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They wish we all could be Californian: the new Tory plan

Fraser Nelson says that the Conservatives are taking their cue from the West Coast of America: the land of Google, Stanford University and venture capital. They want to rebuild Britain in California’s image: dynamic, high-tech, green and ‘family-friendly’

25 February 2009

12:00 AM

25 February 2009

12:00 AM

Once every fortnight or so, David Cameron’s chief strategist lands at San Francisco airport and returns to his own version of Paradise. Steve Hilton has spent just six months living in this self-imposed exile — but his friends joke that, inside his head, he has always been in California. Look at it this way: this is the place on Earth which fuses everything the Cameroons most like in life, where hard-headed businessmen drink fruit smoothies and walk around in recycled trainers. It is where a dynamic economy meets the family-friendly workplace. And it is here, to an extent that is greatly underestimated, that the Conservative government-in-waiting is looking to find a new blueprint for Britain.

For some time now, George Osborne and Mr Cameron have been dropping hints about how West Coast ideas might be used to rebuild post-recession Britain. ‘This needn’t be California dreaming,’ the shadow chancellor declared a year ago. ‘It can happen in Britain.’ It would be an error to write this off as mere whimsy. For herein can be detected a vision of Britain’s future, of growing depth and clarity, which will be implemented from the first day of the Tory government. And it is all inspired not by a book — as Hayek’s works inspired Thatcherism — but by a place.

It is not unusual, of course, for British oppositions to look to America for inspiration. Tony Blair and Gordon Brown did their ideological shopping in the mid-1990s and the results can be seen all around us — from tax credits to Sure Start nurseries to Bank of England independence. Few noticed the significance of this at the time: did it really matter if the shadow chancellor (aka G. Brown) was spending his summers on Cape Cod having barbeques with economists? As it turned out, this experience was transformative — for him, and for Britain.

But, whereas New Labour went policy-hunting on the East Coast, the Tories are going further West — and this is crucial to understanding much of the seemingly disparate Tory policy agenda. For California is the place where all the apparent contradictions of Cameronism fit into place. The mystery of ‘progressive conservatism’ vanishes when you walk around the Bay area of northern California and see affluent but casually dressed families having their cookouts. As it happens, Sacramento, the state capital, also offers a chilling vision of the financial nightmare that Mr Cameron may well inherit, wrestling, as it is, with a deficit which could bankrupt the state.

But let us stick with the big picture. With Mr Hilton based in Santa Clara County (his wife, Rachel Whetstone, is on a secondment at Google’s headquarters) there is no need for fossil-fuel-burning journeys to San Francisco. Mr Hilton is able to make contacts, and to arrange for the gurus of Silicon Glen to come by Westminster when they travel to Europe. A fortnight ago, for example, he brought in to Norman Shaw South, the Cameroons’ nest, Linda Avey, cofounder of the Google-backed 23andMe which will for £200 decode your DNA and advise what diseases you are susceptible to. A week before that, Michael Birch, the British-born but California-based founder of the Bebo social networking site, was in for coffee. The guest list at Norman Shaw South sometimes reads like a Who’s Who of the hi-tech California elite.

That this should be so does not make immediate sense. Faddishness aside, why should the Tories be quite so fixated with internet businesses? In the late 1970s it was the Reaganauts who were dropping by to call on Margaret Thatcher, giving her advice on how to stop Britain sliding into economic perdition. Why so many Web 2.0 entrepreneurs now? The answer is that Mr Osborne and Mr Cameron believe that the internet revolution meshes with the modern conservative mission — flattening hierarchies and empowering the people. It is a huge error, the shadow chancellor likes to say, to see the internet as just a new medium. It is a revolution, which is flipping the balance of power from — for instance — Fleet Street to the high street. It will also transform what people expect from government.

Part of the explanation is that Mr Osborne himself has a well-disguised love of computers born, I am told, of his having been given a ZX Spectrum home computer as a teenager. He has always been gripped by technology, and has given speeches asking how politicians can reach the new generation of voters who meet their partners online, download films and music, and read blogs rather than newspapers. He cycles to work in a Mozilla T-shirt and can argue with room-emptying conviction about how the internet has changed politics forever.


After three years with the Cameroons at the helm, there is now a tightly knit network between Tories and Californians — between west London and West Coast, so to speak. Eric Schmidt, the chief executive of Google, sits on Mr Cameron’s economic advisory council. Doug Richard, a leading Californian entrepreneur, has conducted a review for the Tories on small business. Last summer, Mr Osborne and Mr Cameron met Larry Page and Sergey Brin, the 35-year-old founders of Google and discussed (as Mr Osborne later put it) ‘the contrast between their world and the world of government, stuck as too much of it is in a bygone bureaucratic age.’

The Google–Tory nexus is the most interesting. Mr Cameron has flown over to its headquarters (where Ms Whetstone now works) to give a speech. Mr Schmidt was, in turn, invited to address the 2006 Tory conference. Both are fascinated by what Mr Osborne refers to as the ‘Googlisation of politics’ — the accountability that instant search engines encourage, and the online communities that they can help to nurture. And it is this which has inspired two of the first prospective strategies that a Conservative government would undertake.

The first lesson Mr Osborne draws is that when information is made truly accessible, remarkable things can happen.

