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13 July 2022

The Tories’ new nightmare

Conservative leadership hopefuls scramble to out-pledge each other. But awaiting the winner is a divided party and deepening economic crisis.

By Andrew Marr

Parliamentary politics is an animal affair. As Boris Johnson put it, the herd moved. One lie too far, about the sexual misconduct of former deputy chief whip Chris Pincher, and a critical mass of MPs galloped. Then nothing – not the power of prime ministerial patronage, nor threats about Brexit, nor the distrust of rivals – could stop backbenchers deciding it was over, and ministers from joining the herd. Johnson was right: this was a dynamic from the Serengeti.

After being treated so abusively for so long by No 10, the British establishment had finally moved too. A public letter from the diplomat and truth-teller Simon McDonald, GCMG (“God Calls Me God”), calling out the Prime Minister’s lie about Pincher, began the collapse.

It provoked Sajid Javid, an honourable man, to resign from the cabinet; and then Rishi Sunak; and then the government was stripped away like an elderly oak in an autumn gale. Hour by hour, minute by minute, the resignations came, an irresistible torrent of them. We should not forget. This has never happened before. Tuesday 5 July was unique in our political history.

Even as the dirty tricks and backbiting ripple through the Tory party, it gives Britain the chance of a fresh start – perhaps not now, but soon. There has been a cleansing of the stables. A regime characterised by lies and fantasy has been brought up short. I know: “It’s the hope that kills you.” There are a thousand reasons to be cynical. But that faint hope, of better times not too far ahead, flickers anyway.

Johnson’s response, audible in his resignation speech, is that this was a coup. He had been chosen by 14 million voters. A couple of hundred pusillanimous, mere MPs – the anonymous cattle of “the herd” – had no moral right to overthrow the people’s choice. It is an important argument to confront, for it has the potency to drive a “stab in the back” narrative which may fester and mutate in the pro-Johnson press and on the right-wing edges of politics in a truly dangerous way.

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The New Statesman has long argued for stronger guardrails and oversights inside our uncodified, ramshackle political system. They are certainly needed. But it’s worth remembering that if we had a presidential system with a formal division of powers, the events of this July could not have happened. There is a brisk brutality to parliamentary democracy in moments of crisis that the United States, for instance, with its much clearer division of powers, lacks.

[ See also: Who will replace Boris Johnson as Conservative leader? ]

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As I write, we are in an interregnum. Johnson is still in Downing Street, overseeing a pretend government, one which has no sure parliamentary base and which therefore cannot act decisively in any new direction – something, to give him credit, he has acknowledged himself. Anarchists should enjoy themselves – smoke something illegal, give nude public readings of Thoreau – because this is as near as modern Britain comes to having no government at all.

But, of course, this period will end before the summer does, and will end messily. There are two essential texts to bear in mind as we observe the leadership contest – a weird mixture of fashion show starring the terminally unfashionable, poker game and festival of slander. Because real life goes on outside.

The first text comes from The Book of Twitter, and the money-saving prophet Martin Lewis: “NEWS: I feel sick writing this! I’ve just got the latest price cap predictions…”

He was referring to the energy price prediction for October, which had prices increasing not by 54 but by 64 per cent – an average bill, then, £450 higher than energy regulator Ofgem had expected, up to a typical amount of £3,244 a year. In a later verse, Lewis draws this conclusion: “Can’t believe I’m writing this, but I wonder if this winter we’ll need ‘warm banks’, the equivalent of ‘food banks’, where people who can’t afford heating are invited to spend their days at no cost with heating (eg libraries, public buildings)?”

Illustration by Lincoln Agnew

Lewis argues, not unreasonably, that, against that background, the Tory leadership contest is taking too long.

The second text comes from Andy King of the OBR’s budget responsibility committee. On 7 July the Financial Times quoted him as saying: “In every case I can think of, when we look at tax cuts, the direct fiscal cost of cutting that tax outweighs the indirect fiscal benefit of improved economic activity.” In other words, tax cuts don’t pay for themselves, not in the British economy, not right now.

The Office for Budget Responsibility itself said earlier this month that Britain’s public finances “are on an unsustainable path in the long term” and warned that without tax rises, the debt burden, thanks to an ageing population and other unavoidable changes, could more than treble.

It is these two urgent economic warnings from the real world that provide the essential backdrop to the potential change of government we are witnessing; not questions about which former minister had a relationship with which young ministerial adviser, or which self-promoting video is the cheesiest.

