May de­liv­ers a man­i­festo for Mid­dle Eng­land

But a dis­re­gard for busi­ness sits ill with prom­ise of a strong economy

Financial Times USA - - LETTERS -

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.

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