmed by the Europe question. If Theresa May can just manage to avoid this fate it would be quite some success. 

This article appears in the 23 Nov 2016 issue of the New Statesman, Blair: out of exile