Many Conservatives will have left the party’s Blackpool conference with their feelings about the leadership contest transformed. As the horses enter the final stretch, the pulses of the punters are unquestionably quickening, and the smart money must surely be moving on to David Cameron. It is no disrespect to the other contenders to say that his star has risen the furthest over the last week. It may be that readers do not uniformly share the ecstatic sensations of Bruce Anderson, whose nunc dimittis may be found on page 16, but it is now the Cameron campaign that has momentum, a development that is obviously congenial to this magazine, since The Spectator decided months ago that he was the man for the times and for the job. Now that the excitement is building, and policies can be expected to come under scrutiny, there is only one point that needs reiterating, for the benefit of those ‘modernisers’ who believe that the salvation of the Tories lies in the wholesale imitation of Blair.
That point is the cardinal importance of the economy. It is certainly vital to show that modern Toryism is full of compassion, and that if you believe in winners and losers, as Tories must, then it is a duty of society to look after the losers; and it is certainly vital to demonstrate that Conservatism is not just about economics. It is about protecting certain ideals and institutions, and a concept of what it means to be British, and passing on the best from one generation to the next, and so on. But it would be madness if the Tories were to forget that the single best thing they could do for the British electorate would be to introduce a new and more sensible — a more Conservative — style of economic management.
Whoever is the next Tory leader will be expected to fight an election against Gordon Brown, on a record that is looking increasingly vulnerable. The Chancellor sneaked off to America a fortnight ago to admit that his growth targets for the present year would not be hit. This has serious ramifications for an economic policy dependent on growth to help shrink the gap between Mr Brown’s promiscuous expenditure and already awesome levels of taxation. Now, the taxes used to fund 800,000 new and largely unproductive jobs in the last eight years are depressing productivity in the private sector. Regulation is continually being forced on entrepreneurs which makes their activities either impractical or impossible. Retailing is facing its greatest crisis since the recession of the early 1990s. By any objective measure, inflation has almost doubled in the last year. The Chancellor faces the choice of raising revenue or cutting spending. His wilful determination to pump money and people into largely or totally unreformed public services seems to know no bounds. A year after promising to slash jobs in the Civil Service, not a single job has been cut. Waste of resources is apparent at every level of administration in Britain now, whether in central or local government. Money that should be spent in the private sector, or used for private investment, is instead being used to no productive or wealth-creating end at all. If the creation of wealth is limited, so too will be tax revenues and the quality of service that can be provided using them. If a Tory administration really wants better public services it will, paradoxically, have to streamline their delivery, reduce their overheads, cut their bureaucracy and start to lower the tax burden. Without that, a vicious circle of tax increases and decline, so familiar from the 1960s and 1970s, will be with us again.
George Osborne, the shadow Chancellor, has opened a debate on flat taxation, for which he should be commended, not least since it ought to mean lifting millions of the poorest out of tax altogether. But it would be a great mistake for the Tories to forget their prime task, which is to get a grip on spending. Of course it would be foolish to go into the next election promising a massacre of jobs in the public sector. Public-sector workers not only have jobs and families; they have votes, and Labour has been extremely canny in building up a public-sector vote bank of almost Scandinavian proportions.
Not every public-sector job is by any means essential, however, and it ought to be possible to explain to the electorate that reform would eventually allow for the tax reductions that would provide the economy with the stimulus it so badly needs. That in turn would generate more than enough employment to compensate for the gradual attrition of public-sector non-jobs. It would be defeatist in the extreme of the next leadership not to set about persuading the electorate that efficiency savings can bring both tax cuts and better public services. The urgent priority for a Tory chancellor in 2009 would be to re-incentivise individuals, not least to make it easier for potential entrepreneurs in the (currently Tory-free) black and Asian communities of our inner cities to get businesses up and running, improving those often desolate areas and passing them from the control of the state into the control of the people. This is not ‘centre ground’ stuff. Some of it is positively — to use the latest taboo word — ‘ideological’.
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