Conservatism at a crossroad: aspiration or legislation?

Conservatism in the UK has reached a point where Tories can either back aspirational values, or legislate 'equality'. Ewan Watt discusses...

Where will the Tories take Britain?
Ewan Watt
On 1 April 2013 14:47

In struggling to counter what appears to be a fairly robust poll lead for Labour, the Conservatives are finally starting to shun talk about windmills and Big Societies and embrace the politics of aspiration and how to help “strivers.” With an election just two years away this could not have come sooner. It’s also smart politics. 

Some of the most successful center-right leaders have recognized this investment early on in their tenures of power. They’ve also witnessed stunning electoral returns. Not only did he slash income taxes, but Ronald Reagan killed inflation, a scourge that had seen millions of working-class Americans become poorer with every pay check. It was this accomplishment that Robert Samuelson dubbed “Reagan's singular domestic achievement and the wellspring of his popularity.”  Some joke that Reagan’s popularity was such that it took a cemetery of voters in Minnesota to stop him from winning all 50 states in his 1984 landslide.

In the UK, through privatizing state monopolies and embracing an enterprise culture, Margaret Thatcher created a new generation of shareholders, a legacy that can certainly be seen today. Through ‘Right to Buy’ Thatcher created a home-owning democracy, providing council tenants the opportunity to remove the shackles of local government and purchase property. Over one million families took advantage of the scheme. It was truly the totemic symbol of blue-collar conservatism’s re-birth.

But like any success comes the risk of Conservative politicians acknowledging the very voters that they have to win over, but grossly misinterpreting history and failing to execute the very policy measures that create landslide victories. Some of these politicians have good intentions, while others unashamedly take up the cause to be political expedient. 

Take the minimum wage. In a recent article on the Spectator, Rupert Myers called for the Conservatives to “contemplate something radical” and increase the minimum wage in order to “send a clear message that the government is on the side of working people.” Matthew Hancock MP appears to be of the same mind, saying that Conservatives should "not only support the minimum wage, but strengthen it,” adding that the “standard argument against the minimum wage is that a minimum wage would price people out of jobs. But the academic analysis doesn't back it up.”

Not only is this grossly misleading from academic analysis, but everyone in Britain sees the true cost of the minimum wage on a daily basis:  youth unemployment. The real problem in Britain right now is anxiety in the private sector. This will not suddenly be cured by telling businesses to hire school-leavers, or anyone for that matter, and pay them above their market value. These extra costs can sometimes be absorbed during an economic boom (see late 1990s), but the last thing any business owner in the UK wants right now is higher labour expenses. Conservatives can try and get some cheap headlines through increasing the minimum wage, but all they’ll be doing is regulating the people they claim to represent out of employment. 

Perhaps the chief protagonist of this new “aspirational” wing of the Conservative Party is Robert Halfon MP. Halfon, deservedly so, has received plaudits for campaigning for lower taxes on low-income individuals. In addition, he has launched a one man crusade against taxes on petrol and been a vocal advocate of engaging trade unions—the former an entirely noble endeavor.  However, often in the name of reaching out to the “white van man” Halfon often descends into populist grandstanding and finger pointing against the oil industry and speculators. In addition his vocal opposition to Tesco this week should raise a few eyebrows.

It’s not too surprising that as a constituency MP Halfon has raised concerns over Tesco’s decision to restructure its redistribution system by closing three sites. Luckily, rather than facing redundancy, Halfon’s constituents have been offered jobs but may face the prospect of lower wages and revised working conditions. To the Harlow MP this is “very disturbing” as these individuals in question will become “fundamentally worse-off.”  Halfon has also tabled an Early Day Motion urging “pay and conditions [to] remain the same or better for staff who have been affected.”

Now just to re-emphasize, Halfon represents these individuals so therefore has an interest in their economic well-being. But as Tesco point out, their labour costs are subject to the local market and, thankfully, not to the whims of politicians. As they should be.  But Conservatives should also be alarmed at Halfon’s efforts to use his parliamentary pulpit to shame one of Britain’s largest employers. Ultimately this is about getting Tesco to make business decisions based on politics pressure rather than shareholder value. 

Finally, and perhaps the most dangerous of all Conservative-backed policies to help “strivers”, is the ‘Help-to-Buy’ scheme. For those of you unfortunate enough to follow me on Twitter, my views on this matter are well know. In sum, in order to help individuals purchase a property, “prospective buyers would contribute 5 per cent of the value of the property and the Government will guarantee another 15 per cent.” If people seriously think this is a great idea, then I have a portfolio of AAA mortgage backed securities from Fannie Mae to sell you.

What it is, however, is an admission from the government that they are not willing to go for growth, but that they are entirely enthusiastic about another artificial boom through asset inflation to make people feel wealthy again. Government subsidies will inevitably lead to higher property prices, forcing people to become more leveraged and vulnerable to property fluctuations. They may also end up paying higher maintenance costs for a property they could not afford in the first place. It also promulgates the myth that owning a home is an investment rather than just pure consumption. If you buy a house, you’re therefore not consuming goods and services elsewhere. Some might see this all as a necessary evil to help “strivers” get on the housing ladder, but really it’s nothing but an admission of defeat by this government. 

Conservatives should welcome the fact that their party is becoming more focused on seeking to engage aspirational voters. However, what made Reagan and Thatcher a success was that they championed business, the individual, and the removal of state-backed impediments to aspiration. This was the winning formula, not playing-off business against voters, or promising policies that will do nothing but stymie job-creation. Conservatives should certainly look to see how they can improving living standards and well-being, but not through the state, but rather it’s absence. 

Ewan Watt is a contributing editor to The Commentator.  He lives and works in Virginia and writes in a personal capacity.  You can follow him on @ewancwatt

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