If all political careers end in failure, political eras have a tendency to end in bankruptcy. Sometimes it is metaphoric – as with the Thatcher project's exhaustion in its final years. Sometimes, it is literal. New Labour fell because voters could not see the point of a party that was not only fiscally incontinent but had failed in its raison d'etre – reconciling wealth generation and social justice.
Labour's core voters revolted. The middle class professionals whom the party had pandered to ditched them with astute ingratitude: having banked the winnings from Labour's splurge, many swung to David Cameron, who pledged to balance the books while shielding them from the full brunt of austerity.
How will the current Tory era end? As debt mounts and Boris Johnson shows no sign of rowing back on his desire for ever more spending, many fear that the Government is flirting with fiscal bankruptcy by abandoning Conservative orthodoxy on the public finances. But as their higher mission of "levelling up" descends into chaos, they face political bankruptcy, too. What ought to be a pro-market, pro-enterprise programme of spreading opportunity, and raising all boats, threatens to become a statist spending splurge. One that, assuming the debt binge cannot last, can only end in punishing tax rises for the Tory heartlands in order to pay for it all.
Does the Government know the difference between "levelling up" and "levelling down"? The signs aren't good. Consider the quote from a senior Government source that accompanied this newspaper's report that the Chancellor may be considering a raid on private pensions in order to pay for coronavirus spending: "Our job is to keep people out of poverty, not enrich the middle classes."
If that is really the Government's position, we are being governed not by free marketeers but by socialists. First, it suggests that they do not believe levelling up should mean real progress for the Red Wall; in the wake of lockdowns , the party has settled for preventing the North from falling further behind. Second, it implies that the Tories have appointed their own middle-class grassroots to foot the bill. Levelling up is not about helping the squeezed middle, but ensuring that everyone feels the squeeze, in a form of anti-capitalist collective punishment.
It's a tragedy because the sentiments behind levelling up are both correct and just. Swathes of the country suffer from underinvestment. The economy is overly reliant on the South's financial services sector. There are specific injustices, too, that can be rectified. Brexit has given Britain a rare chance to overhaul intellectual property laws captured by vested interests in the City of London. Reforming these would enable us to shift more money towards tech innovation, which could result in a healthier distribution of jobs and hubs across the country.
The problem is that the Government's levelling up strategy has, from the start, been devoid of any sound economic vision. Apart from pimping up high streets and pursuing vanity projects like HS 2, the Tories have never been clear about what it amounts to. The party's obsession with "tangible" gains for the Red Wall reflects an aversion to more rigorous theorical thinking about how a centre-Right government might help all corners of the country to thrive.
The Tories badly need to start reflecting, for the situation is perilous if the party continues in its present direction. The country is a few interest rate rises away from economic pandemonium. Politically, it is not even clear that the Midlands or North want the vast public spending the Prime Minister is committed to. HS2 is a case in point. As the North reels from lockdowns, a scheme once mocked as farcical is now condemned as grotesque.
Levelling up would be more effective and less antagonistic if Johnson refashioned it into a populist, liberalising recovery strategy. He could ditch the white elephants and put divergence from Brussels' oppressive regulations at the agenda's centre instead. He could be unapologetic that Britain is a country of opportunity, but also limits, where neither land nor money is infinite.
We need to build back a society that is palpably fairer but also industriously meritocratic. Punishing the better off will only delay recovery. Bubbles – whether they are property bubbles inflated by subsidised mortgages, or lockdown bubbles fostered by vast state borrowing – have a habit of bursting. Put simply, in these treacherous times, Britain does not need a "yes, yes, yes" people-pleaser but a "no, no, no" conviction leader.
The Tories may face carnage in the South at the next election unless they change course. Amersham threatens to be just the start of a fatal combination: disillusioned core voters did not bother to turn out for a party that treats them with contempt. Fiscally conservative but socially liberal professionals indulged themselves with a vote for Lib Dem progressivism, reassured that a sensible Tory vote was not on offer.
Nor will the Tories be able to rely on its Red Wall seats. In the boom and bust of politics, voters have a habit of banking gains and switching allegiances – from Thatcher's council house revolution to Blair's reshaping of the welfare state from basic safety net into elaborate middle-class social insurance scheme. Although Red Wall voters may appreciate being somewhat sheltered from the initial fallout of the pandemic, as southern wealth and pensions are raided first, they will not hesitate to drop Johnson when that money runs out and the Prime Minister has no choice but to contemplate wider spending cuts and tax rises.
If Johnson is to have any chance of levelling up the country, he must reopen it now. The window of opportunity for a bounceback with minimal austerity is narrowing. While plans to grow our way out of our fiscal hole, rather than pursuing austerity, carries risks, it is clearly the most politically attractive path for the Prime Minister. The option will, however, soon be closed to him, should the Great Lockdown spiral into the next Great Depression, with chronically weak growth and rising unemployment.
The one saving grace for the Conservatives is that New Labour's downfall was so severe that, more than a decade on, the party is still out of the game. But that in itself contains a warning. The bottom line has a habit of bringing delusional governments back down to reality. It can take years to get up again.
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