October 19, 2009
by Irwin Stelzer
There is something reassuringly familiar about a Tory party conference--the annual gathering of Britain's conservatives. Lots of smartly dressed investment bankers holding down or angling for seats in the Mother of Parliaments; lots of personal assistants who, according to the Times of London, are well groomed, privately educated, and named Daisy, Rosie, or Poppy. But it took some doing to get over the party's chosen slogan for the coming election campaign: "Ready for Change." Too close to what Obama has in mind for us colonials.
But it's probably an accurate description of the mood of British voters. The opinion polls show the Tories with a large enough lead to win a majority in the next parliament, and to survive almost any unpredictable event that might occur between now and the election, most likely to be called in May of next year.
Gordon Brown, the current occupant of No. 10 Downing Street, is not only beyond uncharismatic, but presides over a country that has a soaring deficit, a depreciating currency, rising unemployment, and busted banks. All of this hit after Brown squandered Treasury revenues during the fat years on a massive expansion of public sector payrolls, financed by a series of what here are called "stealth taxes"--60 in all by most counts.
Worse still has been the rise in crime to a point where there are very few places one would walk about in the evening. A generation of feral children prowl the streets, with public drunkenness making many city centers no-go zones on weekends. A refusal to fund new prison construction means that even hardened criminals with multiple convictions are given early release for lack of cells. Meanwhile, the welfare system makes it utterly irrational for millions to choose jobs over the dole and disability benefits. Throw in the fact that Brown ostentatiously flirted with the idea of facing the electorate before abandoning it in the face of bad poll numbers ("bottling out" is the English expression) and you have a conviction on the part of the Tories that the election is in the bag almost no matter what they do. In private, most Labour MPs agree and are preparing for a long spell in opposition--or for careers in the private sector.
Still, the prime minister in waiting, young Etonian and former public relations man David Cameron, warned his party, "This is not some week of celebration." Delegates were told not to be photographed in a celebratory mood--which made it unfortunate that Cameron was photographed by a leading tabloid swilling champagne.
Cameron has brought the party a long way since the days when it was riven by feuds between those who deposed Margaret Thatcher and those who remained loyal to the Iron Lady, its candidates unable to compete with the charismatic Tony Blair, its policies mired in the days when the hang?'em-and-flog?'em set dominated party conferences. A long way, but not far enough to convince more than 28 percent of voters that he has fundamentally changed the party. Voters know that if the Tories win a substantial majority, close to 200 of its MPs will come from business and banking backgrounds--and such things matter in a Britain still aware of class distinctions. So the Tories had to tread carefully as they set out their electoral stall.
It goes something like this: Britain is broken--for all the reasons listed above. It is time for a change. We will build prisons to house 5,000 more miscreants. We will reform the educational system to emphasize discipline and the three Rs, introduce the Swedish-style system that allows parents and entrepreneurs to build and run schools, with the state providing £5,000 per student, and give the best state schools complete independence. We will change the tax structure to encourage marriage. We will tax the high-alcohol drinks that the young quaff until oblivious and prevent supermarkets from selling them at a loss. And we will require anyone receiving disability benefits to undergo a medical examination to prove he or she is unable to work. All of this is part of an effort to repair the torn social fabric of "broken Britain." But these are details. Cameron is most concerned about shoring up the family, which he told a cheering conference is the rock on which communities, and in turn a civil society, are built. He wants to shrink government, eliminate its intrusive inspections and rules, and encourage individual responsibility.
But Britain is not only broken, but broke. On the economic front there is to be a new austerity to cope with the massive deficit. The cost of government will be reduced, in part by cutting the number of MPs by 10 percent, and by the usual assault on waste and inefficiency, although potential ministers are having a hard time identifying any such. With the exception of the lowest paid and the military, pay for public sector workers is to be frozen for a year, but there will be no significant layoffs in a sector bloated by Labour's addition of 800,000 workers as it built its client state. Retirement ages will gradually increase. Benefits to the middle class are to be reduced, as are ministers' salaries. Pensions to new MPs are to be capped. And a new marginal tax rate of 50 percent (up from 40 percent) will be imposed on high earners, part of the shadow chancellor's pledge, repeated eight times in a 30-minute speech, to adopt policies that recognize that "We are all in this together," which is intended to be the modern Tory equivalent of Benjamin -Disraeli's "One Nation Toryism," described by its present-day enthusiasts as "a national community from which no citizen is excluded." Whether modern Tories are true heirs to Disraeli's vision is another matter.
