We must spend freely but wisely if we are to reconnect with voters
As Conservatives, we constantly have to put up with being smeared by the Left, which associates us with tax cuts for the rich, spending cuts and austerity. Here are some facts: government spending is expected to hit £800billion for the first time this year, including record spending on health, education, pensions and the disabled.
Meanwhile the top one per cent of earners now pay 27 per cent of all income tax (versus 11 per cent in the late 1970s) while the lowest 50 per cent pay just 10 per cent. The tax-free allowance has increased from £6,475 in 2010 to £11,500 today, taking three million of the lowest paid out of paying income tax altogether.
All this has happened in a period of Conservative-led governments. Since 2010 too, government spending has increased by about 10 per cent. But our instincts as Conservatives to extol the virtues of financial discipline may have helped feed a false narrative of harsh cuts. In fact, tax (currently 37 per cent of GDP) and government spend are at historic highs.
We shouldn’t be afraid of admitting this truth – that Conservatives can also be a party of record spending on public services – because this has only been possible due to the strength of the economy. I’m not advocating profligacy, but we shouldn’t balk at spending on the right things and investing to benefit the economy in the long term. The crucial difference with the Left is that Conservatives view government spending as a means to an end rather than a goal in itself. Rather than being ideologically wedded to the big state, we believe in government being as small as it can be and as large as it needs to be.
Sections of the public clearly believe it should be bigger and polls suggest they would be willing to pay for it in higher taxes – a willingness that indicates their confidence that the Conservative Government isn’t wasteful and will spend their hardearned money wisely.
It would be wrong for any government to make spending commitments based solely on opinion polls, but there is no doubt there has been a discernible shift in attitudes towards taxing and spending recently – even among MPS. I am not alone among a new generation of Conservative MPS to have a more relaxed attitude towards government intervention, taxing and spending than previous generations.
Increasing spend on health and social care is already planned, but that is an area of broad cross-party consensus, so to differentiate ourselves from the Opposition in the run-up to the next election, Conservatives must focus on areas such as education, housing and digital infrastructure, which are also top concerns of younger people with whom we need to reconnect.
Instead of blaming the young for the disappointing result of the last election we need to think more carefully about developing policies that appeal to them. Housing and especially home ownership may be the silver bullet. It is no accident that people start voting Conservative about the same age they buy their first house. Schemes such as Right to Buy and Help to Buy have enabled thousands of families who would otherwise have struggled to participate in the joy of home ownership. The key driving principle behind such schemes is intergenerational fairness.
More creative use of private pension pots may further open up the housing market. The Government has made accessing pensions far more flexible, but we may still learn from other countries. When living in America, my wife and I were able to put a deposit on our first home by taking an interest-paying loan out from our own pension pot. We were effectively lending money to ourselves.
With two million more children going to good or outstanding schools than in 2010, we hoped education would be a vote winner at the last election, but the conversation was almost entirely about inputs (money) rather than outcomes, and Conservative candidates had some challenging conversations about school funding with parents and teachers at school gates.
Justine Greening recently announced the introduction of a long-overdue national funding formula and an extra £2.6billion in school funding financed through savings and efficiencies from within her department. She also announced a minimum spend of £4,800 per secondary school pupil – a considerable increase for many areas including my own constituency.
If the minimum spend needs to be higher or if further funding is required from outside her department, then Ms Greening will have my support and that of many other Conservative MPS – an increasing number of whom themselves went to state schools and have identified education as their top political priority. If the Conservatives focus on standards and funding, it will make the school gate conversations much less bruising next time.
As well as investing in skills, we must also invest in the physical infrastructure that will enable our children and our economy to succeed in an increasingly digital world. At 12.4 per cent of GDP, the UK has the largest internet economy in the G20, but our competitors are investing heavily to catch up. The Universal Service Obligation will enable all UK homes to receive broadband services of at least 10Mbps by 2020 (coverage will hit 95 per cent this year).
But the economy needs ever faster speeds and more fibre. Initiatives such as the £1bn Digital Infrastructure Investment Fund will help deliver this, and further creative partnerships between government and the private sector will help us retain our digital leadership. Few other initiatives could deliver the economic returns digital infrastructure investments will bring.
As we look towards the next election, we need to be able to say to the public “we spent more, but we spent responsibly”. We must also offer an aspirational and optimistic vision for the nation that appeals to people’s hearts as well as minds, similar to the Prime Minister’s first Downing Street speech in which she promised to build “a country that works for everyone”. I look forward to playing my part in turning these words into reality.
Nigel Huddleston is MP for Mid Worcestershire