Money Matters

Theresa May dances towards an attractive alternative to Labour

Money Matters
By Robert Shrimsley
Mon, 10, 18

With one dance she was free. If only it was that simple. Theresa May may have sashayed around the set at the Conservative conference to the strains of Abba, but politics is not a movie and government is not the last scene of Mamma Mia!

With one dance she was free. If only it was that simple. Theresa May may have sashayed around the set at the Conservative conference to the strains of Abba, but politics is not a movie and government is not the last scene of Mamma Mia!

The simplest way to assess any party conference is to imagine how things would stand if it had not taken place. Triumphant finales rarely endure and for all Wednesday’s feel-good ending Mrs May cannot simply dance away her challenges. While she showed a determination to fight on, her colleagues measure her remaining time in office in months rather than years.

Abba provided the soundtrack for her speech, and Brexit the main conference theme, but Conservatives are beginning to worry about another, increasingly insistent refrain: how to develop a popular capitalist agenda that offers an attractive alternative to Labour’s Jeremy Corbyn.

In her speech, Mrs May tried to tie the political strands together, suggesting that, if her party backs a Brexit deal, she can deliver the long-desired end to austerity. Philip Hammond, her chancellor, talked of a “ deal dividend”; though in reality he has to allocate any available funds between four pots rather than one. His party may want more money for public services, but it also wants tax cuts, deficit elimination and debt reduction. The prime minister has already pledged a hefty five-year increase for the National Health Service and, in her speech, she moved to end financial constraints on council housebuilding.

This is not simply the standard political business of sharing the cake. The Conservatives are divided over how to respond to what Labour is successfully portraying as a crisis of capitalism. Wage stagnation and a housing market that is increasingly inaccessible to the young have fuelled the sense that the system is not working. Do Tories stick to Thatcherite free-market ideology and engage in a full-throated rebuttal of Corbynism? Or do they accept there is something in the critique but respond with more conservative solutions?

The Labour leader has terrified Tories. Some of his hard-left economic policies strike a chord with voters and enjoy intellectual cover from the archbishop of Canterbury. For the first time in 35 years the Conservatives are having to argue for capitalism, a task many show little appetite for taking on.

Mrs May wants to reorient the party’s priorities towards ordinary families struggling with the cost of living. Thus far she has delivered only rhetoric but others also see the need to respond to a sense that the economy is unfairly loaded in favour of the successful.

Not all are convinced the party should surrender its faith in the market. Liz Truss, chief secretary to the Treasury, argues that the party must speak up for lower taxes, a smaller, less regulated state and a cull of planning laws that prevent housebuilding. She hails Uber drivers and Airbnb landlords as “freedom fighters” who increase consumer choice. Those who agree disparage a collective loss of Tory nerve and “Corbyn-lite” agenda. They argue that you cannot offer to outspend high-tax Labour.

Rob Halfon, a former deputy chairman who fears Mr Corbyn’s appeal, rejects the criticism as the “metropolitan obsessions” of “Deliveroo conservatives focused on mobile professionals”. He argues for a “workers’ Conservatism” that pushes resources towards poorer communities. He wants to boost affordable housing, guarantee apprenticeships for school leavers and provide tax incentives for businesses that share profits and equity with staff.

The additional appeal of this last idea is that it offers a Tory alternative to Mr Corbyn’s plans to confiscate 10 per cent of the equity of any company with more than 250 staff, give workers up to £500 a year in profit share and take the rest in tax. Tories could then argue that, while they would encourage businesses to give stakes to workers, Labour wants to take them away, because it does not really believe in share ownership.

Sam Gyimah, universities minister, worries that fellow Tories are dazzled in the headlights of Corbynism. “Sometimes we appear to accept criticisms of capitalism at face value and feel the need to respond accordingly — a futile task. At other times, we seem to want to take on the mantle of Trumpian economic nationalism and protectionism. And sometimes we just reach for the old playbook, implying that if we simply deregulate and cut taxes, all will be fine,” he wrote.

This need not be divisive. No one expects the Tories to walk away from their pro-enterprise beliefs. There is nothing inherently anti-capitalist in tackling business excesses or the high prices that spring from a lack of competition. It is not unconservative to support public services and welfare if the funding comes from growth delivered by a culture that fosters enterprise. What Conservatives cannot do is simply spend without growth. That means they need a good Brexit deal.

Tory success has been built on understanding and adapting to the public mood. Since the days of Robert Peel and Benjamin Disraeli, British Conservatives have known when to bend with the wind. They know that sometimes counter-intuitive measures are needed to maintain the fabric of society.

It remains to be seen whether Mrs May keeps on dancing, but her direction of travel will be hard to abandon. The Tories need an agenda that persuades voters that they can have a stake in society and that we are really all in it together. Otherwise come the next election, voters may be dancing to a very different tune.