Enough of the dry politics of numbers. We need to discuss values and vision
|
Version 0 of 1. My father was born in 1919 and died in 2002. For the first 50 years of his life the stock of government debt was very much higher as a share of GDP than it is now. But, strange to say, I never remember him once blaming his parents and grandparents for leaving his generation with such a high debt burden. Or, indeed, ever talking about it all. Nor did the parents of any of my friends – right or left – discuss it. What would be characterised in today’s hysterical terms as overwhelming debts that threaten the life of the nation simply did not figure in any of their conversations, or more widely. If anybody had solemnly declared that the overriding national purpose should be to cap the national debt’s share of GDP at 80%, they would have been considered deranged. Their generation had more important things to talk about – the defence of the realm, for example, the creation of a good society and the need to do whatever Britain had to do to stay great. The politicians of the day traded their competing visions and debated how they would achieve the common good. Today’s Conservatives would say they were all dupes – but were they? The debt was plainly affordable and a non-problem. Indeed, the ability to sustain large volumes of government, so-called “gilt-edged” securities, was understood to be part of the national settlement, the fair order of things. There was a vague understanding that Britain had been fighting and winning wars for centuries and creating an empire through its sophisticated approach to creating and managing large levels of national debt. It was this, as much as martial valour, that had won the battles of Trafalgar and Waterloo – or the Battle of Britain. The debt would sort itself out as it had in the past – which it did, falling over the 1980s and 1990s as inflation eroded it in real terms. Nobody would think to crucify the nation’s public services, its security and the wider state over delivering an artificial debt ceiling. My father and his generation were perfectly sane. Yet today the airwaves and front pages are full of perplexing projections for debt and deficits as if our lives depended on them. We are meant to puff our chests out with delight that courtesy of selling some shares in RBS and Lloyds, the national debt will peak at 80% of GDP next year. The sun is beginning to come out and Mr Osborne is duly fixing the roof. It is not much – over the heads of most voters, even if they are mildly in favour. Could anybody be against fixing the roof while the sun shines? Anybody for more rather than less debt? But campaigning on the doorstep for less debt is hardly the stuff to win hearts and minds. It is an accountant’s vision of Britain – and people know in their gut that much more needs to happen to stimulate jobs, opportunity and the good life. Moreover, it feels what it is – an obsession motivated by ideological animus against public services and public provision. Britain’s national debt is comfortably affordable today – even moderate, by historical standards. To present it as economic enemy number one is just wrong. The standard Tory response would be that the moral person stands on his or her own two feet, and does not need public support – and wants as little government as possible. Members of this silent majority are allegedly natural Tories, willing on Mr Osborne. But are they? And should Toryism, and indeed fairness, be defined in such narrow terms? More broadly, let’s escape the falsehood that the only metric that counts is the national debt. The national conversation could be transformed. Instead of our politicians talking like accountants, they could start talking of their vision. This goes for the left as well as the right. How do you reach the full range of Britons and engage with the stuff of their lives, with their hopes and aspirations, rather than just talk dry economics? The Conservatives are the worst offenders, but there are the first signs of change. Thinking Tories are alarmed that their party – despite the slavish support of the national press and abundant funding – has not won a national election since 1992 and at best can expect to be the largest party in the House of Commons after the forthcoming general election. The Tories will lose in London, and are hardly represented in the country’s major conurbations, or Scotland and Wales. They are cordially hated by most non-white and non-English voters. The Conservatives have become an inward- looking party of the English outer suburbs and southern English shires, and their shrinkage is creating a quiet crisis within their ranks. Is breakout possible through becoming yet more Thatcherite and Eurosceptic, a respectable version of Ukip – a position urged by ultras like John Redwood or MEP Daniel Hannan? Or does the party need to shed its toxic image as the heartless friend of the rich and become the natural ally for ordinary men and women? And if so, how? Enter TheGoodRight, an initiative of two thinking Conservatives, Tim Montgomerie and Stephan Shakespeare. It was launched 10 days ago with a typically bombastic, but intriguing, speech by the chief whip Michael Gove, another thinking Conservative. TheGoodRight’s founding notion is that any successful political philosophy must possess at its heart a moral project, and that the revival of modern Toryism depends upon broadening its moral basis beyond economistic individualism. It should embrace fairness and support for the ordinary. The reason why a slogan like “a fair deal for everyone” resonates so powerfully with 80% of voters when tested is that it is an easily understandable and comprehensive moral position. There is no reason, they argue, why fairness should be appropriated by the left. It should be re-colonised by the right – both as a matter of principle and of electoral necessity. Mr Gove is an enthusiast, declaring himself a “progressive”, and that Tories should be “warriors for the dispossessed”. He argues, along with Tim Montgomerie, that the foundations of a good society are strong families, good education and job creation. An emancipating state should help everyone achieve these goals. “We are in public