[ See also: What went wrong for Sajid Javid? ]

During his Spring Statement in March, I thought the then chancellor Rishi Sunak made a serious error in not uprating Universal Credit in line with inflation – but he is the only candidate not promising immediate and substantial tax cuts. As I write, nobody has yet explained in detail how such cuts would be funded. Yet more borrowing? Really? For tax cuts? Or maybe a new round of austerity and public spending cuts? If so, where? When? And crucially, who?

Tax cuts can work in the short term. It depends on which taxes, and how carefully they are targeted. Even then, mostly, they provide a quick-hit “sugar rush” of demand, as one economic writer explained it to me. They tend to leak, with about a third of the effect going overseas because of what people buy and how they use the money.

Better, if you must, to increase public spending, which is less leaky. Corporation tax cuts to drive economic growth require other things, including an efficient use of capital, overseen by technologically advanced, long-term-thinking businesses and a mobile, highly skilled labour force. At present, the British economy is deficient in both.

Partly because of the pandemic and the war in Ukraine, the Brexit revolutionaries have been unable to recast the British economy in a more dynamic way; and the frictional effects of severing free trade to the continent continue to grind us down.

In this situation we need a full economic programme for recovery, going far further than a tax-cut auction – itself based on an outdated notion of Thatcherism.

William Hague, the former Tory leader, recently confirmed that, after many conversations with Margaret Thatcher, he realised she never believed in unfunded tax cuts. Politicians, she told him, had to explain where every penny was going to come from.

What we have now is the Tory equivalent of a socialist Labour beauty contest in which everyone is promising ever-higher levels of public spending, without any explanation of how they might be funded. Keir Starmer and Rachel Reeves are quite right to jump on this. Labour has a long way to go in forming a coherent economic plan of its own, though it is interesting and encouraging that the shadow chancellor is now talking openly about government bonds as a way of raising the huge amount of capital needed for modernisation.

Johnsonism more or less ignored these problems. The Prime Minister was an undeclared big-stater for whom grandiose, cheerful promises to “level up” England and “unleash Britain’s potential” provided an acceptable alternative to actual policy. But he will soon be gone, and the problems remain.

Whoever takes over inherits a nightmare. Behind closed parliamentary doors, visceral loyalty to Johnson the man, or visceral loathing of him, still matters more as the rival camps form, reform, break down and form again. Moderates such as Jeremy Hunt are having to tack hard to the right to stay in the race; alleged “Brexit” candidates like Liz Truss or Penny Mordaunt are not regarded as true believers by the Brexit hardcore.

While almost anything could happen, and the main focus of attacks by Johnson’s friends is directed against Sunak, it now appears less likely that the MPs will be able to resolve this by themselves, without taking a contest to the roughly 200,000 Tory members. That, in turn, makes it likelier that Truss or Mordaunt will win. The membership is inclined to read Johnson-supportive newspapers such as the Telegraph and Mail. Many have elevated Brexit into a secular religion.

But the eventual winner will have a heroic task in trying to hold the party together. Had the Tories been having this fight in opposition, I believe they would have broken up. The magnet of power is such that they might – might – be able to cling together during the coming economic storm. But to do that they need much sharper thinking, a greater sense of urgency, than we have seen so far.

[ See also: The race to be Britain’s next prime minister has never been so wide open ]

Meanwhile, Big Dog Johnson is prowling and snarling – I don’t expect him to surrender his Commons seat before the general election – as a potentially seriously disruptive force.

The endless problem of reporting British politics is that to do it, you have to report from inside parliament; but if you are inside parliament, you can’t really do it. Right now, it seems as if the Conservative leadership contest – with all those videos of white cliffs, RAF fighters, dancing vicars and throbbing personal stories – exists in a capsule far away from the rest of the country, which is a more unstable and frightened place.

For parliamentary politics to work, there needs to be a sense of hope and renewal. Labour, at least, has had a very good week or so. It isn’t just Keir Starmer being cleared of breaking lockdown laws by the Durham police. He was also formidable in his attack on Johnson in the Commons on 6 July and he contributed to the fall of the Prime Minister. Interviewing Rachel Reeves in recent days, I was struck by her ebullience – and a new edge and urgency to what she was saying. She thinks it is over, not just for Boris Johnson but for the party that enabled his rise and has been in power since 2010.

[See also: Every Conservative leadership campaign video reviewed and ranked]

This piece appears in the forthcoming issue of the New Statesman; subscribe here.

This article appears in the 13 Jul 2022 issue of the New Statesman, The Selfish Giant