Spending Corbyn’s inheritance

There’s a spectre haunting the Tories — the spectre of 1997. Tories fear that history could be about to repeat itself. That after several years in office, they spend a parliamentary term arguing about Europe and plotting against their weak leader with the result that Labour wins the next election by a handsome margin.

Back then, the Tories left Labour with a ‘golden inheritance’. John Major’s government had done the responsible thing on the economy. It had pared down the deficit, even putting VAT on domestic fuel in an attempt to help balance the books. But the party’s reward for this was its worst defeat since universal suffrage was introduced. Even more galling was Labour’s decision to use the money saved by the Tories to increase spending on health and education in the run-up to the next general election in 2001, which Labour won by another mammoth margin.

In the weeks straight after the 2017 election, Patrick McLoughlin — then the Conservative party chairman — began to remind colleagues what had happened in the 1990s. He argued that there was little point in the Tories going through the pain of balancing the books only to leave Labour with more money to spend. His arguments resonated with Tory colleagues, particularly Theresa May’s new chief of staff, Gavin Barwell.

Monday’s Budget marked the moment when the Tories adopted this position and abandoned any serious efforts to balance the books. They now want to spend before Labour gets the chance to do so because they have no intention of making life easy for an incoming Corbyn government. So virtually all of the additional money from better than expected tax receipts was used: a party which believed that deficit reduction was the national priority would not have done that.