Leader: The return of the state

Electoral incentives are leading the Conservatives to revise their fundamentalist faith in free markets.

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The Conservatives are more electorally dominant than at any time since the Thatcher era, but they do not enjoy a comparable ideological dominance. At last year’s general election they endorsed policies typically associated with their political opponents: increased public spending, a higher minimum wage and borrowing for state investment. As John Gray writes in this week’s cover story: “The era of neoliberal hegemony is plainly over. Electoral imperatives are leading Conservatives to abandon any fundamentalist faith in free markets.” Britain, he says, “is moving rapidly towards a new economic regime”.

Conservatism was never historically inextricable from laissez-faire economics. In 1947, the philosopher Michael Oakeshott dismissed Friedrich Hayek’s The Road to Serfdom, which became a totemic work for the right, as part of the “tyranny of rationalism”. Its main significance, he wrote, was “not the cogency of his doctrine, but the fact that it is a doctrine”. In the wake of the Thatcherite revolution, however, a party traditionally sceptical of dogmatism embraced the trinity of privatisation, deregulation and tax cuts.

Many Conservative MPs who espoused this faith viewed Brexit as a vehicle to “finish the job that Margaret Thatcher started” (in the words of the former chancellor Nigel Lawson). Boris Johnson’s cabinet includes many who championed this approach such as the Home Secretary, Priti Patel, the Foreign Secretary, Dominic Raab, and the International Trade Secretary, Liz Truss. The irony, however, is that rather than advancing the Thatcherite settlement, the Brexit government could be revising it.

In last September’s spending review, the Chancellor, Sajid Javid, a former devotee of the libertarian philosopher Ayn Rand, announced a 4 per cent rise in public spending, the largest increase for 15 years. The once-cherished ambition of an annual budget surplus has been abandoned (government borrowing rose by 10 per cent in the first eight months of this financial year) and Mr Javid now cites ultra-low interest rates as proof that the British state can afford to invest.

The Prime Minister, meanwhile, has vowed to use Brexit to reform public procurement laws in favour of UK businesses and to eliminate restrictions on state aid (previously prevented by EU membership). He has also abandoned earlier promises to raise the 40p income tax threshold from £50,000 to £80,000 and to cut corporation tax from 19 per cent to 17 per cent.

This putative realignment makes more sense than a turn towards libertarianism. Leave voters, most notably in those northern seats the Conservatives captured from Labour, have long craved a more protective, interventionist state. Indeed, after a decade of austerity, public support for higher taxes and government spending is at a 15-year high of 60 per cent, according to the most recent British Social Attitudes survey. Mr Johnson, a consummate populist, was destined to respond to this shift in public opinion. But he is an ideological magpie who is motivated by opportunity rather than conviction. Will this time be any different for him? 

The fires next time

On 13 January, spectators at the Australian Open watched in horror as the Slovenian tennis player Dalila Jakupovic fell to her knees, struggling to breathe, overwhelmed by smoke from the bushfires that have devastated Victoria and New South Wales. The cancellation of a tennis match is relatively minor, but it serves to illustrate the madness of the Australian government’s response to the crisis.

The prime minister, Scott Morrison, has said that his priority was “climate resilience and adaptation”, rather than emissions reduction. Yet the scale of the disaster does not allow for what he called a “practical” approach: since September an area the size of South Korea has been incinerated. The fires have released 400 million tonnes of CO2, greater than the combined emissions of 116 countries. This will make Australia hotter and drier still, exacerbating future wildfire seasons, which, as Tim Flannery writes this week, many species will not survive. And yet by next year, Australia will open a mine that will produce up to 60 million tonnes of coal a year. To propose that people “adapt” to the conditions produced by this business, when it is already impossible for them to breathe normally outdoors, is an abject failure of government.

This article appears in the 17 January 2020 issue of the New Statesman, Why the left keeps losing