So one of his first moves will be to demand that all public bodies publish online every expense over £25,000, as many American states do at present. The prospect of having their accounts scrutinised, he argues, will be a more effective check on waste than a hundred government reviews.

Next, he would complete the work that Thatcher began on local authorities by forcing them to release all their information in a standard format that can be analysed by anyone who develops the right software. In the 1980s, town halls were mandated to release details of their expenses — but they did so in various formats. It was not until the birth of the TaxPayers’ Alliance that anyone compiled this data systematically and drew attention to the surging salaries, burgeoning staff empires and general waste.

What Mr Osborne wants to do is put the TaxPayers’ Alliance out of business — in the nicest possible way. His lodestar is a political website, theyworkforyou.com, which assesses the data which the House of Commons releases in a standardised form. It allows voters to check their MP’s attendance record, rebellion rate, and last four years of expenses. This, Mr Osborne argues, should be seen as a public service. The role of government should be to open up the jungle of Whitehall, Westminster, town halls and official bureaucracy, allowing anyone to come hunting.

Mr Osborne’s contact book overflows with the best and the brightest of Silicon Valley including Carly Fiorina, former head of Hewlett-Packard, Reid Hoffman, founder of Linkedin, the social network for professionals, and Mitchell Baker, chair of The Mozilla Foundation, which specialises in software that anyone can use
. In the Tory high command, the shadow chancellor is certainly the most enthusiastic. Mr Cameron — who posts regular online updates with WebCameron — is also keen. But their interest goes far beyond the potential to replace the clunky NHS computer programme with the free-to-use Google Health. Under the Conservatives, there would also be a serious attempt to bring Californian-style economic practices to Britain.

When Mr Hilton comes back to London (he is here this week) it is the Californian lifestyle rather than its internet firms that he evangelises about. As a new father (since just over a year ago), he has found a state where environmentalism is part of the culture and flexible ‘family-friendly’ working patterns are the norm. Not surprisingly, Mr Cameron’s speeches have started to contain more references to this culture. Last month he demanded a ‘new generation of world-beating start-ups to rival anything going on right now in Silicon Valley’. But the Tory leader wants these start-ups to be ‘family-friendly’ as well as dynamic. This is Thatcherism on a surfboard, with a crèche facility open all hours.

Behind this lies a belief that the Conservative mission must amount to more than repair work and measures to bring under control the awesome levels of public debt a Cameron government would inherit. The Tories also want to remould the British economy, and to do so with a quite specific vision in mind. Britain’s new economy, says Mr Cameron, will be ‘less materialistic, more concerned with people and our relationships… more green, more local, more family-friendly.’ While Lord Mandelson is backing away from maternity pay — fearing the regulatory burden would harry small businesses into the grave — the Conservatives are resolutely moving in the other direction in the belief that therein lies the future.

Mr Osborne’s analysis is that the links between California’s universities, its venture capital and its high-tech industry form a virtuous triangle which he would like to recreate in Britain. It is a big ‘ask’, as they say in internet seminars. Much as we wish (with apologies to the Beach Boys) that they all could be Californian unis, Britain’s higher education system has steadily become an arm of the state, each campus more like a local branch of a centralised bureaucracy, and — alas — has far less expertise to parade on the global stage. Consider this: Stanford University collects more external investment than Oxford, Cambridge and Imperial College, London, put together.

Undeterred, the Conservatives want to apply the Californian formula to the burgeoning ‘green tech’ industry in the hope of incubating a whole new economic sector. There is to be a government-run green stock exchange to direct investment into businesses which spring from universities. Mr Cameron has solemnly declared that Britain is to become a ‘world leader in battery-powered cars’ — thereby leapfrogging California itself, whence this sort of ambition is explicitly imported. Under a Tory government, he says, businesses will develop carbon-capture business in the North Sea, not the Pacific.

Yet a nagging doubt will lurk at the back of every Conservative mind over this strategy. As Mr Osborne admits, ‘government cannot pick winners.’ From Singapore to Scotland, billions have been squandered over the years trying to set up a government-grown version of Silicon Valley. Why should it be any different with green technology? Yet here Mr Osborne thinks of Frederick Terman, who in 1940 persuaded Stanford to set aside land for business, thus creating what was to become Silicon Valley. Perhaps all it takes is for someone to put the elements together, then stand back? This, at any rate, is what the Conservatives would attempt to do in office.

Whatever one may think of its chances of success, this is likely to become the key Tory message on the economy (whether expressed as Californian in inspiration or in some other form). A vision of smaller, family-friendly companies that allow flexible working. A proud refusal to abandon the green agenda in spite of the downturn, on the grounds that — like it or not — environmentalism is the future. To a surprising extent, Mr Cameron has actually revived his eco-strategy since the recession started, saying he wants ‘not green or growth, but both.’ If the election is to be about competing visions for the economy, this will be the Tory credo — and it is designed to be an optimistic one, with rays of Californian sunshine peeking through.

Among themselves, the Cameroons certainly practise what they preach. Mr Hilton worked from home so much before he left for California that some joked the only change is that his emails now land at 3 a.m. It was said of Mrs Thatcher that she was an American leader who just happened to be born in Britain. The Cameroons owe a different debt to America, one that stretches all the way to the Pacific coast. They want to import some of that Californian ease and prosperity to a nation that is faltering and losing its hard-won confidence. Yes: the Tory boys are heading for the beach.


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