May delivers a manifesto for Middle England
But a disregard for business sits ill with promise of a strong economy
Theresa May has left voters in no doubt of the kind of Britain she wishes to build, if she secures a strong personal mandate in next month’s general election. In launching her manifesto, she rejected Thatcherite individualism, and indeed all ideology, promising “mainstream government for mainstream Britain”. In broad outline, this appears to mean a more interventionist approach to both economic and social affairs than previous Conservative governments would have countenanced. It is an unabashed attempt to seize the unoccupied centre ground.
Much of this is a response to the social divisions and disenchantment with the political class exposed by the Brexit referendum. But it also stems from the Labour opposition party’s lurch to the hard left. Mrs May knows she can rely on traditional Tory voters and she wants to win Labour seats in the Midlands and the north previously considered off-limits. She has shown that to achieve her goal, she is prepared to take steps that will be unpopular with many of her party’s older, wealthier supporters.
However, in crucial areas — on Brexit in particular — Mrs May is effectively asking for a blank cheque. This is understandable: the prime minister needs the authority to negotiate in Brussels without being held hostage by pressure groups, including those within her own party. But it is also worrying. Mrs May acknowledges that a poor Brexit deal would have “dire” consequences for the economic security of the “ordinary working people” she wants to help. She has chosen to interpret the referendum as a mandate for a hard, anti-immigrant form of Brexit. This will invite retaliation from the EU but it is also difficult to reconcile with the needs of an economy whose success since the Thatcher era has rested on being a global hub.
The manifesto leaves no room for modifying her approach on Brexit. Despite nodding to the need for compromise, she makes it clear that the UK will leave the customs union as well as the single market. How this will affect standards, regulations, supply chains and the cost of doing business is left unclear. Instead, voters are left with the blustery sound bite: “No deal is better than a bad deal.”
There is a tension between the prime minister’s promise of a strong economy and her lack of sympathy for business concerns about Brexit. Business confidence is vital for the economy as the UK heads into the biggest geopolitical change in 40 years. This does not mean the corporate sector should escape scrutiny: there are good grounds for proposals to act on executive pay, to ensure that workers’ rights keep pace with changes in the labour market, and ensure that promises made during takeover bids are enforceable.
Far more worrying is the failure to appreciate the rising costs of doing business. Once again, Mrs May has reiterated the arbitrary and self-defeating target for net migration. This can only be achieved, it appears, by micromanagement of economic migration as well as a more general clampdown. The risk is that Mrs May’s form of Brexit will weaken the economy so severely that improving living standards for “ordinary workers” will prove elusive.
She has, however, taken welcome steps to give the government room to respond to any shocks the economy may suffer in what is bound to be a turbulent period. The target of balancing the budget has been pushed further into the future to 2025. The government has left itself the option of raising income taxes if necessary to ease strains on public services. The “triple lock” on pensions has been downgraded, and only the poorest pensioners will receive help with energy bills. This creates useful flexibility.
Immigration is one striking example of bad policymaking. Another is the resolve to expand selective schooling, despite evidence that it does nothing to promote social mobility. On social care, Mrs May is justified in arguing that wealthier people should pay more, but she is on weaker ground when scrapping the cap on people’s liability for the cost of care. This will make it nigh impossible to create a private insurance market. Moreover the £100,000 threshold creates incentives for people to divest assets before they need care.
Mrs May has delivered a manifesto in her own image: a clean break with the Notting Hill set. But if she is to turn meritocratic Middle England into Global Britain, she needs to show greater appreciation of the economic realities.