A missed opportunity to banish Brownism

The Autumn Statement was a tragic miscalculation, the final failure of a project to undo the gravest mistakes of the New Labour era and shift the UK in a more dynamic, more conservative direction. Lacking any meaningful plan for economic growth, and postponing many of the most difficult decisions on spending until after the next election, the Statement passed the costs of a ballooning state onto the productive parts of the economy when disposable incomes are collapsing. It was a victory for the Treasury technocrats who have resisted every attempt to move the UK away from Brownite orthodoxy.

“The grown-ups are back in charge”, we keep being told by the self-appointed opinion-formers who believe that tax and regulatory policy make no difference to growth rates, that decline is inevitable – perhaps even environmentally desirable, and certainly partly deserved as a result of Brexit – and that the job of a government is to raise enough money to pay for an ever-larger public sector and welfare system. They are convinced that population ageing must mean a slow shift to social democracy. They do not especially care if millions languish on benefits, or believe it to be a problem that is too much hassle to tackle. They are obsessed with redistribution. By their assessment, a “successful” Budget or Autumn Statement will by definition hammer those on middle incomes and “the rich”.

The Tories were elected in 2010 in the hope that they might roll back some of this miserabilist agenda. They were meant to reduce the size of the state, use welfare reform to end the plague of worklessness, cut taxes and improve the public sector. They pledged to lessen the UK’s reliance on mass migration, seen by the technocrats as the only feasible way to boost GDP in a high-tax, high-spending, low-education, low-investment and thus low-productivity economy.

Then, in 2016, came the Brexit vote, another attempt at reviving this Tory reformist agenda: the idea was to use freedom from the EU’s rules and structures to create a distinctly British economy, marked by free trade, deregulation, low taxes, a greater emphasis on science and technology, and a ferocious effort to sustainably rebuild the economies of left-behind areas. There is a (flawed) school of thought that Brexit almost inevitably pushed Britain in a Left-wing direction because the Conservatives had to placate voters in former Labour seats with more spending. But the far better way to “level up” is via investment zones, improving training and shaping a more competitive economy – and once we were outside the EU, we regained the freedom to do just that.

Tragically, so many of Conservative voters’ hopes since 2010 have been dashed. Indeed, we are pedalling in reverse. Liz Truss’s investment zones are gone. Deregulation, including in obvious areas such as financial services, is not going either far or fast enough. The push for new free-trade deals has stalled. There is no serious effort to reduce legal migration, which is being used to plug holes in the labour and skills market at the same time as vast numbers of people of working age are stuck on benefits.

The welfare bill, shielded by the Chancellor, is set to rise and rise, paid for by a tax burden increasing to its highest level since the Second World War. Soon enough, about eight million workers will be ensnared in the 40 per cent incometax bracket; and a far greater number than before will pay the 45p rate. The dream that we would become much more competitive outside the EU is slipping away, too – thanks to a massive increase in the corporation-tax rate. This is all set against the backdrop of popular anxiety about crime, illegal immigration, cancel culture and strikes.

The irony is that having left the EU, Tory leaders have put the UK more firmly on the road to European-style social democracy, down to the perverse decision to continue with the ultimate grand projet, HS2. The justification is that the Conservatives are trying to keep faith with core voters – such as pensioners, via the triple-lock – and applying the Tory principle of adaptation to changing circumstances. But by becoming Labour-lite, they look unprincipled rather than pragmatic. They are lashing themselves to the mast in such a way as to cost them votes in the long run – hitting the middle class, failing to put people on the property ladder and squandering Brexit opportunities.

The Tories have two years to explain what the previous 12 years were for, and what the point of the party is beyond balancing the books in the future. Otherwise, predictions of a Labour landslide may not be wide of the mark.