But some features of the welfare state will remain. The weekly child benefit of between $20 and $32 per child, depending on age, will continue to be paid, but only to families earning less than $80,000 (£50,000) per year; free television for pensioners will remain (they will not have to buy the mandatory license to watch TV and support the bloated BBC); and winter fuel payments will be made to everyone, regardless of income.
As a political matter, the Tories must move in the direction of "We are all in this together" if they are to overcome the fact that the leadership is dominated by a small group of rather wealthy (inherited in many cases) men. So far, they have succeeded. In a recent election for a vacated parliamentary seat, Labour played the class card, following the Tory around dressed in tuxedos, and lost by a large margin. But Cameron knows that even the English heartland that forms the core of his support has changed since the last time the Tories won an election in 1992. Then, 6 percent of voters in England were nonwhite; that percentage has doubled. And in the rest of the country the change is even greater.
The Tories are helped by the fact that Labour, too, recognizes it must pare spending. Brown is trying to distinguish his cuts from those proposed by Cameron, claiming he is restraining spending out of necessity, while the Tories actually enjoy the exercise. Both parties have said they will continue to increase real (inflation-adjusted) spending on the National Health Service, which accounts for some 15 percent of the British budget, and the Tories have also "ring-fenced" aid to developing countries--to show that they are as sympathetic to the plight of the world's poor as Bono, who visited the conference via video. Unfortunately, British aid also goes to China, with which Britain has so far been unable to compete in many product markets.
To further embellish their image as a party with a heart as well as wallets and brains (Tory bigs Oliver Letwin, David Willetts, and Michael Gove are included on anyone's list of high IQ talents, although only Gove makes the list of future PMs), the Tories are leading the attack on greedy bankers, and promising to use the tax code to wrest from them any undue profits.
So there you have it: a modern, One Nation Tory party, preparing to lead the nation back from the financial brink to which Gordon Brown's policies have brought it, and to restore civility and safety to British life. Britain is broke and broken, and the Tories aim to fix it.
But they do not aim to restore its influence. Yes, Cameron is already angling for a White House meeting with Obama, who has given Brown what can only be described as short shrift, so that he can seem to have influence with America and try to coordinate Britain's Afghan policy with that of the United States. But like Brown, he is unprepared to increase spending on the military to much more than 2-3 percent of GDP, inadequate to meet current commitments much less maintain a properly equipped, consequential force in Afghanistan. So I am told by people at the highest level of the Tory party who know about spending plans, and top military staff who know how little they will be able to do with the available funds. Cameron wants to honor his troops, but sees them not as nation-builders ("We are not in Afghanistan to deliver the perfect society") but as trainers of Afghans so that they can prevent the reestablishment of terrorist training camps. "Then we can bring our troops home."
There is, of course, the small matter of an election. No one believes Labour can win--Brown is simply too unpopular. He has made one final throw of the dice by agreeing to three presidential-style debates with Cameron and with the leader of the Liberal Democrats, Nick Clegg. Brown hopes that his knowledge of economics, and the Keynesian steps he has taken to prevent the recession from worsening, will contrast nicely with Cameron's less sure grasp of fiscal and monetary policy. Cameron is betting that his persona and style will contrast nicely with Brown, described by his predecessor Tony Blair as a "big clunking fist," and recently seen to storm off a television interview because he was asked if he is on tranquilizers. Clegg is just hoping someone will notice him.
One thing is certain: No matter who wins the election, the days of an expanding welfare state are over, temporarily in the unlikely event of a Labour victory, permanently if the Tories win and carry out their plan to reduce the role of the state in the lives of British citizens. Brown and Cameron seem to have coherent but very different views of the relationship between the state and the individual. Brown believes in a strong, central state that should set detailed targets for doctors, cops, teachers--and tell them how to meet those targets. He also believes that the state has a legitimate claim on about half of all the wealth produced by its citizens, and should use that money to expand the welfare state. Cameron believes in devolving responsibility to families and individuals, allowing schools to develop different programs for the brightest and for those most in need of help, and most of all in restoring the sense of personal responsibility that he believes an overweening state has sapped. At last: an election about social values, economic policy, and the relationship of citizens to their state. Worth watching.
Irwin Stelzer is a Senior Fellow and Director of Economic Policy Studies for the Hudson Institute. He is also the U.S. economist and political columnist for The Sunday Times (London) and The Courier Mail (Australia), a columnist for The New York Post, and an honorary fellow of the Centre for Socio-Legal Studies for Wolfson College at Oxford University. He is the founder and former president of National Economic Research Associates and a consultant to several U.S. and United Kingdom industries on a variety of commercial and policy issues. He has a doctorate in economics from Cornell University and has taught at institutions such as Cornell, the University of Connecticut, New York University, and Nuffield College, Oxford.
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