Rafael Behr writes:
The Conservative Party’s dedication to the memory
of Baroness Thatcher is hardly in doubt. Grief at her death earlier this year
brought more unity to the party than any of the policies David Cameron has
devised for that purpose. In case the point was missed (it wasn’t), a group of
Tory backbenchers propose renaming the August bank holiday in honour of the
Iron Lady (it won’t be).
But when it comes to influencing government
policy, Mrs T is rivalled by the man who brought her down. Michael Heseltine
may not enjoy the veneration of his party but he has the ear of its leaders.
Earlier this year, he published a plan for stimulating growth by giving regions
more control over spending.
Chunks of the report have been adopted as
government policy. Ask Treasury ministers and advisers about their economic
strategy and the chances are that Heseltinian intervention will get a reference
before Thatcherism.
Westminster has been so busy noticing the victory
of the right in an argument about cuts it has barely clocked the left’s victory
in an argument about the duty of the state to foster growth. There is
cross-party agreement on the need to spend scarce resources on infrastructure.
There is near consensus that the state should be doing more to nurture
promising, innovative sectors of the economy. The discredited 1970s practice of
“picking winners” has been adjusted and rebranded. It is now a “modern
industrial strategy”. Every party will have one in its 2015 manifesto.
Not everyone has received the new wisdom. There
are Conservatives who despise all state meddling and think that the only good
government intervention is lighting a bonfire of employment rights and
workplace protection. Osborne recognises the need to keep that wing of his
party fed with meaty policy chunks but his own views are more nuanced.
Cabinet colleagues say the Chancellor privately
accepts that Britain already has a liberal labour market and a relatively
low-regulation economy. Future growth, in other words, will be spurred by
government getting stuck in, not getting out of the way.
Osborne took a gamble on hard and fast cuts in
the hope of fighting an election with a tamed deficit and booming economy. That
move failed. But cynical risk-taking is not the same as ideological rigidity.
Osborne’s allies say his urge to win is greater than his eagerness to parrot
Thatcherite shibboleths.
The really zealous expressions of Conservatism
are elsewhere, in Michael Gove’s campaign to prise schools away from
local authority control, for example, or in a welfare policy that sees help from
the state as a cause of poverty rather than its alleviation. In a fiercely
ideological field, economic management is one of the more pragmatic bits of the
coalition agenda.
Labour detests the idea that Osborne is flexible.
The Chancellor’s refusal to change course has been an opposition mantra. Any
dabbling in pro-growth intervention is dismissed with scorn. Money for
infrastructure, say shadow ministers, is dwarfed by earlier cuts to capital
spending budgets.
Funds aimed at supporting new businesses sit idle. If the
coalition wanted local growth plans, why scrap regional development agencies?
Vince Cable might fancy a new industrial policy but, says Labour, the real
agenda is set by old Tory reflexes: tax cuts for the rich; devil take the
hindmost.
There are obvious reasons for Ed Miliband and Ed
Balls to depict Cameron and Osborne as captives of an outmoded and callous
creed. At a glance, the cap fits. But by belittling the Tory conversion to
active government, Labour misses the opportunity to claim a moral victory.
Under the last government, Peter Mandelson led the interventionist revival with
his call for a more “strategic state” to navigate chaotic forces of
globalisation. In candid moments, Heseltinian Tories concede that Mandelson was
right.
Neither Labour nor the Conservatives dare admit
that their economic views are converging. The fortification of opposing
trenches, separated by boggy no-man’s-land (aka the Lib Dems), has become a
strategic necessity and a source of intellectual comfort.
Yet the proximity is
clear to anyone outside the two tribes. Labour has accepted that budgets must
be cut, as the Tories said all along. The Tories are borrowing to keep the
economy afloat, as Labour predicted they would.
Both want to spend on infrastructure and skills.
Both are working their way towards a more vigorous industrial policy.
Both are
planning manifesto chapters on beefing-up consumer regulation to address the
rage of people who feel permanently ripped off by banks, utilities, rail
companies and pretty much every other essential service, many of which are in
the private sector.
The political pendulum is swinging towards more, not less,
intervention in the economy. That should favour Labour – but before the
opposition can take any credit for the new consensus, it has to prove that the
consensus is there. That means recognising there is more to Tory economic
policy than cuts.
Buried in the coalition’s austerity programme is
the kernel of acceptance that, ultimately, government is the solution to
economic malaise, not the cause. Miliband and Balls may not want to give the
Chancellor credit for getting anything right but they also need to look as if
they are winning some big arguments.
Full-frontal attack is Labour’s default
stance towards Osborne. Sometimes faint praise can be more damning.
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