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22 October 2020updated 26 Jul 2021 5:16am

How the Conservatives lost the argument over the size of the state

State intervention is more popular than it has been for years – but the left should be careful not to overreach.

By Chris Deerin

It wasn’t so long ago that the right of British politics wanted to radically slash the size of the state. I’m not talking about Cameron-era austerity, which was largely about rebalancing, but something much more extreme.

Even into the middle of the New Labour years, mainstream Conservatives cast envious eyes across the Atlantic, where they saw a template for a leaner, meaner operation. It was sometimes argued that government spending as a share of GDP should be reduced to around 30 per cent. As late as 2005, the then shadow chancellor George Osborne described a flat rate of income tax as a “very exciting idea”. 

The Thatcher/Reagan approach to economics gave purpose to many on the right and took a long time to loosen its grip. Between 1995, the dying years of the Major administration, and 1999 – Gordon Brown stuck to Tory spending limits for his first two years as chancellor  UK government expenditure fell from 38 per cent of GDP to 35 per cent. Then the New Labour floodgates opened, and by 2005 it had risen to 41 per cent. 

The world has since endured a series of crises and there has been less space for Hayekian theory and more for rapid, robust state intervention. Emergency measures following the 2008 financial crash increased government spending to 47 per cent of GDP in 2010. Austerity returned it to around 40 per cent in more recent years, but due to the Covid-19 pandemic the figure will rise sharply again (perhaps surpassing 50 per cent). 

One by-product of the surreal past 12 years is that we haven’t heard the kind of small-state rhetoric that we used to. The statistic about spending as a percentage of GDP is less commonly quoted. The times have required muscular government; it has been evidenced that sometimes only Leviathan will do.

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The reputation of state intervention is therefore more favourable and benign than it has been for many years (set aside failures in managing Covid-19 – no one is really suggesting this should have been left to the private sector). It seems unlikely that the Conservatives will resurrect the case for economic asceticism in the near future, especially with Labour again competitive in the polls. Boris Johnson is keen to spend, particularly in order to retain the “Red Wall” seats won at last year’s general election. Unemployment is likely to rise, retraining schemes will have to be funded, and spending on the NHS and key workers is a sensitive area. There seems little appetite among Britons for another prolonged period of painful cuts to public services.

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There are, however, other ways to target the bogeyman of big government: it is in the field of culture war and identity politics that the Conservatives are likely to raise their standard. This week’s debate about providing free school meals to disadvantaged children over the school holidays gave an indication of where the party is heading. The most egregious contribution came from Bassetlaw MP Brendan Clarke-Smith, who told the Commons: “I do not believe in nationalising children.” The Tory backbencher also went in studs-up on Marcus Rashford, the Manchester United star who is driving the school meals campaign. “We need to get back to the idea of taking responsibility, and this means less celebrity virtue-signalling on Twitter by proxy and more action to tackle the real causes of child poverty,” Clarke-Smith said.

[See also: George Eaton on how the coronavirus crisis has led to the return of big government]

It must be said that Rashford did a better job of hitting the target against PSG on Tuesday (20 October). Clarke-Smith has been the subject of a furious Twitter backlash, and a YouGov poll puts public support for school meals at 54 per cent, compared to 31 per cent against.

But the populace will not on every occasion take the view that state intervention is good. They will often enough see it as crossing the line into unwarranted and unwanted interference.

It’s worth looking to Scotland. The SNP, which regards itself as the most progressive of parties and Scots as the most progressive of people, has provided some interesting examples of over-reach. 

Late last year the Scottish government was forced to abandon its plan to appoint a “named person” to safeguard the welfare of every child. The scheme, which would have seen a named individual usually a teacher or health visitor – act as a clear point of contact for every child from birth until the age of 18, had been called a “snooper’s charter” that breached the right to privacy and family life. It had also fallen foul of the UK Supreme Court, which ruled that part of the plan breached human rights laws. Polls showed voters disliked it.

Nicola Sturgeon has also found herself in difficulties because of her position on trans rights. Her government was an early and enthusiastic supporter of liberalising gender-recognition laws, but the issue has fundamentally split the SNP, with senior figures such as Joanna Cherry leading the opposition. Sturgeon’s position has also proved unpopular with female voters, forcing the administration to delay what will be a painful debate about legislation until after May’s Holyrood election.

We’ve seen it with immigration: progressives have a habit of getting too far ahead of public opinion on cultural change. They may view it as leadership, but the backlash, when it comes, can be fierce – hence Brexit. The current penchant for demonising, cancelling and even forcing people from their jobs because they hold the “wrong” views – which are often quite mainstream opinions – is another area that Conservatives can successfully exploit.

The “golden era” of the stereotypical Telegraph reader never existed, but there are limits to what a large proportion of the electorate will tolerate. Last year’s general election result, when voters faced the hard left’s unforgiving insistence on a cultural reboot, showed as much. 

The debate over the role of the state is no longer – or not currently – about money. It is instead about invasive legislation, the striking down of long-standing cultural norms, and disconcerting challenges to personal and community identity. It would be foolish to doubt that Conservative arguments for liberty and tradition will echo in the country at large.

[See also: James Meadway on why Covid-19 means there will never be a return to economic normality]

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