Progress | Centre-left Labour politics

Scare Tory

Progress’ resident prophet Matthew Burchell has seen the future after a Tory election victory, and it doesn’t work

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Ten years after Michael Howard’s shock victory in the 2005 general election, Britain is a very different place from how it was under Tony Blair. Now 74, Howard is preparing to hand over the leadership of a massively unpopular Conservative government to David Cameron, the home secretary. Facing a major economic and public spending crisis, this is not a good time for the prime minister to retire. But Howard has had enough and, under little pressure from the opposition Liberal Democrats, there is no real incentive for him to stay on and sort out the mess.

Michael Howard has never been a popular prime minister. His party achieved its remarkable victory on a mere 35 per cent of the vote in an election where turnout plunged below 50 per cent for the first – but not the last – time. The main factor in his victory was the defection of many traditional Labour supporters to the Liberal Democrats, which allowed almost two hundred Conservative candidates in marginal constituencies to squeak through the middle to victory. Although many called the legitimacy of the result into question, Howard took it as a clear mandate all the same.

The new Conservative government ran into difficulties within months. Market jitters set in almost immediately, due to City doubts over the new government’s economic policies. Things worsened considerably after chancellor Oliver Letwin tried to appease the right of his party by promising larger than expected tax cuts, but without corresponding reductions in spending. With the deficit mounting, it was not long before the Bank of England responded with increases in interest rates, and within three years, they had already climbed above 10 per cent as the Bank struggled to keep a lid on inflation.

The Conservatives’ radical programme for vouchers in health and education went similarly awry. Initially, the new health vouchers were seen as a success. With patients eager to avoid lengthening NHS waiting lists, uptake of the vouchers rose steadily in the first five years after their introduction. However, cost control quickly became a major issue. Rather than creating an incentive for increased capacity, private healthcare providers saw the policy as a means of making a fast buck.

Within two years, they had successfully lobbied for an increased level of subsidy in order to ‘cover their costs’. This additional funding was inevitably taken out of existing NHS budgets and now, with NHS waiting times longer than ever and demand for the vouchers at an all-time high, the system is facing a financial crisis that Howard’s government is at a loss to resolve. Powerful voices on the Tory right are calling for the remnants of the NHS to be dismantled and replaced with a private insurance system, and it seems increasingly likely that such voices will be heeded.

The schools voucher was even less of a success. Government predictions that it would encourage the development of new, low-cost private schools came to nothing. The amount of money on offer was simply too low. The government therefore amended the law to allow parents to top the voucher up with their own money, meaning that it can now be used to pay for part of the fees at existing independent schools. For some families, this has worked well – the number of pupils at independent schools is at an all-time high. But for those stuck in the state system, the picture is less rosy, as cash-starved schools resort to ever larger classes in order to teach those who can’t afford to opt out. The proportion of public money spent on education has steadily withered, and with demands for further cuts in public spending growing louder, the trend seems likely to continue.

Since 2005, poverty and social exclusion has accelerated markedly, especially among the elderly. The Conservative government’s decision to wind down the pension credit has reversed the reductions in pensioner poverty achieved under Labour, and more pensioners have fallen into poverty as they have seen the value of their market investments plummet as a result of Tory economic policy. Rising unemployment under the Tories has also led to soaring crime levels in many communities and an ever-growing gap between the haves and the have-nots. This is typified by the growth in the number of American-style gated communities, where the better-off are comfortably isolated from their poorer neighbours. The reductions in child poverty achieved under Labour have also been reversed, and overall levels of social inequality are now growing at a faster rate even than under the Thatcher government.

It is on the world stage, however, that Britain’s position has deteriorated most seriously. Although Howard’s government drew back from its campaign pledge to renegotiate Britain’s relationship with the European Union, the election of such a heavily Eurosceptic Conservative government sent a clear message to other member states. Following Britain’s rejection of the proposed European Constitution in late 2005, a core of members, led by France and Germany, broke away to form a more integrationist core.

One of the first casualties of this development was Britain’s emerging relationship with former Eastern bloc states such as the Czech Republic and Poland which, despite previously being close to Britain in policy terms, decided instead to develop a strategic relationship with the new inner core. Friendless in the EU, Britain now finds itself increasingly overlooked by international investors and unable to reap the benefits of economic reform in the EU.

Britain’s relationship with the United States has fared no better. Having burned bridges with President George Bush through his opportunistic criticisms of the Iraq war, Howard found himself shut out in Washington from the very beginning of his premiership. The situation did not improve following the election of a Democratic president in 2008, and now, as America focuses its attention on the emerging superpowers of China and India, and the vast economic opportunities in Latin American, any notion of a special relationship seems a distant memory.

Yet, despite squandering so much and achieving so little, Michael Howard nevertheless succeeded in leading his party to three successive election victories in 2005, 2009 and 2014. And, in this respect, Labour supporters have only themselves to blame. Having scored his first victory as a result of apathy and complacency on the left, Howard wasted no time in capitalising on divisions among his opponents. By tacitly encouraging the growth of the Liberal Democrats in former Labour heartlands, Mr Howard made it next to impossible for either party to achieve a breakthrough. The 2014 result typified this, where Labour slipped into third place in terms of number of seats, despite still coming second in the overall share of the vote. The damage of the 2005 election appears irreparable.

Meanwhile, the Conservatives have little incentive to tackle the growing wave of apathy afflicting British politics. Instead they rely on populist rightwing policies – anti-immigration, anti-minority, draconian social policies – to turn out their core vote, while despondency ensures that leftwing voters remain at home. Reforms that could make a decisive difference, such as a change in the electoral system, are a fantasy so long as the Tories remain in office.

Ten years since Michael Howard was elected as prime minister, things are worse than people could have imagined. But the search for a way out seems hopeless.

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Matthew Burchell

works for Blue Rubicon, a communications consultancy, and is a former special adviser to Rt Hon Peter Hain MP

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