From tax rises to the culture wars, the Tories must heed their voters

Cultural conservatism and a totally new economic strategy will guide the country to recovery

In the midst of a public health crisis, and facing the possibility of a new wave of infections; during an unprecedented recession, and confronting the reality of rising unemployment; and four months before Britain’s relationship with the European Union changes forever, nine Conservative MPS demanded last week that the Government urgently change course.

They were not writing about the pandemic, the economy or Brexit, but the Gender Recognition Act, which sets out how individuals may legally change their gender. If the Government does not liberalise the law, they said, the Conservatives will face a “new Section 28 moment”, comparing the maintenance of the status quo on changing gender to the notorious legislation, passed in 1988, that prohibited the “promotion” of homosexuality in schools.

The purpose of the parallel was plain: the Tories must make the change or risk a reputation as a party of bigots, out of keeping with modernity. As the party of “freedom and individual choice”, they said, the Conservatives must grant people the freedom to choose their gender, and scrap “bureaucratic and medicalised” safeguards, such as the requirement of a medical diagnosis of gender dysphoria.

This is a strange argument. There are good reasons for keeping the Act as it is. It provides a balance between the rights of trans people to change their gender in law, and the important principle of sex-based rights and provision of single-sex services and spaces, such as women’s refuges and hostels. Liberalisation would destroy this balance, and therefore the privacy and security of women, by allowing, according to government estimates, hundreds of thousands of people to change their birth certificates and other official documents.

The political argument is as badly misconceived as the policy prospectus. Section 28 was a deliberate move to discriminate against gay people, while its supposed modern equivalent, the Gender Recognition Act, introduced by Labour, confers rights on trans people they had never enjoyed before.

The MPS have fallen into the liberal trap of believing in inevitable “progress”, and determined that the Tories must be on the “right side” of history. But they are mistaken. There is no egregious injustice waiting to be addressed, and neither is there a political upside to making a change. In fact, making a priority of trans rights – risking women’s rights and using up political capital addressing what is by any measure a niche issue – would be a grave political error.

The voters who made Boris Johnson’s new electoral coalition possible are hardly clambering for more social liberalism. They turned to the Conservatives because they see the Left as unpatriotic and unconcerned about people like them, and believed the Tories would be more likely to deliver Brexit, reduce immigration and take an uncompromising approach to crime. Far from presenting a danger to this new coalition of voters, cultural conservatism is its very essence.

This is so not only because cultural conservatism is what unites the Tories’ new and old voters. It is also because the party’s new voters supported them despite their traditional economic policies. Opinion research shows that on economic questions Conservative MPS are far to the Right of their new voters and still significantly to the Right of their more traditional voters.

This is one reason why, as the Government contemplates how to lead the country out of the recession in which we find ourselves, ministers and Conservative MPS cannot be complacent. They cannot rely on old policy templates to guide us to recovery, and they cannot succumb to the Treasury orthodoxy that will tell them to limit their ambitions and their spending plans. They need a coherent economic programme, guided by a big vision and underpinned by clear principles.

Instead of trying to consolidate public finances too soon, they need to go for growth, which will require incentives, intervention and investment. Incentives, to coax us out of our inactivity. Intervention, in the form of an ambitious industrial strategy, to focus policy and resources on particular regions and sectors of the economy. And investment, in the form of increased spending on infrastructure and our human capital, through education, training and skills.

Just as before the pandemic brought our economy to a standstill, the Government was committed to “levelling up” the country, so that agenda must be central to its plan for recovery. Britain’s future prosperity and economic and social resilience depend upon a sustained improvement in the competitiveness and productivity of the regions. And so, in the end, do the public finances.

Of course, in time there will be a need for some form of fiscal consolidation. But stronger growth and increased tax receipts, prompted by public investment, can reduce the budget deficit and record stock of Britain’s national debt. And when the time for consolidation comes, the solution will lie not in across-the-board spending cuts, but in higher taxation.

Even before Covid-19 wrought its devastation, tax rises were inevitable. After a decade of austerity, public services cannot afford another squeeze. NHS, social care and pension costs will continue to grow as our population ages. Levelling-up requires more generous day-to-day spending and not only infrastructure investment. There will be loud calls for greater national resilience and more state capacity, especially in the NHS. And then there is a political consideration: the Tories’ new voters enjoy less economic security, and depend more on public services, than their traditional supporters.

So when the time comes to debate public finances, the argument will not be about whether taxes need to increase, but which taxes should rise, and who should take the strain. Already, the Chancellor is contemplating cutting pension tax relief for higher earners, and equalising capital gains tax and income tax. He might also reform National Insurance – which is nothing more than a hidden income tax – so higher-rate taxpayers contribute more.

None of this will feel comfortable to the Conservative MPS who still believe that the future belongs to social and economic liberalism. They need to awake from their complacency, come to understand their new coalition of voters, and think anew as they confront the enormous challenges of our times.