service to help the people who need us, not just those who agree with us. That is why I welcome Tim (Montgomerie) and Stephan (Shakespeare)’s emphasis on solidarity and security as well as enterprise and opportunity,” he said. All this has to be paid for and Gove, together with Montgomerie, gets the point about fairness: it is not a catch-all phrase but one that asserts the close proportional relationship between effort and reward – one’s due deserts – but also the need to compensate those no less deserving, but less lucky, than oneself. For Montgomerie, like me, that means accepting the case for taxation as a means of redistributing income from the better off to the poorer as a “very good thing”. Gove could not quite bring himself to go so far: rather, he congratulated his party and George Osborne for making sure that the “undeserving rich” – overpaid bankers and hedge fund managers – could avoid less tax through the increasing aggression with which the chancellor is attacking its avoidance. But even to accept the distinction between the deserving and the undeserving rich is something of a breakthrough. We are in the realm of values. It allows Gove to wax lyrical about the virtue of work rather than welfare, speaking in terms that New Labour or any New Deal Democrat would recognise. It is work, rather than welfare, that brings human well-being, he says. It is also deserving. For the record, I passionately agree – as did Maynard Keynes and everybody who thinks full employment should be an objective of public policy. Gove and Montgomerie would no doubt retort that employment cannot be achieved by Keynesian means, but instead is the consequence of a vigorous capitalism which works best with competitive markets and the closest possible relationship between reward and effort, as little as possible diluted by perverse tax or generous welfare. Their fallback position suddenly becomes, despite their best efforts, a retreat to the primitive Thatcherism from which they are trying to emancipate their party. Getting beyond this is the step that today’s wannabe compassionate conservatives find so hard to take. The stark truth facing Britain is that the institutions of our capitalism – the firm, the bank, the shareholder – have become profoundly dysfunctional. The financial crisis confronted every western country but was most acute in Britain because banks, as exemplars of our dysfunctional firms, wildly over-expanded their balance sheets to please their tourist, disengaged shareholders and over-rewarded director teams – cheered on not just by New Labour but the Conservative front bench too. This alarming productivity gap has to be closed if the current bounceback is to translate into a full-throated economic recovery. Yorkshire may have generated more jobs than the whole of France last year, as both Messrs Gove and Osborne boast – but they were disproportionately low-paid and insecure jobs. Instead, a progressive would aim for “solidaristic”, reasonably paid employment. Only this can provide the basis for the British people to build families, buy homes and live lives they have reason to value. For that we need rising productivity – and to do that we have to look the failures of the private sector in the eye. This is more than tackling monopoly, important though that is. It is about repurposing business and finance. The creation of a moral order extends to them – not just tax avoiders or welfare cheats. Britain needs businesses that want to create value, backed by shareholders who share that mission, all of which are housed in a wider ecosystem that encourages innovation and investment. The emancipating and enabling state has to engage, shape and co-create this world – but of that we heard not a peep in Gove’s speech. This state – a state driven by values – also has to organise itself so it has the wherewithal to sustain improvements to education, health, infrastructure, housing and defence. On this the much-praised Osborne is as much at sea as TheGoodRight. If he remains chancellor, Britain is to be treated to three years of ongoing spending reductions, so that unprotected departments outside health and overseas aid will by 2018 have suffered cumulatively 40% cuts in current spending and 60% cuts in capital spending. Our cities and criminal justice system, to name but two examples, would be devastated. Even education would suffer real-term cuts, with further education, looking after 3 million students, facing a further 24% cut. Then, whoosh! All the cuts are to be partially reinstated in 2019 as spending rises in line with projected growth in the economy. This is crazed. A progressive government would shore up its tax base and smooth the pattern of spending by borrowing, to avoid such a rollercoaster ride. Today’s conservativism makes such rational behaviour impossible. Thus the need for absurd cuts. But before the state borrows to smooth the pattern of spending, it could find more tax revenue. For example, there are 180,000 potential taxpayers with very high incomes who claim non-domiciled status – a legacy of empire – to pay no tax. Britain is the only country in the world to offer non-dom status. Abolish it, and assuming conservatively that the average lost tax is £100,000 per person, tax receipts would be boosted by £18bn every year. Revalue property from 1991 values , introduce more council tax bands, and there is an additional £12 to 15bn in the coffers. Suddenly, there would be no fiscal crisis. But we’re back talking numbers, though we have at least escaped the all-consuming metric of national debt and the notion that taxation can never be raised – the twin mantras of modern conservatism to which even TheGoodRight, despite its intellectual adventurousness, remains wedded. We need to hear about politicians’ visions. If there is a housing crisis, let’s build new towns and new homes with great architecture that are a delight for people to live in. Let’s unleash an apprentice revolution. Let’s double our research and development. Let’s create a northern powerhouse rather than just talking about it. Let’s build a great country. The national debt is our servant: not our master. Will Hutton’s latest book, How Good We Can Be is published by Little, Brown |